Deng Xiaoping and the Transformation of China (128 page)

On June 12, three days after this major address, Jiang Zemin, the hopeful young leader, asked the master if he approved of the term “socialist market economy,” which clearly was intended to replace Chen Yun's “planned socialist market economy.” Deng, to Jiang's relief, said that he had liked Jiang's speech, adding, “Actually, Shenzhen has a socialist market economy.” Jiang had passed the test. Then, as if he were still the final decision-maker, Deng told Jiang Zemin to circulate his Central Party School speech for internal comment and, if the reaction were favorable, to use it as the theme for the 14th Party Congress. Not surprisingly, the reaction was favorable.

Chen Yun, the elder statesman of the cautious conservatives but also a disciplined party member who always supported party policy, accepted the unanimous Politburo decision to accelerate reform and opening. During his long winter vacation in Shanghai during the early months of 1992, Chen had observed the progress in Pudong and talked to the Shanghai officials overseeing its development. On April 26, 1992, the day before his return to Beijing, Chen, upon hearing reports from Shanghai Party Secretary Wu Bangguo and Mayor Huang Ju on Pudong, not only approved their efforts to enliven Shanghai but also told them to become even bolder.

About three months later, in his July 21 eulogy for his longtime colleague Li Xiannian, who had died a month earlier, Chen Yun acknowledged that he and Li Xiannian had never visited the SEZs, but he said they both acknowledged such experiments were necessary: “We must learn from our experience with them in order to make them a success.” He declared that he was impressed with Shenzhen's modern construction and with its great success in increasing exports much faster than imports. He added, “Economic development in China is much larger in scale and more complicated than in the past,
and many measures that were effective in the past are no longer applicable to the current situation of reform and opening up. The new situation requires us to learn more and to continuously explore and solve new problems.”
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Chen Yun had fought tenaciously to keep inflation low and to keep the planning system running smoothly. In 1992, thanks to his retrenchment policies since 1988, inflation was under control and exports were rising, overcoming the effects of the sanctions. By then, as his career was drawing to a close, Chen Yun acknowledged that China was entering a new and more complex era. In effect, he was giving his vote of confidence to the next generation of leaders, who would move China along a path different from that which he had pursued with such intensity.

By the summer, Deng had consolidated his victory. Local officials were allowed to make higher rates of investment, they could expand their foreign trade, and the experiments from the coast were extended inland. Deng could give more attention to other issues China would face in the decades ahead. On July 24, after reading through the drafts of the documents prepared for the forthcoming party congress, Deng raised several other issues to consider: the structure of rural life, his own personal role in China's development, the governing system, and national security.

On rural policy, Deng acknowledged that contracting down to the household and the abolition of communes had been necessary to motivate China's farmers and other rural workers. But as new agricultural technologies were acquired or developed, the tiny household farms could not afford to upgrade on their own; at some point, a larger collective organization would be required. Deng advised government leaders not to hurry this process but wait until individual farmers took the initiative to change the system.

In considering his legacy, Deng said leaders should not exaggerate his personal role, but describe it as it was. The process of developing reform and opening was so large and complex that no single individual or small group of leaders could think of everything. No one had thought deeply beforehand about relying on township and village enterprises, for example, yet they had become essential to China's development. China's success since 1978 had come from the experiences of large numbers of people. His own role was simply to try to put developments into an overall package and present them to a broader audience.

On the issue of governance and freedom, Deng said that the concept of “democratic centralism” was still the “most rational system” and should remain the country's basic governing principle. Leaders should find ways to
encourage people to express their opinions, but once a decision is made, people should follow the collective decision.

Deng also addressed the issue of China's security. He said that the balance of power among nations was undergoing great changes and that it was important to study these changes carefully. In the current situation, he believed that China could continue to reduce the size of its military, but it was important to raise the quality of military personnel and to be prepared if necessary to defend the country with increased fighting capacity.
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Deng read over Jiang Zemin's proposed address for the 14th Party Congress and approved it. The essence of the speech was the message from Deng's southern journey: accelerate reform and opening.

The 14th Party Congress, October 12–18, 1992

The 14th Party Congress featured the usual carefully prepared documents on present and future policy, but above all it was a public tribute to Deng and the success of his policies—in effect, his retirement celebration. The main address, Jiang Zemin's political report, was filled with praise for Deng and his policies, which were to set the course for China for the next five years—the building of a “socialist market economy.” To be sure, Jiang's speech reflected some compromise with the conservatives: instead of projecting growth of 10 percent per year as Deng had originally proposed, he set the goal of 8 or 9 percent growth. Still, this was a much greater rate than the 6 percent that Li Peng had announced earlier that year.
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Jiang not only praised Deng Xiaoping as the architect of China's reform and opening, he also elevated Deng's views into what would become “Deng Xiaoping theory”
(Deng Xiaoping lilun).
The informed public knew that Deng was a pragmatist, not an ideologue; unlike many top leaders in the Communist world, he had not considered it necessary to be a theorist to make his claim to the highest office. But for Jiang Zemin, elevating Deng's views to a theory strengthened their importance, making them comparable to “The Thought of Mao Zedong” and making it as easy to focus on the four modernizations as on making revolution.

Deng was credited with promoting the concept of “socialism with Chinese characteristics” and using the phrase “primary stage of socialism.” Deng's “theories” had accomplished exactly what Deng had hoped they would: they provided ideological justification for adopting pragmatic policies that supported the continued expansion of markets. Jiang also reiterated Deng's view
that it was not necessary to ask if something was called “capitalism” or “socialism.” Public ownership was to be the chief form of ownership, but efforts to allow state enterprises to become more independent economic units would continue. Shareholding was to be introduced on an experimental basis, and markets were to be expanded, not only for commodities but also for capital, technology, labor, information, and housing. Science and technology were to be considered not simply as a productive force but as the primary productive force.
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In short, the congress represented a ringing affirmation of Deng's fundamental views. Mao's fundamental beliefs—class struggle and continuing the revolution—had begun to weaken even before he had passed away and when he died, they died with him. By contrast, Deng's basic policies, which resonated with the economic needs and wishes of the people, continued to guide policy-making for decades.

At the congress, only three years after the Tiananmen tragedy, Jiang, like Deng, gave more weight to stability than to political reform. At the 14th Party Congress, Jiang did not even mention the possibility of separating the party from business enterprises and administrative structures as Zhao Ziyang had proposed during the previous congress. Like Deng, Jiang used harsh words to condemn the “counterrevolutionary rebellion” of 1989. Yet he maintained that the main threat came not from the right but from the left.
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Although Deng's spirit pervaded the 14th Party Congress, he did not attend the meetings until the concluding session. At that point, Deng entered the hall, went over to Jiang Zemin, and for some twenty minutes stood beside him while television cameras captured the images of the two together; Deng was passing the mantle to Jiang and the news was transmitted throughout China and to the world.
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Jiang Zemin had vigorously affirmed continued reform and opening, and now Deng was showing that he fully supported him. From that moment on, Jiang no longer had to look over his shoulder to see if Deng approved; the baton had been passed to the man whom Deng and others now referred to as the “nucleus” of the party's third generation.
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Shortly before the 14th Party Congress, Deng had pushed the Yang brothers, longtime allies who had joined him on the southern journey, to retire.
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Deng appointed their replacement, the seventy-seven-year-old Liu Huaqing, who was to follow the lead of Jiang Zemin, and of Jiang's ally Zeng Qinghong.
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Jiang Zemin had long considered the Yang brothers, who were senior to him, as rivals who constrained his behavior. Deng earlier told Jiang: “When Mao was in charge and spoke, the issues were settled. When I was in charge and spoke, the issues were settled. My mind will be at ease if when you speak,
the issues will be settled.”
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Deng was close to the Yang brothers, but for him a strong united national leadership was more important than personal friendship. He was doing everything he could to give Jiang the full authority he needed with a team he could command to provide effective national leadership.

Compared to Mao's chosen successors who were arrested or pushed aside shortly after his death, Deng's chosen successors continued to lead China for two decades. At the 15th Party Congress in 1997, Jiang Zemin was reelected for another term and served a full ten years beyond the two years remaining in the term of the deposed Zhao Ziyang. Despite some of Deng's misgivings before the spring of 1992, Jiang proved successful in uniting the country and guiding it during the very difficult years after the Tiananmen tragedy, when he faced skeptical citizens and restrictive foreign sanctions. He steadily pursued Deng's policy of reform and opening and proved to be an excellent political manager. Considering the uncertainties after the Tiananmen tragedy and the collapse of communism throughout Eastern Europe and the Soviet Union, Jiang's success in steering a steady course was a remarkable accomplishment.

In June 1992 the proven economic leader whom Deng had brought to Beijing in 1991, Zhu Rongji, became head of the newly established Economic and Trade Office, which emerged as the most powerful organization overseeing economic work.
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Later, at the NPC meeting in March 1993 when government appointments were announced, Zhu became first vice premier while Li Peng was reappointed premier. Because Li Peng had played a major role in clamping down on the June 4 demonstrations, as long as he was premier, Deng did not have to worry about the possibility of a reversal of the verdict on those demonstrations. Zhu Rongji was enormously successful in managing the economy, especially in overcoming inflationary pressures without causing a hard landing like that which had occurred in 1988–1989. At the 15th Party Congress in 1997, Zhu Rongji became premier.

The man Deng selected as the youngest member of the Standing Committee of the Politburo at the time of the 14th Party Congress, Hu Jintao, became the heir apparent after Jiang. At the time of the congress he was fifty years old, eight years younger than any other member. Hu managed to keep the support of other senior leaders and was later selected at the 16th and 17th Party Congresses to serve two five-year terms as head of the fourth generation of leaders. The people chosen by Deng as successors were thus confirmed by the three party congresses after 1992.

As Deng had planned, the 14th Party Congress also marked the end of lifetime appointments. The Central Advisory Commission, which had provided a formal channel for that special generation of revolutionary heroes to express their opinions—and so had eased their transition from active duty into retirement—was officially abolished. Not only Deng but the entire senior generation, including Deng's rival Chen Yun, stepped down. In the future, all appointments, including those of the highest-level political leaders, would be term appointments. The officials selected for other key positions in 1992 were selected according to Deng's personnel policy—that is, people who performed well in their posts would rise step by step to higher positions.

The Politburo members selected in 1992 were completely in tune with Deng's policies. The two government ministers selected for the Politburo were both concerned with foreign affairs and ready to promote continued opening to the outside—Foreign Minister Qian Qichen and Minister of Foreign Trade Li Lanqing. And before 1992, one Politburo member had represented an inland province, but in 1992 he was dropped and all five members of the new Politburo who had held provincial-level appointments were from the coastal provinces that had prospered under Deng's open policies: Xie Fei from Guangdong, Chen Xitong from Beijing, Wu Bangguo from Shanghai, Tan Shaowen from Tianjin, and Jiang Chunyun from Shandong. The officials from Beijing who remained on the Politburo were also all from coastal areas, including Qiao Shi, Yang Baibing, and Liu Huaqing, the three who had joined Deng Xiaoping in Zhuhai in crafting strategy during the southern journey. These senior leaders were old enough to remember the failures of the Great Leap Forward. They had risen to important positions in the early 1960s and had suffered during the Cultural Revolution. After 1978, they emerged as committed reformers, determined to devote their last years to overcoming the misguided policies and promoting modernization.