Deng Xiaoping and the Transformation of China (123 page)

In December, after the seriousness of the Romanian opposition was exposed, Deng temporarily withdrew from public meetings. According to the official chronology of Deng's activities
(Deng Xiaoping nianpu)
, he attended six meetings in the first half of December, but did not go to any meetings
from December 17, when Ceau
escu ordered firing into the crowds, until January 18 (when Deng met Hong Kong business leader Lee Ka-shing).
⁵⁰
Thus it fell to Jiang Zemin, on December 21, 1989, in the midst of the Romanian crisis, to meet with Hong Kong reporters to calm the worries of Hong Kong residents, who had been in a state of panic since June 4 about what might happen in just eight years when Hong Kong was to revert to mainland rule. Jiang's approach, like Deng's, was to show calm in a tense situation; he explained why the situation in China was fundamentally different from that in Eastern Europe. The founding of the Chinese Communist regime in 1949, he noted, was the result of the victory of the Chinese army, not the Soviet army. China was not surrounded by capitalist nations, and it had been improving the livelihood of its people. Jiang explained that martial law had been introduced in China not to deal with unruly students, but to preserve order. Like Deng in 1957, Jiang affirmed that democracy is a worthy target and that the amount of democracy achieved will depend on the political steadiness of the situation in China.
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From 1989 until the end of 1991, when the Soviet Union collapsed, Beijing officials who supervised propaganda work found it difficult to manage the incoming news from Eastern Europe and the Soviet Union. Despite great efforts to hide, tone down, delay, or slant the news, ultimately they were frequently embarrassed by events that made it impossible for them to maintain their credibility. On June 4, 1989, the very day that Deng's troops put down the demonstrators in Tiananmen Square, Polish citizens were voting for a democratically elected parliament, the first such election in an Eastern European Communist country since the Soviet occupation began shortly after the end of World War II. But the
People's Daily
waited until June 10, the day after Deng's address to military leaders, before it notified the Chinese public of the election. Even then it did not disclose how overwhelmingly the opposition party candidates had defeated the Communist Party's candidates. And although earlier, in the mid-1980s, Beijing's media had cheered Woyciech Jaruzelski as he clamped down on the popular trade union Solidarity, when Jaruzelski was overthrown in November 1989, Beijing's officials, horrified, did not immediately report the news to the Chinese people.
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During late September and early October 1989, while tens of thousands of East Germans were seeking asylum in West Germany, Chinese newspapers continued to praise East Germany. On October 7, for example, when massive protests broke out in East Germany (on the fortieth anniversary of Communist rule), the
People's Daily
not only ignored them, but misleadingly reported
that “the East German people are now strengthening their unity under the leadership of the party.” Such efforts to shield the Chinese public from the truth of what was happening in Eastern Europe would only come back to bite the leadership of Beijing, however, when on November 11 the Berlin Wall was torn down and the
People's Daily
could not hide the news.
⁵³

In February 1990, as the Soviet party plenum discussed giving up the party's monopoly over political power, the
People's Daily
printed nothing. Instead, on the day the plenum ended, without mentioning the Soviet Union, the
People's Daily
announced, “In China, without the strong leadership of the Chinese Communist Party, new turmoil and wars would surely arise, the nation would be split, and the people, not to mention state construction, would suffer.” The following day the paper carried the news that the Moscow plenum had agreed to give up the party's monopoly of power.
⁵⁴
As the Soviet Union was falling apart, some Chinese intellectuals were as joyful as many Westerners. Some even repeated to trusted friends one of the great Chinese slogans of the 1950s when China was introducing Soviet-style industrialization, now used with a very different connotation: “The Soviet Union's today is our tomorrow.”

After he resigned in late 1989, Deng did not take an active role in dealing with the issues of Eastern Europe and the Soviet Union, but he could not escape the consequences of those developments. From 1989 to 1992, he tried to reinforce popular confidence that the Chinese Communist Party was different from that in Eastern Europe or the Soviet Union, and that it would prevail. He did not predict what would happen in the Soviet Union or in Eastern Europe, but by late 1989 Deng began using phrases like “whatever happens in the Soviet Union or Eastern Europe” to lead off statements about how China was different. Convinced that rapid growth was key to keeping the support of the people, Deng also frequently reiterated the importance of adopting policies that would continue economic progress.

On one particularly sensitive occasion, August 20, 1991, the day after conservatives in the Soviet Union had engineered a coup and while they were still holding Gorbachev under house arrest in a dacha in Crimea, Deng called a meeting of the leading power holders in China—including Jiang Zemin, who had just returned from Moscow; Yang Shangkun; and Li Peng—to strengthen their determination to work together and avoid splits. Deng reiterated that China, despite its turmoil, would be able to resist foreign pressures because of its successful reform and opening. He acknowledged that China might seem to advance in waves, with times of rapid progress followed
by periods of adjustment. He also noted that the great changes in the world had given China an opportunity to move forward, but that if China failed to grasp this opportunity, other countries would move ahead while China fell behind. Finally, Deng reassured his comrades that emphasizing economic growth did not mean that China was forgetting Marx, Lenin, and Mao.
⁵⁵

On October 5, 1991, a few weeks after Estonia, Latvia, and Lithuania split with the Soviets, setting off the process that led to the final dissolution of the Soviet Union, Deng came out to welcome Kim Il Sung, leader of North Korea, one of the few remaining Communist countries. Deng conveyed to Kim that China remained firmly committed to economic reform and opening but also steadfast in its commitment to the four cardinal principles. To illustrate the need for communism in China, Deng said that when China had suffered floods that year, no other country could have solved the problem; China had dealt with the floods effectively because of the leadership of the Communist Party.
⁵⁶
On October 26, 1991, Deng again pronounced his belief in the party system, telling the Thai prime minister, Chatichai Choonhavan, that “no one can shake China's determination to build socialism, a socialism that is adapted to our own conditions.”
⁵⁷

Despite Chinese leaders' slowness in reporting to the public the changes in the Soviet Union and Eastern Europe, China's foreign policy adapted quickly to the new realities. When the Baltic republics declared their independence China immediately recognized them; and after December 25, 1991, when Soviet president Mikhail Gorbachev announced his resignation and the Russian flag replaced the Soviet flag at the Kremlin, China quickly granted diplomatic recognition to Russia and the other independent states.
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In attempting to explain what had gone wrong in the Soviet Union, Deng asserted that the Soviet Union had failed to institute economic reforms in a timely manner and that the top Soviet leaders had not firmly supported the Communist Party. Instead, Soviet leaders had become caught up in an arms race with the United States, a contest that had led to wasteful spending that did not improve the lives of ordinary people. Soviet leaders had enjoyed a good life, but the Soviet people had not. During the difficult period after the Tiananmen tragedy and through the period of the collapse of the Soviet Union, Deng continually repeated the mantra “observe calmly, hold one's ground, respond soberly, and get some things done”
(lengjing guancha, wenzhu zhenjiao, chenzhuo yingfu, yousuo zuowei).
⁵⁹

Whatever doubts Deng may have personally had about the fate of China after June 4, 1989, there is no record that he ever expressed any doubts about the ability of the Chinese Communist Party to surmount the difficulties presented
by the collapse of communism in Eastern Europe and the Soviet Union. In public, Deng displayed a quiet confidence that the Chinese Communist Party would survive and eventually prevail, and that the economy would continue to grow. He recalled that he had been personally criticized and had lost his position three times, yet each time had returned. He had seen his troops lose battles yet win ultimate victory. He had seen China reverse itself after both the Great Leap Forward and the Cultural Revolution. Not many world leaders, under such circumstances, could have displayed the toughness, the resilience, and the sheer confidence that Deng exuded in public in the three years after June 4.

Impatience with Conservative Economic Policies, 1989–1991

The atmosphere within the party did not allow Deng to reverse the conservative economic policies that had been put in place to quell the inflation and public panic that had followed the lifting of price controls in 1988. Yet Deng passionately believed that only rapid economic growth would maintain the public support necessary to avoid the fate of Eastern Europe and the Soviet Union. The austerity program that had officially begun on September 26, 1988, at the Third Plenum of the 13th Party Congress was vintage Chen Yun. To end inflation, the government had lowered growth targets and spending flows, reduced the money supply, centralized and tightened financial controls, and endeavored to eliminate financial deficits. In addition, in an effort to appeal to a public that was fed up with corruption, government spokesman Yuan Mu announced that the austerity program would be expanded to include a moratorium on construction of luxurious office buildings, auditoriums, and guest houses.
⁶⁰

Xue Muqiao, an experienced adviser on economic matters, provided the overall rationale for the “consolidation”
(zhengdun)
policies of the austerity program. He explained that after 1984, administrative controls over the economy—through pricing, taxation, and credit allocations—had been weakened before new institutional and macroeconomic controls had been put in place. With the decentralization of controls, local governments and enterprises, including township and village enterprises, had expanded investments too rapidly, causing shortages of raw materials and energy, as well as bottlenecks in the inadequate infrastructure. The result was inflation, and to avoid having it get out of hand, tight controls were introduced.
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At a planning conference in late 1989, Premier Li Peng loyally promoted the austerity program, saying that the party should concentrate on raising quality standards,
improving the circulation of goods, and strengthening party controls over the political and ideological spheres. He argued that even with the austerity program, the party would continue to promote reform. Industrial plant managers would still make key decisions about technology and production, and China would maintain its policy of opening to the outside.
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The attack by Western countries on the Chinese political leadership after June 4 led to a reaction against Western “capitalist countries” and “bourgeois thinking”—and against the opening of markets.
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Deng Liqun, the conservative ideologue who had been pushed aside in 1987, again began to criticize bourgeois liberalization and spiritual pollution. Chen Yun's associates argued that the excessive opening of markets had led to a loss of discipline and to the student demonstrations. And Jiang Zemin drew on the skills of the keeper of orthodoxy, Hu Qiaomu, to draft his speech for the July 1991 seventieth anniversary of the Chinese Communist Party.
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The conservative policies introduced since 1988 had helped to curb inflationary pressures, tighten controls over investment, and balance budgets. And it was expected that at the end of the 1989–1992 period, once the readjustment had been completed, reforms—including price reform, separation of enterprise management from ownership, tax reform, and banking reform—could be reintroduced at a modest pace.
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But the sanctions by Western countries after June 4, 1989, had further restricted Chinese growth even as economic officials continued to pursue cautious economic policies. Even Jiang Zemin, who tried to maintain good personal relations with Deng, felt compelled on economic policies to act in accord with the dominant atmosphere, which now was more aligned with Chen Yun and his cautious approach. Consequently, the GNP growth rate fell from 11.2 percent in 1988 to 3.9 percent in 1989. To prevent political unrest given this precipitous fall, workers in state enterprises in the big cities did not lose their jobs and their wages remained intact. In smaller towns and administrative villages, however, nearly 20 million industrial workers lost their jobs in 1989 and 1990.
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At the time, Deng desperately wanted to speed up growth to maintain public support, but he lacked enough support in the party to do so.