China's economic reforms were bottom-up, not top-down.
GUSTAV JONSSON | 12.26.2021 7:00 AM
(Photo 61887458 © Waihs | Dreamstime.com)
Apologists for the Chinese Communist Party (CCP) never fail to mention that it lifted hundreds of millions of people out of poverty—conveniently forgetting that a whole lot of that poverty was caused by the CCP's own policies since taking over the country in 1949. The party takes full credit for the country's economic rise, and Deng Xiaoping, its paramount leader between 1978 and 1989, is said to be its "Great Architect."
That claim has augmented the CCP's power. In the 1970s, it looked like the party might become yet another ramshackle regime. Today it is flush with self-confidence, using the country's economic prominence to throw its weight on the international stage.
But the CCP is not in fact the linchpin of modern Chinese economic success. Ordinary people, not Deng, began the reform of China's economy. Real change arose organically from below; it was not, contra CCP myth, the result of Deng's genius. Reconsidering that myth is vital, given that this unearned reputation for turning around the Chinese economy leads many people to misjudge the regime's capacities to this day.
The Chinese party line, alas, has fooled much of the world. For example, in 2017 the BBC effused that Deng created the "state-driven, managed economic system" that is responsible for China's economic growth; to mark the 40th anniversary of Deng becoming the party's paramount leader, The Washington Post gushed that "Deng laid out the foundations for China's success" and instituted policies that "unleashed the creative and entrepreneurial potential of the Chinese people."
Far from embarking on a new correct path, Deng was trying to turn back the clock. He wasn't out to create a new economic system; he sought to restore the planned economy that had existed before the Cultural Revolution. The program he tried to implement after 1978 was based on the "Four Modernisations" Zhou Enlai had introduced in 1963 to revive the countryside after Mao's disastrous Great Leap Forward. During the Cultural Revolution of 1966 to 1976, the party's radical elements encouraged renewed collectivization campaigns. Deng sought to reverse those extreme policies, not the planned economy itself.
Deng embraced reforms conservatively, after events on the ground had already made state restrictions obsolete. Upon taking control of the party, he endorsed private ownership of small plots but forbade dividing up collective land to individual households. It was only in 1982, four years after he took power, that households were officially allowed to contract production rights on collective land. He raised the price of grain that farmers compulsorily sold to the state by 20 percent—a substantial concession, but hardly evincing the kind of vision that the title "Great Architect" implies. Indeed, the year after the "great turning point" in April 1979, Deng and the party leadership ordered those who had left the communes to rejoin them.
The planned economy was undermined and subverted from below well before the communes were officially dissolved in 1983. Decollectivization occurred not because of Deng's vision but because ordinary people, under cover of the Cultural Revolution's chaos, left the communes. Several years before Mao died in 1976, it had become common for people to strike out on their own in search of economic opportunities. The party's leadership lamented that the countryside had "gone capitalist," but it couldn't reverse that trend. By 1980, half of all production teams in Guizhou province and more than half in Gansu were under household contracts. This system gave farmers secure tenures of collective farmland, which significantly increased both their productivity and health. One cadre in Anhui province likened household contracting, as reported by the historian Frank Dikötter in a 2016 article in The China Quarterly, to "an irresistible wave, spontaneously topping the limits we had placed…it could not be suppressed or turned around."
The Ironic Aftermath of Mao's Cultural Revolution
Deng was not changing history; he was swept away by it. As the historian Kate Zhou wrote in her 1996 book How the Farmers Changed China: "When the government lifted restrictions, it did so only in recognition of the fact that the sea of unorganized farmers had already made them irrelevant." Ordinary people, not Deng Xiaoping, resisted and reformed the planned economy.
To understand how the party's control of economic activity slipped, one must look to the history of the Cultural Revolution. Mao's "Great Leap Forward" of 1958–1962 had devolved into a Great Famine, killing tens of millions of people. While they starved, the party ramped up grain exports to fellow socialist countries in order to increase its international prestige.
This forced farmers to circumvent the state's orders—one had to lie, cheat, steal, smuggle, or trade on the black markets to avoid starvation. Apart from the party's loyal hacks, only the lucky or enterprising survived. In the early 1960s, even Mao had to acknowledge that the Great Leap Forward had failed. The Central Committee introduced a few paltry safeguards against extreme collectivization. Villagers were thus allowed to cultivate private plots, but only in their free time.
But Mao soon saw this as backsliding, and he launched the Cultural Revolution to secure his hold on the party. Revolutionary committees took control of China. The People's Liberation Army was ordered onto the streets, and the Soviet-Sino border conflict was used as a pretext to reassert control over the countryside. Private holdings were once more collectivized on a massive scale. But the party tore itself apart in the process; its organization was vitiated by factional infighting.
The Cultural Revolution broke the party's apparatus of control—it lost much of its capacity to coerce people's everyday behavior. During the turmoil, people took back some of their lost freedoms. They expanded private lots, left communes, sold produce for private gain, moved to the cities, and even opened underground factories. It is here that we find the true origins of China's modernization.
Successive waves of terror, starvation, and struggle sessions made many local cadres lose interest in upholding the party line. They instead focused on production; some even parcelled out every part of commune property to the highest bidder. Black markets flourished. Soon private firms ("collectives" only in name) sprouted up; enterprising villagers set up unauthorized brick factories and metalworks. The party leadership lamented that the countryside had gone capitalist, but there was usually little it could do about it outside major cities.
The Chinese People Chose the 'Capitalist Road'
The combined effect of millions of ordinary people engaging in trade and production on their own reshaped the Chinese economy. It took place on the sly, hidden from the party leadership. Had villagers organized in open defiance of party policies, it would've brought the full might of the state on their heads. Instead they outmaneuvered the state furtively. Cadres were helpless before massive non-cooperation; indeed, many authorities soon realized that they could live better if they forgot politics and embraced the profit motive. These bottom-up reforms gathered such momentum that the party leadership couldn't stop them.
Villagers established private firms and factories throughout the country. For example, the rate of industrialization in the countryside of Jiangsu province in the early 1970s far exceeded the rate of industrialization there under Deng. And it was these rural industries that fuelled China's GDP growth. Prosperity came not from the cities or from the state-owned enterprises, but from the countryside. The people who worked in these factories had often left the communes on their own initiative, not on party orders. When Deng became paramount leader in 1978, the silent revolution was already well underway.
Not only were factories established, but markets linked rich and poor provinces. And in the coastal province of Guangdong, traders revived overseas trading links, especially once restrictions were eased in 1972. Deng is said to have begun the process of opening up China, but as early as 1974, the amount of money reaching people in Guangdong from overseas was twice what it had been in 1965. Black markets existed everywhere, and although the state maintained rigid monopolies on several key products, almost everything was sold openly on the markets.
These markets benefited from the state's fixed prices. People were often willing to pay twice the fixed price for commodities, if not more, in order to get any at all. When the state lost its capacity to enforce restrictions on everyday commerce, private markets' higher prices gave producers an incentive to withhold their produce from the state. Thus crumbled major aspects of the planned economy.
In province after province, local leaders divided collective property to individual farmers who lost no time in transitioning from state-mandated monoculture. Although farmers were required to produce grain, many grew crops they could sell on private markets and then bought back their state-mandated grain quota with the profits. Others rented their land to work in industry, sending their earnings back to their families. This occurred regardless of the wishes of the Central Committee.
The party also lost control of people's movements. Villagers moved to the cities in search of opportunity, despite the state's efforts to keep them out. The household registration system was meant to keep track of people, but its agents were routinely outwitted. In Hubei province, the urban population grew by one-third of a million from 1965 to 1970, but by half a million in just the next two years. In Beijing itself, the public security bureau had to employ more than 10,000 officers to keep out unauthorized travelers and residents. Many lived insecure lives, constantly looking over their shoulder in fear of deportation, but they could often bribe their way to a residency permit. Around a fifth of residency permits in Hubei province were acquired by fraudulent means.
During the Cultural Revolution, parts of the party promoted the zealotry that had characterized the Great Leap Forward; in Dazhai village in Shanxi province, they claimed, farmers supposedly worked selflessly around the clock every month of the year. In certain provinces, private plots were collectivized much as they had been in the late 1950s. But other factions of the Central Committee cautioned against such excesses. Policies and counter-policies generated much confusion on the ground. No one could be sure of the "correct" party line.
This confusion gave local cadres considerable freedom to interpret the rules as they sought fit. Far from Beijing's watchful eyes, cadres bothered less and less with politics; more and more, they worked with villagers to establish black markets and decollectivize the countryside. In one village in Shaanxi province, a party report complained that "Not one Party meeting has been called, and not one of the prescribed works of Marx, Lenin and Chairman Mao has been studied." But as historian Dikötter wryly noted in his 2016 book The Cultural Revolution, telephone conferences for some production brigades "were not a realistic prospect, since the lines had been cut down and were used by the villagers to dry sweet potatoes."
Marxism and 'Great Man' History
Marxist theory sees history shaped through the interaction between material forces and social relations of production. But in practice, Marxists have often given themselves over to hysterical personality cults. Instead of rejecting the "Great Man" view of history, Chinese Marxism has succumbed to it. Mao thought that he could reshape the entire economy by inspiring the population into colossal feats of labor by sheer willpower. Deng never committed that blunder, but the fact that he is remembered as the man who almost singlehandedly put China on a new historical path is a testament to how seductive the Great Man thesis remains. And now Xinhua, China's official news agency, declared that "Xi Jinping is undoubtedly the core figure mastering the tide of history."
But neither Xi nor Deng mastered the tide of history. Deng recognized that certain changes were inevitable, but his reforms were little more than legalizations of already occurring practices that he was shrewd enough to claim credit for. Why the party should still be thanked for it is another matter.
When Deng ordered the tanks into Tiananmen Square, his soldiers and generals were ready to commit murder on the proposition that his leadership was in China's best interest. Had he not been forced to introduce reforms, the party's hold on power might have been much looser; indeed, it might even have collapsed. Ironically, the party might owe its survival to the very people it formerly condemned as "capitalist roaders"—the ones whose bottom-up reforms allowed the regime to survive.
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