Table Of ContentCHINA: FROM REVOLUTION TO REFORM
STUDIES ON THE CHINESE ECONOMY
General Editors: Peter Nolan, Lecturer in Economics and Politics, University of Cambridge,
and Fellow and Director of Studies in Economics, Jesus College, Cambridge, England; and
Dong Fureng, Professor, Chinese Academy of Social Sciences, Beijing, China.
This series analyses issues in China's current economic development, and sheds light upon
that process by examining China's economic history. It contains a wide range of books on the
Chinese economy past and present, and includes not only studies written by leading Western
authorities, but also translations of the most important works on the Chinese economy
produced within China. It intends to make a major contribution towards understanding this
immensely important part of the world economy.
Published
Dong Fureng
INDUSTRIALIZATION AND CHINA'S RURAL MODERNIZATION
Hong Wang
CHINA'S EXPORTS SINCE 1979
Jiann-Jong Guo
PRICE REFORM IN CHINA, 1979-86
Michael Korzec
LABOUR AND THE FAILURE OF REFORM IN CHINA
Peter Nolan
STATE AND MARKET IN THE CHINESE ECONOMY
Sheng Hua, Xuejun Zhang and Xiaopeng Luo
CHINA: FROM REVOLUTION TO REFORM
Wang Xiaoqiang and Bai Nanfeng (translated by Angela Knox)
THE POVERTY OF PLENTY
Malcolm Warner
HOW CHINESE MANAGERS LEARN
Gordon White (editor)
THE CHINESE STATE IN THE ERA OF ECONOMIC REFORM
Tim Wright (editor)
THE CHINESE ECONOMY IN THE EARLY TWENTIETH CENTURY
Xun-Hai Zhang
ENTERPRISE REFORMS IN A CENTRALLY PLANNED ECONOMY
Yuming Sheng
INTERSECTORAL RESOURCE FLOWS AND CHINA'S ECONOMIC
DEVELOPMENT
Zhu Ling
RURAL REFORM AND PEASANT INCOME IN CHINA
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China: From Revolution
to Reform
Sheng Hua
Research Fellow of Corpus Christi College, Cambridge
Xuejun Zhang
Associate Professor and Department Director
Institute of Economics, Chinese Academy of Social Sciences, Beijing
and
Xiaopeng Luo
Associate Professor and Department Director
Research Centre for Rural Development, China
M
© Sheng Hua, Xuejun Zhang and Xiaopeng Luo 1993
Softcover reprint of the hardcover 1s t edition 1993
All rights reserved. No reproduction, copy or transmission of
this publication may be made without written pennission.
No paragraph of this publication may be reproduced, copied or
transmitted save with written pennission or in accordance with
the provisions of the Copyright, Designs and Patents Act 1988,
or under the tenns of any licence pennitting limited copying
issued by the Copyright Licensing Agency, 90 Tottenham Court
Road, London WIP 9HE.
Any person who does any unauthorised act in relation to this
publication may be liable to criminal prosecution and civil
claims for damages.
First published 1993 by
THE MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 2XS
and London
Companies and representatives
throughout the world
ISBN 978-1-349-11438-2 ISBN 978-1-349-11436-8 (eBook)
DOI 10.1007/978-1-349-11436-8
A catalogue record for this book is available
from the British Library.
Copy-edited and typeset by Povey-Edmondson
Okehampton and Rochdale, England
Contents
List of Tables and Figures vii
Preface and Acknowledgements V111
1 Introduction 1
2 The Political Pattern in the Early Stage and the Upsurge of
Rural Reform 25
2.1 The evolution of the political pattern 28
2.2 The upsurge of rural reform 37
3 Early Urban Reform Attempts and their Implications 63
3.1 The incentive problem 64
3.2 The coordination problem 75
3.3 Some remarks on early reforms 88
4 The High Tide of the Reform 99
4.1 A year of climax 99
4.2 The 'First Battle of Reform in Urban Areas': price
and wage reform, 1985 111
4.3 The origin and legalisation of the Dual Track
System 119
Appendix: Making use of the Dual Track System to
transform the price mechanism (12 September 1984) 126
4.4 'Consolidation, digestion, supplement and
improvement' (1986) 131
5 Rural Reform, 1984-8: Progress and Stalemate 141
5.1 The setback of reforming the mandatory system for
purchasing agricultural products 145
v
vi Contents
5.2 The rapid development of non-farming industries in
rural areas 151
5.3 The perplexity of post-people's commune reform 167
5.4 Dispute over rural reform after 1984 179
Notes 192
Index 233
List of Tables and Figures
Tables
2.1 Index of national income and gross output value of
agriculture and industry 26
2.2 Average annual wage of staff and workers 39
4.1 Average annual consumption of residents 100
5.1 Statistics of non-farming industry in rural areas 155
Figure
3.1 The administration of China's economic system 76
vii
Preface and
Acknowledgements
The ideas in this book originated in 'The Ten-Year Reform in China:
Retrospect, Reflection and Prospect', a serial essay published in 1988 in
nos 9, II and 12 of Economic Research, which is one of China's leading
economic journals. The essay met with a wide unexpected response and
caused heated dispute in both academic and government circles. Many
international newspapers and periodicals gave significant coverage to
the essay's conclusion that reform in socialist countries had reached a
dead-end unless the system of state ownership was dismantled and
property and civil rights re-established. As a result of the media's
involvement, many questions and sometimes misunderstandings were
addressed. Many readers and friends in academic circles encouraged us
to record the reform process in detail and to elaborate our thinking
further on the topic of state socialism in general. Latterly, the events in
Beijing in June 1989 have not only ended a page of the Chinese reform
but also cast great uncertainty over China's prospects. We realised that
further working on the subject was not only a requirement but also our
duty. The first-result is the present book.
The structure and purpose of the book is straightforward. The
introduction examines Chinese reforms in the context of China's
unique and historical development, and especially its transformation
under external challenge and its seemingly unstoppable revolution.
Keeping this background in mind, we portray Chinese reform from
both economic and political angles, and focus on shifts in policy·
making as well as the debates in academic circles so as to offer a key
to understanding the complicated and often confusing economic and
socio-political phenomena in contemporary China. In this way the
book tries, as a first step, to highlight the historical clues behind
alternating revolution and reform in modern Chinese history: why
China chose communist revolution in order to realise its dream of
modernisation; why Mao Zedong's socialism failed to bring about
modernisation; why the initial gentle reform logically led to the
wholesale dismantling of the social and economic structure; why
Deng Xiaoping's reform culminated in such crisis, tragedy and unrest
in 1989 and thereafter, and why the Chinese will be facing the
Vlll
Preface and Acknowledgements IX
challenge of stagnation or upheaval, reform or revolution again at
the next t11m of the century.
Needless to say, we bring certain advantages to writing this book.
Not only have we experienced and personally suffered under the special
form of Chinese state socialism, but we later directly participated in
designing and implementing the transformation of this system. Some of
our suggestions, such as the dual-track system (legalising the market
and letting it gradually outgrow state planning) and the assets
responsibility system (invite public bidding for top manager posts),
were adopted in policy-making, and are regarded as having largely
influenced the basic pattern and trends of the Chinese reform.
Because we have been deeply involved in this process, we, of course,
have our own bias in examining the reform, especially when there still
exist so many controversial arguments with regard to reform strategy,
not to mention its alternative, revolution. As patriotic Chinese, it is
difficult for us to suppress our passion when we observe events which
have such crucial consequences for China's prospects. Therefore, we
do not harbour the extravagant hope that we can offer a definitive
explanation to the subject. What we do hope is that what we present
here could contribute to further discussion and progress.
We are very grateful to Professor Dwight H. Perkins for his
suggestions and encouragement, to Professor Thomas G. Rawski
for his sharp but constructive critiques, and to Dr Keith Griffin for
enlightening discussions. We are particularly indebted to Dr Peter
Nolan, Dr Tage Vosbein and Dr Chris Bramall for their detailed
comments and suggestions on the early draft of some chapters. We
would like to pay special tribute to our English translators, Ms
Angela Knox and Mr G. Wang. Without their excellent work the
book would hardly have reached its present form. Of course, we
remain solely responsible for all remaining mistakes (Sheng Hua
revised and proofread the final version). Most valuable, albeit limited,
financial supports from the Center for Modern China (Princeton),
one British company, the Edward Boyle Memorial Trust and the
Centre for Modern Chinese Studies, Oxford, are gratefully acknowl
edged.
We would also like to express our thanks to our publishers and to
the editors for their constant help and co-operation.
SHENG HUA
XUEJUN ZHANG
XIAOPENG Luo
