China's Market Reform Debate

Isabella M. Weber, How China Escaped Shock Therapy: The Market Reform Debate. London and New York: Routledge, 2021. 358 pp. £ 30.00 paperback. In the histories of capitalist genesis and development, including the capitalist logic of the Cold War and post-Cold War (and the threatened new Cold War) and of neoliberal globalization, the market integration and invigoration which has brought the economy of Communist China to global prominence is a remarkable story. Of intense scholarly interest are China's growth model, institutional and policy adaptations, and interactions with others in the geo-economic and geopolitical reordering of the world. Yet, despite the expanding literature in this field, comparative case studies which delve into the extensive historical and international, as well as intellectual and discursive, contexts are relatively rare. Isabella Weber's book How China Escaped Shock Therapy contributes to filling this gap. A quick background sketch of the familiar yet often neglected basics is useful here. The People's Republic of China (PRC) was founded upon, and fundamentally defined by, the victory of the Chinese Communist Revolution in 1949. Committed to both national and social liberations, the revolution achieved unity and independence for the country in terms of socio-economic development, forging a self-aware sovereign people in the process. In constructing a socialist political economy, the new regime pursued a collective, egalitarian and participatory politics. The state mobilized resources to rapidly accumulate capital and labour, buttressed by a rudimentary ‘public good regime’ to meet basic needs. China could thus withstand imperialist blockades and transform itself from one of the world's largest poor nations. By the end of the 1970s — before any ‘market miracle’ and despite recurrent policy errors of dizzying scale — Communist China had built up an industrial edifice and seen both the size and life expectancy of its population approximately double, an epic feat to be appreciated with ‘an acute and painful awareness of all the horrors and crimes that accompanied the revolution’ (Meisner, 1999: 12). Taking 1949 as the normative benchmark, a balance sheet of the vicissitudes of the Chinese Communist Party (CCP), state and society since reform began in 1978 can be drawn up. The landmark 1978 Party plenary decision to reform the economic system within the bounds of socialism enjoyed a broad mandate and kindled a novel atmosphere of political openness and intellectual probing. Despite early signs of derailing, contemporaneous with surging neoliberalism in the West, the nature of China's 1980s reformism was clearly distinguishable from the next decades of ‘revolutionary’ neoliberalization. Brewing discontent over burgeoning official corruption and social insecurity, however, erupted in 1989, with the Tiananmen Square protests signalling the breakdown of the initial reform consensus. A refined periodization of the ‘long 1980s’ (1978–92) identifies the events of 1989 and Deng Xiaoping's 1992 southern tour, reinstating the Special Economic Zones (SEZs), as a turning point. The 1990s became a testament to the ‘great reversal’ of socialism in China (as William Hinton put it), consistent with the triumph of capitalism globally, marked by imposed privatization, privileged foreign investment, marketization of healthcare, education and other public services, and resultant crises in minsheng or livelihood — the ‘rural triple crisis’ being the best known. In the first two decades of the 21st century, seemingly incompatible policy positions of seeking corrective repairs and ‘deepening’ the reform were pursued simultaneously. If it was the predicaments of Chinese socialism that compelled reform, it was the radicalization of that reformist position that led to the accumulation of contradictions from within which became ultimately self-negating. The preoccupations of the 1980s centred around the end of the Cultural Revolution and the beginning of ‘Reform and Opening’. To recover from the ravages wrought by Maoist mass attacks on the party state, the reformers oversaw two diverse tracks. One was bureaucratic ‘crony capitalism’ (known in the common Chinese perception as quangui zibenzhuyi) of public office in collusion with private wealth to take advantage of the loopholes of market transition. The other was legalization and democratization encouraged from above and below since the late 1970s, prompting the leadership to formally pledge to institutionalize a ‘highly civilized and highly democratic socialist society’. It is hard to imagine anything worse than the logic of China's subsequent development: as the former became systemic, the latter proved short lived, resulting in just a few co-opted demands, such as procedural legality and limited competitive elections. By the early 1980s, closing the door on popular participation as the foundation of power and the only force which could counter bureaucratic capitalism meant that a fleeting chance of political regeneration was forfeited. The reform process began to steadily liberalize the economy, first embarking on rural decollectivization to replace the existing communes with a family responsibility system. Urban restructuring followed, alongside authorizing an initially ‘shallow globalization’ making use of foreign capital, markets and technologies. Dissolving communal agriculture and ending the unified purchase and marketing of grain, cotton and oil did not alter collective land ownership, but changed the entire structure and operation of the economy. Left in its wake were rundown villages and disorganized farmers — the context of the present effort to reinstate cooperation and ‘revitalize the countryside’. The rural contract system was transplanted to the urban state-owned enterprises (SOEs) for managerial autonomy. Instead of government budget allocations, each enterprise was to be liable for its own profits and losses on interest-bearing bank loans. Meanwhile, collectively managed township and village enterprises (TVEs) flourished, absorbing agricultural surplus labour and raising local wage income. The invention of coastal SEZs led the way in converting China into ‘the factory of the world’. Before long, however, both thriving TVEs and the majority of regional SOEs vanished in waves of private and foreign takeovers in the 1990s. Revisiting China's vibrant 1980s, before its neoliberal and developmentalist turns, can be daunting. Isabella Weber, a young scholar of originality, rigour and nuance, succeeds in her endeavour of scrutinizing the Chinese debate over China's the of the of in the late 1980s, a could China from its and a of and into global capitalism’ the of capitalist integration her on its of the of the debate and its and historical and intellectual and her and with and the in this two can be the of Maoist socialism and the of market The of had managed the before the national economy as The had up the Cultural Revolution and with the and the the of the the Reform in Deng of the Party to the young rural it be to rural China's are By to to the the and of China's of the and as the of China's are not China China are China be are can has from with the and are to socialism capitalist in How this was as China in the of industrial and is a story. reform was on the the rural economy became and market were the as the reformers were marketization but to a to be achieved in one for a — and The for the a but is an 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In with the of and of and turns, China's can be and — had is not and the logic of and could be of How China Escaped Shock Therapy for and the global Isabella Weber's to the entire of Chinese all that is and are to be and to be of and as well as to common and of in the new China and up its reformist and neoliberal the 1980s are not that first reform the of capitalist but of its to the socialist reform, and its public with and a participatory and is in in the of London of and is the other of The of Chinese China and and Revolution and in China

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