Deng’s China, 20 Years On

With the next generation of Chinese rulers knocking on the door of the Politburo ahead of a leadership reshuffle later this year, The Atlantic’s Damien Ma looks ahead by first looking back on Deng Xiaoping’s “southern tour” and the “peaceful evolution” undertaken by China over the past 20 years:

What a course it has been, as the record speaks for itself. Since 1978, China’s economy has grown more than 100-fold, while per capita GDP has risen roughly 80 times (not adjusted for inflation or exchange rate differences). It has far exceeded Deng’s expectation of reaching a per capita GDP of $4,000 by mid-21st century–a milestone that was achieved forty years ahead of schedule. China’s steel output is now north of 600 million tons, an incredible feat considering that the Great Leap Forward in the late 1950s mobilized nearly 100 million Chinese only to end up with 11 million tons of steel.

I recount this snapshot of history on the anniversary of the not for its own sake, but because I believe it is instructive for observing China today. As China proceeds through a political transition, culminating in the new 18th Party Congress this fall, there are echoes of 1992. The Jasmine Revolution, Arab Spring, Wukan violence, increasing civil disobedience, and pluralism on social media, are new manifestations of peaceful evolution, as Hu Jintao’s culture essay elliptically warned against. The unusually public campaigns for political office–primarily construed as a two-way contest between Bo Xilai and Wang Yang–appear to be fundamentally about a referendum on the direction of reforms.

The political status quo in 2012, unlike the early 1990s, isn’t resigned to narrow ideological trench warfare. Rather, it is about monied elites who are largely concerned with enriching themselves and those in their circles, exacerbating inequality in a country that has yet to create a broad-based middle class. But just as China requires the equivalent of an LBJ-like “great society” transformation, forces are arrayed against it, leading to wayward and dispirited reforms.
What’s more, the great helmsman is no longer around to right the course. A new political consensus will have to be forged by a new cohort of leaders. Whether they can coalesce around a social agenda as ambitious and transformative as Deng’s and inject energy into flagging reforms are ever more pertinent questions. They will get an opportunity come this fall–to complete Deng’s unfinished business of heralding sociopolitical change for the sake of nation building.

Minxin Pei of Claremont McKenna College, on the other hand, wonders why China bothers to remember Deng’s southern tour given the irony that pro-market economic reform in China does not exist. From The Financial Times:

Evidence of the demise of is easy to spot. The Chinese state has reasserted its control over the economy. Big state-owned enterprises dominate nearly all the critical sectors, such as banking, finance, transport, energy, natural resources and heavy industry. The private sector, a victim of persistent official discrimination, is in full retreat. Critical prices, such as interest rates and land, are officially controlled and severely distorted. Foreign businesses, once welcomed with open arms, are getting squeezed with protectionist measures. The overall orientation of the Chinese economy has veered so much off the reformist path that foreign business leaders who have long been supportive of China are now voicing their bitter disappointments, some publicly. China’s main western trading partners do not need to read scholarly analysis to know that there is no pulse in its reform. All they need to do is to listen to their business community, check their trade statistics with China, and take a look at Chinese economic policy.

A China Daily commentary by Chi Fulin of the Hainan-based China Institute of Reform and Development also notes the need for reform:

Deng’s confirmation of reforms aimed at facilitating the establishment of a socialist market economy released a vitality that has propelled the fast and long-term development of the country. Deng’s remarks enabled the country to embark on a socialist market economic road and it has taken the perfection of such a market as its supreme target.

The reform and opening-up policy has enabled some regions and some people to get rich earlier than others, which has led to powerful groups with vested interests. To maintain their established interests, these groups have become a barrier to further reforms, which has resulted in the interests of some middle and low-income people being marginalized, fermenting social discontent.

China should wholeheartedly endeavor to overcome this barrier so that it can realize Deng’s vision of common prosperity . This will help the fast-growing nation release its huge consumption potential and lay a solid foundation for its sustainable and rapid development in the years ahead.

China’s economic and social development now requires a social transformation and reforms targeted at equality and sustainable development. To facilitate this, the country should embrace a consumption-driven, green and market-regulated development model, prioritize increasing people’s wealth and push for government transformation. To this end, China should push forward overall reforms of its economic and social institutions as well as governance changes during the 12th Five-Year Plan (2011-15) period. While giving the market a full role in the distribution of resources, the country should step up the establishment of a public service system and a service-oriented government. A systematic foundation should also be laid for the expansion of domestic demand and the establishment of social justice and sustainable development.

See also a Global Times editorial discussing Deng Xiaoping and the need for a steady and unified course of political reform.