01.11.2013 13:05
How the die was finally cast for economic change ? and subsequent decades of explosive growth ? by tenacious reformists
By staff reporters Hu Shuli, Huo Kan and Yang Zheyu
Reform Series: Part II
No one doubts that China's reform and opening campaign has been powering the nation's economic miracle for some 35 years. But in the late 1980s, the campaign's direction was seriously challenged. China was on the verge of backtracking. It came close to reviving old norms of the planned economy. And then something happened.
At a critical moment, the nation's reform path was reaffirmed.
A close look at the events surrounding that historic period are worth reviewing. They show how China's new generation of leaders as well as the general public can work against the odds, yet tap the power of economic, political and social reforms ? the reform ingredients China needs to usher in the next era of economic development.
Part I: Paving the Way
On the morning of October 12, 1992, then-General Secretary Jiang Zemin delivered a seminal policy address at the 14th National Congress of the Chinese Communist Party. When it came time to discuss economic reform, Jiang departed somewhat from the script.
"Now that we have gained a deeper understanding of market forces in practice," he said, "we should state explicitly that the objective of economic reform is to establish a socialist market economy that will further liberate and expand productive forces."
The speech delivered at the Great Hall of the People in Beijing was met with thunderous applause. And it was significant for setting, finally and from that day forward, a clear goal for economic reform. This goal laid the foundation for the following two decades of economic progress. Even 88-year-old reform pioneer Deng Xiaoping applauded Jiang's words on that day as he sat in front of a TV set.
The party had not always enjoyed such unity based on a single direction for reform. From the late 1970s onward, the political elite frequently and contentiously debated whether to choose a centrally planned or a market economy. At the time, the expression "market economy" was still regularly dismissed as synonymous with capitalism.
During the late 1980s and early '90s, the political upheaval then affecting the Soviet bloc and the ultimate collapse of the Soviet Union led to further uncertainty about China's future. Moreover, these events intensified the nation's ideological debates over capitalism versus socialism.
Deng Xiaoping had made it clear, particularly after 1989, that in his mind China would never turn back nor abandon the reform and opening campaign. But his determination was challenged by the popular thinking of that time.
For example, many people thought that market-oriented reform was directly responsible for problems such as corruption and inflation. And many advocated returning to the doctrine of a centrally planned economy, with supplemental market adjustments, as proposed during the party's 12th National Congress in 1982.
During intense debates at party policy meetings, certain contradictory objectives of the reform and opening effort were exposed. Planned economy and market economy factions could not find a way to resolve their conflict. In the end, a preliminary consensus was reached and all sides agreed that China should pursue a "system that integrates planning with the market."
Nevertheless, with that consensus the party took a step backward from a policy position that "the government regulates the market and the market guides enterprises," which had been set at the 13th National Congress in 1987.
In 1989, China's economic growth slowed to an annual rate of 3.8 percent. It was the slowest growth since 1978, and it spurred Deng Xiaoping to action. He called for the party to pay attention to economic matters, and on March 3, 1991, he held private talks in his home with then-recently appointed General Secretary Jiang Zemin and other Politburo members.
"Many nations in this world have fallen, and the root cause has always been poor economic performance," Deng Xiaoping told the leaders. He went on to voice concerns about the potential consequences of slow growth: Unless the Chinese economy expanded at above 5 percent, he warned, the party would face not only economic but political problems as well.
Based on these economic considerations, Deng Xiaoping advocated a pragmatic approach and called for pressing forward with the reform and opening campaign. He also set aside controversies swirling around the differences between socialism and capitalism.
How the die was finally cast for economic change ? and subsequent decades of explosive growth ? by tenacious reformists
By staff reporters Hu Shuli, Huo Kan and Yang Zheyu
Reform Series: Part II
No one doubts that China's reform and opening campaign has been powering the nation's economic miracle for some 35 years. But in the late 1980s, the campaign's direction was seriously challenged. China was on the verge of backtracking. It came close to reviving old norms of the planned economy. And then something happened.
At a critical moment, the nation's reform path was reaffirmed.
A close look at the events surrounding that historic period are worth reviewing. They show how China's new generation of leaders as well as the general public can work against the odds, yet tap the power of economic, political and social reforms ? the reform ingredients China needs to usher in the next era of economic development.
Part I: Paving the Way
On the morning of October 12, 1992, then-General Secretary Jiang Zemin delivered a seminal policy address at the 14th National Congress of the Chinese Communist Party. When it came time to discuss economic reform, Jiang departed somewhat from the script.
"Now that we have gained a deeper understanding of market forces in practice," he said, "we should state explicitly that the objective of economic reform is to establish a socialist market economy that will further liberate and expand productive forces."
The speech delivered at the Great Hall of the People in Beijing was met with thunderous applause. And it was significant for setting, finally and from that day forward, a clear goal for economic reform. This goal laid the foundation for the following two decades of economic progress. Even 88-year-old reform pioneer Deng Xiaoping applauded Jiang's words on that day as he sat in front of a TV set.
The party had not always enjoyed such unity based on a single direction for reform. From the late 1970s onward, the political elite frequently and contentiously debated whether to choose a centrally planned or a market economy. At the time, the expression "market economy" was still regularly dismissed as synonymous with capitalism.
During the late 1980s and early '90s, the political upheaval then affecting the Soviet bloc and the ultimate collapse of the Soviet Union led to further uncertainty about China's future. Moreover, these events intensified the nation's ideological debates over capitalism versus socialism.
Deng Xiaoping had made it clear, particularly after 1989, that in his mind China would never turn back nor abandon the reform and opening campaign. But his determination was challenged by the popular thinking of that time.
For example, many people thought that market-oriented reform was directly responsible for problems such as corruption and inflation. And many advocated returning to the doctrine of a centrally planned economy, with supplemental market adjustments, as proposed during the party's 12th National Congress in 1982.
During intense debates at party policy meetings, certain contradictory objectives of the reform and opening effort were exposed. Planned economy and market economy factions could not find a way to resolve their conflict. In the end, a preliminary consensus was reached and all sides agreed that China should pursue a "system that integrates planning with the market."
Nevertheless, with that consensus the party took a step backward from a policy position that "the government regulates the market and the market guides enterprises," which had been set at the 13th National Congress in 1987.
In 1989, China's economic growth slowed to an annual rate of 3.8 percent. It was the slowest growth since 1978, and it spurred Deng Xiaoping to action. He called for the party to pay attention to economic matters, and on March 3, 1991, he held private talks in his home with then-recently appointed General Secretary Jiang Zemin and other Politburo members.
"Many nations in this world have fallen, and the root cause has always been poor economic performance," Deng Xiaoping told the leaders. He went on to voice concerns about the potential consequences of slow growth: Unless the Chinese economy expanded at above 5 percent, he warned, the party would face not only economic but political problems as well.
Based on these economic considerations, Deng Xiaoping advocated a pragmatic approach and called for pressing forward with the reform and opening campaign. He also set aside controversies swirling around the differences between socialism and capitalism.
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