China Openings to the Market Economy and Political Repression

By | January 13, 2022

In 1980, China joined the International Monetary Fund and the World Bank. Now firmly in power, the new Chinese leadership, moderate, technocratic and efficient, accentuated the policy of modernization and promotion of the country’s economic growth and extended the measures of liberalization and opening up the economy to foreign countries. In the international field, the aspiration to the complete reunification of the Chinese territory by the end of the century achieved two important successes with the agreements for the return of Hong Kong in 1997 and Macao in 1999 signed with the British government in December 1984 and with the Portuguese one. in April 1987. Repeated attempts by Beijing to reach a similar agreement with the nationalist government of Taiwan were instead rejected by the latter, also induced to intransigence by the continuation of military aid from Washington. This aid remained the main cause of friction in relations between China and the United States, which however developed further through economic and technological cooperation agreements. Relations with the USSR also experienced a gradual thaw from the beginning of the 1980s, allowing for a resumption of economic and commercial exchanges and cooperation agreements between the two countries. Internally, this policy provoked an acceleration of productive development, accompanied however by contradictions and difficulties. In agriculture, the leasing of land to peasants and the preponderant weight assumed by family production for the market led to significant increases in the most profitable crops, but also the decrease of some collective work investments, indispensable for water regulation, and a tendency to shrink the area destined for cereals, with the risk of food shortages. In industry, the introduction of market mechanisms, the increasing importance of foreign exchanges, assumed as engines of development, favored very high growth rates, but also strong sectoral and territorial imbalances. More generally, the difficulties in managing rapid economic expansion, the onset of inflationary phenomena, employment problems and massive migratory movements, the increase in social and regional inequalities, corruption and crime raised social tensions,

In March 1986, according to EQUZHOU, China became the 47th member of the Development Bank of Asia and applied to join the General Agreement on Tariffs and Trade (GATT). That same 1986 also saw a notable development of the political-cultural debate, also encouraged by a renewed ‘hundred flowers’ policy, but at the end of the year a series of student demonstrations, demanding democratic reforms, aroused concerns and divisions in the management team. Some intellectuals were accused of favoring tendencies towards ‘bourgeois liberalism’. Despite these rigidities, the reformist and modernizing line was clearly reasserted at the XIII congress of the party and Deng Xiaoping, although he retired from some of the positions held, was reconfirmed as the leader of the country. 1988, also following the adoption of further measures to liberalize the economy, saw an acceleration of the processes of uncontrolled production growth, which was accompanied by an aggravation of imbalances, foreign indebtedness and above all inflation. Sharp rises in food prices increased discontent in the cities, while financial difficulties and speculative phenomena arose.

In April 1989 student demonstrations called in Beijing quickly transformed into a large protest movement, in which the denunciations against social inequalities, privileges and corruption were accompanied by requests for greater democracy, also inspired by the reform attempt promoted in the USSR. by M. Gorbacev. In May, as the movement spread to numerous cities, the population of the capital largely sided with the students, who had permanently occupied Tien An Men Square since the 13th. On May 20, after a bitter conflict within the leadership team, Prime Minister Li Peng and President of the Republic Yang Shangkun, with the support of Deng, proclaimed martial law in Beijing, while CCP Secretary General Zhao Ziyang, advocate of dialogue with students, he was in fact placed under house arrest. Blocked for two weeks by the population, who took to the streets en masse, the troops brought to the capital were able to reach and occupy the center only after the massacre of at least a thousand people and the wounding of thousands more in the night between 3 and 4 June. The clashes continued for a few days, even in other cities, while a harsh repression of the protest movement, defined as a ‘counter-revolutionary revolt’, was launched, with thousands of arrests and dozens of executions (martial law remained in force in Beijing until January 1990). At the end of June, the Central Committee of the CCP and the Standing Committee of the People’s Assembly ratified the victory of the repressive line: Zhao Ziyang and some other leaders were dismissed; party general secretary was elected Jiang Zemin, who in the following months replaced Deng in the last posts he had held. Despite his retirement from official posts, the 85-year-old leader nevertheless still maintained a profound influence on the country’s political life.

China Openings to the Market Economy