Prisoner of the State: The Secret Journal of Premier Zhao Ziyang (30 page)

D
uring the process of “adjustment and reorganization” greater power shifted into the hands of the State Council, and away from me and the Central Economic and Financial Leading Group. I continued to search for economic solutions within the group; however, they would not discuss, let alone execute my proposals.

Deng Xiaoping originally suggested the formation of the Central Economic and Financial Leading Group. The purpose was to let me continue to lead economic development and reform even after I had left the position of Premier. When Li Peng had taken over as Premier, many people were concerned, because I was more familiar with the issues involved. Moreover, Li Peng had always been vague about his attitude toward economic reform, so people had doubts. Therefore, Deng Xiaoping designated that I should continue to manage economic affairs, and the group was established.

When “adjustment and reorganization” began, they believed that my position in economic affairs had weakened. They took controlling power, which meant the Politburo Standing Committee, the Central Economic and Financial Leading Group, and I could no longer run economic affairs. Thus they were able to restore many of the old methods, in the name of “adjustment and reorganization,” something the Politburo Standing Committee and the Leading Group would never have agreed to do.

As I mentioned previously, people made a run on banks and commodities to preserve the value of their savings. If interest rates had been raised immediately, the problem could have been resolved. At Leading Group meetings, I repeatedly proposed that we raise interest rates on bank savings. Other comrades in the group, such as Zhang Jinfu and Du Runsheng, agreed.

But the State Council kept fiddling, neither raising interest rates nor launching value-guaranteed savings. Although they eventually raised interest rates, the increase was too small to make a difference. The State Council’s method was to use administrative means to slash credit quotas. As a result, there was insufficient liquidity, and no funds for procuring agricultural products or upgrading technology for factories. Production stagnated.

Another issue was that while people’s savings had decreased, the currency supply had actually grown. Therefore, in the latter half of 1988 and the beginning of 1989, the biggest problem was a severe tightening of credit and loans, which disrupted production and distribution, even as the money supply and currency in circulation had both increased. This proved that the measures taken were a mistake.

I suggested keeping credit under control—tightening it but not so stringently—so that production needs could still be taken care of, while at the same time making efforts to resolve the savings issue to ease people’s fears. My proposal was not adopted.

Some senior comrades complained that since I was now the General Secretary and no longer Premier, I should focus on the Party and matters of political theory, leaving economic affairs to the State Council. In fact, it was clear that the State Council was attempting to block my work and evade decisions made by the Central Economic and Financial Leading Group—while spreading such comments to force me to cut back or halt my work on economic affairs. It couldn’t have been a coincidence that these two things were happening at the same time.

The campaign was powerful. Hong Kong newspapers said I had been stripped of real power and no longer managed economic affairs. Rumors claimed I would lose my post as General Secretary and become chairman of the Central Military Commission, or the President of the People’s Republic. The meaning of all of these rumors was that I was no longer in charge. Once, at a photo session in Huairen Hall for a conference of delegates, Xiaoping asked me, “Why did Hong Kong newspapers report that you no longer manage economic affairs? How can you not be managing the economy anymore?”

Another issue was that “adjustment and reorganization” gave people the impression that economic reforms had run into serious trouble; otherwise, why wasn’t “deepening reform” being mentioned as a way to stabilize the economy? This allowed certain people an opening to reverse economic reforms, deny their achievements, and wage a campaign to overthrow me.

Some senior comrades demanded that the Politburo Standing Committee—in fact they meant me—take responsibility and admit guilt. [Vice Premier] Wang Renzhong more than once raised the issue in Politburo meetings of an investigation into who was responsible. He said that, since such a grave situation had emerged, those responsible must take part in a self-criticism.

During this period, I heard from many channels that a group of elders collectively wrote a letter to Deng Xiaoping condemning me, saying I was not qualified and demanding that I step down. Deng Xiaoping said several times during this period that “the structure of the central leadership should not be changed.”

Around the end of 1988, a newspaper in Hong Kong reported that when Deng was in Shanghai, Li Xiannian had suggested to him that Deng ask me to step down, but that Deng had not accepted his suggestion. After I read the report, I wrote a few lines to [Deng’s secretary] Wang Ruilin and asked him to show it to Deng. I said something like “There have been rumors circulating around the country and abroad. I don’t know whether Deng knows about them.”

With this campaign, people around the country and abroad worried that I could turn out to be the “second Hu Yaobang.”

The State Council and some senior comrades exaggerated the economic problems, presenting them as extremely grave. The State Council repeatedly criticized the so-called “two rushes for results”: “the rush to build” and “the rush to reform.” There may have been grounds for attacking “the rush to build,” referring to infrastructure expenses that had grown too large. But there were no grounds for attacking any “rush to reform.” They merely used this phrase to oppose reform and attempt to overturn past policies.

Some Party elders cooperated with Li Peng, Yao Yilin, and the State Council. Just before the New Year’s holiday of 1989, the Politburo Standing Committee held a Party life meeting at which Li Peng and Yao Yilin took the lead in criticizing me. By that time, they had already blocked my influence, but in the meeting they accused me of intervening too much, making his [Li’s] job as Premier very difficult.

They also asked many odd questions about reforms. Yao Yilin asked, “What does ‘price reform breakthrough’ mean? How did that come to be proposed?” He had not known at that time that the phrase was proposed not by me, but by Deng Xiaoping. He thought I had invented it and was trying to use it to attack me.

They wanted to settle a score. The intention of the meeting was to blame me for the problems that had emerged because of economic reform.

When I reported to Deng about what had happened at the meeting, he appeared very displeased. He spoke at length in support of reform, and made positive remarks about it. He believed that without reform, there was no hope for China’s future.

Yao Yilin had never expressed unequivocal opinions, nor had he ever taken the lead on anything before. This time, however, he was clear, direct, and apparently fearless. His attitude and the attitude of Li Peng seemed to represent a general trend, and somebody was supporting them from behind the scenes. A campaign was under way.

There were also rumors attacking me and my family. Some claimed that my children were profiteering: trading color televisions, automobiles, grain supplies, and alloy steels, and making themselves wealthy. These were all completely fictitious, but they spread far and wide. Later, after I stepped down, they rushed to launch an investigation into the matter, which actually was helpful. After searching high and low, they were unable to find a thing.

Before this, rumors of this kind about me were rare. Why did they suddenly pop up, giving the impression that my family was corrupt, in the latter half of 1988? The emergence of this campaign was not an accident, but rather a concerted attempt to smear me and destroy my image as a reformer.

A
campaign was growing strong within the Party: opposition to reform, efforts to “Overthrow Zhao,” the creation of a public opinion campaign. Behind it all were comrades with deep-seated beliefs in the planned economy, who thought reform was a failure and that it was responsible for problems like the bank runs and panic buying. With these developments, it was easy for the campaign to spread.

But let’s step back. Before 1987, I held the position of Premier and was mainly responsible for economic affairs. The policy was, of course, reform and openness. Political affairs—matters relating to politics and ideology—were managed by Comrade [Hu] Yaobang. I had a lot of things on my hands; I often took trips abroad and received foreign guests. I did not often involve myself in political affairs.

Yaobang and I had differing opinions on how to manage economic affairs. I was considered more cautious and did not speak about things so casually. I did not promote unbridled development, I opposed large-scale infrastructure projects and I believed in proceeding methodically. Yaobang was different: he was ideologically liberal and carefree.

There was a conservative faction in the Party that stubbornly opposed liberalization and reform. Among Party elders, it was represented by Li Xiannian and Wang Zhen; in the ideological sphere, it was represented by Hu Qiaomu and, especially, Deng Liqun. Together with their associates and organizations, they formed an influential force.

Yaobang had been the primary target of their opposition. They did not make me a target, as I was viewed as being relatively neutral. They may even have believed I was closer to their side in some areas. Therefore, when Yaobang stepped down and the decision was made to make me General Secretary, they were not opposed.

That said, [influential Party elder] Li Xiannian had objected at first. He said I had learned too much foreign stuff, and demanded that I change my ways. As long as I was willing to change, he would support me to take over from Yaobang. There was no other obvious opposition.

Wang Zhen [another Party elder] had tried to persuade me to remain as Premier while suggesting that [State Planning director] Yao Yilin become General Secretary instead. Since I had never wanted the position of General Secretary and preferred to remain as Premier, I thought that whoever was made General Secretary would be just fine by me. At the time of his suggestion, I had no reason for suspicion. Later, people told me that Wang Zhen had actually wanted to make [ultraconservative ideologue] Deng Liqun the General Secretary, but experienced trouble winning support for the idea.

Once I became Acting General Secretary, the first issue I had to deal with was the Anti-Liberalization Campaign. I believed it should be strictly contained, reduced in scope, and cooled down. I didn’t agree with their plan to wage a full-blown campaign to widen its scope. They had drafted a list of names, wanting to criticize this person and that. I suppressed it and made speeches aimed at protecting some of those who were on the list. They also wanted to wage a major criticism campaign in newspapers against Yaobang. I didn’t like this Cultural Revolution–like behavior and from the very beginning laid down the rule that there would be no guilt by association in the Anti-Liberalization Campaign, no hunt for “representatives” at various levels. I also blocked the campaign from entering the economic arena.

As a result, after the June Fourth incident [in 1989], I was criticized for having placed these restrictions on the campaign. In fact, the charges were true. The Central Committee had issued a document setting strict rules and limits on the campaign and defined so-called “liberalization” as opposing the leadership of the Communist Party and supporting wholesale Westernization. This was done to avert the mistakes of past campaigns.

If the campaign were to continue all the way up to the 13th Party Congress, then the Congress would not be able to proceed. We absolutely had to make it a congress of reform and openness.

The leftist forces—Deng Liqun and his associates—used every means possible to expand the reach of the campaign and restore the old leftist ways. They made every attempt to extend the campaign to the economic arena. Using their terms, they wanted to attack not only those who were speaking liberalization, but those who were “doing liberalization.” The term “doing liberalization” was meant to refer to those who were carrying out reform. Under the suggestion of Deng Liqun, some people in the Central Party School opposed the phrase “one central focus, two basic points,” arguing that upholding the Four Cardinal Principles could not be placed at the same level as reform, that the former was a principle and the latter just a means. They also said that the rural land contract scheme had damaged the foundations of agricultural cooperatives and had destroyed rural collectivization.

I discussed these issues with Deng and offered him my opinions. I felt that some Party elders were attempting to use the Anti-Liberalization Campaign to oppose reform. An appropriate response needed to be made in order to influence public opinion; otherwise, it would be difficult for the 13th Party Congress to support reform. I was prepared to give a speech about it. Deng completely supported my idea.

On May 13, 1988 [actually 1987], I spoke to comrades working in the area of theory and ideology. I said that after the implementation of the Anti-Liberalization Campaign, the general climate had changed; therefore, the campaign could be brought to a close. The tasks going forward would mainly be in the field of education. I also said that the disturbance caused by liberalization was temporary, while the disturbance caused by leftists was long-lasting and fundamental. I listed many mistaken leftist comments in the theoretical and ideological arena opposing reform.

After the June Fourth incident, they also criticized me for shifting the target of the struggle from the right to the left and, on May 13, turning Anti-Liberalization into Anti-Leftist Dogmatism. This was actually true as well.

This indicates that they had expected me to adopt their ideas in conducting the Anti-Liberalization Campaign. However, my May 13 speech turned out to be not against liberalization but against them. Later, at the 13th Party Congress, I set the tone for the gathering and wrote a report to Deng that included the phrases “initial stage of socialism” and “two basic points,” and in general opposed the leftists. This provoked more antagonism from them.

There was a phrase in my 13th Party Congress report that referred to the market economy, without using those exact words. I stressed that “the state intervenes in the market, and the market drives the enterprises.” This is the mechanism of market economics, with the state only playing the role of making adjustments, and then only by using economic means. The market would guide enterprises and production. I also said that market mechanisms were to cover all aspects of society.

Before these points were drafted into the report of the 13th Party Congress, I wrote a letter to Deng Xiaoping, but did not send copies to Chen Yun and Li Xiannian. They were displeased with my ideas, but it was hard for them to oppose them openly.

A few incidents made them particularly unhappy with me. One was removing Deng Liqun before the Party Congress from the role of heading ideological work, and replacing him with Hu Qili. I suggested that Deng Liqun could continue as a Politburo member and participate in Politburo meetings. He had read many books and was entitled to express his opinion. I also said that if Deng Liqun were allowed to continue in theoretical work, not only was there no hope for Marxism to develop in China, but there would be no hope for theories that would benefit reform. He soon heard about my damning remark.

I also abolished the headquarters of the left-wing writers, the Research Office of the Secretariat, as well as
Red Flag
magazine. Of course, Deng made the final decision to shut them down, but the suggestion came from me.

These actions strengthened popular support for reform. Deng Liqun and the left-wing conservatives who opposed the reform agenda were suddenly exposed to the public in China and overseas; they were isolated. We did nominate Deng Liqun during the 13th Party Congress for membership on the Central Committee so that he would have a chance to become a member of the Politburo, but he lost in the election. Later he was nominated for membership on the Standing Committee of the Central Advisory Commission, but he lost again. They thought I had manipulated the results; as a result, Li Xiannian, Wang Zhen, Hu Qiaomu, and even Comrade Chen Yun remained angry with me.

Comrade Wang Zhen actively opposed liberalization but he believed in openness, so I was surprised that he ended up hating me to such a degree. After the 13th Party Congress, Li Xiannian openly denounced me in Shanghai and Hubei in front of local officials. He accused me of not carrying out socialism and of having learned too much foreign stuff. He said that I had no understanding of economics and had brought chaos to the economy. Comrade Chen Yun was more discreet and made reasoned arguments.

They later came to the conclusion that I was “more Hu Yaobang than Hu Yaobang.” Things Hu Yaobang had not dared to do or was unable to accomplish, I had managed to pull off.

Before the panic buying, and before “adjustment and reorganization” had been proposed, they had secretly tried to undermine me. When these developments took hold, they believed their chance had arrived, since they thought that I had ruined economic policy and spoiled the reforms. They spread adverse opinions about me and waged a campaign to “overthrow Zhao.”

I was not well informed. Since I had spent so many years working at local levels and had recently come to the central leadership, I had fewer channels. Some of the behind-the-scenes dealings remain obscure to me, even now. For example, a group of people wrote a letter to Deng Xiaoping attacking me, but I don’t know who they were.

Before the incident of June Fourth, amid the “Overthrow Zhao” campaign, Deng Xiaoping had always firmly supported me and was not moved by their attempts to sway him. This can be seen from a series of incidents.

For instance, Deng said on many occasions that the structure of the central leadership could not be changed. It was obvious that Deng said this in response to the people who wanted to make this change. Deng even said directly to me and to other comrades that I should remain General Secretary for two subsequent terms. Of course, this was only his personal opinion.

After the New Year of 1989, Li Peng and Yao Yilin launched an attack against reform at the Politburo Party life meeting. Deng was upset when he heard about the incident, so Li Peng went to Deng’s place to explain and defend himself. During this conversation, Deng told him, “Zhao will be General Secretary for two more terms” and asked him to forward this message to the other members of the Politburo Standing Committee. Of course, Li Peng had to tell me what Deng had said.

Before June Fourth, just before my North Korea trip, I paid a visit on Deng. He told me that after my trip, he wanted to discuss my continuing on for two additional terms as General Secretary. A list of names had been prepared to participate in a discussion of this. In addition to the members of the Politburo Standing Committee, some of the Party elders were included. He also told me then that Chen Yun and Li Xiannian had agreed. As for how that discussion had gone, I don’t know.

During the Spring Festival holiday in 1989, just before departing for Shanghai, I had made another visit to his home. That discussion had gone even further. He said that he had been thinking for some time, but had not told anyone and wanted to discuss with me first, that he wanted to resign as chairman of the Central Military Commission and wanted me to take over. He said that if he did not entirely retire and still kept the position, it would be difficult to persuade other elders to stop intervening. He said this seemed the only way. It was obvious that he felt that the elders had been too intrusive and had made it difficult for me to manage. Perhaps he considered this move after the elders had gone to him to express their opposition to me. In order to allow me to work unfettered, he had decided to relinquish his position.

When he suggested he retire, I firmly disagreed. I said, “With the economic problems we are now encountering, people are talking. If you retire completely, it will be very difficult for us to manage. Politics in the East differs from the West; here in the East, your retirement would not stop the interference, nor would the fact that they no longer held any official positions. As long as these heroic founders of the nation are still alive, it will be impossible to persuade them to stop interfering in state affairs. If you were to stop intervening, but they continued to, it would be even more difficult for us to manage. With you in charge, it is still easier for us to get things done.” I suggested to him, “No matter what, you really must not raise this issue again for at least a year.”

After I said this, he paused to think for a moment. Then he replied, “Very well. I will do what you have suggested. I will not mention this for another year.”

This talk with Deng made me realize that some people, perhaps many of the elders, had been putting pressure on Deng, bad-mouthing me. Deng openly expressed that he would not be influenced by them. He rejected their pressure. From the moment I was made General Secretary in 1987, a conservative force had gradually formed to oppose me. Though they were aggressive in their opposition, utilizing all sorts of tactics, without Deng Xiaoping’s support they were unable to succeed.