CHINA AFTER MAO: The Deng Xiaoping Revolution Deng’s Economic Reforms

DENG’S BASIC APPROACH TO ECONOMIC MATTERS Economic Realism Performance of Market or Performance of Socialism? Contact or Isolation from Capitalist World?

DENG’S BASIC APPROACH TO THE ECONOMIC MATTERS Economic Realism Not Possible During Mao’s Reign Deng Discriminated Due to Economic Realism 1982: Deng’s Aims for China’s Economy Released

DENG’S HANDS OFF POLICY Hand’s Off Policy Begins Departure from Planned Economy Under Mao Problem of State Owned Enterprises (SOEs) Tackled

DENG’S HANDS OFF POLICY Dogma Replaced by Pragmatism The economy would become the key focus of Chinese government policy Return to Market Economy Stages of Economic Development

Agricultural Reform Commune System Abandoned, Replaced by the xiang Production Quotas Remain Peasants Given Incentive to Produce More

China’s Agricultural Record

Problems with Agricultural Reform Major Problem Caused by Reform: Property Rights Peasants Have Precedent to not trust State Property Questions Leave Efficiency in Doubt

Industrial Reforms - Education Focus by mid-1980s Turns to Industry First Focus on Education Expansion of Education to Produce Technical Experts Thousands of Chinese Students Go Abroad

Industrial Reforms - Special Economic Zones Educated Youth to Return to Develop SEZs 4 SEZs Established in the country SEZs were Chief Commerical Outlets and Key to Opening Up Commerce

Special Economic Zones - Deng’s Pragmatism

Industrial Reform - Problems No More Guarantees For Workers and Businesses? SOEs would now need to become efficient Employees Paid Based on Efficiency and Output

Resistance from SOEs SOEs Resistant to Changes Loss of “Iron Rice Bowl”? State Tried to Please Workers, Reforms Carry Through Centralized Planning Would Have Been Impossible in China

Results of Deng’s Economic Reforms China On An Economic Boom Since Deng’s Reforms Massive Growth…Fastest Growing Economy in the World the Past 25 years Growth at any Cost? Impact on prices? Environment? Equity?

Deng’s Basic Aims To stimulate China’s Domestic Economy To open Chinese trade to the outside world Means The 4 Modernizations Agriculture IndustryDefense Education Methods Allowing market forces to operate Subordinating theory to practical considerations Allowing the development of individual enterprises Encouraging joint venture of Chinese and foreign investment Reforms Land End of the Commune Industry Training of students Creations of SEZs Export Drive Drive for Efficiency/Productivity