ABSTRACT
As Will Hutton1 argued in an international conference of (mostly) Chinese economists in 2006,2 ‘the next twenty-five years will be a great deal harder for China than the last twenty-five years’.
Once the Third Plenary Session of the Eleventh Party Congress had accepted the reforming ideas of the fully rehabilitated Deng Xiaoping in December 1978, the political economy of China that had been created by and in the image of Communist China’s first supreme leader, Mao Zedong, including its unique autarkic, anti-capitalist and antimarket stances and policies, was finally set aside. Indeed, China embarked upon a reform process beginning in the very early 1980s under the slogan ‘Reform and Open to the Outside World’ (gaige kaifang), which set in train such radical shifts in policy that the political economy of China has now become almost unrecognizable from its form twentyfive years ago. Some of the earliest reforms, including the abolition of the commune system in the countryside-where 90 per cent of the population then lived-and its replacement with small-scale, de facto privatized family farming between 1980 and 1983 with the introduction of the ‘Household Responsibility System’, struck deeply at the very fabric of Chinese socio-economic life. As the state began a partial withdrawal from its top-down, autocratic, direct management of the economy, markets were reintroduced into the countryside, price controls were partially lifted and local political leaders were encouraged to engage in economic enterprises of all kinds, as were farmers to undertake a wide variety of sideline activities which had been denounced by Mao as ‘capitalist tails’ (zebenzhuyi weiba) during the first twenty-five years of the life of the People’s Republic.
