CHARACTERISTICS OF THE CRISIS
The slowdown in industrial growth between 1970 and 1979 marked a crisis in the success of the Maoist development process in China’s urban centers. Similarly, the rural population’s standard of living also stagnated (Selden 1993, 60). From the 1970s, the combination of slow industrial growth, the crisis in agriculture, supply shortages, and the resultant political and social discontent constituted a somewhat volatile set of circumstances (Lieberthal 1995, 297).36
The crisis among the country’s political leadership linked to this situation was, however, not yet sufficient to bring about significant change. After Mao’s death in 1976, the coalition of market-oriented reformers in the party and the rural periphery allied with Deng Xiaoping—based, inter alia, on a technocratic intellectual class—faced “Maoism without Mao” under Hua Guofeng (chairman of the Communist Party from 1976). The latter in particular insisted on reviving the command economy using traditional Soviet methods (D. Yang 1996, 441). Only the rise in social opposition created sufficient impetus to tip the balance of power within the political leadership in favor of the reformers.
The years from 1976 up until the Chinese democracy movement in 1978–79—the call for, among other things, the Fifth Modernization, in other words, democratization—and isolated worker protests in 1980 was a period of diverse social protest (Spence 1995, 774–83; Wenten 2011, 33–34). The root causes of the change in political direction can, therefore, be identified using a conflict model where the farmers and the working class forced the power elite to change course (Bernstein 1999, 204–5; Heberer 2008, 37–40). The April Fifth Movement (Tiananmen Incident) in 1976—mass protests triggered by the death of the beacon of hope, Premier Zhou Enlai—already illustrated this. The protests that took place during what was dubbed the Beijing Spring convinced the wing of the party allied with Deng Xiaoping that a change of course was a matter of urgency (Eifler 2007, 102–7; Xie 1993, 323). The rural population played a particularly active role in this. Food shortages coinciding with a crisis of confidence in the CCP consequently forced the party and the state apparatus under its control to authorize spontaneous land distribution. This paved the way for a return to family-centered methods of farming.
At the end of 1978, there was finally a breakthrough on the political level: during the Plenary Session of the Eleventh CCP Central Committee, Deng and his allies established themselves as the new ruling group. One year later saw the tentative, and, to a great extent, still unfocused, implementation of modified economic policy concepts. In order to overcome the resistance from the senior cadres within the party and the army (in Beijing, but also and particularly in the northern provinces), the group in allegiance with Deng endeavored to win the support of the subnational governments. The prospect of fiscal decentralization gave many local leaders hope that their existing room for maneuver would be expanded. In addition, productivity increases in the provinces of Anhui and Sichuan were linked to the reforms, bolstering the institutional strength of the reformers (Goldman and MacFarquhar 1999a, 7–8).37
As a look at global trends of this era reveals, it is no coincidence that the group of leaders allied with Deng Xiaoping advocating “institutionalized revisionism” (Dittmer 1987, 266) favored a partial liberalization route and, a little later, the controlled policy of opening up—although they still classified this as an increase in the efficiency of the command economy.
THE GLOBAL REFORM MOVEMENT OF THE 1970S AND NEW DEVELOPMENT POLICY MODELS
The Chinese leadership’s change of direction coincided with an unprecedented global economic situation—characterized by the end of a long period of growth after 1945 and the transition to the neoliberal phase of global capitalism. The propensity toward state-controlled economies that had prevailed from the 1930s had run its course (Altvater and Mahnkopf 1996; R. Brenner 2006; Harris 1986; ten Brink 2014b).
Worldwide, the changes observed in the 1970s—the end of the “economic miracle,” the crisis of Western Fordism, and a tendency toward stagnation on the “periphery”—created ideal conditions for neoliberal discourse. This also applied to developing and newly industrialized countries. If the West believed that Keynesianism had failed, then certain versions of development theory and Stalinist command methods would also be perceived as doomed in many less developed countries. Instead, Third World elites increasingly considered more liberal development models to be a viable alternative (Hurtienne 1988; Chibber 2003). Elites who, to a greater or lesser extent, had followed a policy of state planning and “import substitution” (Fröbel, Heinrichs, and Kreye 1988) now attempted to liberalize the economy, facilitate deeper integration into the global market, and increase the country’s focus on exports.38 Here, reference could be made to various positive role models: particularly in East Asia, there were a number of export-oriented economies, primarily Japan and what later became known as the “Tiger states,” on a successful growth path that served as the basis for creating a new development policy model.
Against this backdrop, socialist planning concepts were also increasingly beset by crisis. Since the 1930s, to an extent, the Eastern Bloc countries and China had represented the most extreme form of state intervention.39 However, the pace of their economic development continued to be influenced by the tempo of the global economy and the balance of power within the system of states. In the national context, the state-capitalist period that commenced in the 1930s permitted the model of catch-up industrialization with import substitution to embark on a relatively efficient catch-up process. With the increasing integration of the global market from the 1960s, this strategy reached its limits, however. Over the course of time, China’s autarkic ambitions lost momentum. The development of the forces of production, which was accompanied by close links between companies and individual states during the first half of the twentieth century, now evolved into a trend toward surpassing national economies. Endeavors in state socialist countries to circumvent the accompanying new international division of labor, as it transpires, increasingly hampered the efficient accumulation of capital. More recent research shows that the failure to adapt to the internationalization of capital flows is one of the key causes of the demise of these regimes (see Dale 2004; Haynes 2002). A flawed technology transfer as a result of isolation from the global market is one example of the dilemma created by an economy geared toward self-sufficiency. The closer a sector moved toward global product development, as was the case with the microelectronics sector, for instance, the more apparent the deficiencies of the model became. Here, the transition from Fordist to post-Fordist forms of production and employment was the least efficient.
The crisis of state interventionism and of command economies also hit the most populous Asian countries. For instance, even the power elites in India, who in the immediate postindependence period were still proposing to implement economic policy through development plans (the Bombay Plan), declared the end of Nehruvian socialism and, against a backdrop of economic stagnation, began to search for alternative accumulation strategies (Chibber 2003, 248–53).
Ultimately, the PRC underwent a similar development (Harris 1986, 163–69). As well as the inefficiencies in the state-controlled economy, the erratic foreign economic relations that prevailed during the Mao era were subject to criticism, particularly because global economic integration had effectively already become more relevant.40 The model of successful development exemplified by some East Asian economies, particularly Japan’s, which stimulated a wave of industrialization in East Asia, became a template here, which, of course still had to be given its own national form. Deng expressed this at the National Congress of the CCP in 1982: “[We should] learn from foreign countries and draw on their experience. But the mechanical copying and application of foreign experiences and models will get us nowhere” (quoted in Hartig 2008, 43). Making an implicit reference to the adoption of Soviet industrialization strategies, which had been fraught with problems, Deng pointed out that China had already “learnt many lessons in this respect.”
Particularly the economic dynamism of the neighboring countries was a role model for China, although it did not really admit to this (Goldman