By He Qinglian on January
19, 2012
(translated by kRiZcPEc)
This January 18 marked the
20th anniversary of Deng Xiaoping's tour around southern
China (Southern tour). When the younger generations talk about the
economic reform that Deng initiated, they have completely no idea
that it almost went dead at the turn of 1980s and 1990s, and came
back to life only after Deng went to the south and gave a speech in
January 1992.
The healing effect of
the “Deng's Speech in his Southern tour (Speech in the South)”
Because of the impacts of
the “June-4th incident”, all across China, from north to south,
people were all fearful of politics and the economy was lackluster at
the beginning of 1990s. When Deng traveled around southern China in
Spring 1992, the atmosphere of dullness, disorientation, and anxiety
did indeed get swept away.
To this date I could still
recall the various news circulated both through public and private
channels in Shenzhen. At that time in China, the places most fearful
of the return of “birdcage economy (opening of economy with
restrictions)” were special economic zones (SEZ) like Shenzhen and
Zhuhai. The remarks of a top official that “households with savings
of 10,000 or more would be 'fixed' to bankruptcy” got widely
circulated even though it wasn't made in public. It was against this
backdrop that Deng Xiaoping, an octogenarian, traveled far and wide
to such cities as Wuchang, Shenzhen, Zhuhai and Shanghai in the space
of thirty-odd days from January 18 to February 21, 1992 and delivered
the “Speech in the South” to reassure the people that “economic
reform would speed up”, that SEZ would be here to stay and that
reform would be carried out in the inland regions as well. Tian
Jiyuan, then Vice Premier of State Council, made an internal speech
specifically on that topic. The message he conveyed was: “Some
insist that the country sticks to planned economy. Fair enough, I
suggest that we establish a planned SEZ, where coupons for food and
clothes are issued, and rationing is practiced, and let those
advocates of planned economy go there–let's see if they would want
to be there or not.”
After that, all across
China, trading emerged as a trend among the people, the intellectuals
hurriedly jumped on that bandwagon and became businesspeople
themselves. At that time, there was a catchphrase that everyone knew:
“Of the one billion population, nine in every ten people engage in
business, and the remainders are moving to that direction.” It was
after Deng's Southern tour in 1990s that the improvement in the
people's lives and an influx of huge amount of foreign investments
took place. After that trip, the reform and opening policy that Deng
personally started didn't just get adhered to for a decade without
interruption, it also laid a sound and solid foundation for the
apparent economic boom under the leaderships of Jiang Zemin and Hu
Jintao.
Without doubt, of his
contemporaries, Deng Xiaoping was the communist revolution leader who
went furthest. In comparison with Fidel Castro, a revolution leader
who is still alive, Deng's vision was all the broader and more insightful. But all great persons had their own historical limitations,
apart from this, Deng Xiaoping, the actual head of the Communist
Party of China of the time, set out to do anything with mainly the
core interests and the ruling rights of the party in mind. This made
it certain that his "reform and opening" policies were
laden with flaws, the deadliest of which was, in order that the
interests of CPC could be guaranteed, he left behind various channels
which led to corruption and the difficult issues of political reform
that must be dealt with today.
Merger of Planned and
Market Economy: the channel for the government to control the economy
For Deng Xiaoping, the
merger of planned and market economy was an expedient measure of
“Crossing the River by Feeling the Stones”. The consequences of
this, however, were it left behind institutional channels through
which the government and officials could plunder wealth and gave rise
to the conflicts between the people and the government that led to
high tension in society.
The so-called “planned
economy” , in short meant that the government would retain the
power of resource allocation. According to the institution designed
by the CPC government, all resources on the Chinese soil—in
particular those of farming villages, be they land, minerals, rivers,
or monuments—were, and still are, owned by the state, the
government had total control of the revenues generated from all this
public property. The way the government
control resources at the beginning of economic reform did not differ in essence from Mao's era,
yet there emerged a market that did not previously exist. Through the
market “power” could be cashed for money—the phenomenon
“marketization of power” that I mentioned in my book the Pitfalls
of Modernization. Beginning since the economic reform, the
advance of marketization was precisely what enabled the government
(officials) to cash through the market their right of public
resources allocation. This state of semi-administrative control and
semi-marketization made it possible that individuals inside the bureaucracy and those
dependent on it became upstarts, big or small.
With this institutional
channel of public resources control, anything from land to mineral
would be expropriated in the name of state without exception, so long
as the local governments realized their values. Since this involved
the living resources of the people, time and again across the country
incidents of forcible demolition, eviction, and land requisition
instigated by the governments occurred, leaving many villages with no
land, giving rise to over 100 million landless, jobless peasants who
had no place to go; numerous urban dwellers, too, had lost their
homes. These victims became the main body of 'mass incidents' in
today's China, and the tension between officials and the people has
been extremely heightened.
Social Progress
hindered by Politics
Another main point of the
“Speech in South” was about politics. Deng said, “[We] adhere
to the principle of "doing two jobs at once and attach equal
importance to each. Stick with the four cardinal principles and
oppose bourgeois liberalization...The key is to uphold the party's
basic line of "one center and two basic points" for a
hundred years without wavering.”
The two leaderships
succeeding Deng Xiaoping adhered to this stance vigorously, they even
lifted it to the height of “core interests of the state” and
demanded the international community to respect it. Yet it was
precisely this doctrine that allowed the government to steadily
strengthen its intervention in the economy, the doctrine even brought
forth the trend of local governments turning into interest groups.
Over a decade ago, I said that to reduce corruption government power
must exit from the economy. More than ten years had gone by, as the
government's presence in economy grew by the day, corruption became
ever more serious. Many flawed systems hadn't been abolished; on the
contrary, they appeared to be rooted even more deeply. The reason for
this, as my research indicated, was that the so-called government
organization necessarily comprised many officials, whose “homo
economicus” nature dictated that they had their own interests
needs. In the Chinese society where power is above the law, and where
supervision system is non-existent, officials could easily present
the interests of their own group as “public interests” as the
government has control over areas like politics, economy and public
opinion. The reality in China has proven that once a local government
became a self-serving political group catering for its own interests,
the officials would cease paying attention to public interests and
the future of the country. Instead, they would focus only on how to
gain through certain kind of channels; they may even seek to cater
for their own special benefits at the expanse of public interests and
the long term good of the country. This is the root cause that many
areas of the economy remain in the state of semi-administrative
control despite market reform has been carried out for more than
thirty years.
For China's political
interest group, it is most ideal that the state of semi-free market,
semi-administrative intervention is maintained. To go a step
further and start a democratic reform, or to move backward to Mao's era would
not suit their needs. To let the Chinese market become one that has
“total competition” in place, the government's regulatory power
over the economy would either be weakened or have to exit from
certain areas, and this means the capability the bureaucracy has in
“rent-making” and rent-seeking would diminish or disappear, their
“trading capital” would be gone. And if the country regresses to
Mao's era, the government would have the power to control the
economy, but there would be no market, and therefore the officials
could not cash what they have gained through rent-seeking with the
power in their hands. In sum, the current murky state of semi-market
and semi-administrative intervention makes it most convenient for
officials to fish in troubled waters.
In the history of the CPC,
only two persons had created grand political landscape. Mao Zedong
was one and Deng Xiaoping was the other. Mao Zedong's accomplishment
of “founding a republic” is still cherished by generations inside
the party, some even have a fond memory of the Cultural Revolution,
which the world sees as anti-civilization. Deng Xiaoping had two
merits. First, he emancipated the Chinese people from hunger and
destitution of Mao's era; second, he ended the seclusion state the
country was in and opened up its door. However, these merits of his
were largely compromised because of the “storm” more than two
decades ago, of corruption, of too wide a wealth gap, and of
miscarriage of justice. Yet I think the institutional flaws Deng
Xiaoping left behind were a result of his own limitations, he could
not have foreseen how those flaws would be played out today.
It often takes time for objective evaluation of historical figures and events to come about.
Perhaps what people of our time should do most would be to faithfully
and accurately record the genuine perception of the people in this
era.
