Deng Xiaoping's Reform and Opening-Up
The Third Plenum of the 11th Central Committee of the Communist Party of China, held in December 1978, was the event at which Deng Xiaoping consolidated his political dominance and launched China's transformation. The plenum formally ended the 'two whatevers' policy of Hua Guofeng (whatever Mao said was correct; whatever Mao instructed must be followed) and adopted a pragmatic approach encapsulated in Deng's formulation: 'seek truth from facts.' The reform programme proceeded through several phases: Agricultural reform (1978–84): The communes established under Mao were replaced by the 'household responsibility system,' in which individual farming families contracted land from the collective and retained surplus output. Agricultural productivity increased dramatically; rural incomes rose; the food supply stabilised. The success of agricultural reform created political space for urban economic liberalisation. Special Economic Zones (1980–): Four SEZs were established (Shenzhen, Zhuhai, Shantou, Xiamen) where foreign investment, market pricing, and capitalist management practices were permitted within a controlled geographic area. Shenzhen, a fishing village in 1979, became a city of millions by the late 1980s. The SEZ model allowed the Party to experiment with capitalism without committing the entire economy. State enterprise reform (mid-1980s–): Township and village enterprises (TVEs) operated outside the state plan; state enterprises were given more autonomy; price controls were gradually reduced in a 'dual-track' system where some goods were sold at plan prices and others at market prices. Deng's political formula was consistent: economic liberalisation was permitted; political liberalisation was not. The Tiananmen Square crackdown of June 1989 — ordered by Deng — was the brutal demonstration of this distinction. Deng's 'Southern Tour' of 1992, at a moment when the reforms appeared to be losing momentum after Tiananmen, reinvigorated the programme and secured its continuation under Jiang Zemin. By 2010 China had the world's second-largest GDP, had lifted approximately 800 million people out of poverty (by World Bank standards), and had become the world's largest exporter. No government has presided over comparable economic transformation in a comparable time period.
- Year: 1978 CE
- Category: Political
