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The "NEW CHINA" Reaches Out
Gene H Hogberg

While the world has been in the throes of a startling upsurge of terrorism in the past five years, a revolution of an entirely different kind has been under way in the world's most populous nation.

   LITTLE appreciated by the outside world, a remarkable social and economic transformation has been under way in the People's Republic of China since 1979.
   The implementation of a comprehensive policy of economic reform, coupled with a long period of domestic tranquility, has meant a rapid increase in prosperity for the more than 1,000,000,000 people of China.
   It has also engendered a widespread feeling of public confidence in the future.
   The amazing turnabout is largely attributed to two individuals: Deng Xiaoping, the country's top leader since late 1978, and Zhao Ziyang, Premier since 1980.
   As television viewers in the United States recently witnessed on an eye-opening two-hour-long documentary, the change in China can be visibly measured in the increasing numbers of motorbikes, refrigerators, television sets and other consumer goods Chinese can now purchase. Brighter and better-made clothes are replacing the standardized blue uniforms once favored as "proletarian."
   With freer market forces in operation, and the shift out of farm communes into family farming, agricultural sufficiency has replaced the years of storages and rationing.

Zhao Executes "Master Plan"

   Deng Xiaoping is believed to have undertaken China's monumental reforms without a detailed program. According to one longtime Western observer of Chinese politics, "There was no path, no map, only a compass to give him the general direction."
   Fortunately for the 79-year-old Deng and China, there was a person available to translate the generalized master plan into practical day-to-day reality — Zhao Ziyang.
   A victim of the extremist Cultural Revolution of 1966-1976, once denounced as a "capitalist roader," Zhao, 64, has risen rapidly in the Chinese hierarchy.
   Zhao had won favor for his agricultural management of Inner Mongolia and Guangdong Province from 1971 to 1975. He was subsequently promoted to party secretary and governor of Sichuan, China's most populous province, which lay in economic shambles after the turmoil of the Cultural Revolution.
   Zhao's policies quickly turned food shortages to bumper harvests. He restored peasants' private plots, raised farm prices, revived bonuses and told factory managers to think in terms of profits and losses. By 1979. Sichuan's farm output was up 25 percent and industrial production up 81 percent.
   "People should free their minds from the straitjacket and let economic levers push the economy ahead according to economic law," announced Zhao. (Perhaps his most quoted economic principle is: " We must not bind ourselves as silkworms do within cocoons. All economic patterns which hold back development of production should be abolished.")
   As Deng won the leading role within the party after the death of Mao Tse-tung in 1976, Zhao's star ascended. In 1980 he was brought to Peking as a member of the Politburo and a Vice-Premier, and six months later he was named Premier, the third since the Communist Party took power on the Chinese mainland in 1949.

Turnabout in Agriculture

   On the national level, Premier Zhao has been able to put his provincial experiences to the biggest test of all.
   Armed with the rationale that "production is to improve the people's livelihood," rather than with the earlier dictate that "production is for the revolution," Zhao first tackled the restructuring of Chinese agriculture.
   The policy of the "people's commune" system of farming begun by Mao 25 years ago has now been abandoned. For China's 800 million peasants Zhao encourages, instead, family farming, the establishment of cottage industries and the development of free trade in most agricultural commodities.
   These agricultural reforms paid off handsomely in 1983 with a record grain production of 370 million metric tons — despite floods in the south and drought in the north.
   The bumper harvests are, reported a Reuters dispatch from Peking, "widely attributed to the introduction of profit incentives for peasants." Some farmers are actually said to be wondering what to do with all the money they are earning.

Industry and Bureaucracy

   Industrial reform has proven to be more difficult to implement. In industry, Zhao originally pushed for greater autonomy for enterprise managers, but he soon encountered roadblocks.
   Few managers were up to the challenge, mainly because they were politically appointed bureaucrats, not entrepreneurs willing to take risks to increase efficiency and profits. Zhao readily admits that much has yet to be done in the industrial sector.
   As far as industrial workers are concerned, Zhao has maintained that they should be paid according to their work, not just because they have a job. State employment, furthermore, should no longer be guaranteed. Bonuses, Zhao insists, must be paid generously for increased productivity or otherwise not at all.
   The bureaucracy is a favorite target in Zhao's reform drive. He has boldly trimmed central government agencies and personnel by more than a quarter and is forcing the streamlining down through the provinces to the cities and counties.
   In a startling development in May 1982, the number of Vice-Premiers was slashed from 13 to two.
   Overall, the team of Zhao Ziyang and Deng Xiaoping, his mentor, have cooperated to bring these changes about. Each man, apparently, has his role to play and specific area of responsibility.
   "Deng may supply the political muscle and others some of the ideas," says a Chinese political scientist, "but Zhao is the man who has to get things done. Either industrial production goes up, or it does not. Either the harvest is better, or it is not. Either science and technology advance, or they do not. And, whatever the underlying reason may be, it is Zhao who answers."

Tapping Western Resources

   Further advances in China's industrial sector necessitates gaining greater access to the scientific and technological expertise of the Western world.
   Unlike China's leaders in the past, Premier Zhao has traveled extensively outside his native land. In January of this year he became the highest ranking official from the People's Republic to visit the United States. His visit took place three months in advance of President Ronald Reagan's scheduled return trip to China in April. At his stops in Washington, New York and San Francisco — especially in his top-level talks in the capital — the Premier emphasized the issues of trade and investment.
   For the time being, irritations with the Reagan administration have been placed on hold. Before he left Peking, for example, Zhao told a press conference that China would not press for new concessions on the Taiwan issue beyond the 1982 agreement to gradually diminish U.S. arms sales to the island.
   In Washington, Zhao said China wanted to "blaze a new trail and build socialism with Chinese characteristics." He said China had an increasing demand for manufactured goods and needed to exploit energy resources and develop communications and transportation.
   "In all these endeavors, massive capital and advanced technology are required," he said, adding that while relying on its own efforts, China would actively seek foreign aid and trade.
   As a result, a number of agreements between the United States and China in the spheres of trade and investments are expected soon.

America's Interest

   "The business of America is business," the late U.S. President Calvin Coolidge once remarked.
   For a while, after another President, Richard Nixon, broke the ice with the People's Republic with his visit there in 1972, and after formal relations between the two powers were established in 1979, the United States talked a great deal about "playing the China card" — leveraging relations with China against the Soviet Union.
   Currently this "strategic" aspect of the relationship is secondary. Instead, U.S. officials talk more about "bringing China into the world financial and trading system." In other words, trade over geopolitics.
   The prospects of markedly increased trade with the People's Republic is especially attractive to U.S. industrialists who already are dealing in ever-increasing volume with the countries of the Orient. In a speech before the World Affairs Council of Northern California in San Francisco, Premier Zhao reminded Americans of their growing stakes in the countries of the Pacific rim. He said:
   "China, with its 1,000,000,000 people, has now embarked on a long march and is concentrating its efforts on socialist modernization. Thanks to its endeavor of more than a century, Japan has become a world economic power. The Soviet Union is gradually shifting its focus of investment and economic development from west of the Urals to the Far East.
   "On the other hand, the economic center of gravity in the United States is moving from the east to the west, that is, to the Pacific coast. In fact, the trade volume of the United States with Asian countries has already outstripped that with European countries....
   "Particularly noteworthy is the fact that a number of countries in the Pacific region have stayed in the lead in economic development, while many industrially advanced countries, being plagued by what is known as stagflation, have been slow in economic advance for the past decade or so. This has led to the prediction by many people in the world that the 21st century will be a Pacific century."
   Backing up Zhao's analysis is a recent Wall Street Journal survey of over 200 business executives from 16 European countries, which produced "stark evidence" that Europe has declined as a source of technology leadership, with the U.S. maintaining its top position and Japan growing in importance.

Drifting Away from Europe

   It is a fact of immense importance, though recognized only faintly by most Americans, that culturally, economically — and soon strategically as well — the United States is drifting out of the Atlantic orbit.
   For years now there has been a perceptible shift in the United States away from its historic attachment to Europe into a much closer relationship with the nations of the Pacific basin.
   "The overwhelming European influence on our culture is on the wane and giving way to the Orient," Frederick Allen, Morgan Guaranty Trust Co. vice-president, commented in an interview published early in 1983.
   Franc Viviano, an editor of Pacific News Service in San' Francisco, added that "once the word 'immigration' was synonymous with the arrival of Europeans, and later with Latin Americans. Today two of every five newcomers to the United States are Asian.
   "Consider the fact," added Mr. Viviano, in echoing Premier Zhao's remarks, "that in 1982-83, for the first time in history, overall U.S. trade with Pacific nations exceeded that with Atlantic nations, registering a record $121,200,000,000."
   This shift toward the Pacific, in turn, plays a significant role in the rift now developing between the United States and its Western alliance allies in Europe.
   "Our future lies in Asia" is the recurring theme in some influential economic and political circles in the United States. This viewpoint is usually coupled with the call for the United States to eventually cut defense ties to Europe, to pull United States troops out of the Continent.
   If enough West Europeans don't like the presence of new Pershing II and cruise missiles supplied by America to N A TO, follows this reasoning, then let the Europeans either defend themselves or make their own security arrangements with the Soviet Union.
   The end result will be a Europe cut off from America — but a Europe eventually becoming a I "third force" superpower of its own rank.
   In the meantime, the relationship between the United States and the People's Republic of China will undoubtedly deepen — as long as the remarkable duo of Deng Xiaoping and Zhao Ziyang chart China's course.

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Plain Truth MagazineApril 1984Vol 49, No.4
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