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a gigantic social systems engineering project, which involves straightening out the relationships between the Party and the government, power and judicial organs, mass organizations, enterprises and institutions, and between central, local and grassroots organizations; it concerns hundreds of millions of people. This is an arduous and protracted task. [423]
The reform project has usually been seen in narrowly economic terms, as if it had few political implications. In fact Deng’s project involved not just an economic revolution, but also a largely unrecognized political revolution, which entailed a complete overhaul of the state, both in its modus operandi and its perso
Almost from the outset, economic growth rates were transformed from the 4–5 per cent of the Mao period to an a
From the outset, Japan and the Asian tigers had been an important influence on China ’s economic reform. [429] These countries shared with Deng a pragmatic and non-doctrinal view of how to conduct economic policy. It was recognized, however, that none of them could, in themselves, provide a suitable model: the conditions, especially those flowing from China ’s enormous size and diversity, were simply too different. In the era of globalization that began around 1980, moreover, it was no longer possible for China, unlike Japan and the Asian tigers earlier, to grow its industries and companies behind a wall of tariffs until they were ready to compete in the international market. A further complicating factor was that China, as a Communist country, was still viewed with a certain amount of suspicion by the United States: as a result, its entry into the WTO took fifteen years and was the subject of the most detailed agreement ever made with any country — contrasting strongly, for example, with the far less demanding terms required of India a few years earlier. China, for a variety of reasons, had to invent its own way. [430]
Although China enjoyed nothing like the intimacy of South Korea and Taiwan’s relationship with the United States, it recognized the crucial importance of wi
The approach of the Chinese leadership, following Deng’s emergence as the paramount leader, had been built on caution and pragmatism, notwithstanding the obvious radicalism of the reform process. They eschewed shock treatment and grand gestures. Although drawing on elements of neo-liberalism, they resisted the Washington orthodoxy and instead pursued a very home-grown approach. [433] They were painstakingly meticulous in the way that they sought to introduce reforms by a gradual process of constant testing and trial and error. The state, in the time-honoured Chinese fashion, remained at the heart of this process of reform, even though the latter was to involve a drastic contraction in its economic role, with the share of government revenue decreasing from around one-third of GDP in 1978 to 17 per cent in 2005. [434] For the Chinese leadership, the objective of economic reform was never Westernization, but rather a desire to restore the Party’s legitimacy after Mao through economic growth, [435] and thereby to build a strong nation and state. [436] Political stability was accorded the highest priority. ‘[China ’s] modernization,’ Deng stated, ‘needs two prerequisites. One is international peace, and the other is domestic political stability.’ [437] The disintegration of the Soviet Union after 1989 only served to reinforce Deng’s belief in the vital importance of economic reform, an area in which the Soviet Union had palpably failed, and the need to avoid destabilizing political reforms, a trap which they saw Gorbachev as having fallen into. [438] The Asian financial crisis in 1997- 8 similarly confirmed the Chinese leadership in its aversion to shock treatment: that China should move with great caution in its financial reform and resist any premature liberalization of the capital account that would allow the free movement of capital into and out of China, and consequent floating of the Chinese currency, the renminbi (also called the yuan), which might lead to speculative attacks on the currency and the consequent destabilization of the economy, as happened to South Korea, Thailand and Indonesia — to their great cost — during the Asian crisis. [439] (As a consequence, the renminbi remains, unlike the dollar, yen and euro, for example, a non-tradeable currency.)
[423] People’s Daily, 1 July 1987, quoted in ibid., p. 186, also pp. 165, 178, 184.
[424] Zheng Yongnian, Discovering Chinese Nationalism in China: Modernization, Identity, and International Relations (Cambridge: Cambridge University Press, 1999), pp. 31-2.
[425] Zheng Yongnian, Will China Become Democratic?: Elite, Class and Regime Transition (Singapore: EAI, 2004), p. 34.
[426] Zheng Yongnian, Discovering Chinese Nationalism in China , pp. 31-2.
[427] Wang Zhengyi, ‘Conceptualising Economic Security and Governance: China Confronts Globalisation’, Pacific Review, 17: 4 (2004), p. 526; Gittings, The Changing Face of China, p. 252; Zheng Yongnian, Will China Become Democratic?, p. 241; Zhao Suisheng, A Nation-State by Construction: Dynamics of Modern Chinese Nationalism (Stanford: Stanford University Press, 2004), p. 217.
[428] Gittings, The Changing Face of China , p. 254.
[429] Deng offered his pragmatic support for the model of the East Asian developmental state; Zhao, A Nation-State by Construction, p. 30.
[430] Peter Nolan, Transforming China: Globalisation, Transition and Development (London: Anthem Press, 2005), pp. 185, 187-8.
[431] Zhao, A Nation-State by Construction, pp. 142-7, 242. Also, Shi Anbin, ‘Me diating Chinese-ness: Identity Politics and Media Culture in Contemporary China’, in Anthony Reid and Zheng Yangwen, eds, Negotiating Asymmetry: China’s Place in Asia (Singapore: NUSPress, 2009,), p. 16.
[432] Wang Hui, China’s New Order (Cambridge, Mass.: Harvard University Press, 2003), pp. 96-124; interview with Wang Hui, Beijing, 23 May 2006; interview with Fang Ning, Beijing, 7 December 2005; and Wang Xiaodong, ‘Chinese Nationalism under the Shadow of Globalisation’, lecture at the London School of Economics and Political Science, 7 February 2005.
[433] Da
[434] Angus Maddison, Chinese Economic Performance in the Long Run, Second Edition, Revised and Updated: 960-2030 AD (Paris: OECD, 2007), pp. 64, 89.
[435] Wang Gungwu, ‘Rationalizing China’s Place in Asia, 1800–2005: Beyond the Literati Consensus’, in Reid and Zheng, Negotiating Asymmetry, p. 5.
[436] Gittings, The Changing Face of China , p. 186.
[437] Zheng Yongnian, Will China Become Democratic? p. 33.
[438] Ibid., pp. 238-9.
[439] Yu Yongding, ‘Opinions on Structure Reform and Exchange Rate Regimes Against the Backdrop of the Asian Financial Crisis’, unpublished paper, Japanese Ministry of Finance, 2000, pp. 1-11; Wang Yizhou, ‘Political Stability and International Relations in the Process of Economic Globalisation — Another Perspective on Asia’s Financial Crisis’, unpublished article, Beijing, 2000, pp. 1-13; and Wang Zhengyi, ‘Conceptualising Economic Security and Governance: China Confronts Globalisation’, Pacific Review, 17:4 (2000), p. 542.