China's stalled transition

Li Datong
19 February 2009

This year marks the thirtieth anniversary of China's reform policy towards opening up the economy, whose formal launch is traced to a party meeting in Beijing on 18 December 1978. It is an occasion for both government and the people to look back. It is unfortunate, then, that official reviews are full only of praise for the policy, with no mention made of errors and failures. The successes of reform then become proof of the legitimacy of Communist Party rule.

Li Datong is a Chinese journalist and former editor of Freezing Point, a weekly supplement of the China Youth Daily newspaper

Among Li Datong's articles in openDemocracy:

"Xiamen: the triumph of public will" (16 January 2008)

"China's soft-power failure" (16 May 2008)

"China and the earthquake" (2 June 2008)

"China: after the quake, the debate" (16 June 2008)

"China's leaders, the media, and the internet" (4 July 2008)

"China's digital nationalism: Kung Fu Panda under fire" (16 July 2008)

"Death in Shanghai, law in China" (15 September 2008)

"China's power, China's people: towards accountability"
(29 September 2008)

In contrast, popular discussion is more enlightening. China's academics, for example, debate how many of these past thirty years actually experienced "reform". The answers differ: some experts identify three periods of reform, others two, but none claims that reform has been constant across these decades. There was, for example, no reform worth the name between mid-1989 and Deng Xiaoping's "southern tour" of 1992. At the time, anti-reform forces were at their peak; they could have ended the entire process had Deng not come out of retirement to attack his former allies, declaring that those who failed to reform would fall from power.

In general, there is a consensus of popular opinion that China's reform has been limited to the economy, and that it had the core aims of shifting from a planned to a market economy and integrating with the global economy. The development of this reform process can be divided into two stages, each having different motives and benefiting different groups.

The two stages

The first stage of reform was powered by the desire of the people to escape poverty. Indeed, the overriding impetus of reform in this period - and impetus is an essential precondition of any reform - can be summed up in one word, for both rural and urban populations: poverty. Nobody wanted to stay poor.

There was another fuel for reform, however: the party's sense of impending crisis. The party's leaders had come to realise that the gap between China and the western developed nations presented a threat to the very legitimacy of their system (and not simply to its claim of superiority over capitalism), and that China was at risk of losing its place among the community of nations. The governing clique came to accept Deng's view that a failure to reform would lead only to a dead end.

Today, Chinese academics of a liberal persuasion are unanimous: the whole of Chinese society profited from the first decade of reform, with the only opposition coming from a small number of party officials who cleaved to their traditional ideology.

The second stage of reform was launched in 1992 by Deng's tour of southern China, and continued until China's formal accession to the World Trade Organisation (WTO) in 2001. Its impetus came from both government and business, forces that combined to promote reform and became interlocked in the process. Government officials were promoted on the basis of their economic performance, while businessmen initiated a wholesale takeover of resources.

But farmers and many workers found themselves gradually marginalised, and their interests suffered. This second period of reform resulted in rapid economic growth, but also increased social stratification and a concentration of wealth in the hands of government and the rich. There was a clustering of new interest groups, with 90% of wealth gradually coming under the control of a powerful 1% of the population.

When reform began in 1979, the state (or "collectives") owned all industry and fixed the prices of 97% of commodities. By the late 1990s, less than 30% of businesses were state-owned, and the market set the prices of 97% of commodities. Those figures hold true today. As far as the key economic factors of business ownership and market pricing are concerned, reform ended with the 1990s and WTO entry.

Among openDemocracy's recent articles on China:

Robert Barnett, "Tibet: questions of revolt" (4 April 2008)

Wenran Jiang, "Tibetan unrest, Chinese lens" (7 April 2008)

Wang Lixiong, "China and Tibet: the true path" (15 April 2008)

James A Millward, "China's story: putting the PR into the PRC" (18 April 2008)

Chang Ping, "Tibet: looking for the truth" (8 May 2008)

Emily Lau, "Tiananmen, 1989-2008" (4 June 2008)

Jeffrey N Wasserstrom, "Tiananmen's shifting legacy" (26 June 2008)

Kerry Brown, "China on Olympic eve: a globalisation of sentiment" (10 July 2008)

Jeffrey N Wasserstrom, "China's long march to modernisation" (7 October 2008)

Kerry Brown, "China's nervous transition" (22 September 2008)

Kerry Brown, "China in 2009: a year for surprise" (14 January 2009)

Wei Jingsheng, "China's political tunnel" (22 January 2009)

The next process

Is China still reforming? It is hard to say. If it is, what is the main impetus of reform today? The finding of a survey by the China Institute for Reform and Development (CIRD) of central and local party and government officials with an academic background, academics at universities and research institutions, and other experts (including businesspeople) is interesting in this respect: 84% of respondents agreed that "current reform lacks the needed consensus, is lacking or missing motivation, and is seriously impeded by vested interests." A closer look at the purposes of reform, then and now, suggests that this judgment might be far more widely shared.

At the birth of the reform and opening-up process in 1979, the party set the aim of quadrupling GDP and achieving a good standard of living for China's people by 2000. The goals were thus limited to the economy, and not altogether clear. But this was the first time China had opened its doors and made such changes: both government and society were finding their way in unfamiliar territory, and it is understandable if the elements of a modern state were not fully understood. Thirty years on, GDP has multiplied by a factor of ten rather than just four. Yet the economic crisis engulfing the world has finally revealed that China's people lack purchasing power. The country is rich, but its people remain poor - that is also the outcome of the broken reform of these decades.

The party's general-secretary Hu Jintao made a new commitment in a statement marking the December 1978 anniversary. He promised that by 2021, China will have "a more affluent, well-off society"; and by 2049 "build a rich, strong, democratic, civilised and harmonious socialist modern country" Are these goals able to inspire the people? Perhaps three decades ago they might have been, but not now. They are too vague; society needs concrete targets and timetables.

What, for example, does "democratic, civilised" signify here? The CIRD survey also asked respondents to identify the most important goal for the next stage of reform; 67.21% opted for the "comprehensive start of political-system reform, and progress in democratisation". It is not clear that China's ruling party is considering such options. But the very suggestion raises a number of questions:

▪ when will China's constitution become more than a mere piece of paper?

▪ when will Chinese people be able to rely on the constitution to defend their rights in court?

▪ when will Chinese people be able to vote for government leaders - even if it is just a county head?

▪ when will China's taxpayers be able to oversee the government's use of their money?

▪ when will there be an end to the government's spending of billions on wining and dining; overseas travel; luxurious vehicles and extravagant offices?

▪ when will the people be able to criticise the government or officials without fear, or the risk of being accused of attempting to overthrow the state?

There are more such questions, which bear on the point that this "civilised" nation does not enjoy a constitutional government. China's society is still highly polarised (between urban and rural, rich and poor); the country is still ruled by an authoritarian one-party regime. The crises of government China faces stem from these facts. Reform is stalled, and social discontent is increasing. Nobody knows what 2009 will bring China.

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