CHINA'S ECONOMIC REFORMS I: THE DEBATES IN CHINA

Abstract

Unlike the Hungarians, who had agreed on a programme of economic reform two years before it was implemented, China's economic reforms evolved in the midst of bitter debates and controversies. Typically, unfavourable developments in the economy would trigger off opposition to the economic reform, expressed in theoretical disagreements; meanwhile the reform programme would have to mark time to await theoretical clearance. It was not until October 1984, six years after the reforms first began, that the Chinese leaders finally formulated a model or programme of economic reform in a formal decision of the Central Committee of the Chinese Communist Party (CCP).1 There are three reasons for this extraordinarily long gestation period. First, the reforms began as a series of localised experiments which were later adopted by central authorities. There was no direct relationship between the local experiments in Sichuan where Zhao Ziyang, now Premier, was at the time First Secretary of the provincial Party and the national reform programme.2 The Sichuan initiatives placed overwhelming emphasis on enterprises rather than on unified planning control, whereas in the national discussion those economists and central leaders in charge of research and propaganda still dealt with reform of the planning system in terms of pre-Cultural Revolution thinking. Second, the economic reforms were initiated at a time when the national economy was in a state of macro-economic and structural imbalance. This called for economic readjustment (retrenchment) and cast doubt on the immediate relevance of the economic reform. The ensuing debate on whether economic readjustment should