What are the aspects of China’s economic reform ?

The recent sweeping economic aspects of reforms in China include the follow­ing elements.

Christopher Martell on Social Studies and Education:

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(1) Rejection of Marxism, Leninism, Maoism :

The unprecedented reforms introduced in China clearly violate the teachings of Marx and Mao. There is de-Maoization. China’s leading, ideological journal advised the Chinese to stop seeking a magic remedy in the works of Marx and Mao. They were the beacons of socialism. But none of them had the full answers to the Chinese problem. The paper said “we must integrate theory with practice. In recent years, we have sometimes stressed theory, sometimes practice, we must not make-the same mistake again.”


The new approach is “pragmatic” and not blindly ideological. Deng initiated a daring move in 1977-78 for the “emancipation of mind”, “finding truth from facts”, which meant that Maoist orthodoxy would no longer be sacrosanct in China. Marx and Mao-both provided the basis of theory which people must apply in the light of modern conditions.

Mao’s model of development was based on self-reliance egalitarianism and moral impetus. These have been discarded. Marxism was value-based and not commodity-based. According to Marx, socialist character has to be built first rather than the socialist structure. Mao’s ideas were “politics” first and expertise next, destruction first and con­struction later.’ These are not practical and did not conform with Chinese realities.

While justifying the recent reforms it is said “Marxism is a science and a science always keeps developing.” A leading Chinese ideologist Yu Guang Yuan said “Marx was good at revolution but not so good at socialist reconstruction.” Thus Marxism or Maoism is held is an obsolete ideology. “Marxism is not a dogma. It is not a dogma. It is a catch the rat. Although officially there are “four modernizations”, the fifth also way be included as the “modernization of Marxism.”

(2) Reform in the Planning System :

The Soviet Union relied heavily on the highly central centralized planning. In Yugoslavia the interplay of market forces created certain problems of its own. But China was trying to combine as well as coordinate the regulatory functions of planning and the market force with an emphasis on the latter. “Mandatory planning which vogue would be limited to major products and critical economic activities.


Other types of production and economic activities would be either subjected to “guidance planning” or would be left to the operation of the market forces. The State dropped direct control of the economy and restricted itself to fine tuning by indirect monetary and fiscal levers. Unified national planning, which has hitherto been the hall­mark of the Chinese system, has given way to decentralized planning with provinces and cities and even countries given a role and authority.

There is very little central direction outside a few strategic sectors. The official plan targets become less and less significant. The centre controls less and less of national investment — it directed 66 per cent in 1978 but 38 percent in 1984.

Thus the present tendency is to gradually phase out central planning in favour of more market-oriented economy. While praising the market mechanism, Mr Xue, China’s foremost economic theoretician, observed that it was founded and perfected by the capitalist world over the past three centuries and is suited to the needs of the large scale socialized production. Making full use of market mechanism, under the guidance of planning, represents a new development of Marxist theory on socialist construction.

(3) Reform in the Pricing Process :

Reforms have been brought about in the pricing process as well. “Previously the controlled prices of many commodities did neither reflect their value nor the relation of supply to demand. The irrational price system created a number of problems. Chinese agriculture suffered due to low State prices. Low prices were detrimental to farmers and acted as a disincentive. Besides, the irrational price system failed to bring about a smooth circulation of goods between rural and urban areas, promote technological advances and nationalise the production mix and consumption pattern. Hence it has been decided to reduce the scope of price control.

(4) Rejection of Egalitarianism :


Maoist egalitarianism has been publicly abandoned. The central committee told that egalitarianism in distribution was “utterly incompatible with Scientific Marxist views of socialism.” It declared “the policy of encouraging some people to get better off earlier accords with the law of socialist development and is the only road lo prosperity for the whole people. “A widening of economic disparities is now considered to be a desirable and necessary spur to larger and more efficient production. Hence the official slogan is “get rich first.”

(5) Stress on Improvement in the Standard of Living :

‘Under Mao for three decades people were forced to lead a life of austerity, discipline and moral values. According to the new strategy, improvement in the standard of living is the final objective. Deng’s famous slogan is “to look towards the future.” Men must live better than their ancestors.

Per capita income of people today is rapidly rising. Household in­comes with 1 lakh Yuan are quite common today. Rapid increase in rural incomes has brought about a change in taste, habit and fashion of the people. The per capita calorie intake in 1980-82 reached 2548 kilo calories approaching the world’s average of 2571. T.V. sets, washing machines, refrigerators, etc., unthinkable even a few years ago, are being increasingly purchased by common people. There is liberal imports of consumer goods from abroad. In fact the priority has shifted to the production of con­sumer goods. In 1978, the share of light industries in the gross industrial output was 42’7 per cent, which rose to 514 per cent in 1984.

Today compulsory ascetism has given way to voluntary savings. As a result during the last decade the ratio of investment to national income has come down from 36 per cent to 27 per cent. According to Mr. Deng, China can boast of having achieved full socialism only after per capita income rises to something $4,000 in the first 30 to 50 years of the 21st century. He further declared “Poverty is not socialism.” Thus to all indications there is going to be a change over from “Socialism” of austerity” to “Socialism of affluence.”

(6) Growth of Private Enterprise :

For long individual economy was considered to be a tail of capitalism, required to be cut off. An important aspect of the recent reforms is the remarkable growth of private enterprise. The constitution has been amended to allow the private sector to be a part of the socialist Chinese economy. The private sector thus is to play a substantial complementary role with the public sector. The public sector units also will operate with private entrepreneurial spirit.

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