Chinese lessons for Soviet Union

Press, 30 June 1983, Page 16

Chinese lessons for Soviet Union

From ‘The Economist/ London

The leaders of communism’s oldest revolution, the Soviet Union, and its biggest one, China, paused recently on the long haul to the millenium to consult their maps. China’s prospect, on the face of it, is the cheerier. The 78-year-old Mr Li Xiannian has become the country’s first president for 14 years, although real power rests with 79-year-old Mr Deng Xiaoping. That makes 69-year-old Mr Yuri Andropov, now Soviet president as well as party leader, a mere apprentice.

China seems able to afford its older leaders: in contrast to Russia’s economy, China’s with the pragmatic Mr Deng at the controls, now has a head of steam behind it and is picking up speed.

Can China keep up such momentum once Mr Deng goes? Results so far are impressive. The four in five of China’s 1 billion souls who work the land earned an average of 260 yuan last year (about $200). Not much, but even allowing for a mild Chinese inflation a lot more than they earned in 1978, when the restoration of China’s econony began in earnest. In 1982 China claims its factories produced 7.7 per cent more and its farms 11 per cent more than in 1981 — well above plan targets. Those neat figures hide some unsightly bulges: heavy industry, set to grow by 1 per cent, swelled by 10 per cent, gobbling up resources earmarked for light industry and farms. All the same,

China’s goal of quadrupling national income per head by the year 2000 now looks a bit less of a pipe-dream. Next door Mr Andropov is straining hard to keep the Soviet economy moving at all. What accounts for the difference? First, priorities. Stalin’s forced pace of industrialisation in the 1930 s laid the foundations of Soviet industry and Soviet military power. It also left behind the swollen bureaucracy of central planning, the wreckage of agriculture and the spent society that Mr Andropov has to grapple with today. With four times the population of the Soviet Union and only half the arable land, China cannot afford such excesses. Food production is the fuel on which China’s entire economy runs.

Mr Deng’s aim is still to industrialise China. But he has learnt the hard way that more haste in China means less speed. “Balance” is the good word today among China’s economic planners. That means controlling growth so that the different sectors of the economy expand in rough proportion, not choke each other to death; and it means keeping the biggest appetite — that of the generals — on a strict diet. Unlike Mr Andropov’s Russia, where defence spending has a stranglehold on the rest of the economy, China still puts defence fourth on Mr Deng’s list of four modernisations — after agriculture, industry and science. The second reason for Mr Deng’s success is economic reform. He has forged a strong coalition of energetic pragmatists centred in the party leader, Mr Hu Yaobang, and the Prime Minister, Mr Zhao Ziyang. He has elbowed aside those of the party’s old guard who cling nostalgically to ex-Chairman Mao’s all-poor-together egalitarianism.

That has cleared a path for reforms, first in agriculture and then, gradually, in industry too; if they succeed, they will give most of China’s 1 billion pairs of hands a personal stake in raising output, because they will get paid by results.

A weary Mr Andropov, glancing over at the relaxed-looking Mr Deng, might question sourly whether China’s reforms can succeed. Fair question. China’s leaders have not yet reached the hard part. Their gains so far have been easy, taking up the slack in an economy left idle after years of political upheaval. The next five years will be heavier going. The biggest brake on the economy will be China’s ever-growing population. Unless more young Chinese settle for one child, not two or three, any increase in farm output will be eaten up by the extra mouths. And what happens when Mr Deng goes? Today’s China is a model of a modern gerontocracy: but that means full power has yet

to pass to the post-Mao generation. Mr Deng has prepared the future as best he can — by installing competent youngsters to head both the party and the Government, and by trying to disentangle the lines of authority between them. But China is still a one-party state, and the party is still in two minds over Mr Deng’s reforms. Between those party members who fear that Mr Deng is leading China back to the capitalist road and ‘those who still hanker after the undiluted power Mao’s turbulent years gave them, resistance to change inside China’s 39 millionstrong Communist party is still considerabe. It is likely to increase. One result of Mr Deng’s reforms will be a widening of differences in China — between good workers and poor workers; between farmers and factory workers chasing incentives and army men and party men stuck on fixed incomes; and between richer areas, such as those clustered around the huge markets of Shanghai, Canton and Peking, and the more isolated half of China where life is far tougher. The more they succeed, the more Mr Deng’s reforms will raise expectations among China’s 800 million peasants that cannot all be met — and so increase tensions within the party. If China’s reforms do come unstuck, Mr Andropov will be the first to say, “I told you so.” When his predecessor, Leonid Brezhnev, tried something similar in the Soviet Union, in 1965, it was sabotaged by party conservatives worried that, in the upheaval to follow, power would be knocked from their grasp. That is why, when Mr Andropov casts about for new ideas to put some rev back into revolution, he is likely to stop short of really radical reform. Mr Deng has shown he has a more adventurous spirit than Mr Brezhnev ever had, and the authority to back it up. Will his successors run into the same political blockages to reform farther down the line as the Soviet party did?