Deng Xiaoping

Deng Xiaoping {{Audio|zh-Deng_Xiaoping.ogg|listen}} ({{zh-stpw |t=鄧小平 |s=邓小平 |p=Dèng Xiǎopíng |w=Teng Hsiao-p'ing}}; August 22, 1904—February 19, 1997) was a revolutionary elder in the Communist Party of China (CPC) who served as the de facto ruler of the People's Republic of China from the late 1970s to the early 1990s, forming the core of the "second generation" CPC leadership. Under his tutelage, China developed one of the fastest growing economies in the world while the Communist Party retained tight control over the country.

"Socialism with Chinese characteristics"

The goals of Deng's reforms were summed up by the Four Modernizations, those of agriculture, industry, science and technology and the military.

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The strategy for achieving these aims of becoming a modern, industrial nation was the socialist market economy.

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Deng argued that China was in the primary stage of socialism and that the duty of the party was to perfect "socialism with Chinese characteristics." This interpretation of Chinese Marxism reduced the role of ideology in economic decision-making and deciding policies of proven effectiveness. Downgrading communitarian values but not necessarily Marxism-Leninism, Deng emphasized that socialism does not mean shared poverty.

Related Topics:
Socialism - Socialism with Chinese characteristics - Chinese Marxism

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Unlike Hua Guofeng, Deng believed that no policy should be rejected out of hand simply for not having been associated with Mao, and unlike more conservative leaders such as Chen Yun, Deng did not object to policies on the grounds that they were similar to ones which were found in capitalist nations.

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Although Deng provided the theoretical background and the political support to allow economic reform to occur, few of the economic reforms that Deng introduced were originated by Deng himself. Typically a reform would be introduced by local leaders, often in violation of central government directives. If successful and promising, these reforms would be adopted by larger and larger areas and ultimately introduced nationally. Many other reforms were influenced by the experiences of the East Asian Tigers.

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This is in sharp contrast to the pattern in the perestroika undertaken by Mikhail Gorbachev in which most of the major reforms were originated by Gorbachev himself. The bottom-up approach of the Deng reforms, in contrast to the top-down approach of perestroika, was likely a key factor in the success of the former.

Related Topics:
Perestroika - Mikhail Gorbachev

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Deng's reforms actually included the introduction of planned, centralized management of the macro-economy by technically proficient bureaucrats, abandoning Mao's mass campaign style of economic construction. However, unlike the Soviet model, management was indirect through market mechanisms.

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Deng sustained Mao's legacy to the extent that he stressed the primacy of agricultural output and encouraged a significant decentralization of decision making in the rural economy teams and individual peasant households.

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At the local level, material incentives, rather than political appeals, were to be used to motivate the labor force, including allowing peasants to earn extra income by selling the produce of their private plots at free market.

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In the main move toward market allocation, local municipalities and provinces were allowed to invest in industries that they considered most profitable, which encouraged investment in light manufacturing. Thus, Deng's reforms shifted China's development strategy to an emphasis on light industry and export-led growth.

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Light industrial output was vital for a developing country coming from a low capital base. With the short gestation period, low capital requirements, and high foreign-exchange export earnings, revenues generated by light manufacturing were able to be reinvested in more technologically-advanced production and further capital expenditures and investments.

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However, in sharp contrast to the similar but much less successful reforms in Yugoslavia and Hungary, these investments were not government mandated. The capital invested in heavy industry largely came from the banking system, and most of that capital came from consumer deposits. One of the first items of the Deng reforms was to prevent reallocation of profits except through taxation or through the banking system; hence, the reallocation in state-owned industries was somewhat indirect, thus making them more or less independent from the government interference. In short, Deng's reforms sparked an industrial revolution in China.

Related Topics:
Yugoslavia - Hungary

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These reforms were a reversal of the Maoist policy of economic self-reliance. China decided to accelerate the modernization process by stepping up the volume of foreign trade, especially the purchase of machinery from Japan and the West. By participating in such export-led growth, China was able to step up the Four Modernizations by attaining certain foreign funds, market, advanced technologies and management experiences, thus accelerating its economic development.

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Deng attracted foreign companies to a series of Special Economic Zones, where foreign investment and market liberalization were encouraged.

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The reforms centered on improving labor productivity as well. New material incentives and bonus systems were introduced. Rural markets selling peasants' homegrown products and the surplus products of communes were revived. Not only did rural markets increase agricultural output, they stimulated industrial development as well. With peasants able to sell surplus agricultural yields on the open market, domestic consumption stimulated industrialization as well and also created political support for more difficult economic reforms.

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There are some parallels between Deng's market socialism especially in the early stages, and Lenin's New Economic Policy as well as those of Bukharin's economic policies, in that both foresaw a role for private entrepreneurs and markets based on trade and pricing rather than central planning.

Related Topics:
New Economic Policy - Bukharin's

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An interesting anecdote on this note is the first meeting between Deng and Armand Hammer. Deng pressed the industrialist and former investor in Lenin's Soviet Union for as much information on the NEP as possible.

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