Turning points in history

Jimmy Carter and Henry Kissinger traveled to Beijing to speak with Chinese government leaders and commemorate the first visits that Carter and Deng Xiaoping made to each others countries in 1979.

“There is no more important diplomatic relationship in the world than the one that has grown between the People’s Republic of China and the United States of America,” said Jimmy Carter

The two countries are undoubtedly closely linked. Two and a half million Chinese people live in the United States, Wal-Mart buys over $22 billion worth of goods from China each year, and China holds nearly $600 billion of our debt (over a fifth of our foreign debt holdings).

Chinese is becoming a popular foreign language for students at many private colleges in the U.S. The article cites that 10 percent of undergraduates at Yale University study Chinese (though it's probably true that 100% of students at Beijing University have studied English since grade school). And from my anecdotal evidence, a good number of Harvard and Princeton students are also studying the language. Harvard has a summer language program at Beijing Language and Culture University and they were an impressive group as they took a pledge to speak only Chinese so they stood out being a close group of foreign students who were always talking in Chinese. Same for Princeton, I ran into their group in the Longqing Gorge – they were bungee jumping the same time when I went – and only spoke English when a European tourist asked them where they were from.

The history of China in the last 30 years and how it got to where it is today is a fascinating story and a sharp contrast to the decades of civil war, famine and repression from the 1930s through the middle of the 1970s. I knew little about China’s path of development until reading a few books recently. In “China Shakes the World,” James Kynge describes a common misperception about the way economic reforms were implemented, “In the popular imagination, the launch of China’s economic reforms in 1978 was a planned, top-down affair managed by a man who is often called the ‘architect’ of the country’s emergence, Deng Xiaoping.” But, planned economy or not, history tends to run its own course. As Kynge explains, “the reality has not been so neat. Many of the key events and occurrences that propelled progress towards capitalism were, in fact, either unplanned, unintended or completely accidental.”

The initial reforms–ending collective agriculture and allowing free enterprise–led to a period of the fastest growth and greatest reduction in poverty the country has ever seen. According to the World Bank,

“China’s poverty reduction in the past 25 years is unprecedented. Poverty fell from 53 percent in 1981 to eight percent in 2001, pulling about 500 million people out of poverty. Rural poverty fell from 76 percent in 1980 to 12 percent in 2001. The sharpest reduction was in the early 1980s, spurred by agricultural reforms that started in 1978. The household responsibility system, which assigned strong user rights for individual plots of land to rural households, the increase in government procurement prices, and a partial farm price liberalization all had strong positive effects on incentives for individual farmers. In the first years of the reforms, agricultural production and productivity increased dramatically, in part through farmers’ adoption of high-yielding hybrid rice varieties. Rural incomes rose by 15 percent a year between 1978 and 1984."

Not only were much of the reforms unplanned, much of the initiative was taken on my local officials and individual entrepreneurs (for better or worse–Beijing now has stricter environmental policies but often there is little compliance at the local level).

Another example of consequential changes that subverted the central party are the events that kicked off the second burst of reform and growth in the 1990s. Tim Clissold wrote the book “Mr. China” about his two years as a language student in Beijing in the early nineties, followed by several years working for an American firm investing in the Chinese auto industry. The Chinese economy stumbled after Tiananmen Square and the Communist Party reached a nadir as their hold on power seemed untenable unless they could counter the swell of social unrest with economic prosperity. As Clissold describes,

“While Deng was no liberal, he was a pragmatist and realized years before his Russian counterparts that if the Chinese Communist Party was to survive, it had to deliver the economic goods. Tiananmen Square has shown that he would not shrink from using force, but he knew that in the longer term power grew from rising living standards rather than from the barrel of a gun… Even though he had won the battle for the top place in the Chinese hierarchy, Deng could not just set policy as he pleased, and when he tried to recharge the economy he faced serious opposition from the conservatives.”

To get around the political stalemate, Deng, who was 88 years old at the time, went on a holiday trip to southern China with his family during the Chinese New Year in 1992. He planted a tree in Shenzhen and proclaimed, “To get rich is glorious,”, followed by a tour of cities and factories up the coast and a visit to the Pudong Special Economic Zone in Shanghai.

“He talked directly to local officials about the need to ‘guard against the left,’ and pushed his agenda for greater reform…[party conservatives] knew that Deng had deliberately bypassed all the normal party structures and had reached out directly to local officials. They also quickly realized that they were fighting a losing battle; the rank and file liked what Deng had to say and the tide was against them.”

The most substantial changes start with ordinary people. China’s (and America’s) most successful leaders were those who were able to sway public opinion and convince people that they had a stake in improving the country. The expansion of civil society, the internet and media, and the growing numbers of university graduates and foreign students and workers in China bode well for further reforms and prosperity.