Editing Deng Xiaoping (section)

=== Reform and Opening-up ===
{{Main|Chinese economic reform}}At the outset of China's reform and opening up, Deng set out the [[Four Cardinal Principles]] that had to be maintained in the process: (1) the leadership of the Communist Party, (2) the socialist road, (3) Marxism, and (4) the [[dictatorship of the proletariat]].<ref>{{Cite book |last=Zhao |first=Suisheng |url=https://www.worldcat.org/oclc/1331741429 |title=The dragon roars back : transformational leaders and dynamics of Chinese foreign policy |date=2023 |publisher=[[Stanford University Press]] |isbn=978-1-5036-3088-8 |location=Stanford, California |pages=136 |oclc=1331741429 |access-date=8 January 2023 |archive-date=6 March 2023 |archive-url=https://web.archive.org/web/20230306101710/https://www.worldcat.org/oclc/1331741429 |url-status=live }}</ref> Overall, reform proceeded gradually, with Deng delegating specific issues to proteges such as Hu Yaobang or Zhao Ziyang, who in turn addressed them under the guiding principle of "seeking truth from facts" - meaning that the correctness of an approach had to be gauged by its economic results.<ref name=":26" /> Deng described reform and opening up as a "large scale experiment" requiring thorough "experimentation in practice" instead of textbook knowledge.<ref name=":42">{{Cite book |last=Heilmann |first=Sebastian |url= |title=Red Swan: How Unorthodox Policy-Making Facilitated China's Rise |date=2018 |publisher=[[The Chinese University of Hong Kong Press]] |isbn=978-962-996-827-4 |author-link=Sebastian Heilmann}}</ref>{{Rp|page=65}}

In Deng's view, socialism could not be considered superior to capitalism unless it improved the lives of the people in material ways.<ref name=":11">{{Cite book |last=Chatwin |first=Jonathan |title=The Southern Tour: Deng Xiaoping and the Fight for China's Future |publisher=[[Bloomsbury Academic]] |year=2024 |isbn=9781350435711}}</ref>{{Rp|page=xiv}} During Reform and Opening-up, he criticized those he deemed as the ideologues of the Cultural Revolution for seeking "poor socialism" and "poor communism" and believing that communism was a "spiritual thing".<ref name=":11" />{{Rp|page=xiv}} In 1979, Deng stated, "Socialism cannot endure if it remains poor. If we want to uphold Marxism and socialism in the international class struggle, we have to demonstrate that the Marxist system of thought is superior to all others, and that the socialist system is superior to capitalism".<ref name=":11" />{{Rp|page=xvi}}

==== Four modernizations ====
{{Main|Four Modernizations}}
Deng quoted the old proverb "it doesn't matter whether a cat is black or white, if it catches mice it is a good cat", which summarizes his pragmatic "[[Cat theory (Deng Xiaoping)|cat theory]]". The point was that capitalistic methods worked.<ref>{{Cite book |last1=John Naisbitt |url=https://archive.org/details/chinasmegatrends00nais_0 |title=China's Megatrends: The 8 Pillars of a New Society |last2=Doris Naisbitt |publisher=HarperBusiness |year=2010 |isbn=9780061963445 |page=[https://archive.org/details/chinasmegatrends00nais_0/page/4 4] |url-access=registration}}</ref>  Deng worked with his team, especially as Zhao Ziyang, who in 1980 replaced Hua Guofeng as premier, and Hu Yaobang, who in 1981 did the same with the post of party chairman. Deng thus took the reins of power and began to emphasize the goals of "four modernizations" (economy, agriculture, scientific and technological development and national defense). He announced an ambitious plan of opening and liberalizing the economy.<ref>{{Cite journal |last=Mason |first=David |year=1984 |title=China's Four Modernizations: Blueprint for Development or Prelude to Turmoil? |journal=Asian Affairs |volume=11 |pages=47–70 |doi=10.1080/00927678.1984.10553699 |number=3}}</ref>

The last position of power retained by Hua Guofeng, chairman of the Central Military Commission, was taken by Deng in 1981. However, progress toward military modernization went slowly. A [[Sino-Vietnamese War|border war]] with Vietnam in 1977–1979 made major changes unwise. The war puzzled outside observers, but Xiaoming Zhang argues that Deng had multiple goals: stopping Soviet expansion in the region, obtain American support for his four modernizations, and mobilizing China for reform and integration into the world economy. Deng also sought to strengthen his control of the PLA, and demonstrate to the world that China was capable of fighting a real war. Zhang thinks punishment of Vietnam for its invasion of Cambodia was a minor factor.<ref>{{Cite journal |last=Zhang |first=Xiaoming |year=2010 |title=Deng Xiaoping and China's Decision to go to War with Vietnam |journal=Journal of Cold War Studies |volume=12 |issue=3 |pages=3–29 |doi=10.1162/JCWS_a_00001 |s2cid=57559703}}</ref> In the event, the Chinese forces did poorly, in terms of equipment, strategy, leadership, and battlefield performance.{{sfnb|Vogel|2011|p=526–535}} Deng subsequently used the PLA's poor performance to overcome resistance by military leaders to his military reforms.<ref name=":05" />{{Rp|page=230}}

China's primary military threat came from the Soviet Union, which was much more powerful despite having fewer soldiers, owing to its more advanced weapons technology. In March 1981, Deng deemed a [[military exercise]] necessary for the PLA, and in September, the [[North China Military Exercise]] took place, becoming the largest exercise conducted by the PLA since the founding of the People's Republic. Moreover, Deng initiated the [[Modernization of the People's Liberation Army|modernization of the PLA]] and decided that China first had to develop an advanced civilian scientific infrastructure before it could hope to build modern weapons. He therefore concentrated on downsizing the military, cutting 1&nbsp;million troops in 1985 (百万大裁军),<ref name=":02">{{Cite web |date=6 May 1985 |title=Troop Cut to Save Money, Deng Says |url=https://www.latimes.com/archives/la-xpm-1985-05-06-mn-4457-story.html |url-status=live |archive-url=https://web.archive.org/web/20200622133140/https://www.latimes.com/archives/la-xpm-1985-05-06-mn-4457-story.html |archive-date=22 June 2020 |access-date=20 June 2020 |website=[[Los Angeles Times]]}}</ref> retiring the elderly and corrupt senior officers and their cronies. He emphasized the recruitment of much better educated young men who would be able to handle the advanced technology when it finally arrived. Instead of patronage and corruption in the officer corps, he imposed strict discipline in all ranks. In 1982 he established a new Commission for Science, Technology, and Industry for National Defense to plan for using technology developed in the civilian sector.{{sfnb|Vogel|2011|p=535–552}}<ref>{{Cite journal |last=Dreyer |first=June Teufel |year=1988 |title=Deng Xiaoping and Modernization of the Chinese Military |journal=Armed Forces & Society |volume=14 |issue=2 |pages=215–231 |doi=10.1177/0095327X8801400203 |s2cid=144391672}}</ref>

==== Three steps to economic development ====
In 1986, Deng explained to [[Mike Wallace]] on ''[[60 Minutes]]'' that some people and regions could become prosperous first in order to bring about common prosperity faster.<ref>{{Cite book |last=Paulson |first=Henry M. |title=Dealing with China : an insider unmasks the new economic superpower |date=2015 |isbn=9781455504213 |edition=First |location=New York |page=21}}</ref> In October 1987, at the Plenary Session of the National People's Congress, Deng was re-elected as Chairman of the [[Central Military Commission (People's Republic of China)|Central Military Commission]], but he resigned as Chairman of the [[Central Advisory Commission]] and was succeeded by Chen Yun. Deng continued to chair and develop the reform and opening up as the main policy, and he advanced the three steps suitable for China's economic development strategy within seventy years: the first step, to double the 1980 GNP and ensure that the people have enough food and clothing, was attained by the end of the 1980s; the second step, to quadruple the 1980 GNP by the end of the 20th century, was achieved in 1995 ahead of schedule; the third step, to increase per capita GNP to the level of the medium-developed countries by 2050, at which point, the Chinese people will be fairly well-off and modernization will be basically realized.<ref>{{Cite web |title=The Three-Step Development Strategy |url=http://www.china.org.cn/english/features/38199.htm |url-status=live |archive-url=https://web.archive.org/web/20180917215520/http://www.china.org.cn/english/features/38199.htm |archive-date=17 September 2018 |access-date=28 November 2010 |publisher=china.org.cn}}</ref>

==== Further reforms ====
{{Main|Socialist market economy|History of the People's Republic of China#Political reforms}}
{{More citations needed section|date=July 2020}}

Improving relations with the outside world was the second of two important philosophical shifts outlined in Deng's program of reform termed ''Gaige Kaifang'' (''lit.'' Reforms and Openness). China's domestic social, political, and most notably, economic systems would undergo significant changes during Deng's time. The goals of Deng's reforms were summed up by the [[Four Modernizations]], those of agriculture, industry, science and technology, and the military.

The strategy for achieving these aims of becoming a modern, industrial nation was the [[socialist market economy]]. Deng argued that China was in the [[primary stage of socialism]] and that the duty of the party was to perfect so-called "[[socialism with Chinese characteristics]]",<ref>{{Cite news |date=20 February 1997 |title=Deng Xiaoping Is Dead at 92; Architect of Modern China |work=The New York Times |url=https://www.nytimes.com/1997/02/20/world/deng-xiaoping-is-dead-at-92-architect-of-modern-china.html |url-status=live |access-date=15 February 2017 |archive-url=https://web.archive.org/web/20170123203613/http://www.nytimes.com/1997/02/20/world/deng-xiaoping-is-dead-at-92-architect-of-modern-china.html |archive-date=23 January 2017}}</ref><ref name="jac" /> and "[[seek truth from facts]]". (This somewhat resembles the Leninist theoretical justification of the [[New Economic Policy]] (NEP) in the 1920s, which argued that the [[Soviet Union]] had not gone deeply enough into the capitalist phase and therefore needed limited capitalism in order to fully evolve its means of production.) The "socialism with Chinese characteristics" settles a benign structure for the implementation of ethnic policy and forming a unique method of ethnic theory.<ref>{{Cite journal |title=万方数据知识服务平台 |url=http://d.wanfangdata.com.cn/periodical/ghlc201105008 |url-status=live |doi=10.3969/j.issn.1004-1494.2011.05.008 |archive-url=https://web.archive.org/web/20210217055507/http://d.wanfangdata.com.cn/periodical/ghlc201105008 |archive-date=17 February 2021 |access-date=28 October 2020 |website=d.wanfangdata.com.cn}}</ref>

Deng's economic policy prioritized developing China's [[productive forces]].<ref name=":9">{{Cite journal |last=Boer |first=Roland |author-link=Roland Boer |date=1 October 2021 |title=From Belgrade to Beijing : Comparing Socialist Economic Reforms in Eastern Europe and China |journal=World Review of Political Economy |volume=12 |issue=3 |pages=309 |doi=10.13169/worlrevipoliecon.12.3.0296 |issn=2042-8928 |s2cid=247967541|doi-access=free }}</ref> In Deng's view, this development "is the most fundamental revolution from the viewpoint of historical development[,]" and "[p]oor socialism" is not socialism.<ref name=":9" /> His theoretical justification for allowing market forces was:

{{blockquote|The proportion of planning to market forces is not the essential difference between socialism and capitalism. A planned economy is not equivalent to socialism, because there is planning under capitalism too; a market economy is not capitalism, because there are markets under socialism too. Planning and market forces are both means of controlling economic activity. The essence of socialism is liberation and development of the productive forces, elimination of exploitation and polarisation, and the ultimate achievement of prosperity for all. This concept must be made clear to the people.<ref>Cited by John Gittings in ''[[iarchive:changingfaceofch00gitt|The Changing Face of China]]'', Oxford University Press, Oxford, 2005. {{ISBN|0-19-280612-2}}. Page 253.</ref>}}

Unlike Hua Guofeng, Deng believed that no policy should be rejected outright simply because it was not associated with Mao. Unlike more conservative leaders such as Chen Yun, Deng did not object to policies on the grounds that they were similar to ones that were found in capitalist nations.

This political flexibility towards the foundations of socialism is strongly supported by quotes such as:

{{blockquote|We mustn't fear to adopt the advanced management methods applied in capitalist countries&nbsp;... The very essence of socialism is the liberation and development of the productive systems&nbsp;... Socialism and market economy are not incompatible&nbsp;... We should be concerned about right-wing deviations, but most of all, we must be concerned about left-wing deviations.<ref>Cited by António Caeiro in ''Pela China Dentro'' (translated), Dom Quixote, Lisboa, 2004. {{ISBN|972-20-2696-8}}</ref>{{page needed|date=July 2020}}}}

Although Deng provided the theoretical background and the political support to allow economic reform to occur, the general consensus amongst historians is that few of the economic reforms that Deng introduced were originated by Deng himself. Premier Zhou Enlai, for example, pioneered the Four Modernizations years before Deng. In addition, many reforms would be introduced by local leaders, often not sanctioned by central government directives. If successful and promising, these reforms would be adopted by larger and larger areas and ultimately introduced nationally. An often cited example is the [[household responsibility system]], which was first secretly implemented by a poor rural village at the risk of being convicted as "counter-revolutionary". This experiment proved very successful.<ref>Dali Yang, Calamity and Reform in China, Stanford University Press, 1996</ref>{{page needed|date=July 2020}} Deng openly supported it and it was later adopted nationally. Many other reforms were influenced by the experiences of the [[Four Asian Tigers|East Asian Tigers]].<ref>Cited by David Shambaugh in ''Deng Xiaoping: portrait of a Chinese statesman'', Oxford University, Oxford, 1995. {{ISBN|0-19-828933-2}}</ref>{{page needed|date=July 2020}}

This was in sharp contrast to the pattern of ''[[perestroika]]'' undertaken by [[Mikhail Gorbachev]], in which most major reforms originated with Gorbachev himself. The bottom-up approach of Deng's reforms, in contrast to the top-down approach of ''perestroika'', was likely a key factor in the success of the former.<ref>Cited by Susan L. Shirk in ''The Political Logic of Economic Reform in China'', University of California, Berkeley and Los Angeles, 1993. {{ISBN|0-520-07706-7}}</ref>{{page needed|date=July 2020}}

Deng's reforms actually included the introduction of planned, centralized management of the macro-economy by technically proficient bureaucrats, abandoning Mao's mass campaign style of economic construction. However, unlike the Soviet model, management was indirect through market mechanisms. Deng sustained Mao's legacy to the extent that he stressed the primacy of agricultural output and encouraged a significant decentralization of decision making in the rural economy teams and individual peasant households. At the local level, material incentives, rather than political appeals, were to be used to motivate the labor force, including allowing peasants to earn extra income by selling the produce of their private plots at free market value.

Under Deng Xiaoping's leadership, the Cultural Revolution-era trend towards localizing authority over [[State-owned enterprises of China|state-owned enterprises]] was reversed, and SOE management was again centralized.<ref name=":023">{{Cite book |last=Hirata |first=Koji |title=Making Mao's Steelworks: Industrial Manchuria and the Transnational Origins of Chinese Socialism |date=2024 |publisher=[[Cambridge University Press]] |isbn=978-1-009-38227-4 |series=Cambridge Studies in the History of the People's Republic of China series |location=New York, NY}}</ref>{{Rp|page=260}}

==== Export focus ====
In the move toward market allocation, local municipalities and provinces were allowed to invest in industries that they considered most profitable, which encouraged investment in light manufacturing. Thus, Deng's reforms shifted China's development strategy to an emphasis on light industry and [[export-oriented industrialization|export-led growth]]. Light industrial output was vital for a developing country coming from a low capital base. With the short gestation period, low capital requirements, and high foreign-exchange export earnings, revenues generated by light manufacturing were able to be reinvested in technologically more advanced production and further capital expenditures and investments.{{citation needed|date=September 2023}}

However, in sharp contrast to the similar, but much less successful reforms in the [[Socialist Federal Republic of Yugoslavia]] and the [[People's Republic of Hungary]], these investments were not government mandated. The capital invested in heavy industry largely came from the banking system, and most of that capital came from consumer deposits. One of the first items of the Deng reforms was to prevent reallocation of profits except through taxation or through the banking system; hence, the reallocation in state-owned industries was somewhat indirect, thus making them more or less independent from government interference. In short, Deng's reforms sparked an industrial revolution in China.<ref>FlorCruz, Jaime (19 December 2008) [http://www.cnn.com/2008/WORLD/asiapcf/12/18/china.reform.florcruz/index.html "Looking back over China's last 30 years"] {{Webarchive|url=https://web.archive.org/web/20180320230717/http://www.cnn.com/2008/WORLD/asiapcf/12/18/china.reform.florcruz/index.html|date=20 March 2018}} ''CNN''</ref>

These reforms were a reversal of the Maoist policy of economic self-reliance. China decided to accelerate the modernization process by stepping up the volume of foreign trade, especially the purchase of machinery from Japan and the West. In October 1978, to exchange the instruments of ratification for the "Treaty of Peace and Friendship between Japan and the People's Republic of China", Deng Xiaoping visited Japan for the first time and was warmly received by Prime Minister Takeo Fukuda and others. Deng Xiaoping was only Vice Premier during the time of his meetings with Japanese officials, but the Japanese government received Deng as the effective paramount leader of China due to his long history with the CCP, nonetheless. Deng was deemed the first Chinese leader to receive an audience in addition to Japanese Emperor Showa. A news article  from NHK Japan in 1978 reported that Deng diplomatically stated "we talked about our past, but His Majesty's focus on building a better future is something I noticed." Deng's statement suggests the new era of China's political reform through foreign economic diplomacy.<ref>{{cite web |last1=NHK JAPAN |title=鄧小平副首相 天皇皇后両陛下と会見 |url=https://www2.nhk.or.jp/archives/movies/?id=D0009170072_00000 |website=NHK JAPAN |access-date=30 May 2024 |archive-date=14 March 2023 |archive-url=https://web.archive.org/web/20230314235114/https://www2.nhk.or.jp/archives/movies/?id=D0009170072_00000 |url-status=live }}</ref>

Treaty of Peace and Friendship between Japan and the People's Republic of China is an ongoing pact between the two nations to this day. Article 1 of the treaty describes mutual respect for sovereignty and territorial integrity, mutual non-aggression, and mutual non-interference in internal affairs. Article 2 proclaims anti-hegemony. Article 3 discusses the further development of economic and cultural relations between the two countries, and Article 4 addresses the relationship of this treaty with third countries. Although it took six years from the restoration of diplomatic relations for the peace treaty negotiations to be concluded as the "anti-hegemony" clause and the "third country" clause were considered the most contentious, the agreement still informs much of contemporary Sino-Japanese relations.<ref>{{cite journal |last1=Lee |first1=Chae-Jin |title=The Making of the Sino-Japanese Peace and Friendship Treaty |journal=Pacific Affairs |date=1979 |volume=52 |issue=1 |pages=420–445 |doi=10.2307/2757656 |jstor=2757656 }}</ref>  By participating in such export-led growth, China was able to step up the Four Modernizations by attaining certain foreign funds, market, advanced technologies and management experiences, thus accelerating its economic development. From 1980, Deng attracted foreign companies to a series of [[Special Economic Zones of the People's Republic of China|Special Economic Zones]], where foreign investment and market liberalization were encouraged.<ref>{{Cite journal |last=Stoltenberg |first=Clyde D. |date=1984 |title=China's Special Economic Zones: Their Development and Prospects |journal=Asian Survey |volume=24 |issue=6 |pages=637–654 |doi=10.2307/2644396 |issn=0004-4687 |jstor=2644396}}</ref><ref>{{Cite web |last=Holmes |first=Frank |date=21 April 2017 |title=China's New Special Economic Zone Evokes Memories Of Shenzhen |url=https://www.forbes.com/sites/greatspeculations/2017/04/21/chinas-new-special-economic-zone-evokes-memories-of-shenzhen/ |url-status=live |archive-url=https://web.archive.org/web/20190322005508/https://www.forbes.com/sites/greatspeculations/2017/04/21/chinas-new-special-economic-zone-evokes-memories-of-shenzhen/ |archive-date=22 March 2019 |access-date=22 March 2019 |website=Forbes}}</ref>

The reforms sought to improve labor productivity. New material incentives and bonus systems were introduced. Rural markets selling peasants' homegrown products and the surplus products of communes were revived. Not only did rural markets increase agricultural output, they stimulated industrial development as well. With peasants able to sell surplus agricultural yields on the open market, domestic consumption stimulated industrialization as well and also created political support for more difficult economic reforms.{{citation needed|date=September 2023}}

There are some parallels between Deng's [[market socialism]] especially in the early stages, and [[Vladimir Lenin]]'s NEP as well as those of [[Nikolai Bukharin]]'s economic policies, in that both foresaw a role for private entrepreneurs and markets based on trade and pricing rather than central planning. As academics [[Christopher Marquis]] and Kunyuan Qiao observe, Deng had been present in the Soviet Union when Lenin implemented the NEP, and it is reasonable to infer that it may have impacted Deng's view that markets could exist within socialism.<ref name=":10" />{{Rp|page=254}} In first meeting between Deng and [[Armand Hammer]], Deng pressed the industrialist and former investor in Lenin's Soviet Union for as much information on the [[new economic policy]] as possible.