Modern China: The Fall and Rise of a Great Power, 1850 to the Present

In the late 1970s, China was a very poor country. The rising population, which reached 962 million in 1978, put a severe strain on food supplies. Average calorie intake was only marginally above the minimum survival requirements, particularly in rural areas. Some 250 million people lived in absolute poverty. Transport and infrastructure were primitive. Steel production was still low.

China lagged behind its East Asia neighbours, not just Japan but also South Korea. (1) Most galling was the progress of Taiwan. Helped by American backing and finance, the isalnd’s government had overseen the distribution of 864,583 acres of public and private land to 217,653 households in the 1950s. Rents were cut. Landlords were compensated for loss of property with bonds and shares in state companies; some moved into business, and invested the money in new firms (2)

From a predominantly agricultural economy, the Republic of China became an exporter of industrial goods, textiles and chemicals. As it evolved up the value added chain of manufacturing, annual growth hit 11 per cent between 1964 and 1973, with small and medium-sized enterprises playing a major role. By the 1970s, when expansion slowed but remained at a strong 7 per cent, the island was able to dispense with American aid. It built modern roads, railways, dams and electricity. National income per capita doubled in two decades. Services grew. Foreign investment flowed in. (3)

Politically, Chiang Kai-shek had kept a tight grip on power under martial law, backing the oppression of the native Taiwanese by the newcomers from the mainland. Manipulation of Kuomintang factions ensured the succession of the Generalissimo’s son, Ching-kuo, when the old man died in 1975. Chiang’s widow was kept at arm’s length by the new ruler, and some relaxation was permitted. An unofficial opposition made up of a network of associated personality-based groups was tolerated, and the share of seats in provincial assemblies won by non-KMT parties rose from 6 to 27 percent at elections in 1977, while such groups took 16-20 per cent of the vote for county seats and Taipei City Council. (4)

Deng felt he had to reject the political pattern across the strait, which would lead to full electoral democracy by the end of the twentieth century. But the economic message was unmistakable, as was the example of the booming British colony of Hong Kong beside Guangdong on the Pearl River delta. After the Cultural Revolution and the Great Leap, it was impossible to argue for a continuation of Maoist economics.

The first priority was the countryside, where 795 of the 980 million population lived. In 1976, the average annual cash distribution to each member of the agricultural communes was 12 percent less than it had been in 1973. Agricultural output had declined to account for only a third of GDP, compared to 50 per cent for industry. To stem the decline, policies were needed which would encourage the farmers to grow more. Private enterprise was introduced in Anhui, Henan, Shandong and Sichuan. Under the “household responsibility system,” land was contracted out to farmers, who were required to hand over a certain amount of output and to pay taxes, but could sell whatever was left over. (5)

To boost the rural revolution, state expenditure allocated to farming was increased to make it double the tax take from the countryside. The concentration on rice and wheat was reduced where other crops were more suitable, including those which earned bigger cash rewards. Grassland was turned to pasturage. The state payment for grain was raised by 20 per cent, and the official price for private sales went up 50 per cent. Prices for vegetable oil, meat and fish rose. This all fuelled inflation, but that was a cost the new rulers were ready to pay to jump-start the heart of the nation. (6)

In the past, a peasant had been part of a huge, amorphous commune or collective run by adres, who might know nothing of farming, and subject to orders from political bosses. Now, individuals could better themselves by their own effort and skills. It was the greatest change seen since the early Communist land reforms, and a frontal attack on everything done since the early 1950s. It was also stunningly successful.

There was initial resistance in some places, and in Hebei a reminder of how natural disasters could impede progress: drought between 1980 1982 brought big crop losses, and 14 million people needed emergency rations as some ate tree bark to survive. But by 1984, 98 per cent of agricultural households had adopted the new system. In the once-model commune of Dazhai in Shanxi, a woman cadre recalled how, in the past, she had intervened to stop people selling produce, but now ‘you can do anything you like, raise pigs to eat or sell, make cloth tigers and sell them at market.’ Progress in the countryside brought new transport links; bus routes overcame the traditional village isolation while rural railway station platforms were piled with goods waiting to be taken to market. The change was not only in the fields. Doctors, teachers and lawyers set up village practices. (7)

Farm output rose 8-10 percent a year, with a record harvest in 1984. Grain yields went from 2.5 tonnes per hectare in 1978 to 3.5 in the mid-1980s. Rural incomes increased by an average of almost 18 per cent a year between 1978 and 1984. In agricultural Guangdong, incomes doubled between 1978 and 1982 - and doubled again in the following six years. In Dazhai, the cadre and her husband were able to buy a Panda television set, which they thought was “magic with its sounds and images’. (8)

Piece rates were reintroduced after being dropped in the name of Cultural Revolution egalitarianism. Bonus payments also became more common. Under-employed workers, particularly in the state sector, found second jobs to supplement their income. To compensate for increased food prices, the wages of urban inhabitants were raised. Cities saw the growth of individual enterprises, often consisting of only one person or a couple. To absorb more than 2.5 million unemployed school leavers and youths returning after having been ‘sent down’ to the country during the Cultural Revolution, urban collectives were organized, making everything from furniture to zip fasteners, or offering catering and undertaking services. They set the wages of members and distributed profits after paying taxes. In the Hunan capital of Changsha, almost half the 23,000 school graduates went into such groups. (9)

The danwei work units remained in place in urban areas, allocating housing, jobs and benefits to their members. But greater labour mobility was allowed, even if this ran into opposition from units which did not want to lose members or their authority over them - they could exert pressure by withholding the dossiers officially required to gain a job elsewhere, though other employees might simply take on people without papers, whatever the regulations. China was still far from having a free labour market, with the hukou system of local registration officially tying people to their home districts. But, increasingly, workers were allowed to move as temporary migrants: by the end of the 1970s, there were estimated to be 10 million such ‘non-fixed’ workers; they had fewer rights than settled staff in state-owned enterprises, but they could seek employment in new and expanding sectors.

Despite all this change, public sector factories remained predominant for the moment, with CCP committees in plants having the last word. ‘The critical issue of giving enterprises decision-making power has not been dealt with,’ as an official document noted in 1984. Still, state enterprises began to seek profits, and appointed managers who might achieve that, though observers found the pace of work slow, with much standing around and cigarette smoking. Unions, which had been disbanded from 1966 to 1973, were re-established but acted as arms of the Party and management - the right to strike was contained in the constitution; however, it was stipulated that this must not interfere with production.

Cities began to lose their drabness. In Beijing, a two-year programme starting in 1980 built 150,000 flats while two ring roads were constructed to handle the growing volume of traffic. Consumerism started to return. By 1980, advertising was common. Some foreign goods could be found, though very few people could afford them. Overseas Chinese began to invest, earning patriotic points from the regime; Deng went in person to preside at the opening of a Beijing hotel built by a shipping tycoon from Hong Kong, and wrote the calligraphy for its neon sign. In Nanjing, a hotel financed with foreign money towered over low-rise buildings surrounding it. (10)

Markets thrived. The experience of the capital during a shortage caused by bad weather in 1979 was indicative of how things were changing - while the shelves of official shops were half empty, the thirteen officially permitted markets were filled with food on sale at higher prices. The Qianmenwei areas was lined with stalls selling porcelain, crab apples, roasted duck, musical instruments, lapel badges, brightly coloured tablecloths, plus pictures of Western film stars and bathing beauties showing off their legs.

Fortunetellers reappeared on the streets, as did peddlers of fake medicines. Hawkers in Tianjin became celebrated for clearing shops out of clothes, shoes and quilts as soon as they appeared, and selling them on at a profit. In Kaifeng, a Western visitor, who had last been in China during the Maoist era of austerity, was taken aback at the array of fresh vegetables for sale on the pavements, and by the way in which managers at the local cigarette factory paid bonuses to the most productive workers. (11)

Life became more relaxed, and enjoyable, within the limits of what was available. As class warfare waned, ‘capitalist-roaders’ and ‘big-landlords’ were able to reintegrate into society. In cities, family discipline lessened, and the number of divorce cases rose by 50 per cent in the first half of the 1980s, to 46 per 10,000 population. A Beijing resident wrote indignantly to newspaper of gangs which traded jackets, trousers, watches, cameras, bicycles, gold and currency, as well as ‘photos of nude women and foreign sex magazines.’

Percy Cradock, who had returned to Beijing as the British ambassador, recalled seeing ‘louche young men in T-shirts and sunglasses [who] belonged to a new, non-revolutionary world. The girls had taken to high heels, smart dresses, curls and makeup. Even the PLA were out of their workmanlike fatigues and arrayed in elaborate uniforms, with much gold braid. There was Western-style dancing, Taiwan and Hong Kong-run restaurants and inns and even agencies providing cooks and nannies for better-off familes.’ (12)

Shortages were still frequent for everything from bicycle tyres and matches to sewing machines and plastic shoes; a saying had it that China’s light industry was ‘like a train entering a station, making a lot of noise but moving very slowly.’ Big centres such as Beijing, Shanghai and Guangzhou were best supplied. Luxuries were generally unavailable; women’s stockings were coarse - most wore socks. The closest thing to a glossy magazine, the monthly “China Pictorial,” was aimed at foreigners.

But in one area of life, state intervention was stepped up as the regime tried to impose a one-child policy. China already had a high legal minimum age for marriage - twenty for women and twenty-two for men. Permits were required to give birth. There had been sterilization drives. But the population still rose. In 1979, a one-child limit was implemented in cities - a second child was allowed in the countryside after a gap of five years. The urban restriction was backed by an array of fines and punishments, and a mass movement conducted in the manner of Maoist days. A propaganda barrage was launched, with ‘struggle sessions’ against parents who had two or more infants, and the dispatch of medical teams to conduct abortions and sterilzations, and fit contraceptive devices. (13)

The limitation led to an emphasis on having boys. For farming families, in particular, girls were unwelcome. They were regarded as less fitted for work in the fields; they ould marry outside the family and support their families-in-law, rather than their own parents. So there was an upsurge in abortions of female foetuses an female infanticide. In 1981, when the population reached a billion, there were 108.5 males for every 100 females in China; by 1985, this had risen to 111 and to 114 by 1989.

(1) I am indebted to Professor Robert Ash for this and other rural statistics. Robert Ash and Y.Y. Kueh, “The Chinese Economy Under Deng Xiaoping (Oxford: Clarendon press, 1997), p. 253. Jiangqan Yu in Bui, p. 34.

(2) Hill Gates, “China’s Motor. A Thousand Years of Petty Capitalism (Ithaca, NY: Cornell University Press, 1996), pp 218-21.

(3) Sihad Selya give comprehensive accounts of Taiwan, post-1949. Nathan, p. 132. YongpingWu, ‘Rethinking the Taiwanese Development State,’ in CQ, March 2004.

(4) Jeremy Taylor, ‘The Production of the Chiang Kai-shek Personality Cult 1929-75,’ CQ, March 2006.

(5) Ash and Kueh, p 13. Tang Tsou, “The Cultural Revolution and Post-Mao Reforms (University of Chicago Press, 1988), pp 193-8. Ruan Ming, “Deng Xiaoping: Chronicle of an Empire (Oxford: Westview Press, 1994), chapter 5.

(6) Robert Ash, CQ, December 2006.

(7) Edward Friedman, Paul Pickowicz and Mark Sedden, “Chinese Village, Soviet State” (New Haven, Yale University Press, 1991), pp. 245, 249, 258. (Dazhai) Lijia Zhang and Calum MacLeod, “China Remembers” (Oxford University Press, 1999), pp 198-93.

(8) Rohwer, p 127 (Guangdong) Yefi Yang in Bui, p 80 (Dazhai) Zhang and MacLeod, pp 189-93.

(9) Peter Nolan, “China’s Rise, Russia’s Fall” (London: Macmillan, 1995), p 215. Charlotte Ikels, “The Return of the God of Wrath” (Stanford University Press, 1945), pp 210-14. Bonavia, p 9.

(10) China Daily Archive, 7 June 2007.

(11) David Bonavia, “Verdict in Beijing” (London Burnett Books, 1984), chapter 12. (Visitor) Roy Rowan, “Chasing the Dragon” (Guilford, Conn.: The Lyons Press, 2004), p 229. Joseph Cheng, “China in the Post-Deng Era” (Hong Kong: Chinese University Press, 1963), p 599.

(12) Richard Evans, “Deng Xiaoping” (London: Hamish Hamilton, 1993), p 257. Percy Cradock, “Experiences of China” (London: John Murray, 1999), pp 151-2.

(13) Delia Davin, Times Higher Education Supplement, 16 March 2007. Tyrene White, pp 1-4.