Useful Notes / To Get Rich Is Glorious

"It doesn't matter whether a cat is black or white — so long as it catches mice."
Deng Xiaoping

The current phase of Chinese history.

Despite the disaster of the Great Leap Forward and the Cultural Revolution, Mao was able to remain in power until his death in 1976. While major economic reforms did not begin until after his death, Mao began opening China in 1972 when he and President Nixon restored diplomatic relations between the US and the PRC. Immediately after his death, Mao's wife Jiang Qing attempted to maintain control and undermine Mao's official successor, Hua Guofeng, together with three close associates known as the "Gang of Four." The power struggle was short. Less than a month later all four were arrested and later sentenced to lengthy prison sentences, with Jiang Qing herself committing suicide. During the trial the four were accused of political abuses and the persecutions of 750,000 people, including ~35,000 deaths. It was during this trial that Jiang Qing said, "I was Chairman Mao's dog. I bit whomever he asked me to bite." While acknowledging Chairman Mao's "great contributions," the Chief Prosecutor stated Mao nevertheless bore some responsibility for the "plight" of the people during his tenure. It would be the closest China would come to justice for the Cultural Revolution.

The struggle in a wider sense was one between "Leftists" on one hand, who advocated strict adherence to Chairman Mao's legacy and the principles of the Cultural Revolution, and "Reformists" on the other, who while respecting Chairman Mao maintained that changes were required if China was to grow. This faction would be led by Deng Xiaoping. Deng had been on the "Reformist" side and a supporter of Hua Guofeng immediately after Mao's death, however after the fall of the Gang of Four Deng and Hua would come into opposition, with Hua being too conservative for Deng and his supporters. It would be Deng who would lead China on its course of economic expansion, becoming de facto leader of China when his ideas for economic reforms were adopted by the Chinese communist party in 1978.

The reforms began from agriculture. Formerly the government maintained full control of production, with peasants being given a production quota to fill. Going beyond the quota rarely meant substantial rewards. Now farming would be de-collectivized: peasants would still be required to sell a certain portion of their harvest to the government, but quotas were drastically lowered, and peasants would be allowed to sell any extra for their own profit. Almost immediately food production began to rise.

Similar reforms were undertaken in other areas in the same vein. State-owned industries were still given production quotas and their goods sold at government prices, but anything produced above the quota would be allowed to be sold at market prices. Furthermore, while these industries would still be officially owned by the government, a contract system would allow them to be managed by individuals or groups - in effect a form of privatization.

Perhaps most striking were China's new "Special Economic Zones." These were cities, mostly along China's coast, which would be opened up to direct foreign investment. These zones included lower wages and taxes, among other reduced regulations in order to be especially attractive to foreign investors. The focus would be on light industry producing products for export. Subsequently these regions would experience stunning economic growth, helping fuel the rest of China's economy. (In an uncomfortable historical coincidence, many of these cities are the very same which were forcibly opened to western investment by European imperialism in the 19th and early 20th centuries - a source of resentment for many Chinese.)

Reforms continued apace, even after Deng Xiaoping's death. Today China has largely privatized, with almost all former state enterprises, with a few exceptions, now in private hands. Since the late '70s China's economy exploded, surpassing Japan in 2010 to become the 2nd largest economy in the world - with many now seeing the #1 spot not beyond its reach. China's export-driven focus paid dividends, having since become "the world's factory." Turn over your mouse or keyboard. Look under your desk, lamp, or chair. Check your bowl or mug. Odds are almost certain at least one of those things (if not more or even most) were made in China.

Despite China's insistence that it remains a "Socialist" country, most economists consider China to have a mixed market-economy, a type of economy common in many western states including the US. The main difference now seems to be political rather than economic. Unlike the rest of the Eastern Bloc, China did not implode following the Cold War. Instead it managed to reform its economy while keeping its political system largely intact, with the Chinese Communist Party still firmly in control of the country. This has been an uncomfortable fact for many in the West, where it was long assumed that free markets made free people. China (and to some extent Russia) seem to be presenting an alternative model - one in which it is possible to have a largely free economy while maintaining a largely un-free political system. Following the economic recession of 2008 and seeming political disarray in the US and EU, some see China as presenting something more stable than the endless crises and internal strife of western liberal democracies. Of course China's economic growth has presented its own problems, including staggering wealth inequality and corruption (greater even than in the US), and pollution has also become a widespread problem, with China's legendarily smog-filled cities famous the world over. Also while income has shown fantastic growth and China created one of the largest and fastest-growing Middle Classes in history, there is still a human cost to all those cheap products, which are so cheap partly because things like workplace safety, labor rights and living wages fall by the wayside.

The actual phrase, "To get rich is glorious," is a translation of the Chinese expression, "致富光荣" (zhìfù guāngróng). While it has been attributed to Deng Xiaoping, there's no evidence that he ever really said it. What we know he did say is posted above, "It doesn't matter whether a cat is black or white — so long as it catches mice," indicative of his view that Socialism was not incompatible with a market-economy.

In 2013, Xi Jinpingnote  developed a plan of measures known as the "383 Plan", which will involve a greater opening of the market, some transformations in the government and a reformation of enterprises in order to boost innovation on various levels. The eight key areas to tackle are: cutting administrative approvals, promoting competition, land reform, opening up banking including the liberalisation of interest rates and the exchange rate, reforming the fiscal system including setting up basic social security, reforming state-owned enterprises, promoting innovation including green technology, and opening up the services sector. Within these, the plan identifies three major breakthroughs to be achieved: lower market barriers to attract investors and boost competition, setting up a basic social security package, and allowing collectively-owned land to be traded. With this, the government hopes to diminish inequality, inefficiency and the enormous levels of corruption. The success or failure of these measures will likely determine Xi Jinping's (and China's) future.