A presentation that attempts to understand how Deng Xiaoping achieved his ambitious policy agenda during the early reform period (1978-84). While Mao passed away in 1976, this presentation examines how Deng still had to work within his institutional and political legacy. The presentation pays close consideration to the "balance of power" between Deng and Chen Yun in the Politburo Standing Committee over the period.

1. Deng Xiaoping’s Reforms Changes & Challenges Jonathon Flegg and Chen Xin

2. Seminar Structure

3. 盲人摸象The Blind Man and the Elephant As public policy practitioners, what framework are we developing to understanding informal politics and factional power dynamics?

4. Explaining Events Fewsmith (2000: 143)

5. Political Relationships Dittmer (2000)

6. Critical Dates Leadership Transition and Early Reform Period

7. Seminar Structure

8. The System in 1976

9. Hua Guofeng and Deng Xiaoping The military (Xu Shiyou and Wei Guoqing) gave Hua an ultimatum to bring back Deng or face a challenge to his chairmanship.

10. A Winning Coalition Huang (2000) and Fewsmith (2000)

11. The Problem of Hua Guofeng Consider for a moment Deng’s position in 1977? He could attempt to depose Hua through legitimate or extralegal means. Why did he choose the legitimate path to power, rather than treating him like the Gang of Four?

12. Seminar Structure

13. Balance of Power The hardliners’ policy preferences were largely to return to the “hey days” of the mid-1950s, while the liberals’ preference was to reform large sections of the entire communist project. Lieberthal (2004: 131)

14. Politburo Standing Committee 1977-1981: 11th Politburo SC 1. HuaGuofeng 2. Ye Jianying 3. Deng Xiaoping 4. Li Xiannian 5. Wang Dongxing (1977-1980) 6. Chen Yun (from 1978) 7. Hu Yaobang (from 1980) 8. Zhao Ziyang (from 1980) 1981-1982 1. Hu Yaobang 2. Ye Jianying 3. Deng Xiaoping 4. Zhao Ziyang 5. Li Xiannian 6. Chen Yun 7. HuaGuofeng 1982-1987: 12th Politburo SC 1. Hu Yaobang 2. Ye Jianying 3. Deng Xiaoping 4. Zhao Ziyang 5. Li Xiannian 6. Chen Yun

15. Post-1978 Power Sharing The executive Potiburo Standing Committee was divided, between two factions with different seniority and policy preferences. While by 1980 Hu Yaobang held the most senior office of General Secretary of the CCP, final power still rest in the hands of the older Party ‘elders’, including Deng. Deng entrusted economic reform to Zhao Ziyang and ideological reform to Hu Yaobang.

16. Seminar Structure

17. Two Policy Paradigms Huang (2000: 357)

18. 1978 Initial Reform Agenda Rehabilitation of cadres persecuted in the CR. Give priority to economic development. Providing significant resources and incentives to bail out the agricultural sector that was draining the whole economy. Moving away from class struggle and mass movements. Breaking away from personally driven rigidities imposed by Mao. Opening up to the outside world. MacFarquhar(1997: 320-321);Lieberthal (2004: 132)

19. Overall Policy Goals

20. By March 1979 Deng’s reform agenda had hit a tactical roadblock. What if Chen and Hua formed a winning coalition? The Solution: 4 Cardinal Principals Reaffirm the principals that underpin socialist policy until Hua could been fully dealt with. 1. Uphold the socialist road 2. Uphold the dictatorship of the proletariat 3. Uphold the leadership of the Party 4. Uphold Marxism-Leninism & Mao Zedong Thought ? The Result: Deng’s First Policy Crisis “Truth from Facts” vs Cardinal Principals

21. Seminar Structure

22. Challenges for the CCP By the 12th People’s Congress the CCP had become: Huang (2000: 387) Plus Deng’s position as leader together with his weak political position against Chen, meant he was not in a position to seriously reform the leadership institutions.

23. Seminar Structure

24. The Policy-Choice Model The system in 1976-84 can best be explained with the policy-choice model (Harding 1981). Information flows up to the Politburo significantly improved post-1976, informing leaders’ policy preferences. Leaders demonstrated clear differences in policy preferences, and pursued them within the political constraints. Leaders followed their policy preferences beyond what would have been politically most efficient. This is most evident in the policy ‘cycles’ that characterised the period. However power is always a pre-requisite for policy implementation. Deng, with his strong informal political position, provided the political cover for Hu and Zhao to implement their policy preferences.

25. Suboptimal Policy Environment Deng and Zhao were attempting to reform the economy, without control of the main economic arms of the government. State Planning Council Finance Department Likewise Deng and Hu did not have control over the main ideological arms of the government. Propaganda Department Personnel Department In a institutionalised policy-making environment, this should not have been a problem. The Chinese informal political system forced Deng and his supporters towards a suboptimal policy reform process. Decentralisation (allowing Deng’s sympathisers in some provinces to ‘experiment’ with new policies). Think-tanks and intellectual networks.

26. Macro Cycles: Growth Laurenceson and Rodgers (2010: 325)

27. Macro Cycles: Inflation Ash and Kueh (1996: Table 9)

28. Challenges to Good Policy The executive did not have institutional policy-making power at their disposal. Having to resort to executing policy through informal channels meant policies were less than optimal. Fundamentally the problem lies in the process of compromise. Over this period, policy compromise occurred but was only ever a short-term tactical decision. If short-term political parameters change, the system was prone to policy crisis (eg. Four Cardinal Principals).

29. Whydid the reformssucceed? The system did not help the process of reform. The momentum for reform was maintained because of: * Lau, Qian, and Roland (2000)

30. Seminar Structure

31. Key Findings We can explain events by the interplay of informal politics, formal structures and political issues. The system from 1976-84 can be explained best with the policy-choice model. The deposing of Hua was a precondition for policy reform. Reform agenda was constrained by Chen Yun and his supporters, resulting in an unstable policy environment prone to crisis. As Chen’s supporters still maintained control of much of the Beijing-based formal bureaucratic channels, Deng’s supporters were forced to rely on informal channels and decentralisation to achieved policy objectives. While the executed policies were viable, they were rarely, if ever, optimal. Early economic successes and targeting “reform without losers” lent crucial early support for the reformist agenda.

32. Bibliography Ash, R. F. and Y. Y. Kueh1996. The Chinese Economy Under Deng Xiaoping. Oxford: Oxford University Press. Dittmer, L. 2000. “Informal Politics Among the Chinese Communist Party Elite”, in L. Dittmer, H. Fukui, and P. N. S. Lee (eds.), Informal Politics in East Asia: 106-40. Fewsmith, J. 2000. “Formal Structures, Informal Politics, and Political Change in China”, in L. Dittmer, H. Fukui, and P. N. S. Lee (eds.), Informal Politics in East Asia: 141- 64. Harding, H. 1981. Organizing China. Stanford: Stanford University Press. Huang, J. 2000. Factionalism in Chinese Communist Politics. Cambridge: Cambridge University Press. Lau, L., Y. Qian, and G. Roland 2000. “Reform Without Losers: An Interpretation of China’s Dual-Track Approach to Transition”. Journal of Political Economy 108(1): 120-43. Laurenceson, J. and D. Rodgers 2010. “China’s macroeconomic volatility – How important is the business cycle?”. China Economic Review 21: 324-33. Lieberthal, K. 2004. Governing China: From Revolution through Reform. New York: W. W. Norton. MacFarquhar, R. 1997. The Politics of China: The Eras of Mao and Deng. Cambridge: Cambridge University Press. Naughton, B. 2007. The ChineseEconomy: Transitions and Growth. Cambridge, MA: MIT Press.

33. Questions?