China Today

China TodayChapter 22, section 31Chinas EconomyUnder communism- Command Economy

Since 1970s-Allowed aspects of market economy- Mixed EconomySome Private ownershipForeign business people allowed to own companies

China since the Cultural RevolutionGradually, the forces of moderation, led by Zhou Enlai and Deng Xiaoping, resurfaced and prevailed, especially after Maos death at the age of 82 in 1976. After a brief power struggle against extremist elements led by Maos widow and a faction known as the Gang of Four, the moderate and more practical Deng Xiaoping emerged as Chinas new leader. Since then, China has progressed in both the fields of foreign policy and economy.In foreign policy, China's more moderate image led to its acceptance as a member of the United Nations in 1971. This put increased pressure on the United States to recognize the communist government in China. The Chinese communists, in turn, wanted better relations with the West to act as a counterbalance against the Soviets. In 1972, President Nixon visited China and started the long road towards normalizing relations between the two nations. A major stumbling block was Americas support of the Nationalist government of still ruling the island of Taiwan. The communist government on the mainland insisted that its relations with Taiwan were an internal Chinese affair and that the United States should cut relations with and support for the government there. In 1978 the United States agreed to most of China's demands, although it informally maintained economic and diplomatic relations with the government on Taiwan. Other erstwhile enemies, notably Japan, also normalized diplomatic and economic relations with mainland China during this period.Economically, Deng Xiaoping, instituted significant economic reforms known as The Four Modernizations (agriculture, industry, science and technology, and military) which provided farmers and factory workers incentives to work harder. Farmers were allowed to keep small plots for growing surplus food which they could sell, while factory workers could also do business on the side as long as they did not hire (and thus exploit) employees in the capitalist manner. To many hardliners, these reforms seemed too capitalistic in spirit. However, they helped lift China's economy dramatically in the following decades. As Deng put it, he did not care whether a cat was black or white as long as it caught mice.China's growing prosperity brought demands for more political rights and power for the common people, which Deng was not willing to grant. Unfortunately, this contrast between economic progress and the lack of corresponding political progress created tensions in Chinese society, much like the tensions in Soviet society caused by more political rights but the lack of economic progress. In 1989, massive demonstrations demanding more political rights spread across many Chinese cities. After several weeks of indecision, the aging leaders brutally suppressed the movement at Taiananmen Square in Beijing and reestablished a harsh and repressive rule.Since then, China has rapidly emerged as a major economic force facing both new opportunities in economic and diplomatic affairs and challenges in its political policies at home. Much of what will happen hinges on what sort of new leadership would take the helm when the last of China's first generation of Communist leaders finally passes on.

2Types of EconomiesCommand EconomyEconomic system in which the government owns all the businesses and makes all of the decisionsMarket EconomyAn economic system based on free trade and competition3Economy TodayAgriculture

Rice, wheat, corn, and potatoesMore Chinese work in farming than anything else10 percent of land good for farmingIndustry

Industry and manufacturing most profitable part of Chinese economy

Manufactures many products

At the milestone Third Plenum of the National Party Congress's 11th Central Committee which opened on December 22, 1978, the party leaders decided to undertake a program of gradual but fundamental reform of the economic system.[30] They concluded that the Maoist version of the centrally planned economy had failed to produce efficient economic growth and had caused China to fall far behind not only the industrialized nations of the West but also the new industrial powers of Asia: Japan, the Republic of Korea, Singapore, Taiwan, and Hong Kong. In the late 1970s, while Japan and Hong Kong rivaled European countries in modern technology, China's citizens had to make do with barely sufficient food supplies, rationed clothing, inadequate housing, and a service sector that was inadequate and inefficient. All of these shortcomings embarrassed China internationally.The purpose of the reform program was not to abandon communism but to make it work better by substantially increasing the role of market mechanisms in the system and by reducingnot eliminatinggovernment planning and direct control. The process of reform was incremental. New measures were first introduced experimentally in a few localities and then were popularized and disseminated nationally if they proved successful. By 1987 the program had achieved remarkable results in increasing supplies of food and other consumer goods and had created a new climate of dynamism and opportunity in the economy. At the same time, however, the reforms also had created new problems and tensions, leading to intense questioning and political struggles over the program's future.The first few years of the reform program were designated the "period of readjustment," during which key imbalances in the economy were to be corrected and a foundation was to be laid for a well-planned modernization drive. The schedule of Hua Guofeng's ten-year plan was discarded, although many of its elements were retained. The major goals of the readjustment process were to expand exports rapidly; overcome key deficiencies in transportation, communications, coal, iron, steel, building materials, and electric power; and redress the imbalance between light and heavy industry by increasing the growth rate of light industry and reducing investment in heavy industry.In 1984, the fourteen largest coastal cities were designated as economic development zones, including Dalian, Tianjin, Shanghai, and Guangzhou, all of which were major commercial and industrial centers. These zones were to create productive exchanges between foreign firms with advanced technology and major Chinese economic networks.

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Early China was also a river civilization. In this area, much of the landscape was covered with loess, which is a fine yellow dirt. During the floods losses would often clog irrigation ditches. The Chinese also began to build dikes to control the annual flooding. "The region was semiarid. In later historical times we know that a crop-fallow rotation was practiced. The fallow was primarily for storing moisture rather than a fertility restoring device as in shifting cultivation." (Pg. 210) (3F) Later the Chinese began rice farming. The rice field would be flooded and each plant would be planed by hand in the soft soil of the planted field. Due to lack of animal manure, farmers often used human waste to fertilize their fields. Their fertilizing allowed them to used the fields year after year, without the need to allow it to lay fallow. This type of rice farming flourished in China. As a result the population of china also flourished. From 750 to 1100 the population in China doubled to 100 million. (16F)

Much of what we know about Ancient China's farming comes from the "Book of Odes". "The Books of Odes (Chinese) assembled from bits and fragments from the 11th century to the middle of the 6th century BC botanically; it is the most informative of early literatures and mentions about 150 plants. (3F)

5Chinas governmentGovernment tightly controls most areas of lifeGovernment controls newspapers and internetPeople who oppose the government are harshly punishedChina controls Tibet Limits rights since 1959 rebellionExtensive censorshipBut the technology ministry said would-be website operators would now have to submit identity cards and photos of themselves, as well as meeting regulators before their sites could be registered. The freeze had been imposed by the state-sanctioned group which registers domain names, after complaints by state media that not enough was being done to screen websites for pornography. The BBC's Quentin Sommerville in Beijing says that despite extensive censorship, the internet remains a surprisingly vibrant and critical environment in China. What causes the dispute?The Dalai Lama: A spiritual leader and an international celebrity Many Tibetans accuse the Chinese of suppressing Tibetan culture, freedom of expression and worship. They are particularly resentful of efforts to supplant their spiritual leader the Dalai Lama with a communist-approved alternative.Another bone of contention is the increasing numbers of Han Chinese migrants arriving in the region, which causes resentment among the local population.The communist authorities disagree. They point to major infrastructure projects such as the railway linking Lhasa to Qinghai province, and the growth of industry in the region.China's leaders point out that Tibetan areas are much more wealthy under Beijing's rule than they would otherwise have been.Beijing also says Tibetan communities enjoy a great deal of autonomy under a system of devolved government. How long has it been going on?China says Tibet has officially been part of the Chinese nation since the mid-13th Century, so should continue to be ruled by Beijing. Many Tibetans disagree, pointing out that the Himalayan region was an independent kingdom for many centuries, and that Chinese rule over Tibet has not been constant. For example, after a brief military conflict between China and Tibet in the early part of the 20th Century, Tibet declared itself an independent republic in 1912. Although its status did not receive widespread recognition, Tibet functioned as an independent government until China sent troops to Tibet in 1950, and summoned a Tibetan delegation the following year to sign a treaty ceding sovereignty to China. Since then there have been periods of unrest

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1989: Massacre in Tiananmen SquareSeveral hundred civilians have been shot dead by the Chinese army during a bloody military operation to crush a democratic protest in Peking's (Beijing) Tiananmen Square. Tanks rumbled through the capital's streets late on 3 June as the army moved into the square from several directions, randomly firing on unarmed protesters. The injured were rushed to hospital on bicycle rickshaws by frantic residents shocked by the army's sudden and extreme response to the peaceful mass protest. Demonstrators, mainly students, had occupied the square for seven weeks, refusing to move until their demands for democratic reform were met. The protests began with a march by students in memory of former party leader Hu Yaobang, who had died a week before. But as the days passed, millions of people from all walks of life joined in, angered by widespread corruption and calling for democracy. Tonight's military offensive came after several failed attempts to persuade the protesters to leave. Throughout the day the government warned it would do whatever it saw necessary to clamp down on what it described as "social chaos". But even though violence was expected, the ferocity of the attack took many by surprise, bringing condemnation from around the world.

7Rural ChinaFarming methods outdated

Small villagesSmall shopsNot modernUrban ChinaHigher standard of livingShanghai is largest cityBeijing is capital

Rapid city growthSeaport, industrialCultural and political centerTrade and tourism-Hong KongHealthier

8Rural China

9Urban China

10Challenges

Swimming has long been a symbol of physical strength in China, yet outside the country's elite sports schools competitive swimming is not an option for ordinary Chinese who might want to take it up as a hobby. For most Chinese, pools are only a place to cool off, not to race. During the peak days of summer when the heat becomes unbearable, the pools explode into a riot of colors as thousands of people jump into it to escape the scorching heat. The popular slang expression used for going swimming is "boiling dumplings" because public pools are so crowded that all a person can do is stand on the spot. Lack of swimming facilities is the main reason why pools are crowded in China, and because of this people cannot pursue swimming as a year-round hobby. Many local governments cannot generate enough money from indoor pools to run them year-round, said Zhang Yeduan, deputy head of the Hongkou Public Pool, Shanghai's largest.But the number of facilities is increasing as incomes rise and privately run gyms with pools proliferate. Some of these pools are massive. The Dead Sea of China is a saltwater swimming pool located in Daying county, Sichuan province, inspired by the original Dead Sea in the Middle East. The pool covers an area of 30,000 square meters and accommodate up to 10,000 visitors at once. Another swimming pool in the Yao Stink district is able to accommodate a staggering 230,000 swimmers at one time.Do these pictures make you nauseate? It should. According to Chinas Health Ministry report announced last year, out of 5,639 public swimming pools tested in 24 Chinese provinces, 10 percent of the pools exceed the safe limit for urea levels. In case you dont know, urea comes from urine. Research also determined that the total percentage of bacteria in a swimming pool can reach 92.3 percent while the rate of coli bacteria can be as high as 96.9 percent. The consequences of this can be fatal. In 2008, one man died and 3,158 swimmers critically poisoned when they swallowed the pool's water which was laced with the urine and fecal matter of 47,000 swimmers in the gigantic Mao Mao Municipal Pool in Beijing. A toxicologist noted after taking a sample of the water that urine and fecal matter consisted of nearly 90% of the mix.

11EnvironmentAir and water pollution(Three Gorges Dam)Loss of farmlandLoss of forestDesertification

12Three Gorges Dam

The Three Gorges Dam is the worlds largest hydropower project and most notorious dam. The massive project sets records for number of people displaced (more than 1.2 million), number of cities and towns flooded (13 cities, 140 towns, 1,350 villages), and length of reservoir (more than 600 kilometers). The project has been plagued by corruption, spiraling costs, environmental impacts, human rights violations and resettlement difficulties. The environmental impacts of the project are profound, and are likely to get worse as time goes on. The submergence of hundreds of factories, mines and waste dumps, and the presence of massive industrial centers upstream are creating a festering bog of effluent, silt, industrial pollutants and rubbish in the reservoir. Erosion of the reservoir and downstream riverbanks is causing landslides, and threatening one of the worlds biggest fisheries in the East China Sea. The weight of the reservoir's water has many scientists concerned over reservoir-induced seismicity. In 2011, China's highest government body for the first time officially acknowledged the "urgent problems" of the Three Gorges Dam.The Three Gorges Dam is a model for disaster, yet Chinese companies are replicating this model both domestically and internationally. Within China, huge hydropower cascades have been proposed and are being constructed in some of Chinas most pristine and biologically and culturally diverse river basins - the Lancang (Upper Mekong) River, Nu (Salween) River and upstream of Three Gorges Dam on the Yangtze River and tributaries.

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14EconomicRural Chinese very poorHigh unemployment Overcrowding in cities

The Chinese economy expanded 7.8 percent in 2012, the government has said, the worst performance in 13 years, in the face of weakness at home and in key overseas markets.But gross domestic product (GDP) grew 7.9 percent in the final three months of the year, the National Bureau of Statistics (NBS) said, as it snapped seven straight quarters of slowing growth in a positive sign for the spluttering global recovery.China's GDP reached $8.28 trillion in 2012, cementing its position as the world's second-largest economy after the US.Annual growth slowed for a second straight year but the figures were just ahead of expectations, with economists surveyed by the AFP news agency having projected GDP growth of 7.7 percent in 2012, and 7.8 percent in the fourth quarter.The official statistics come as optimism grows among analysts that China will pick up steam in 2013 after two years of relative weakness."The international economic environment remains complicated this year and... there are still unbalanced conflicts in the Chinese economy," NBS spokesman Ma Jiantang told reporters.However, Ma added: "We expect China's economy to continue to grow in a stable manner in 2013."'Shaky'China's growth has slowed amid weakness in the global economy, particularly the key export markets of the US and Europe, and as the government took steps to cool a once red hot property market.The annual growth figure was the lowest since 1999, when it stood at 7.6 percent, according to official statistics.But IHS Global Insight senior economist Ren Xianfang said the worst was probably over for China's economy and that it had avoided a "hard landing", although challenges remained as it entered a "new normal" of slower growth."The rebound by itself looks quite shaky," she wrote in a report after the data. "The trajectory of recovery is flat, mirroring the shallow downturn it's rebounding from."Growth had slowed for seven straight quarters through September, when the economy expanded 7.4 percent, the worst since early 2009. Annual GDP grew 9.3 percent in 2011 and 10.4 percent in 2010.Qian Liu, from the Economist Intelligence Unit, told Al Jazeera that the figures were no real surprise. "It is very much in line with the market expectations," she said."The third quarter of 2012 was the slowest, and the last quarter was better. Looking ahead into 2013, we are confident that it will be even better. We at EUI are looking at an 8.5 percent growth."Power handoverSuccessfully managing the economy is a key concern for China's leaders who derive much of their claims to legitimacy from the country's reform-led economic rise, which has lifted hundreds of millions of people out of poverty over the past three decades.The government is due to formally conclude a once-in-a-decade power handover in March with Xi Jinping, already named Communist Party chief, becoming president, and Li Keqiang taking over as premier in charge of day-to-day administration.The World Bank said last month that China's economy is expected to expand 8.4 percent this year, but added that longer-term GDP growth is expected to moderate as China's leaders move away from a growth model based on investment and exports.

15PoliticalLittle political freedomNot respecting human rightsSome countries want to limit trade

China is still a communist country. It is therefore quite logical for outside observers to simply label it as a "monolithic communist authoritarian state," "a totalitarian state," and a "Leninist hierarchy." However, looking deeply, the matrix of power in China is far more complex than the essentialized description found in mass media and even in some standard textbooks. As Kenneth Lieberthal points out, the political system in China consists of many vertical lines ("tiao") and horizontal pieces ("kuai"). To mesh and integrate the vertical command lines and the horizontal blocks is very demanding, so the Chinese Communist Party has insisted on the principle of democratic centralism which often is the case of centralism without democracy.However, the gigantic size and underdeveloped economy have long left China in a cellular structure in which factionalism, localism and departmentalism could thrive. After reforms were introduced with an emphasis on decentralization and the retreat of the state from the economy, the traditional system was further fragmented. Some scholars have deemed the Chinese system a "fragmented authoritarianism"(Lieberthal), a "negotiated state" or a "consultative authoritarian regime." In other words, the current Chinese system has created space for autonomy, loopholes for bargaining, and hopes for democratization. Looking inside what was once known as the "party-state," today the Party and the state have been differentiated (for example, the people's congresses at all levels have started asserting their power to provide some checks upon the government and the judicial agencies). Local governments often pursue their own initiatives in defiance of the central directive, and tensions are often created between the center and the localities. In fact, Hong Kong today, as a Special Administrative Region, enjoys the highest degree of autonomy of all other provincial units, but its residents are demanding more. Looking at the state and its environment, the state has to manage a new relationship with the economy, the society, and the global community. The market forces in the economy, the civil society and dissident forces in the society, and international standards (for example, the WTO laws, international human rights values, etc) are pressuring and inducing the Chinese government to make more changes. The fact that a Leninist Party has engineered China's rise is puzzling as well as adding uncertainty to this rise. It is against conventional wisdom that a communist party would have altered its core ideology and embraced a market economy. For a quarter century, that the marriage of "market Leninism" has lasted and is still going on begs for explanation. As China's rise continues, people have to ask two questions: First, can the current regime with a communist party continue to provide political foundation and institutional support to the soaring economy? Second, if the Chinese economy keeps going on like the past quarter century and expanding the size of a prosperous middle class, will China find a smooth pathway to democracy? At this moment, the CPC continues to insist that it is a valuable asset for China, the Chinese people, and their future. But it has also become evident, that the CPC is fighting against the mega-trend of history along with a few struggling junior partners such as North Korea, Vietnam and Cuba; by insisting that "without the CPC, there is no new China"namely, the collateral damage resulting from the collapse of the CPC would be the downfall of the entire Chinese nation.

16ChallengesPovertyUnemploymentLittle political freedomNot respecting human rightsPollutionDesertificationFlooding

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