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Dilemmas of Reform in Jiang Zemin’s China, by Andrew J. Nathan, Zhaohui Hong, and Steven R. Smith (eds.)
Foreword
China’s economic reforms since 1978 have led to economic, political, social, and cultural changes. Economic reform originated in the agricultural sector with the elimination of the people’s commune and establishment of the household responsibility system. This stimulated the enthusiasm of farmers and led to a rapid increase of agricultural production. The rise of township and village enterprises successfully absorbed more than 120 million surplus laborers in the countryside. The initial success of economic reform in the rural areas led to urban reforms. Over 100 million laborers released from the agricultural sector accelerated the movement of laborers that sped up the development of a nonstate economy. Now, private enterprises exceed the performance of the state-owned enterprises (SOEs) by contributing more than 70 percent of the gross national production. At the same time, SOEs began to carry out ownership reforms, introducing shareholding and cooperative shareholding.
Economic reform has led to the transformation of a predominantly state-owned and centrally planned economy to a market economy. A stock market, real estate market, and labor market have emerged, and all the crucial elements for a market economy have come into being. Pushed by economic freedom and the market economy, the government has begun to recognize the legitimacy of private ownership and freedom of choice in the economy. The development of a market economy has become irreversible.
The rise of a market economy has led to political changes. As the central government reduced the size of its bureaucracy and curtailed its own authority, local governments strengthened their power in finance, banking, and personnel management. With the emergence of local economies, relations between the central and local governments have become increasingly tense, and local authorities are able to influence and restrain the central government in policymaking and implementation. As a result, the centralized leadership of the Chinese Communist Party (CCP) faces an unprecedented challenge. Additionally, the rise of localism has accelerated the separation between the government and enterprises, as well as between the party and the government. Because an increasing number of factory directors and managers have become contractors, many enterprises have become independent; this economic independence has become the symbol and driving force for democracy, freedom, and pluralism.
Despite problems, county-level elections have been held since 1980. Many nonofficial candidates have won elections through campaigning, while many government-endorsed candidates have been defeated. These grass-roots elections have strengthened the sense of participation of the public, spread the ideas and theories of democracy, and shaken the foundation of the authoritarian system. Grass-roots democracy has further enhanced the democratic function of the People’s Congress and gradually changed it from a “rubber stamp” to a representative institution with basic supervisory and check-and-balance functions. As the supreme authority established by the constitution, the People’s Congress has begun to participate in the policymaking process, utilizing the legal power provided by the constitution, and resisting pressure from the CCP. As the People’s Congress becomes more independent, it represents a challenge to the authoritarian power of the executive branch and the CCP.
While the economy has been modernized, reform has also created political, economic, social, and cultural crises. Because the market system is still in a primitive stage and the modern enterprise system not fully established, many people have been hurt by unemployment. Extensive corruption exists and the social security system is inadequate.
Political reform has become the bottleneck of institutional transformation and social development, but transformation of the political system is the key to further reform. The success or failure of political reform will largely determine whether China will be able to achieve growth, prosperity, and stability in the twenty-first century. The existing political system limits the development of the country. The serious problems in population control, environment, education, relations between nationalities, social order, the judicial system, and the cultural crises are immediately related to the mistakes and miscalculations of the government. Although the CCP began to pay lip service to political reform in 1985 so as to match the economic reforms and eliminate political obstacles to economic development, the Tiananmen Square incident interrupted healthy experimentation and development and caused a deeper political crisis.
With no internal divisions and no external checks, the power of the CCP has created the prerequisite for nationwide corruption. The practice of trading money for power has become so common that it threatens the legitimacy of the regime and may become the spark that ignites mass protest and social instability. Drawing from historical lessons that people’s revolts have been driven by misgovernment, it seems likely that without political reform the existing government may be in danger. Political instability would threaten all economic and social reforms.
Although the cry for political reforms has never stopped, reforms have been few. Demand for political change has clashed with political reality and has cost some people their lives. Reforming the political system has become the key link as well as the biggest problem. How to effectively promote and achieve political democracy has become the most challenging task and the greatest test of the wisdom and ability of Jiang Zemin’s China.
With the goal of promoting a market economy and political democracy in China, the Center for Modern China, established in 1990, is recognized as one of the leading institutions of China studies. With a “liberal, pragmatic, scientific, creative, and cooperative” spirit, the center brings together social scientists to study the issues essential to the success of China’s institutional transition. The center has three hundred active members residing in eighteen countries and areas, each specializing in one of the social sciences or in the humanities. In several major countries outside the United States, the center has branch/liaison offices. It maintains regular exchanges with approximately three hundred scholarly organizations and with nearly two thousand scholars around the world. One unusual feature of the center is that its research associates were born in China and maintain contact with different segments of Chinese society. Some have been active for many years in promoting reform, while others have personally participated in making important decisions regarding reform. Most members of the center have received formal doctoral training in the West and now teach and conduct research in Western universities and research institutions. Some members are recognized as leading specialists in their fields; these scholars are regarded as China specialists by governmental agencies, research institutions, universities, and the mass media in China and elsewhere.
Since 1990, the Center for Modern China has sponsored about two hundred research projects, twenty-five international conferences and seminars, approximately six hundred public lectures around the world, and several study missions to China, the former Soviet Union, and eastern Europe. Its members have participated in approximately two thousand interviews by media organizations from different countries. The center has published approximately eighty issues of its Chinese and English journals, as well as initiated and funded several writing and publishing projects, including thirty volumes of its popular book series and eighteen specialized studies. The fourteen volumes of Market Economy Popular Reader Series, for instance, sold 400,000 copies in the first three months of its publication in China and won the grand prize for the 1994 Chinese Books Award.
Organized by the center with the support of other organizations, an international conference on “The Fifteenth Communist Party Congress and China’s Development” was held in New York City in November 1997. The conference featured papers on the significance of the Fifteenth Congress of the CCP for China’s political direction, the reform of state-owned enterprises, social problems, cultural reconstruction, China’s reunification, ethnic problems, and U.S.–China relations. This book is an outgrowth of that conference; most of its authors were participants and are research fellows of the center.
The editors of this volume have selected ten essays focused on economic reform and political challenges that they believe address the toughest issues, offer the sharpest analyses, and will be of most interest to a wide audience of English-speaking readers. The authors write with the insight that comes from having lived and worked within the Chinese communist system, while at the same time trying to answer the questions they know will be on the minds of their North American colleagues and students. All who are interested in modern China will benefit from the expertise and insight of the authors.
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