Deng Xiaoping and the Transformation of China (43 page)

In the more leisurely days of Meiji Japan, the Iwakura Mission had taken more than a decade to produce its twelve-volume
Opinions on Industry
to guide industrial development. By contrast, after the Gu Mu trip, it took just several weeks for the delegation to complete its reports and for Chinese economic leaders to organize appropriate units to discuss the implications of what they had learned.

As soon as the reports were completed, the State Council convened the Forum on Principles to Guide the Four Modernizations
(Sihua jianshe de wuxuhui)
, which lasted from July 6 to September 9, to consider how to take advantage
of the new opportunities for borrowing technology and capital from the West. At the opening session, Gu Mu presented a lengthy report of what they had learned from the trip and added some personal impressions.
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The meetings were chaired by Li Xiannian, who was still the highest official in charge of the economy. Participants were told not to focus on errors of the past, but to think of what the country should do in the future. Deng Xiaoping, who was busy with managing education, science, technology, and foreign relations, did not attend, but he followed reports of the sessions and, at the end, read the draft final reports and made suggestions for revision.
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Unlike work conferences in which participants are closeted in a hotel for several days, the forum was conducted in a series of twenty-three morning sessions spread over two months. Hua Guofeng, who rarely attended State Council meetings, regarded these gatherings as so important that he took part in thirteen of the twenty-three morning sessions.
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In the afternoons, the officials returned to their regular work units to report on the morning discussions and to prepare their units' written responses to the issues raised. The forum allowed some sixty representatives of the key economic ministries and commissions to present the overall activities and plans of their units. This way, each unit could get a sense of what all the other units were thinking without becoming involved in arguments about the precise allocations and production targets; such details would be discussed at later planning meetings.

At the closing session on September 9, Li Xiannian, who had led the economy when it was virtually closed to the outside, announced the beginning of a new age of openness for China. In his concluding report to the forum, he explained that China could no longer remain a closed economy, that it must import foreign technologies, equipment, capital, and management experience in order to accelerate its development. Li further stated that if the Chinese took full advantage of the present favorable conditions, China could achieve a high degree of modernization in the twentieth century. To achieve this goal, he declared that between 1978 and 1985 China should import US$18 billion worth of goods and equipment.
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In mid-1978, the forum participants were just beginning to learn about the global economic system, and China was not yet ready to begin experimenting with markets. But in the relatively free atmosphere, the participants could raise all the big issues about markets, decentralization, prices, foreign trade, micromanagement, and macromanagement that would be addressed in greater detail during the ensuing two decades. Of these, two of the most
pressing were: How could China expand foreign trade and the role of foreigners without losing control? And how could China provide incentives to individuals, local areas, and foreigners but still retain overall control of the national planning system?

The ten-year vision that was shaped by the discussions at the forum reflected the optimism and excitement that had grown out of the Gu Mu trip. Some assumptions—for instance, that China could pay for imports of new plants and equipment with petroleum exports—were to prove completely unrealistic. Excited by the unprecedented new opportunities, ambitious but inexperienced officials who wanted the country to make up for the two lost decades conceived visions that would exceed their capacities. Yet although they were excessively optimistic, officials at the forum did not abandon government controls. Foreigners were not given full, unfettered access to the Chinese economy. Instead, foreigners' contacts with the Chinese economy were mediated through special units of the government involved with foreign trade, where Chinese officials with linguistic skills and some knowledge of foreigners guarded China's interests.

The optimistic forum participants were in no mood to listen to the champion of the sober cautious officials, Chen Yun. Although Chen Yun had not been an official since being pushed aside by Mao in 1962, no one knew better how the excessive optimism of the Great Leap Forward had devastated the economy and no one had been bolder in trying to temper the optimism at that time. Toward the end of the forum, Chen Yun, who had been informed of some of the forum discussions, told his former underling Li Xiannian that the forum should be extended for a few more days in order to hear other points of view.
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Chen said, “It is correct to borrow money from foreign countries . . . but to borrow so much at once—we can't manage it. Some comrades only look at the conditions abroad and have not looked at the realities in our country. Our industrial base cannot compare with theirs, our technical capacity is not up to theirs. They only see that we can borrow money . . . if we don't do it in a balanced way, and just rely on loans from abroad, it will not be reliable.”
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Forum participants were eager to move ahead, and Hua did not extend the meeting to consider other views.

Deng did not participate in the forum, but he followed the proceedings and did nothing to restrain the optimism. When told of the decision to borrow US$18 billion worth of technology and goods, Deng casually said, “Why not US$80 billion?” Zbigniew Brzezinski, who had met Deng two
months before the forum convened, accurately observed Deng's mood (see
Chapter 11
). Deng, he told President Carter, was in a hurry.

Lighting the Spark, September 13–20, 1978

When Mao was planning to ignite the Chinese revolution, he wrote a famous essay declaring that a single spark can start a prairie fire. Echoing this thought, Hu Yaobang said that Deng's trip to the Northeast (September 13–19, 1978) helped light the spark for a fire that would forge dramatic changes in China, changes reflected at the Central Party Work Conference held later that fall.
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He might have added that the changes included the elevation of Deng Xiaoping as paramount leader. Deng Xiaoping himself later recalled that there were three occasions when he went to the regions to “light a spark” for reform and opening. The first occasion was in Guangzhou in November 1977, when he and Ye Jianying met with PLA officials and civilians to liven up the Guangdong economy.
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The second was in Sichuan in February 1978, on a stopover between visits to Burma and Nepal, when he met Zhao Ziyang to discuss the promotion of rural and urban reforms. (While in Sichuan, Deng mocked those who said that if a farmer has three ducks he is socialist, but if he has five ducks he is a capitalist.
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They should liberate their thinking from this rigid dogma, Deng argued; socialism is not poverty.) The third was on this trip to the Northeast, on his way back from attending the thirtieth anniversary celebrations of the founding of the North Korean Workers' Party.

During this last spark-lighting trip, Deng spent several days in China's three northeastern provinces (Heilongjiang, Jilin, and Liaoning, called “Manchuria” by the Japanese) and then Tangshan and Tianjin, where he championed a bolder departure from Maoism than Hua Guofeng's “two whatevers.” By the time Deng visited the Northeast, the struggle between the article “Practice Is the Sole Criterion for Judging Truth,” which first appeared three months earlier, and the “two whatevers” had begun to heat up. Just a few weeks earlier, Zhang Pinghua, Hua Guofeng's Propaganda Department head, had made the rounds of the Northeast urging officials to support the “two whatevers.” (Zhang was to become one of the first officials whom Deng replaced after he gained more power at the Third Plenum; Hu Yaobang took his place.) Deng's Northeast tour, then, was in effect a way of answering arguments made by Zhang Pinghua and stirring up support for a bolder effort to expand reform and opening. In Beijing, Chairman Hua controlled the propaganda
apparatus, so to avoid causing a direct confrontation, Deng spoke in Beijing with some caution. Away from Beijing, however, he could address larger audiences and speak with less reserve. He spoke informally so that he did not have to go through a bureaucratic process of getting official clearance for formal speeches. In his presentations, Deng did not attack Hua Guofeng directly, but he did criticize the “two whatevers” and supported “Practice,” presenting indirectly his case against Hua. Politically savvy Chinese officials observing Deng concluded that by making the case for “Practice” against the “two whatevers,” he was gathering support in his competition with Hua for the preeminent position in the party. It was logical for Deng to begin by lighting a spark in the Northeast because there he had his base of supporters—in particular Ren Zhongyi in Liaoning province, Wang Enmao in Jilin province, and Li Desheng, commander of the Shenyang Military Region—who were among the first to declare support for “Practice.”

At a gathering of Jilin provincial party officials, Deng criticized advocates of the “two whatevers” for not conveying “Mao's true spirit, which is to seek the true path from facts.” Deng said Marxism-Leninism did not tell the Chinese revolutionaries to surround the cities from the countryside: Mao had succeeded militarily because he adapted Marxism-Leninism to China's particular conditions at the time. Similarly, Deng argued, when foreigners had refused to sell their goods to China, conditions were not yet ripe for developing foreign trade, but conditions had since become favorable for improving economic relations with foreign countries. The Gang of Four may have denounced improving relations with foreigners as a “national betrayal,” but the correct way to hold high the banner of Mao Zedong Thought would be to adapt to such changes and promote foreign trade.
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In Liaoning, Deng said that Chinese leaders, including himself, must admit that they had let down the wonderful Chinese people who had been very patient. The politically sophisticated understood, so Deng did not have to add: “Who was in charge when ‘we’ let down the Chinese people? Who was not making any changes to correct those errors? How could anyone believe that everything Mao said was correct?” Instead, Deng said: “Our nation's system . . . is basically taken from the Soviet Union. It is backward, deals with issues superficially, duplicates structures, and advances bureaucratism. . . . If we can't grow faster than the capitalist countries then we can't show the superiority of our system.” It took no huge leap to conclude that Deng believed Hua was not doing enough to change the structure and to lay a solid foundation for economic growth.

In the Northeast Deng also wanted to firm up his support in the military. Li Desheng, the highest military official in the Northeast who was commander of the Shenyang Military Region, had served under Deng in the Second Field Army. Deng had ample opportunity to talk with Li, who accompanied Deng as he visited factories, farms, and military units.
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At the time, Deng was concerned about the personal loyalty of another high-level military official who was stationed in the Northeast at the port of Dalian, Admiral Su Zhenhua. Su had served under Deng in the Second Field Army, but he had not proved very loyal; when officials were called upon to attack Deng in 1976 he had been more critical of Deng than Deng judged necessary. In April 1978 when a destroyer accidentally exploded in Zhanjiang harbor causing many deaths, Deng held Su Zhenhua, as the highest-ranking naval official in the country and the military representative on the Politburo, responsible. Shortly after being criticized, Su was notified that Hua Guofeng would stop in the Northeast on the way back from his trip to North Korea. Aware of the rivalry between Deng and Hua Guofeng and unhappy about being criticized, Su Zhenhua offered to hold a naval exercise with some 120 ships as part of the welcoming ceremony when Hua arrived in Dalian. When Deng heard that Su was planning to give such a display of support for Hua, he was furious and used his leverage over the military to have the military exercise cancelled. During his visit to the Northeast, Deng wanted to make sure that there were no remnants of military support for Hua Guofeng. To achieve this, he worked closely with his loyal former underling Li Desheng as they traveled together.

Deng repeated to his audiences that the criticism of the Gang of Four should end and the focus should be on doing what was necessary to increase production. Deng was prepared to start working to increase production and the audiences had no doubt that he stood ready to take on greater responsibilities as well.

Central Party Work Conference, November 10–December 15, 1978

In official Communist Party histories, the Third Plenum of the 11th Party Congress, December 18–22, 1978, is acknowledged as the meeting that launched Deng's policies of “reform and opening.” In fact, the plenum was merely a formal ratification of what had been resolved in the lively discussions at the Central Party Work Conference held from November 10 to December 15. Coming two years after Mao's death and the arrest of the Gang of
Four, the conference took place at a time when various perspectives could be discussed afresh with less concern about being improperly disrespectful of Mao. As the meeting came to an end, Deng praised the conference, which marked a return to the party's tradition of democratic discussions, in which people could speak frankly about what they really believed. He said it was the best such discussion at a party meeting since 1957 (when the Hundred Flowers campaign had encouraged freer expression).
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Some thought it was the best meeting since the 7th Party Congress of 1945, while others thought it ranked alongside the Yan'an rectification campaign of 1941–1942.
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