Left and right in China's economic reform in the 1990s and the façade of the ‘third thought liberation’

Abstract

The Fourteenth Congress of the Chinese Communist Party settled a fourteen‐year‐old dispute over the plan‐market relationship by calling for the establishment of a ‘socialist market economy’. It also restated the theory of the ‘primary stage of socialism’ to promote the private sector. Since then, conflict between the Leftist and Rightist orientations in economic reform has focused on the interrelated issues of the shareholding system, privatization and the public sector‐private sector relationship. The Rightist reform programme has been implemented as the official programme since the Fourteenth Congress, whereas the Left has been marginalized and forced to fight a losing rearguard defence. The shareholding system, criticized by the Left as a privatization measure, has constituted a major component part of the official state‐owned enterprise (SOE) reform policy, while small SOEs have been rapidly privatized and the private sector has grown phenomenally despite Leftist criticisms. The Fifteenth Congress has complementarity redefined the public economy and upgraded the private economy's role. The decisions signify a fundamental reconceptualization of the public sector‐private sector relationship, and hence mark a substantial step forward in the Rightist reform programme's evolution. Their successful implementation would result in massive privatization. Since August 1997, there has been much talk of Jiang Zemin achieving a ‘third thought liberation’ by declaring that the shareholding system is a ‘form of realization’ of public ownership at the Fifteenth Congress. This ‘liberation’ is actually a facade because Jiang's declaration is unnecessary in either the formulation or implementation of the Rightist programme. Jiang was induced to make his declaration by some intellectuals and aides who wanted to commit him to an irreversible break from the Left. But while the ‘liberation’ is phoney, Jiang's declaration does further demoralize the Left. With the Rightist programme progressively entrenching itself both in theory and practice, the Left is destined to become an irrelevant ideological embarrassment for the regime.