chapter  4
11 Pages

Chinese reforms in historical and comparative perspective

Among the most important leadership strategies that developed during the reforms in the People’s Republic of China is one of de-linking politics from economics. We are familiar with how the PRC followed a different path of reform from the erstwhile Soviet Union. There the almost simultaneous reforms of the political and economic system produced results that were much more volatile than those in China where economic changes were implemented incrementally and political changes occurred much more slowly leading to a more stable pattern of reforms. What is somewhat less noticed is that a similar pattern of delinking politics from economics has also been adopted in China’s international relations especially since the late 1990s. The so-called ‘peaceful rise of China’ has entailed putting difficult political problems – for instance with countries like Japan, Taiwan, India or Southeast Asia – on the back-burner and not permitting them to interfere with economic relations. Consequently, with the enormous growth of China’s trading volumes with these Asian economic partners the stakes are much higher on both sides to discourage recklessly pushing political issues. While this is by no means the end of political problems between these nation-states, the incentives for bilateral and regional co-operation have grown (see for instance Goldsmith (2007), who argues that economic interdependence within Asia is the major factor reducing conflict among these Asian nationstates). Thus, when I discuss the social and historical conditions of reform in China below, we need to keep in mind the vision and strategy of the central government leadership as another necessary condition. Let me now turn to the specific historical arguments I wish to make with regard to the success of the reforms. There are three terms we have to keep in mind: 1) the central government, 2) the local authorities or the party-state at the provincial and sub-provincial levels, 3) and the common people or local society. In this analysis I will not refer much to the central government beyond the discussion above regarding the leadership strategies. Moreover, partly because of my own training in Chinese rural history, I will address the reforms primarily among the rural communities where the bulk of the Chinese people still reside. During the 1980s and 1990s, much of the success of Chinese reforms came from developments in the countryside, initially from de-collectivization of farms and the rise of agricultural incomes and from subsidiary rural enterprises (fuye). Subsequently, much of the success of the reforms stemmed from the thousands of Township and Village Enterprises (TVEs) that dotted the Chinese countryside. After 1994, large-scale integrated agricultural firms also began to appear on the scene which until recently often developed from the TVEs and other rural enterprises. The reforms proceeded by unleashing the energies of local authorities. This was expressed most clearly in the policy of ‘every tub on its own bottom’ zifu yingkui which had an electrifying effect in local society. It created incentives for each local unit or danwei to increase its economic product because it could keep a larger share of the product. If we simply focus on this policy, we can see two important historical dimensions of this factor. In the first place, the policy took effect within the mobilizatory apparatus of the Maoist period. Second, it has to

be understood within the longer-term effects of state-society relations from the late imperial period, especially the Qing. One of the most powerful factors contributing to the success of the Chinese communist revolution was the organizational structure or the apparatus of mobilization instituted by the communists. Although it was based upon the Leninist idea of the communist party cell as the nucleus of mass organizations, the Maoists adapted and developed it sufficiently to Chinese conditions so that it became one of the most powerful instruments of political mobilization in the world. Indeed, as I will discuss later, to call it a mere instrument is to belittle its power because it was central to the remaking of identity and society – or the cultural nexus – in China. In this apparatus of mobilization, the CCP was located strategically at every level of organization down to the neighborhood if not family, so that the policies and initiatives of the party could be translated into action across the depth and breadth of this society (although, of course, with uneven results). Many of these policies were conducted through the well known campaign mode of mobilization, such as during the Collectivization Drive or the Cultural Revolution, but most initiatives were also implemented through more every-day, small-scale mobilization, whether to persuade production team members to join brigades or to dissuade peasants from demanding bride price. In the command economy, this mobilization ability gave the local authorities considerable power to mobilize and deploy labor and other resources for production wherever they were needed. Few people have noted how the mobilization apparatus was utilized, perhaps unconsciously, during the reform period. If one went to a provincial level administrators’ meet in the 1990s, one might see the representatives of the counties and prefectures arrayed and ranked by their production figures and quotas in a great hall. They were expected to display their successes and failures in a campaign style public performance so as to motivate cadres to greater achievements, since distinction and reward was gained through achieving higher production targets. Here we see the legacy of socialist mobilization where struggle is replaced by competition. Indeed, even the vocabulary of the correct ‘road’ and ‘line’ was transferred from the goal of struggle to competitive production. Further, the ability of the party-state to provide better conditions for capital investment than most other developing countries is tied to the ability of the party-state to mobilize labor and other resources effectively and with low transaction costs. Socialism provided the state with the organizational capacity to mobilize the devolutionary policy. Second, the Qing period was characterized by what Max Weber called a prebendary system. The system represented a hybrid or intermediate stage between a modern bureaucracy and feudal relations. Unlike a modern, rationalized bureaucracy the official – in this case, the county magistrate – is not fully salaried by the state. Rather he fulfills a quota to be delivered to the higher levels while the remainder is utilized for his local administrative expenses. At the same time, of course, the magistrate is appointed for a limited tenure by the state and is subject to its laws and norms. While the reasons for utilizing this structure is different in

each case, the devolutionary policy of ‘each tub on its own bottom’ or zifu yingkui is structurally quite similar to the Qing prebendary system. To be sure, the capitalist nature of production and greater organizational capacity produces a different dynamic in the current system, but the structural resemblance is significant because it produces the same problem in both eras: the problem of surveillance over local authority structures by higher authorities and/or local communities. I now turn to the third term, or the role of the common people in the reforms. The reforms implemented by the central government in 1978 unleashed not only the initiative of local authorities, but also the entrepreneurial spirit of the people. The most important historical condition here is the millennium-long entrepreneurial tradition of Chinese local society beginning with the commercial revolution of the Tang-Song transition. As we know, one of the most important conditions of entrepreneurship in late imperial China was the robust system of markets that integrated much of the empire vertically under interlinked metropolitan cities. This has been ably analyzed by G.W. Skinner and the Japanese scholar, Shiba Yoshinobu (Skinner 1977; Yoshinobu 1970; see also Elvin 1973). Another historical expression of local economic activity is the pervasive institution of contracts. Anyone who has done research on local history in China is familiar with how China is a society of contracts. There are contracts for every type of activity bringing two parties together in a transaction and they represent a form of customary law. Usually, the format of the contract is quite simple: it lists the names and identities of the two parties, the terms of the exchange, and the equally indispensable middlemen or middleman (zhongjianren). The middlemen often represent people with face or authority in local society and are known to both parties. I want to urge us to look at the institutions of the local economy and entrepreneurship in the context of what I have earlier called the ‘cultural nexus of power’. Economic practices and institutions were firmly embedded in the local cultural nexus. From at least the sixteenth century, contracts were authorized by the nexus of ritual, lineage, gods and ancestors and practically mediated by guilds, relatives, middlemen and village leadership. Markets were frequently held at the time of temple festivals and fairs, and in north China, temples became the centers of economic activity (Zhao 2002: 171). Several professional or guildlike communities were also organized under a tutelary deity and merchants worshipped Guandi, an empire-wide protector god, in addition to Caishen, the god of wealth. The authority of religious deities and temple management committees was frequently invoked or brought in to mediate contractual issues. In other words, the trust necessary for economic activity was enabled by the norms and authority structures of local society more than an abstract set of laws. The Qing courts accepted many of the norms of customary law and frequently upheld the normative claims of local society when it was forced to make a judgement (Ocko and Gilmartin 2009; see also Duara 2009). But most contracts were not legally mediated and the Qing played what we might think of as a ‘night watchman’ role of not interfering in local society (wuwei). As such its legal role was consistent with the general role it played in local society. The size, as we

know, of the imperial bureaucracy was very small in relation to the society it governed, so it had to rely on an ingenious model of local government without requiring too much of the imperial government. By the nineteenth century, there was one representative of the bureaucracy governing 300,000 to 400,000 people. The imperial state was able to govern by delegating the symbolic power of the government while at the same time keeping public funds out of the reach of those to whom it delegated this power. As is well known, the literati or degreeholding gentry (shenshi) possessed the right and symbolic power to distinguish themselves as elite by their formal access to officialdom. Thus they were designated as community representatives who had the sanction of the imperial state to manage their own problems (perhaps the fengjian model of imperial times did have an influence). The gentry society model involved the entrustment of ideologically state-oriented elite with the imprimatur of state power without expending fiscal and political power on social maintenance. The night-watchman role of the imperial state with regard to customary law was similar. Here critical to the trust in customary law was a normative commonality – a cultural nexus – that kept local society and state in balance. It is certainly true that these practices and institutions were dependent on a society of personal relationships rather than an impersonal society bound by abstract laws. But there were resources in the cultural nexus that were able to considerably extend the range of these activities. Networks of temple communities and the large-scale lineages in south China often framed their range. David Faure has shown the importance of rituals and roles of people sanctioned by ritual to a variety of economic activities including contracts and claims to land ownership (particularly by lineages and genealogies) (Faure 2006: 34-42). I have studied self-managing irrigation communities in Xingtai County in north China that extended over many villages and markets which drew water from the same river. Co-operation and conflict management across the river basin was conducted in a segmentary mode of organization focused on temples at different levels of activity. Thus different levels of the Longwang temple structure paralleled water-and work-sharing organizations. The co-ordination of different scales of activity was conducted at the corresponding levels of the Longwang temples and decisions and activities were sanctified and sanctioned by rituals conducted at the temple. What about the limitations of such a local economy to the modern needs of generating large-scale accumulation of capital? How would it be possible to scale up economic activity without a banking system and developed financial institutions? How could economic activities go beyond inter-personal or inter-group relationships? Before we accept that the cultural nexus was not suited for such scaled-up activities, we should consider the role of such groups as the Ningpo or the Shanxi bankers which had business interests spread across large stretches of China (see also Zelin 2005). For instance, Shanxi bankers were very important in the late nineteenth century when Mongolia was being settled by Chinese farmers. Most of the agricultural development was not undertaken by modern banks but by these Shanxi bankers. It would be interesting to explore the economic and cultural practices they employed to extend credit and trust over large areas.