Deng Xiao Ping Theory: The Framework which Guides China's Development by Eric Sommer
In the movement of new knowledge and innovations across the globe,, some things travel quickly. But other things, especially those which encounter cultural or ideological barriers, may move with glacial slowness or not at all. The whole world knows that China is the fastest expanding economy in the world, with average 10% or more growth per year, and a potential economic and political super-power. But the framework which guides China's remarkable development remains almost unknown outside the country. What makes outside ignorance particularly odd is that the theory is known to almost everybody inside China, for it is a key part of the curriculm in public school, and is a required subject for many university programs. It is also the offical policy of the Chinese Government and the Chinese Communist Party, and it is currently a key part of the education of the 60 million or so members of the communist party in China. Chinese people call this framework - which guides China's development - 'Deng Xiao Ping Theory'. And it was, to a great extent, created by China's late president Deng Xiao Ping. To fully understand Dengs' contribution, we need to see it within the historical context from which it emerged. After Mao Tse Tung's Death in 1976, Deng re-emerged as a national leader, and moved the party to break the 'cult of personality' around Mao which had deified him as a human God who could make no mistakes. Deng declared that the Chinese people need *not* always follow 'the way indicated by Chairman Mao'. Instead, he insisted that 'everyone can think for themselves' about China and its development. Moreover, under Dengs' leadership the party made a serious critique of Mao's role. Critique of Mao This critique found that in the first part of his life Mao's contribution to China was mostly good: This contribution was, first, Mao's leadership role in the revolution" with its anti-feudal aim to free peasant farmers from the terrible exploitation and oppression they suffered under feudal landlords; second, Mao's special method of popular 'people's war' using guerrilla warfare based on the peasantry, the elimination of the control of different parts of the country by separate warlods; and the elimination of foreign domination. Mao also made a great contribution in providing Communist leadership in the anti-Japanese war during the Japanese invasion and occupation of large parts of China. In the second part of his life, however, the party found that Mao made very serious mistakes - mistakes which had been harmful to China's people and to their economy.. These mistakes included the great leap forward and the cultural revolution. (Brief explanation of cultural revolution needed here.) The root cause of these mistakes, the party found, was Mao's wrongheaded, and economically and socially disastrous view that class struggle was the key to solving all problems, and his idea that class struggle must continue unabated in China even *after* its socialist revolution. (Brief explanation needed of the class-struggle-after-revolution concept.) Relevance to other Developing Countries Deng played a crucial role in getting the party, and the country, to accept the view that not class struggle but economic development was now central for solving China's problems, and that it, and not class struggle inside China, is the key to China's further development. In developing his theory, , Deng Xiao Ping persuaded the Communist party and government of China to adopt a completely new approach to Socialist and economic development in the post-Mao era: Deng articulated three meta-economic criteria for evaluating all policies - policies and practices should !) maximize the productivity of China, 2) maximize the range of skills and abilities within China, and 3) maximize the standard of living of workers and peasents. The Market Belongs to Socialism To begin with, Deng reaffirmed long-term commitment to a cooperative socialist future for China. He said that, in fact, after a very long time the whole world will adopt advanced socialist or communist forms of cooperation and sharing. As a Marxist, he viewed even the collapse of the Soviet Union as a temporary setback. He believed that in an extended world-historical process humanity's' productive forces are gradually built up and, ultimately, will be socially shared resources for all people. Next, Deng declared that 'the market belongs to socialism as well as capitalism'. Deng proposed that In the period of socialist development - and especially for a developing country like China - private and public enterprises should function through the market. Deng called this view 'the socialist market economy'. Western world pundits, and especially those in the U.S., often equate the market with private ownership, while state planning is equated with socialism. One of Deng's key innovations was to say that under market socialism, state, cooperative, and private firms could *all* trade and function through the market. In China, the market does not mean only private enterprise. This is something which seems very hard for westerners, and perhaps especially American's, to understand. To those who think China is now simply a capitalist economy, it may come as a shock to learn that within China's mixed economy, China's state-owned enterprises had the most profitable year in their history in 2004; and that nearly half or so of all Chinese exports were from these firms. Deng's framework rests, in important part, on the Marxist notion that the build-up of social productive forces - skills, knowledge, tools, machines, social organization, and all else that contributes to human productions - leads, ultimately, to a cooperative socialist society. Openning up and Knowledge Transfer. A third pillar of Deng Xiao Ping's thinking was the theory of 'openning up'. Deng insisted that China needs to learn from the whole world. Deng rejected what western management theorists call the 'not-invented here fallacy'. This is the fallacy whereby some companies or organizations assume that anything they have not developed themselves cannot help them or is not valuable. Deng did not make this mistake. He clearly stated that China urgently needed injections of both knowledge and of capital from the outside world for its development.. Deng was deeply aware of China's need for scientific, technical, and managerial knowledge from the rest of the world, and especially from the 'advanced countries'. Joint ventures with foreign companies and organizations, and allowing foreign companies to operate in China under government guidelines, were seen as key means to access the needed knowledge and capital. China's Economy Today. China's economy is frequently characterized, in western periodicals like the Economist, as dynamic but 'held back' by the presence of SOE's (state owned enterprises). Asian people often say that all things have a good side and a bad side. And this applies to the SOE's. Bad debts, some inefficiencies, corruption problems, and other problems (amplify this point) were the bad side for state owned banks and enterprises. However, many of these problems have been or are being resolved. Many unprofitable SOE's have been sold or closed. In addition, however, at the macro-economic level, and in meeting social needs, and in generating revenues without imposing heavy taxes on the private sector, the combination of private and state owned sectors gives the government, and the country, enormous flexibility. Within the guidelines of Deng Xiao Ping Theory, China can utilize all economic forms to build productive forces and meet social needs. Enterprises can be owned and operated by large state companies associated with the central government, by city governments, by regional government economic organs, by workers cooperatives, and by private companies. Moreover, a mixture of these forms is frequently achieved through joint-venture enterprises owned jointly by state and by private parties. Deng Xao Ping famously summed-up this part of his approach with the aphorism: "It doesn't matter if the cat is black or white as long as it catches the mice." He meant that building up China's productive forces, and the standard of living of its people, is the priority, and that government, cooperative, or privately owned enterprises could all play a role in this process. The size of the social sector of the Chinese economy is sometimes underestimated due to government use of joint-stock economy forms. For example, government directives to SOE's to take on thousands of employees, and to take other special measures, were used to stabilize China's economy, and that of Asia and the world, during the severe Asian economic crisis during the late 1990's. Though deeply relieved at the time, western, and especially U.S., ideological assumptions about the 'purity' of private enterprise have prevented proper credit from being given to the Chinese mixed economy for stabilizing Asia at a crucial moment. Latest Developments - Greening of China and Turn towards Greater Social Equality: To be added here: Explanation of the new 'scientific concept of development' as wholistic sustainable development, and explanation of the 'Construction of a New Socialist Countryside'. The Communist party and national People's congress of China recently held major meetings on the 11th five year plan for the country in Beijing. A new approach, based on upgrading social welfare, education, and medical services and medical insurance for all Chinese people, and also featuring protection of the environment and construction of a 'New Socialist Countryside' to radically upgrade the standard of living and life opportunities of farmers is being put in place. The concept of 'some can get rich first' which fueled the initial stages of the economic boom is being replaced with the goal of 'common prosperity for all' - and the notion that 'before the countryside supported the cities (in the initial stages of modernization and development) but now the 'cities must support the countryside (in providing the economic muscle to deliver medical care and health insurance, educational systems, increase crop yields, diversified economic base, and more to the 1 billion Chinese who inhabit the countryside). These new policies are, in a way, a reach backward to the socialist traditions of China but utilizing the market system - both public and private companies operating through the market - as the engine of development. There will now also be more emphasis on independent research, innovation, and science and technological development is also included. This is important and has been - as usual - inadequately reported in the western media. The government buzzword here is to turn China into an 'Innovation Society'. In addition, a completely revised set of GDP measurements, which will take environmental costs, and costs to workers health and well-being into account - is being prepared. This will vault China into a leading position, from its past poor record, on environment. One Center; Two Points Deng Xiao Ping Theory is the official policy of the Chinese Communist party. It is elegantly summarized by the party itself as 'One Center; two points." The Center is Economic Development. The Two points are Opening up and the Socialist Road A third 'point' now being added, may be said to be the 'greening of China', which now sports the world's first GDP to include substantial ecological criteria. China in recent decades has pioneered a new path of development, Chinese authorities are quick to point out that no nation should blindly imitate China's economic and political approach; each nation, they say, must find its own path of development which is suited to its historical, social, and other conditions. Nevertheless, the tremendous progress achieved by China, a nation of 1.3 billion people, under Deng Xiao Ping Theory is worthy of note by the rest of the world. Moreover, while blind imitation is unwise, careful study and selective use of elements of this theory by other developing countries in Africa, Latin America, and Asia might well be of real benefit to the people of those nations and the world "True development puts first those that society puts last." -Mahatma Gandhi "Dare to be naive." - Buckminster Fuller "Work for the world." - Karl Marx "A loving heart: In all the world this state of mind is best." - ADM CEO --------------------------------- Never miss a thing. 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