AS IF A BILLION PEOPLE COULD BE GOVERNED CENTRALLY:

China After 30 Years of Reform: Do Hu and Wen have Deng Xiaoping's wisdom? (Gordon G. Chang, 12.16.08,, Forbes)

The now-accepted narrative is that Deng argued for a startling transformation of Chinese society. We buy the story that he first debated with his fellow revolutionaries, then experimented and finally decreed change.

Yet, in reality, reform progressed more by disobedience than design. Initial failure to meet state-planning goals forced Deng to back away from command-economy tactics and permit individual initiative. Peasants on large collective farms, for example, were permitted to form "work groups" to tend designated plots. Central government policies specifically prohibited these groupings from including just one family. But families started to look after their own plots--and local officials pretended not to notice.

Urban subterfuge followed rural subterfuge. Deng's Beijing strictly prohibited private industry, but entrepreneurs proceeded by operating their businesses as "red hat" collectives and enterprises--private companies operating under the flag of state ownership. Deng's reforms succeeded because the Chinese people disobeyed Deng's rules.

Such defiance would have been unthinkable in the Maoist years. Deng's great contribution, therefore, is not so much that he planned China's "economic miracle" but that he let it happen. The economy during the last three decades has grown at an average annual rate of 9.8% largely because peasants, workers and frustrated bureaucrats made themselves into entrepreneurs and pushed their country forward. By ignoring central government decrees, they built private businesses now accounting for as much as half of the Chinese economy. [...]

The growth we see today is largely the payoff from earlier reforms. Growth tomorrow requires reform today. China's current political system, however, cannot sustain the pace of necessary economic restructuring.

The Party apparently thinks--probably correctly--that further economic reform would threaten the country's authoritarian system, so the Party will not sponsor much more change.

Their only good option is to let reform from the ground up continue while they pretend to be in charge.

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Posted by Orrin Judd at December 18, 2008 6:31 AM