Thirty Years After Deng: The Man Who Changed China

[BanglaBhoot]

By Michael Elliott

When students ask me who was the most memorable character I've met, I never know how to reply. Was it Nelson Mandela, with a steel-trap political sense sneaking out from under the surface charm and grace? Or Margaret Thatcher in her pomp, allying clarity of thought to an utter conviction in the rightness of her judgment? Or Bill Clinton in 1991, fizzing with ideas and intellectual curiosity, before we knew how indiscipline would diminish him? Or any one of countless others?

It's an impossible choice. But when it comes to the leaders of modern times whom I never met, but would dearly have loved to, there's no contest. I'd give anything to have sat down with a tiny — barely 5 feet tall — bridge-playing chain smoker who used the spittoon liberally and had a weakness for croissants. And I'd ask him: Did you have any idea what you were doing?

It is exactly 30 years since the conclusion of the Third Plenum of the Central Committee of the Communist Party of China, the meeting that consolidated Deng Xiaoping's position as China's leader and laid the groundwork for a generation of economic reform. In 1978, Deng was the great survivor. He had been a party member for nearly 60 years, and had been purged more often than a top model's digestive tract, only to claw his way back to the leadership. China was desperate. The horrors of the Cultural Revolution were a fresh memory. As Premier Wen Jiabao said in a speech to a World Economic Forum conference in Tianjin this year, in 1978 "the country was in a backward state ... with the economy on the brink of collapse."

Deng was no student of the dismal science. He once said, "I am a layman in the field of economics. I proposed China's economic policy of opening to the outside world, but as for the details or specifics of how to implement it, I know very little indeed." But he knew enough to let others lead. The reforms that Deng blessed started in the countryside, where farmers were allowed to sell surplus produce and, in time, were allowed to farm their own land on long leases rather than as part of a commune. "Township and village enterprises" — small firms, many of which grew rapidly in size — sprang up. Prices were freed. As the success of reform became evident in the countryside, it was gradually extended to the cities. Deng endorsed the creation of Special Economic Zones, islands of capitalism in a communist society. (The most famous SEZ, Shenzhen, just north of Hong Kong, knows whom to thank for its prosperity; Deng's statue graces a square in the city.) So China started that long run of supercharged economic growth that has made it the workshop of the world. (See pictures of China hosting the Beijing Olympics.)

And — more to the point — Deng's reforms improved the life chances of more people, faster, than has ever been done before in the history of humankind. To be sure, you can still find poverty in China. Traveling deep in rural Guizhou province this fall, I saw damp villages where the homes were mean huts and families eked a living from rocky hillsides. But everyone had shoes, and nobody looked malnourished.

It is by now an axiom that a generation of breakneck economic growth has brought its own problems. Modern China is not charming. Many of its towns and cities are desperately ugly and shoddily built, workers have few rights, and environmental disasters abound. As global demand contracts, China's export-led, manufacturing-heavy economy is now facing a sharp downturn. Moreover, the accepted narrative of China — that Deng opened up and modernized an old-fashioned and hermetic economy — needs much qualification. Recent historical research has stressed that China was modernizing and internationalizing fast, if imperfectly, in the half-century between the late Qing dynasty and the outbreak of war with Japan in 1937. And for all his twinkling eyes, Deng was tough. Together with a group of party elders, it was he who gave the go-ahead for the army to crush the demonstrations in Tiananmen Square in 1989, snuffing out the hope that real political reform would accompany changes in the economy.

Yet for all the caveats, there is something stupendous about Deng's achievement. (This magazine certainly has long thought so; he is one of only four non-Americans to have twice been named TIME's Person of the Year.) A friend of mine in Hong Kong describes what is happening in China today like this: Think of a quarter of the world's population — with all its good and bad, beauty and ugliness — rejoining the mainstream of human development after centuries when it stood to the side.

That is the great story of our time. It is our story, everyone's story — not just China's. And it is Deng's legacy.

Thirty Years After Deng: The Man Who Changed China -- Printout -- TIME

 

[aimarraul]

he is a real good leader,unfortunate chairman Mao wasted 30 years ,otherwise China would be a much better country,i am glad we are back on the road，India is a larger economic entity than china 30 years ago..... but now 1:3,

 

[BanglaBhoot]

After 30 Years, Economic Perils on China’s Path

By JIM YARDLEY
Published: December 18, 2008

SHENZHEN, China — The ruling Communist Party threw itself a big party on Thursday. The country’s leadership marked the 30th anniversary of the reform era that transformed China into a global economic power and, in doing so, changed the world.

At a triumphant ceremony at the Great Hall of the People in Beijing, President Hu Jintao invoked Deng Xiaoping, who consolidated power in 1978 and began “reform and opening.” Mr. Hu emphasized the party’s unwavering focus on economic development. “Only development makes sense,” said Mr. Hu, quoting Deng.

But beyond the oratory, Mr. Hu and other Chinese leaders are now facing a new era in which Deng’s export-led economic model, as well as his iron-fisted political control, face unprecedented challenges. Global demand for Chinese goods has slumped, unrest is on the rise in the industrial heartland, and China is scrambling for a new formula to preserve stability and ensure growth.

The downturn is so swift — exports fell last month for the first time in seven years — that Beijing is being forced to abruptly shift priorities. Until recently, Mr. Hu had been trying to curb excesses like rampant pollution and income inequality that posed environmental and social challenges to long-term development. Now, those priorities seem eclipsed.

Instead, leaders are restoring tax breaks for exporters and pushing down the value of China’s currency to encourage exports. At the same time, they are casting about for ways to spur domestic demand and wean China’s economy off its dependence on foreign markets swept up in the global financial crisis.

Politically, Chinese reformers had hoped the symbolic weight of the anniversary and the nation’s post-Olympic glow might propel some measure of political reform to address official corruption and help defuse rising social tensions.

But as Beijing worries about strikes and mass layoffs even in some of its most prosperous areas, official tolerance of political dissent has seemingly narrowed. This month, a prominent dissident was detained after writing an open letter calling for greater democracy. An editor at one of the country’s leading newspapers was reassigned after publishing articles deemed too politically provocative. “We must draw on the benefits of humankind’s political civilization,” Mr. Hu said in his Thursday speech, according to Reuters. “But we will never copy the model of the Western political system.”

If any place symbolizes China’s reform era, it is Shenzhen, a city conceived from Deng’s imagination — and one now in the cross hairs of the economic downturn. Thursday’s celebration was timed to a 1978 political meeting, the Third Plenum, which anointed Deng as China’s leader and introduced “reform and opening.” Two years later, Deng pointed at a sleepy fishing village in coastal southern China, near Hong Kong, and ordained it the country’s first “special economic zone” to experiment with foreign investment and export manufacturing. Today, Shenzhen is a city of more than 10 million people ringed by thousands of factories.

A factory district just outside Shenzhen, Fuqiao Industrial Park, is a snapshot of the economic troubles rippling through the region. Several small factories in the park have closed in recent months. At Wang Jinda Industries, the lettering had been scraped off the entrance after the owner closed last week. Two customers had arrived for a shipment of goods only to find an empty factory.

Meanwhile, some factories that remained open were struggling. Workers at a large printing factory said the owners had stopped recruiting new workers in September while many others had quit. Several workers said wages had dropped significantly as the owners were reducing the length of shifts. A few workers accused owners of deliberately trying to drive down wages to force workers to quit. “Everybody is worried,” said Lin Baozeng, 26, a cashier at a canteen inside the industrial park. Her daily lunch crowd has dwindled to about 100 migrant workers from 500.

“If the economy is bad,” Ms. Lin added as her 3-year-old daughter played nearby, “how can I afford to raise my child?”

As yet, gauging the scale of factory closings remains difficult in Shenzhen and surrounding Guangdong Province, the country’s main export engine. Guangdong was already making a concerted effort to move up the manufacturing value chain at a time when rising labor costs and greater government regulations were making some smaller, cheaper exporters unprofitable. But the recent export slowdown is having an unanticipated impact. More than 7,000 small- and medium-sized factories have closed in recent months. Shenzhen’s mayor said 50,000 people in the city alone had lost their jobs in the last few months.

And there are mounting signs that the problems could be far broader. Over all, China’s economy will continue to expand next year, but some economists say the rate of growth could fall as low as 5 or 6 percent, far slower than the double-digit pace of the preceding several years.

State media have reported that 4.85 million migrant workers have returned to the countryside early before next month’s annual Lunar New Year holiday. Some inland provinces have already announced subsidies for unemployed returnees. On Thursday, the country’s official news agency, Xinhua, reported that 6.5 million migrant workers may be jobless next year.

Beijing has recently restored some export subsidies that had been repealed as part of earlier efforts to rebalance the economy toward domestic demand. Huang Yasheng, a management professor at the Massachusetts Institute of Technology, said such subsidies made short-term political sense, given the huge numbers of jobs provided by factories, but did not address China’s long-term economic challenges. “I see the export supports as a crisis measure,” Mr. Huang said. “They really have no other way to maintain employment.”

Mr. Huang said the government’s focus on exports and expanding the role of state-owned corporations since the 1990s had meant too little of the country’s wealth had trickled down to ordinary people. He said household incomes had lagged well behind overall growth, meaning that hundreds of millions of ordinary people still had relatively little spending money — a major problem when the government is trying to rapidly increase domestic consumption. “It’s a huge challenge,” said Mr. Huang, author of a recent book, “Capitalism with Chinese Characteristics.”

China’s immediate answer is a stimulus program focused on infrastructure like railways and ports. State-owned banks are being ordered to make credit easily available, and business taxes on real estate sales were waived this week. Such steps may be crucial to buttressing the Chinese economy and preventing a deeper global recession. Yet some Chinese officials are wary of the potential impact of another phase of state-led industrial development.

The government stimulus program enacted in response to the 1997-98 Asian financial crisis enabled China to avoid the recessions suffered by neighboring nations. Yet it also propelled the enormous investment in heavy industry that is a major reason China is now the world’s largest emitter of greenhouse gases.

In an opinion article in the online edition of People’s Daily, Pan Yue, the outspoken vice minister of the Ministry of Environment, blamed Western excess for the global crisis and warned that China risked ruin if it blindly pursued Western industrial models.

“China’s reform and opening has achieved in 30 years the economic gains of more than 100 years in the West — yet more than 100 years of environmental pollution in the West have materialized in 30 years in China,” Mr. Pan wrote. “The present global economic crisis shows that if China continues down the old road of Western industrial civilization, it will only come to a dead end.”

China is a far more open and dynamic place than the country Deng first unleashed three decades ago. Much of that change has come from ordinary people pushing for more space in society, just as much of China’s economic success has come from the entrepreneurial energy and hard work of its work force. Yet Communist Party leaders have been careful to hoard political power: independent unions and political opposition remain illegal.

Earlier this year, Shenzhen’s leaders seemed eager to position the city as a pioneer of political reform. Shenzhen officials published a reform plan that advocated some local elections and greater leeway for local legislatures and courts to make decisions. But those plans, later tempered by provincial leaders, now seem derailed as officials are focused on maintaining social stability.

Some influential Chinese say more should be done. Yu Keping, a scholar at a leading Communist Party research institute who has advised top leaders, published essays this week in leading Chinese newspapers about the need for greater democratization to combat corruption.

In an interview with The New York Times, Mr. Yu called for “breakthrough reform.” But he also said that change must come incrementally, given the need for social stability, with an initial emphasis on better governing and rule of law. “We need to promote democratization in China,” Mr. Yu said. “On the other hand, we need to promote social stability. If we had an election right now, we might end up like Thailand.”

In fact, the limited momentum toward modest political change could well be sidelined by economic problems, some experts say. “A real huge question is how the economic downturn is going to affect any sort of political reform,” said Joseph Fewsmith, a Boston University professor who studies Chinese politics. He said officials might deliberately slow efforts to carry out a new rural land reform law approved this fall to grant farmers the ability to transfer their land rights.

“People worried about social stability are going to proceed very, very slowly,” Mr. Fewsmith said.

http://www.nytimes.com/2008/12/19/world/asia/19china.html?_r=1&hp

 

[jeypore]

The Chinese model for growth was one of the best ideas that has ever seen, and clearly China grew very rapidly in a short amount of time. The draw back was that they could not create an internal economy because of the wages, the mass was just straggling for basic needs, and could not create any form of disposable income. Because of this down turn it has put china in a pickle, to rapidly create an internal economy. I would love to see if they do come up with new reform for the internal economy model, that would be a step to copy for all other countries.

The united states model was creating innovation and creating a very very favorable enviroment for entreprenualship sprite. Let see if China uses these steps or alternative.

 

[BanglaBhoot]

China Leaders Promise More Liberalization

By JASON LEOW

BEIJING -- China's Communist Party leaders, meeting Thursday to celebrate 30 years of market-driven economic strategy, promised more liberalization but warned that an economic slowdown threatened gains and created the need to guard against instability.

"Nothing can be done without stability," said Chinese President Hu Jintao, who is also head of the party, speaking in the Great Hall of the People. He said economic development was key to achieving "enduring peace and stability."

Mr. Hu mentioned the global financial crisis and its impact on China only briefly in a speech intended to mark the triumph of the country's policy of "reform and opening up," which began in 1978 under Deng Xiaoping.

China is now on track to become the world's third-largest economy. In 16 of the past 30 years, China has posted double-digit gains in gross domestic product, a broad measure of economic activity.
More

* Video: Beijing Celebrates 30 Years of Reform

Today, however, Mr. Hu and his government are faced with slowing growth and a population increasingly upset with job losses and a widening gap between rich and poor. The global financial turmoil of the past year has hurt China's exports, on which the economy depends. The country's GDP is likely to expand by just over 9% this year, down from last year's 11.4% growth. Economists predict growth next year of less than 8%, threatening greater unemployment and unrest.

"It would have been nice to celebrate the 30th anniversary with an economy that is doing well, but that's not what we have," said Deng Yufei, a furniture salesman. He said his monthly salary recently was halved to 5,000 yuan ($730) because of poor business conditions. "The best the Chinese people can do is face up to the challenges together. I can survive. So can China," he said.

Last month, China's government announced a four-trillion-yuan stimulus package that included ramping up spending on infrastructure construction for the next two years, saying the measure would boost economic growth at home and help support a slumping global economy.

On Thursday, China's National Development and Reform Commission, which sets industrial policy, said it was cutting state-set prices on gasoline by about 14% and diesel by about 18%. The cuts will help trucking companies, factories and others squeezed by high fuel costs. Some of the price cuts will be offset by a rise in fuel taxes, but consumers are expected to see significant savings.

In his speech, Mr. Hu made little mention of political or environmental overhauls, an issue for critics who say changes in those areas lag far behind China's economic progress. The president said only that China would stick to a social system and development path "chosen by its own people" and not bow to foreign pressure.

Mr. Hu's calls for "stability" appeared to indicate some anxiety about popular unrest. Across China, protests against local officials and poor labor conditions have gone on for years, but in recent weeks, worker protests have appeared to gain traction.

China Leaders Promise More Liberalization - WSJ.com