The liberation of China from the Guomindang in 1949 and the ascendancy of Chairman Mao Zedong in the newly formed People’s Republic of China (PRC) heralded the start of a period of socialist transformation that was to last thirty years. In this period China, “progressed from a backward, predominantly feudal, agricultural base to a [considerable] level of industrial sophistication” (Breth, 1977, p1).
However, since his death in 1976 the development program used by Mao has, supposedly, been radically altered; archetypal socialist characteristics (rural collectivisation, central planning, state control and ownership of industry, self-reliance and isolationism etc. ) being replaced by capitalistic strategies implemented to realise the Four Modernisations (e. g. the role of the market, private ownership of the means of production and an increase in foreign trade etc. ). The scale of Deng Xiaoping (Mao’s successor) policy ‘shift’ has resulted in western analysts calling this new era, ‘The Reform Period’.
But does, as use of the word ‘reform’ suggests, this shift represent a distinct break with the policies of Mao, or is there some degree of continuity between pre- and post-1978 Chinese policy? It is this question which the rest of the essay is dedicated to answering. In so doing, the essay is divided into three sections that correspond with key sectors of pre- and post-1978 Chinese policy; agriculture, industry and foreign policy. The predominant aim of Mao’s agricultural policy was collectivisation and regional self-reliance.
However, the Soviet Union, who signed a friendship treaty with the Chinese in 1950 promising help and assistance with the socialist transformation of the PRC, believed, “collectivisation [is] only feasible when preceded by a sophisticated level of industrialisation capable of ‘mechanising’ the countryside” (Breth, 1977, p5). Thus, acknowledging their greater experience and lacking the necessary industrial base, Mao pursued a strategy of intermediate stages that would gradually lead to the socialisation of agriculture and the preeminence of communes within the countryside (Meisner, 1977).
These stages progressed from the completion of the “land to the tiller” Land Reform, through mutual aid teams, cooperatives and collectives and culminated in 1958 with the Great Leap Forward and the establishment of the commune as the principal form of rural organisation in China (Blecher, 1988). However, by 1979 Deng Xiaoping’s reforms had reversed this collective trend, promoting instead a decollectivised production responsibility work ethos that gave a greater role to market forces.
Under this new system the Maoist doctrine of “take grain as the key link”, which enforced the cultivation of grain to the virtual exclusion of other crops, was abandoned in favour of a doctrine that allowed peasants to act as individual decision-makers. Thus licence was given for peasants to diversify their crop range if they so wished (Meisner, 1977, Blecher, 1986, Leeming and Powell, 1990). Accordingly, the state directed plan for the procurement of foodstuffs (an integral part of Maoist policy) needed to be replaced by the government as the emerging environment began to stress peasant freedom.
Their response was to turn to a system of negotiable market based contracts that encouraged producers to sell goods in excess of the government’s quota (Leeming and Powell, 1990). In this sense then, both of these post-1978 policies represent a distinct break with those of the Maoist era. However, a closer examination of the policy that dictates the use of contracts rather than centrally planned criteria, reveals some continuity. For instance, the contracts, though negotiable, are set by the state and thus do not accurately reflect market prices or values (Blecher, 1988).
Additionally, “….. no enterprise, no matter how profitable its total operations may be, can retain any of it’s profits if it has not first [satisfied the government’s quota]” (Gray, 1982). This then, is essentially a continuation of Maoism where policy is aimed at securing foodstuffs, as opposed to an outright attempt to encourage efficiency and profitability via use of incentives. It therefore does not represent a break from any previous government policy as ‘reform’ would suggest.
Instead it continues an ancient strategy in China whereby securing food for the populace is seen as an ‘easy’ (and essential) way for a new government to gain political legitimacy (Meisner, 1977). Similarly, the decollectivisation of agricultural activities from the scale of the communes to individual family farming also bears considerable similarity to policy ensconced under Mao. Post-1978 policy reform saw the household emerge as the principal unit of production and accounting and closer links develop between levels of work and reward.
These strengthened labour incentives and the drive for efficiency that was lacking in the system under Mao (Blecher, 1988, Leeming and Powell, 1990); “The major advantage of the production responsibility system is that it implements the principle of ‘to each according to his or her work’. The peasant can see that hard work means in theory more reward, and enthusiasm for work is encouraged. This is a clear attempt to install material incentives within the rural economy” (Leeming and Powell, 1990, p147).
However, such a policy can justifiably be compared to the determinants of income that operated within the basic unit of the commune, the production team. Here, each team member earned a certain number of work points each day, that was theoretically proportionate to the amount of individual effort put in. Collecting these work points then allowed them to claim a relative portion of the teams produce (Meisner, 1977, Prybyla, 1986, Blecher, 1988, Cannon and Jenkins, 1990, Leeming and Powell, 1990).
These work points thus acted as a material incentive to team members in a similar way to Deng Xiaoping’s production responsibility system; the more individuals put in, the more they get out. In fact the only difference between the two appears to be that whereas the pre-1978 system relied on selling the produce to the state (who then distributed it along egalitarian lines), the post-1978 system relies on individuals choosing between selling surplus produce to the government (at a higher rate than would be paid for quota produce), or seeing what price can be got at the local market.
Thus, contrary to the stereotypical view that Maoist China relied primarily on moral and political exhortation to sacrifice for the larger good, a complex web of material incentives was built in to the heart of collective agriculture: individual material incentives (the more one worked the more one could expect to earn) and collective material incentives (the more the team earned the more the team member would earn)” (Blecher, 1988, p93). Just as the sino-soviet alliance in 1950 influenced the course of pre-1978 Chinese agricultural development so the alliance shaped early Maoist industrial policy.
Here Soviet ‘experience’ resulted in an emphasis being placed on rapid industrialisation which required a high rate of capital investment. Priority was given to industry rather than agriculture and, within this, heavy as opposed to light industry (White, 1988). Industry itself began to be placed under joint state-private ownership via a series of consecutive policies. This led to decisions regarding the accumulation and reinvestment of capital in industry being taken at a centralised level (Meisner, 1977).
Organised in such a command economy manner, Mao then embarked on a Five Year Plan (1953-57) that focused on large-scale plants, most of which were placed under strict central control, and the reduction of spatial inequalities, which had seen the Coastal Region advancing at a far greater rate than the rest of the country (White, 1988, Cannon, 1990). The result of this First Five Year Plan was that two-thirds of the large- and medium-scale projects undertaken, were undertaken in an inland area (Cannon, 1990).
Thus, as with agricultural policies, egalitarian principles and an emphasis on regional (and national) self-reliance continued to play an influential role in Maoist politics. Compared to this type of industrial development strategy then, Deng’s chosen policy path can be seen as a reversal of Maoist trends. In 1978 reform economists such as Hu Qiaomu challenged Mao’s insistence on the predominance of politics over economics, suggesting that there is an economic sphere in society which can be governed more efficiently by economic laws than state planning (Watson, 1982, Lockett, 1988, White, 1988).
As such, policy was adopted in 1984 that reduced the role of central planning in the industrial economy (White, 1988, Cannon, 1990, Howard, 1990). Consequently reforms in this sector focused on predominantly three factors. Firstly, giving enterprises greater autonomy, replacing party officials with managers and quotas with profit targets (Lockett, 1988, Howard, 1990). Secondly, reducing the extent to which prices were artificially fixed by the government, adopting instead a system that abided more closely to broad economic laws (White, 1988, Cannon, 1990).
Finally, free grants from the state were replaced by bank loans complete with interest repayments (Cannon, 1990, Howard, 1990). In addition to these, a decision was taken to allow companies to pay taxes rather than surrender profits thus enabling the accumulation of capital and the financing of their own development (Howard, 1990). In short, “the central element of the reform paradigm [was] the attempt to reinstate market [forces] as [a] central feature of socialism” (White, 1988, p87). Decentralisation of control has thus created an economic environment in which horizontal linkages have an increasingly important role to play.
Regional comparative advantage, rather than regional self-sufficiency and egalitarianism, is becoming the order of the day (Gray, 1982, Cannon, 1990, Cannon and Jenkins, 1990); “China is vast, and its natural and production conditions vary from place to place….. Therefore the pace at which areas and peoples become prosperous will never be simultaneous” (Beijing Review, 1985 cited Cannon, 1990, p40); “Industrial productivity is expected to increase differentially across the country, declining from east to west and from coast to interior” (Howard, 1990, p178).
However, although these post-1978 reforms appear to represent a paradigm shift from early Maoist trends, as with agricultural policy, some elements of continuity may be found. For example, Deng Xiaoping’s comparative advantage policy, that on first sight represents one of the most dramatic breaks with (egalitarian) Maoism, could be seen to have its origins from the occasion of the Eighth Congress in 1956 when Chairman Mao was “signalling the ‘pragmatic’ advantages of development in the established coastal regions, betraying a belief in the virtues of regional inequality” (Cannon and Jenkins, 1990, p8).
Although not a strategy directly pursued by Mao for national security reasons, such (published) thoughts obviously provide evidence of linkage between the two periods. Similarly, Mao’s published documents, ‘On the Correct Handling of Contradictions Among the People’ and ‘Economic Problems of Socialism in the USSR’, that surmised his own interpretation of Stalin’s developmental errors and led to the mass mobilisation of the Great Leap Forward (which was meant to be a pure manifestation of Mao’s thought), actually predated many of Deng’s industrial reforms.
These ocuments were generated from much of the discussion at the Eighth Congress where it was decided “to decentralise, to cut down the high investment priority given to heavy industry [and] to lower the rate of central accumulation of capital” (Gray, 1982, p293). The parallels between Mao and Deng’s policies, when viewed in this manner, are evidently quite striking. Additionally, even some of the reform’s that appear to be the antithesis of Maoist policy do show signs of continuity.
For example, Gray (1982) notes that measures introduced to increase a company’s autonomy (eg. he replacement of state allocated funds with negotiable bank loans), “are actually, in the context of the extreme looseness of past control of investment, a measure of tighter (though it is hoped more discriminating) control [than anything experienced under the centralised command economy of the First Five Year Plan or the mass mobilisation economy of the Great leap Forward]” (Gray, 1982, p299) Along similar lines, firms are now allowed to retain a substantial part of their profits to invest in their own development and increase the aggregate purchasing power of their employees by increasing wages.
The fact that only a small proportion of the profits are devolved to employees means that such policy does little more than directly replace the state’s power to allocate capital, a system that was formerly present under Mao (Gray, 1982, Cannon, 1990). In this sense then, just as Mao introduced policies that were not properly implemented (eg. the Great Leap Forward), so Deng is suffering from the same fate; ironically providing this provides a continuity between the two periods.