By Kristian Whittaker
Last October's Fourteenth Congress of the Chinese Communist Party bore testimony to the continuing influence of the retired, unelected but still "paramount" leader Deng Xiaoping. Supporters of his policy of faster and wider economic reform emerged victorious as China's first congress since the collapse of Stalinism in eastern Europe and the former USSR unanimously endorsed a report inspired by Deng's internally distributed Document Four.
With more than half of the 14-member Politburo resigning, the congress confirmed the growing power of a relatively younger generation of supporters of faster-paced reform among party/state technocrats, economists and military officers.
The losers, inaccurately labelled "conservatives" in the Western media (Deng and his supporters are supposedly the "economic liberals"), are mainly those who, while supporting wide-ranging reform in principle, are concerned at the pace. They are to be found muttering darkly in the official Chinese press about the unabashedly capitalist, open-market nature of the reforms, and cautiously deriding Deng's "socialism with Chinese characteristics" — a slogan providing a facade behind which all factions can unite for public purposes.
Deng's victory was wonderfully smoothed by the horror with which the party elite watches the unfolding situation in the former Soviet bloc. For different reasons, similar misgivings have gripped many non-party members, appalled by the social turmoil if not by the demise of Stalinist governments.
Such alarm is reinforced by a party campaign emphasising dongluan (social turmoil and chaos) in the former Soviet bloc, a campaign that strikes a particularly deep chord among educated layers with bitter memories of China's own dongluan, the "Great Proletarian Cultural Revolution".
With the last vestiges of the CCP's moral authority in tatters after the Beijing massacre, all the main leadership factions now (publicly, and for the time being) support Deng's economic xiaokang strategy, designed to raise most Chinese to a level of material wealth regarded as "comparatively well off" by international standards.
This approach appears to have given the party leadership some breathing space, which it hopes will extend well beyond Deng's final departure. Crucial to this strategy is a continuation of
extraordinary annual growth rates of 9-10%, which have attracted the support of those, in and out of the party, who are busy enriching themselves on Deng's gravy train, or who would like to do so.
The Deng supporters' economic approach has been accompanied by increased political repression, including book bannings and more power for public security organs and the courts. Nor have public security officials been backward in arresting supporters of heping yanbian — peaceful evolution towards political change driven by economic reform, an approach supported by many Western liberals.
Prior to the congress, differences between the major leadership factions were expressed mainly as alternative proposals for economic growth rates. Democratisation of party and state, widely supported within the party before the 1989 crackdown, were not mentioned.
Early leadership opposition to Deng's faster-pace proposals came from figures such as Chen Yun and Li Peng, who expressed concern about the extent and rate of expansion of open-market regions, share floats for "competitive" state-run enterprises and proposals to dismantle "inefficient" ones.
Supporters of slower-paced reform said Deng's pace might lead to state planners losing control in a period when there is a risk that unemployment and inflation could rise rapidly. In 1988-89, both these factors were important in a rise of public dissatisfaction with the leadership.
Any such social instability would come at a time when considerable political-economic control is being devolved to regional and local authorities, and the party's remaining ideological underpinnings are being dumped.
However, Deng's supporters appear secure while China's economy is growing at a stupendous rate. In the first half of 1992, growth was up 11% on the same period in 1991, while industrial output was 18% higher. Exports grew by around 15% in 1991.
The southern provinces, home of the Special Economic Zones have led in these figures. Guangdong province experienced real GDP growth of 13% in the first half of 1992, together with industrial growth of 26%.
Meanwhile, Western economists, foreign investment firms and many fast-pace reformists continue to press for "revitalisation" — a restructuring of state enterprises to subject them to market forces.
Many workers realise reform of the state-run enterprises will smash the "three irons" (iron rice bowl, iron armchair and iron wages), China's main guarantees of living standards and working conditions. In 1992, Labour minister Ruan Chongwu announced that "revitalisation" of state-run enterprises would involve a generalised employment contract to create a more "mobile" work force.
Generally, Chinese workers are divided into three categories:
- Permanent workers, who are assured of their job and income for life.
- Contract workers, whose condition is less stable, but who can often climb to permanent status.
- Temporary workers, who can be dismissed at any time, and whose social welfare is usually not guaranteed by the employer.
The Deng approach involves a massive expansion of contract labour, but by April 1992, only 14.6% of workers in state-run enterprises were on contract. "85.4% of staff and workers are still clinging to their three irons and even girls do not go steady with a lad who is on a labour contract", moaned one Hong Kong economist.
However, by May 1992 the "three major reforms" (employment, salaries, social security) were beginning in 40,000 enterprises, affecting about 17 million staff and workers, and the government was pushing to spread it further.
The contract system will dramatically reduce the size of many work forces, a process aided for the present by large numbers of workers taking long leaves of absence to try to set themselves up in business. The government is also encouraging enterprises to set up early retirement and training schemes.
Elderly central planners such as Chen Yun and the recently deceased Li Xiannian have expressed fear of the political repercussions of an industrial work force cut loose too quickly from the relatively comprehensive welfare system offered by the state enterprises. They support a "bigger birdcage" approach: a further decentralisation of government and a larger role for market forces within an overall structure of central planning and "socialist ownership".
Those favouring a faster pace, such as Jiang Zemin and Zhu Rongji (leaders of the Shanghai Reform Group), deny that national industries must be protected at all costs, and have sided with Deng in calling for opening wider, if not entirely unhinging, the
door of the national birdcage. However, it is likely in the short term that the door will be opened wide only in some areas, and then at different rates.
Leading up to the party congress, Deng Xiaoping, responding to debate on the political nature of his reforms, declared that a "market economy could neither be called capitalist nor socialist". Wan Li, recently retired chair of the National People's Congress Standing Committee, emphasised later that Deng's declaration had "suddenly enlightened our thoughts ... Our main trend in the reform of the economic system is to get rid of a highly centralised planned economy and to develop a socialist market economy."
What does the cementing of Deng's program mean for the future? While the yet unknown reaction of workers to the dismantling of the "iron rice bowl" will be crucial, what of the future of the CCP?
"The transformation of the privileged party bureaucrats into a bureaucrat-comprador bourgeoisie is already under way", writes former People's Daily journalist Liu Binyan in a recent issue of New Left Review. Expelled from the party several times since he first joined in 1944, Liu was often mobbed by crowds of supporters around 1987 because of his writings against bureaucratic privilege and social injustice.
"The answer to the mystery of why 'communism' does not worry about 'capitalism' is simply that the group with the prime vested interest in economic reform consists of the leaders and their families. Using legal or illegal means, they obtain access to the state treasury and therefore control an immense amount of social wealth ...
"The combination today of national and foreign capital in the hands of those who, as officials, are 'public servants', and yet who, as businessmen, are at once in search of personal gain, is by far the most serious form of widespread corruption, and a source of mass discontent and therefore of potential crisis. I would add, though, that as reform progresses it seems likely that social forces will have to realign, and that a splitting up of the party is likely".
Liu says a "new backbone" of Chinese society has emerged, comprising workers on the state payroll and the "thinking generation", those in their late 30s to late 40s whose formative years included the Cultural Revolution. Many of these people started as Red Guards but later fell into disfavour for opposing purges and social dislocation. They lived with the peasants and workers and championed the cause of the least privileged, and from among their ranks came many of China's best
writers, reporters, film makers, entrepreneurs and party cadres, as well as important elements in the administration and army. Then there is a younger generation within the party itself.
The "outlook and way of thinking" of this new backbone is "quite different from ... the veteran leaders, and they are much better informed about the outside world and new trends. Some are tempted by the West, but those familiar with the realities of life in China and who retain a belief in the original impulse and ideals of the revolution, and yet are themselves committed reformers, remain sceptical about a 'capitalist' solution with its demand for 'full- scale privatisation'. Both groups, from their differing perspectives, oppose economic reform that in essence leads towards 'capitalism with Chinese characteristics' — the combination of indigenous bureaucracy and imported capitalism — and advocate instead political reform, beyond Deng's program, directed toward democracy".