From Mao to Deng: from Crisis to Opportunity

1950s-1990s

Session 4

Table of ContentsI. China in Mao’s EraII. Deng’s Economic Reform & the Open Door

PolicyIII. Economic MiracleIV. China’s Foreign PolicyV. Conclusion

I-1. China in Mao’s Era

• Mao’s utopian idealism, war-oriented mentality, class struggle policy, economic fantasy and life-long rule put China into a crisis by 1976

A utopian society- an egalitarian society “Chinese have stood up from now on.” Land redistribution Stimulated economic development From each according to his ability, to each according to his

need, Marx

war-oriented mentalityThe Korean War from 1950-53The Vietnam WarSplit and military confrontation with the SSUR

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Class Struggle policyThe Anti-rightists campaign in 1957

Let One Hundred Flowers Bloom, One Hundred Schools Contend

550,000 intellectuals had been labeled as rightistsEconomic Fantasy

The Great Leap Forward in 1958 “Surpass Great Britain and catch up the US in 15

years”Famine for three years from 1959-61

Mao-the Cultural

Revolution

I-2. Consequences of the Cultural Revolution

1966-1976Red Guards: abolish of Old Customs, Old Culture, Old Habits, and Old Ideas

Economy at edge of collapse

Education to a virtual halt for almost 10 years.

Psychological scar for almost everyonealmost anyone with skills over that of the average

person was made the target of political “struggle” in some way.

Hundreds of thousands of people lost their lives.

I-3. China in 1976Zhou Enlai passed away on Jan. 8

Tiananmen demonstration in April 2 million people appeared in Tiananmen to

commemorate Zhou, resent unfair treatment of Zhou

Protest the Gang of Four directly and the Cultural Revolution indirectly

Worry about China’s future

Marshal Zhu De died in July

The Earthquake of Tangshan in July

A rumor that Mao lost the Mandate of Heaven wide spread in China

Mao passed away on 9/9/1976

The Cultural Revolution-a national

crisisHistorian Anne F. Thurston wrote that it "led to loss of culture, and of spiritual values; loss of hope and ideals; loss of time, truth and of life..."[98]

II. Deng Xiaoping Resumed his Power and Launched China’s Economic Reform in 1978

II-1. Major Shift in ThinkingDeng remarked that “a liberation of thoughts” was necessary and the leadership must “seek truth from facts” - Third Plenum of the Eleventh CCP Congress, Dec. 1978

Deng’s Pragmatism: “It doesn’t matter whether its is a white cat or a

black cat, it is a good cat as long as it catches mice”

Cross the river by stepping over stones (learning by doing)

II-2. Centrally-planned Economy Transformed into Market Economy

“ Planning and market forces are not the essential difference between socialism and capitalism. A planned economy is not the definition of socialism, because there is planning under capitalism; the market economy happens under socialism, too. Planning and market forces are both ways of controlling economic activity

We mustn't fear to adopt the advanced management methods applied in capitalist countries (...) The very essence of socialism is the liberation and development of the productive systems (...) Socialism and market economy are not incompatible

II-3. Agricultural Reform

The household responsibility systemOf the population of 120, 67 peasants diedA harvest larger than previous 5 years combinedPer capita income: 22-400 yuan

Township & village enterprises

II-4. BreakthroughMarket-determined price

Breaking the “iron rice bowl”

70% of China’s GDP is in the private sector (2010)

The economic reform and social transition led to the Tiananmen Square Confrontation (occupation of the Wall Street)

Movie: the Gate of Heavenly Peace

Discussion

• Is there any way to avoid the tragedy of the Tiananmen Square Incident when China experienced a radical social transition from socialism to capitalism?

Could Deng find an alternative solution?

II-5. Reform in Education

Resumed the College Entrance Examination in 1977, among 5.7 million candidates, only 273,000 passed.

III. The Open-Door Policy

• 15 years effort to enter the WTO• China’s tariffs dropped to 9.8%

from an average of 15.3% in five years

• Welcome international trade & foreign direct Investment

• Study abroad and welcome foreign students to China• Three “ten thousands”

IV. China’s Economic Miracle

1. GDP has grown at an annual average rate of 10 % for 30 years

2. China becomes world’s second largest economy in 2011

3. Largest exporter, second largest importer, second largest trading nation in the world in 2011

4. Foreign reserves: $2,447 billion (Mar 2010; ranked 1st).

China’s Progress in Technology

• Canton-Wuhan high-speed train at speed of 165 miles per hour; 4 hours from Beijing to Shanghai (600 miles)

• It now has the second largest R & D budget

• China’s GPS • Walk in the space

In 2007 China contributed more to global growth than the United States, the first time another country had done so since at least the 1930s.

Since 1978 400 million people have been lifted out of poverty in China—about 75 percent of the world's total poverty reduction over the last century.

Lawrence Summers has recently pointed out that during the Industrial Revolution the average European's living standards rose about 50 percent over the course of his lifetime (then about 40 years). In Asia, principally China, he calculates, the average person's living standards are set to rise by 10,000 percent in one lifetime!

In two decades China has experienced the same degree of industrialization, urbanization and social transformation as Europe did in two centuries - Newsweek, Issue 1, 2008

Newsweek, Issue 1, 2008

V. China’s Foreign Policy

Peaceful rise/development

To be a responsible great power

Created a peaceful world environmentNormalization with the US in 1979Normalization with the Soviet Union in

1989Visited Japan in 1978

Comparison between Mao’s War-oriented Mentality

& Deng’s Peace-oriented MentalityMao: China should make preparations “for an early world war, a major war and nuclear war.”

If you are not with us, you are against us.

Deng: China’s foreign policy in the 1980s, and in fact in 1990s, even in the 21st century, can be summarized in two sentences. China makes efforts to maintain world peace and oppose hegemony. China always belongs to the third world.”

If you are not against us, you are with us.

Deng Visited Japan in 1978

"China is striving to build itself into a modernized socialist power. We need a peaceful international environment and we are willing to develop friendly and cooperative ties with all countries. Despite different social systems in China and Japan, the two countries should and can coexist in peace and friendship."

Deng and Carter

Deng Xiaoping in the US

Deng and Mikhail Gorbachev

Conclusion

Deng’s Economic Reform: Transferred the Crisis into an Opportunity

Missions impossible” Accomplished in China

• Mao lost Mandate of Heaven and led China into a critical crisis in 1976.

• Reestablished the Mandate of Heaven through replacement of Communist ideology with pragmatism.

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• Centrally-planned economy transformed into market economy, with growth the fastest ever, made China a second largest economy.

• New rising power has not resulted in a war, territorial expansion, or a challenge to the world order, relations between China & other powers & neighbors better rather than worse.

Questions?

谢谢 !