Socialism with Chinese Characteristics PDF

Reform & Opening Up since 1978 (1) (pp.416-420) Background Theories of ‘Socialism with Chinese characteristics’ 1. Affirming the guiding principle of 1. Marxism-Leninism adapted to Chinese conditions ‘seeking truth from facts’...

Reform & Opening Up since 1978 (1) (pp.416-420) Background Theories of ‘Socialism with Chinese characteristics’ 1. Affirming the guiding principle of 1. Marxism-Leninism adapted to Chinese conditions ‘seeking truth from facts’ ~ the country should seek truth from fact (not taking Marxism as a dogma), so ~ Hua Guofeng, the Chairman of the CPC, China should proceed from her actual condition and follow her own road proposed the ‘Two Whatevers’ (兩個凡是) 2. Developing productive forces as the major task  "We will resolutely uphold whatever ~ Deng thought that China was at the primary stage of socialism policy decisions Chairman Mao made, and China can enter into the stage of communism only when productive forces had unswervingly follow whatever instructions increased Chairman Mao gave" ~ he also thought that socialism was not equal to ‘poverty’ or ‘slow development’  Hua upheld Mao’s credo ( 信 條 ) of  Deng proposed ‘one central task’ (making econ dev) & ‘two basic points’ “taking class struggle as the key link” (upholding the 4 cardinal principles) as the path for the primary stage of socialism  it formed another hinderance to bring 3. Achieving common prosperity by allowing some people in some regions to things back to order get rich first ~ Deng Xiaoping, the Vice-Chairman of the ~ Deng proposed allowing some regions & some people to get rich first CPC Central Committee, suggested ‘seek  these regions could help other regions to prosper truth from facts & unite as one in looking to  common prosperity would be achieved the future’ (實事求事，團結一致向前看) 4. Implementing the ‘Reform and Opening Up’ policy  he suggested to solve problems in a ~ Deng believed that ‘to arouse people’s initiatives’ was important pragmatic way  the aim of the econ reforms was to develop a socialist market econ on the basis  Deng’s theory laid a theoretical of public ownership & diverse forms of ownership foundation for the 3rd Plenum of the 11th CPC ~ Deng also believed that if China was to develop, she must learn from other Congress countries’ technology, science and management 2. The 3rd Plenum of the 11th CPC  so opening up was necessary Congress to rectify the direction of 5. The ‘three-step’ strategy of socialist modernization running the country (中共十一屆三中 a. to double the GNP (Gross National Product) by the end of 1980s 全會) Dec, 1978  the problem of food and clothing by large would be solved ~ though Hua was the Chairman of the CPC, b. to double the GNP again by the end of 2000 he was criticized in the session while Deng  a moderately prosperous society with comparatively comfortable standard of was supported by most cadres living would be secured ~ the session discarded ‘Taking class struggle c. to achieve modernization by 2050 as the key link’ & shifted the focus of the  the level of moderately developed country would have reached work of the party & the state onto economic 6. Macroeconomic regulation & control development & socialist modernization ~ fiscal & monetary policies as well as administrative means were adopted  Deng became the paramount leader of the e.g. adjusting interest rate, controlling monetary supply, avoiding rampant inflation party & the state by suppressing investment  the policies of ‘Reform and Opening Up’  gov’t can control the econ growth rate & minimize negative impact brought by were adapted to achieve the goals of ‘four fluctuations in the economy modernization’ e.g. in 1978, the gov’t stopped the construction of many infrastructure projects to lower the fiscal deficits & prevent the overhead economy 1  Reform & Opening Up since 1978 (2) (pp.421-433) Economic aspect Economic reform internally Opening Up policy to the outside world 1. Agricultural reforms 1. Opening up coastal areas i. the household contract responsibility system (1978) a. Setting up coastal Special Economic Zones (SEZs) (1980) ~ peasants could retain and sell their surplus crops on the open ~ located at Shenzhen, Zhuhai, Shantou, Xiamen, Hainan market after submitting a certain % of crops to the gov’t  foreigners could set up enterprises at favourable tax rates,  ‘more work, more pay’ measure increased crop production by low labour cost & low land cost 49% between 1978 & 1984  SEZs helped bringing foreign capital, technology & ideas to  Peoples’ Communes disappeared in 1984 since the peasants China households became the production units b. opening up coastal cities ii. the establishment of township enterprises ~ in 1984, 14 coastal cities (e.g. Shanghai, Tianjin) were opened ~ gov’t encouraged rural pop to develop township enterprises,  foreigners enjoyed similar preferential policies but confined such as processing agr by-products, service industry, etc in one particular city  peasants could obtain the right to run enterprises by paying c. Economic Open Zones (EOZs) rent to the gov’t ~ in 1985 gov’t declared 5 more areas as EOZs, such as  it increased the supply of consumer goods & absorbed Zhujiang Delta, Changjiang Delta, etc surplus labour force in the rural areas  EOZs offered huge incentives for foreigners to do export  income in rural areas increased&over-pop in cities was eased trade, processing industry & production of raw materials 2. Industrial & commercial reforms 2. Developing foreign-owned enterprises i. reforming state-owned enterprises ~ gov’t offered incentives for foreigners to invest in China ~ factory director responsibility system was introduced through 3 kinds of foreign-funded enterprises : Sino-foreign  enterprises were paying taxes to gov’t on % of their profits joint ventures, Sino-foreign cooperative ventures, enterprises  they could retain their surplus, decided their production plan based solely on foreign capital & setting prices, hire/dismiss their own workers  many multinational corporations invested in China ~ in mid-1980s, gov’t implemented joint-stock system e.g. Panasonic Corporation & Sony Corporation from Japan ~ Two stock exchange were founded in Shenzhen & Shanghai e.g. General Motors from the US  many state-owned enterprises restructured into joint stock  Foreign investment created a great no. of job opportunities & corporation and went on listing on the two stock exchanges became one of the main drivers promoting econ dev in China iii. reforms in the ‘ownership system’ 3. Participating in international econ & trade organization ~various ownership systems were developed (e.g. collective ~ China actively participated in different international econ & economy, individual economy, private economy, Sino-foreign trade organizations joint equity enterprises) with public ownership economy as the e.g. Chi had its legitimate seat in the World Bank & IMF (1980) core many people engaged in trade under the new modes e.g. Chi joined Asian Development Bank & applied to be iv. implementing reforms in pricing included in the GATT (1986) ~ in 1985 the gov’t implemented ‘double-track pricing system’  by participating in these organizations, Chi could borrow  goods produced in the state plan would be sold at state-fixed money & express its opinions prices while those outside production targets in the state plan  this helped China build fair trading relationships with others would be regulated by market forces ~ in 1996, market decided prices of 93% of the total products 2  Reform & Opening Up since 1978 (3) (pp.421-433) Other aspects 1. Limited political reforms 3. Developing science & technology i. collective leadership ~ gov’t made effort to dev high technology, especially ~ under Deng, China was ruled by his high-hand aerospace technology  it was until Jiang Zemin became CPC General e.g. Chi started developing the Long March rockets (1985) Secretary in 1989 that Chi began to practice collective ~ gov’t also set up high-end technological development leadership to avoid autocracy e.g. Zhongguancun Science Park  each member of the Standing Committee commanded different power networks including the party, the gov’t, the 4. Modernizing national defence army, the NPC, the CPPCC ~ in 1985 gov’t cut down 1 million soldiers & reduced 11 ii. grass-roots democracy military regions into 7 ~ in 1980s, gov’t delegated power partially to some ~ gov’t introduced military equipment & skills from villagers & urban residents to expand political western countries & developed its own strategic missiles participation of the people ~ gov’t also sent students abroad to learn military iii. carrying out law reform knowledge from the US & Russia ~ in 1982 gov’t promulgated a new constitution, ensuring 5. Developing inland regional economies the legislative & supervisory authority in the NPC & local a. central inland region people’s congresses ~ this region is rich in natural resources, such as coal, oil, ~ in 1996 NPC agreed to amend the Criminal Procedure natural gas, iron, steel & timber + Law & apply the principle of ‘presumption of innocence’ ~ 7 out of 13 agricultural zones are located in this region ~ in 1999 gov’t added the principle of ‘running the state ~ however, foreign investment in this region was limited according to law’ into the Constitution due to its geographic location  signified China’s transition from the rule of man into  gov’t only promoted the local economy by giving state- the rule of law owned enterprises more freedom & providing agricultural 3 2. Development in social aspect subsidies i. introducing birth control policies  No full-scale development strategy was devised in this ~ gov’t introduced one-child policy in order to slow down region the population growth & reduce expenditure on social b. western inland region welfare ~ most parts of this region were economically backward  additional children would result in fines though it is rich in natural & energy resources, such as oil, ii. development of education natural gas & hydropower ~ in 1986 Compulsory Education Law was passed  differences between the eastern & western regions are  9-year free education was introduced big ~ in 1990 gov’t introduced Project 211 to build around 100  gov’t therefore implemented the Grand Western universities, cultivated key subjects & systematized higher Development Programme in 2000 education e.g. strengthened the construction of infrastructure e.g. introduced projects, such as the West-East Gas Pipelines & West to East Power Transmission Project  western China became the main area for transmitting energy resources though it still lagged behind the eastern region Impact of the Reform & Opening Up (4) (pp.433-442) Positive Impact 1. Economic aspect 2. Political aspect : relaxing control over speech a. Developing a diversified economic structure ~ R&O brought a relatively higher degree of freedom of ~ R&O changed Chi’s economic mode that based on ‘public speech, pol atmosphere became more open ownership’ to a diversified economic structure  people called for reforms began to emerge e.g. no. of private enterprises rose from 110000 to 820000  CPC tightened up freedom of speech once again after (1979-96) while private capital made up 29.1% of total June 4th incident industrial output  however, R&O had brought western thoughts to China  state-owned enterprises no longer monopolized the market 3. Technological & military aspects : development in  Chi’s foreign trade grew rapidly aerospace technology & national defence e.g. Sino-American trade amounted to US$8 billion (1986) ~ in 1980s, China became the 3rd nation after the USSR and China became the 7th largest export country by 2000 the USA to launch satellites b. Improving productivity ~ China’s mil. power grew to rank third in the world, after ~ R&O improved agr. & industrial productivity the US & Russia e.g. average annual growth rate of industrial production e.g.in 1983 it improved the 1st generation of intercontinental amounted to 12% while grain output increased by 40% ballistic missile & increased missile range by 13000 km (1978-84) 4. Social aspect  Chi’s economy grew at an average annual rate of 9.8% a. Improving living standards from 1979-1997 ~ R&O greatly improved its living standard  by the late 20th century, Chi became one of the largest e.g. per capita annual net income of peasants increased from economies in the world, aside from the US & Japan 130 RMB in 1978 to 2,200 RMB in 1999 c. Speeding up industrial & commercial development e.g. pop living under absolute poverty amounted to 250 mil ~ increasing agricultural production provided raw materials in 1979 but it dropped to 29 million in 1999 4 for industrial development + e.g. only 17.2% of families in cities had color TV in 1980 but ~ township enterprises also helped industrialize rural areas & it increased to 86.2% in 1990 offered support to state-owned enterprises b. Speeding up urbanization e.g. in 1997 total output of township enterprises made up 1/3 ~ more & more peasants worked in township enterprises of the national production while some moved to towns and cities to find jobs  all these greatly helped national economic development  a ‘tide of migrant labour’ emerged & increased urban pop ~ foreign investors brought in new technologies, capital & e.g. urban pop increased from 170 mil to 380 mil (1978-99) modernized method of operation  the proportion of urban pop to the total pop increased  Chi became the ‘world factory’ by the late 20th century from 17.9% to 30.9%  no. of cities grew from 193-683 e.g. industrial products made up 74.4% of Chi’s total export 5. Diplomatic aspect : active participation in int. affairs  in 2000 secondary sector made up 45.9% of Chi’s GDP ~ since 1988 Chi had actively participated in the while that of tertiary sector made up39.3% peacekeeping operations of the UN d. Increasing agricultural production e.g. Chi sent mil observers to the Middle East in 1990 ~ R&O raised peasants’ incentives to farm & helped promote ~ Chi joined other regional & international organizations agricultural development e.g Chi joined World Bank & IMF in 1980 & APEC in 1991 e.g. agr. production increased by 50% (1979-84) e.g. Chi joined the Group of Twenty in 1999 e.g. average annual growth rate of grain was 4.8%  China’s image in the Western countries was improved  in 1996 national grain output reached 500 mil tons Impact of the Reform & Opening Up (5) (pp.433-442) Negative Impact 1. Economic aspect 2. Political aspect a. Three Rural Issues a. No democratic reform in sight ~ gov’t shifted the focus of reform from rural to urban ~ people demanded for pol reforms & intellectuals advocated dem areas in the mid-1980s that caused ‘Three Rural Issues’ :  But CPC insisted on one-party rulership i) Agricultural : insufficient gov’t investment in agr led to  China lagged behind the west in the degree of democratization slow agr dev  difficult to increase agr. productivity b. Serious corruption among cadres ii) Rural areas : inadequate infrastructure development+ ~ some officials, cadres secured their interests by abusing power. growth of rural population  resulting in further poverty e.g. they would obtained goods at a cheap official price and sold them iii) Peasants : low incomes  many peasants moved to at the higher market price cities to find jobs  their life was not much improved  widespread social discontent & finally led to 4th June incident,1989 e.g. rural income was only 2160 RMB in 1998 while that c. Deficient legal system in urban income reached 5425 RMB ~ there are still a no. of loopholes existed in the legal construction  slow agr dev would badly affect Chi’s modernization e.g. econ law was deficient & it could not accommodate modernized business administration; law protecting private property was inadequate 5 b. Huge deficit & hyperinflation 3. Social aspect ~ gov’t invested greatly in infrastructure a) serious unemployment  issued large amounts of paper money to reduce the ~ state-run enterprises faced fierce competition due to the opening up huge deficit & resulted in hyperinflation of the market  many workers were laid-off  serious unemployment e.g. inflation rate had increased from 6% to 17-18% e.g. unemployment rate rose each year from 1.8% in 1985 to 3.1% in (1980-90) 1997 + no comprehensive social security system  medical, edu, housing expenses continued to rise  greatly affected the livelihood of the unemployed  it led to the falling living standard b) wider gap between the rich & the poor ~ great differences between coastal/interior; urban/rural areas c. Increasing trade disputes with foreign countries e.g. GDP per capita in coastal regions was 2242 RMB while that in ~ since 90s, Chi products had become more competitive inland regions was only 1228 RMB (1991) in the market e.g. many people in western regions was below US$200  many foreign countries had a trade deficit with China c) Gender imbalance  set tariffs on Chi goods to protect their local industries ~ under one-child policy, culture norm of preferring boys to girls e.g. some EU members collected anti-dumping duties on created problem of gender imbalance Chi goods + US also repeatedly objected to China’s e.g. no. of male aged 15 or below was 18.83 million more than that of restoring its signatory status in GATT (forerunner of the female in 2000 WTO) d) Inadequate educational resources ~ Chi’s edu expenditure accounted for 2.56% of national income while d. Fake products in the market that in other countries was 3.3% of national income on average ~ some businessmen sold fake goods, inferior goods or illiteracy in Chi was still high even goods below health standard to earn more money e.g. 12% of total pop was illiterate or semi-illiterate e.g. food processing factories in Chaozhou, Guangdong e) Social problems caused by urbanization produced toxic milk powder ~ rapid urbanization led to serious social problems  Chinese products could hardly built its reputation e.g. poor living environment, serious traffic congestion & pollution  it undermined the development of Chinese enterprises Impact of R&O policy on China’s relations with other Asian countries (1) (pp.446-456) Development of China’s foreign policy Factors affecting China’s foreign policy 1. Before 1978 1. Ideological factors ~ in 1949 many western countries did not recognize ~ Deng advocated for seeking truth from facts & the PRC constructing a socialist market economy  China implemented the ‘leaning to one side’  China abandoned fierce ideological struggles foreign policy, i.e. established ties with communist  this greatly improved China’s relations with other countries such as the USSR capitalist countries ~ in late 1950s Sino-Soviet relationship worsened  China turned to build diplomatic relations with 2. Economic factors the 3rd world countries ~ Deng proposed Reform & Opening Up after 1978 ~ in 1970s China’s relation with the Western  China needed a harmonious & stable international capitalist countries improved environment to gain foreign investment, technology,  on the whole, China’s diplomacy before R&O was talents & markets + limited 6  ~ SE Asian countries contained rich natural 2. After 1978 resources, e.g tin, rubber, natural gases, etc ~ in 1978 China strove for a peaceful environment ~ Japan had abundant capital & possessed advanced for modernization technology  China adopted an independent foreign policy of  China sought to build friendly relationships with peace & established friendly & cooperative relations its neighboring countries with neighboring countries in Asia  this policy was based on the ‘5 Principles of 3. International factors Peaceful Coexistence’ : ~ China’s power rose rapidly following the * mutual respect for territorial integrity&sovereignty implementation of Reform & Opening Up * mutual non-aggression  the rise of China aroused the anxiety of * non-interference in each other’s internal affairs neighboring countries + * equality & mutual benefit ~ the June Fourth Incident of 1989 & the collapse of * peaceful co-existence the USSR in 1991 ~ in the late 1990 China adopted the policy of ‘multi-  posed huge diplomatic challenges to China faceted diplomacy’, i.e. keeping on friendly terms  China had to adopt the principle of ‘keeping a low with all countries profile’ & avoided disputes with other countries ~ in 1996 China established a ‘strategic cooperative partnership’ with Russia ~ in 1998 China established a ‘partnership of friendship & cooperation’ with Japan China’s relations with other Asian countries during R&O (2) (pp.446-456) Political aspect Military aspect 1. Normalizing diplomatic relations 1. Frequent military a. NE Asian countries exchanges with other i) Japan advanced countries ~ 50s-60s no diplomatic relation with Jap due to the Cold War in Asia ~ in 1972 Chi & Japan signed the Sino-Japanese Joint Declaration ~ in order to  Sino-Japanese relations were normalized in 1972 modernize national  in 1978 Chi & Jap signed the Sino-Japanese Treaty of Peace & Friendship defence, China had ii) Russia frequent military ~ 50s-60s Sino-Soviet relations worsened due to the split between Mao & Khrushchev exchanges with Russia ~ in May 1989 Gorbachev visited to China  Sino-Russian relations turned to normal e.g. in 1994 Chi  in 1991 China was one of the earliest country to recognize the Russian Federation bought 4 submarines iii) South Korea from Russia at a 7 ~ 50s-60s no diplomatic relation with S. Korea due to the Cold War contract price of ~ in Sept 1992 President Roh Tae-woo visited China US$1billion  China & South Korea established diplomatic relations b. SE Asian countries e.g. in 2000 Chi & ~ 70s poor relation with Vietnam due to Vietnamese invasion of Cambodia & the outbreak of Russia signed a the Sino-Vietnamese War (1979) cooperative ~ in 1991 relations were normalized due to the withdrawal of Vietnam from Cambodia agreement, in which c. South Asian countries Ru promised to ~ since 1959 Sino-Indian relations had started to worsen due to border disputes & local wars increase its sale of ~ 80s USSR declined & reduced support to India weapons to China  1988 Sino-Indian relations began to normalize with exchanges of high-level official visits 2. Dealing with territorial disputes ~ China also played ~ Deng suggested setting aside the territorial disputes to avoid serious conflicts in building an active role in diplomatic relations peace-keeping in Asia e.g. both Chi & Jap agreed to shelve the issue of the Diaoyu Islands & seek solutions through e.g. in the 1990s future negotiations China made use of its e.g. both Chi & Ru solved most of the territorial disputes along the border between them by influence to prompt signing the Sino-Soviet Border Agreement in 1991 the ceasefire & the e.g. both Chi & India agreed to put aside border disputes around Xinjiang & Tibet in 1993 end of the civil war in 3. Maintaining regional peace Cambodia ~ China maintained peace & stability in Asia in order to create a favourable environment for econ development e.g. China adjusted its ‘leaning to one side’ policy towards North Korea  Chi prompted North Korea & South Korea to resolve the nuclear crises through negotiation on an equal basis in the early 1990s  Chi brought about the 1st meeting of the North & South Korean leaders to resolve their differences through dialogue & cooperation China’s relations with other Asian countries during R&O (2) (pp.446-456) Economic aspect Social aspect 1. Enhancing economic cooperation 1. Providing foreign assistance a. Frequent trade ~ China grew strong since the ~ during R&O, volume of trade between Chi & other Asian countries grew introduction of R&O policy rapidly  Chi provided the neighboring e.g. Japanese enterprises, such as Panasonic Corporation & Toyota Motor countries various kinds of aids, such as Corporation, set up factories & offices in China loans, technical support, humanitarian  volume of trade grew from US$6.7 billion to US$85 billion (1979-2000) aid, medical teams, assistance in the  Jap offered a huge sum of econ aid & loans to China construction of infrastructure, etc Jap’s Official Development Assistance to Chi exceeded US$3.2 billion in e.g. 80s Chi assisted Burma in building the period 1980-88 Stadium e.g. S. Korea was allowed to directly invested in Shandong & Liaoning e.g. 90s Chi trained up officials in  volume of trade grew from US$41 mil to US$34.5 billion (1980-2000) Burma & Laos to capture drug 8 e.g. Ru sold heavy industrial products to Chi while Chi exported low-priced smugglers consumer goods to Ru e.g. Chi cooperated with UN Refugee  volume of trade grew from US$75 mil to US$7 billion (1989-1997) Agency to help Lao refugees in Chi to return to Lao (1992-97) b. Joining trade organizations & regional development plan 2. Promoting civil exchanges ~ in 1991 Chi joined APEC to promote free trade in the Asia-Pacific Rim ~ civil exchanges between Chi & other ~ in 1996 Chi developed full dialogue partnership in the ASEAN Plus Asian countries became more frequent THREE Summit e.g. in 1995 Chinese students studied in  laid a foundation for establishing a free trade area between Chi & Japan amounted to 24000 ASEAN countries e.g. in 2000 institution of higher 2. Stabilizing the economy in the Asian region education in China recruited over 16000 ~ in 1997 the Asian financial crisis swept across Asia Korean students & over 13000 Japanese  financial market & currencies experienced huge fluctuations students  Chi promised that it will not depreciate RMB so that economy in the e.g. since 1998 Chi invited artists & Asian region would not be worsened performers from different countries to  Chi also provided US$4 billion assistance to Asian countries who were participate, promoting arts & cultural hit by the crisis exchange in the Asian region  R&O had improved Chi’s econ power that helped strengthen the economy in the Asian region 3. Entering into the economic competition ~ China gradually became the ‘world factory’ after implementing R&O  it competed with other Asian countries for export markets in textile products, garment, electronic products, etc ~ in 1994 the depreciation of RMB increased the competitiveness of China’s export  Chi became the main competitors of SE Asian countries, including Thailand, Malaysia, Indonesia & the Philippines 9