China Study Group

Mao's Legacy in China's Current Development

uploaded on: 28 jun
by Pao-yu Ching

A Chinese worker said,”This is not socialism with Chinese characteristics as Deng Xiaoping told us. Instead, what we have here is capitalism with Chinese characteristics.”
A Chinese peasant said, “When Chairman Mao warned us about the restoration of capitalism, we really did not understand what he was talking about. Now we do.”

In China & Socialism -- Market Reforms and Class Struggle[i], Martin Hart-Landsberg and Paul Burkett argued successfully why the so-called “market socialism” in China is in fact the restoration of capitalism, and that China’s economic Reform of the past twenty-five years can not serve as a socialist model of development for other less developed countries. Hart-Landsberg and Burkett’s research on this topic in current literature (in English) is very thorough and includes perspectives from the Left liberals and some progressives, who had mistaken China’s economic development since the Reform as socialist. Hart-Landsberg and Burkett also give a detailed and accurate account of the Reform itself from 1979 to the present.

Hart-Landsberg and Burkett give credible reports on how the capitalist restoration in China has dismantled the social welfare system and other protections the working population enjoyed before the Reform, and thus resulting their tremendous hardships and sufferings. They also report how workers and peasants in China have resisted the Reform, and the different ways by which they have fought back.

Hart-Landsberg and Burkett’s book and other studies listed in their references give us an overview on the West’s (mostly the US) current debates on China’s Reform. These debates are timely, because workers, peasants, and intellectuals in China have themselves been actively engaging in similar debates.

However, I do not agree with Hart-Landsberg and Burkett on their view expressed in the “Historical Context for Post-Mao Economic Reform” (27-30); this view is inaccurate and is inconsistent with the rest of their analysis. The reasons Hart-Landsberg and Burkett state in the “historical context” for the post-Mao Reform, are the very same excuses that Deng and his supporters used to embark on their capitalist restoration. If we were to agree with Hart-Landsberg and Burkett’s negative evaluation of the socialist period ), why would it even matter to those on the Left, whether the current development in China is socialist or capitalist"#2" name="_2" title="">[ii]

The essay stated that in 1956, Liu sent a team to the Soviet Union to study their labor system. Upon its return, the team proposed the adoption of the Contract Labor System modeled after what the Soviet Union had adopted. However, when the changes were about to take place, the Great Leap Forward started, thus interrupting its implementation. The essay continued in stating that in the early 1960's Liu again attempted to change the permanent employment status by adopting a "two-track system," enterprises were to employ more temporary and fewer permanent workers, and the mines were to employ peasants as temporary workers. Then, in 1965, the State Council announced a new regulation on the employment of temporary workers, indicating that, instead of permanent workers, more temporary workers should be hired. The regulation also gave individual enterprises the authority to use allocated wage funds to replace permanent workers with temporary workers. Again, according to the author of this essay, the Cultural Revolution interrupted Liu's effort to reform the labor system, and, in 1971, large numbers of temporary workers were given permanent status. Although Liu could not fully implement his labor reform, he had "experimental projects" going on here and there, and before the Cultural Revolution began, large numbers of temporary workers had been hired.[iii]

The author of Labor Contract System Handbook expressed his regrets that these earlier efforts to institute labor reform failed, and he stated that if there had not been the Great Leap Forward and the Cultural Revolution, it would have been possible to carry out these Labor Reform long before the current time.

In fact, Liu-Deng and their allies had a plan to develop capitalism in China since the 1950’s. The afore-mentioned Labor Reform was only one of the many projects they prepared to carry out. Their plan to develop capitalism in China before 1979 consisted of projects to be implemented in every economic, political, social, and cultural sphere. This short essay only allows a brief discussion of one of many projects. The purpose of this discussion is to show the current class struggle in China so carefully documented by Hart-Landsberg and Burkett has its origin. From what to be discussed below, it is not difficult to understand from this one example of Labor Reform how Deng’s Reform was diametrically opposed to that of Mao’s. That was and is the precise reason for the past and current class struggles in China.

II. Mao’s Legacy

As Deng and his supporters began their 1979 Reform, they denounced China’s mass movements in general and the Cultural Revolution in particular. The Reformers attributed, though not openly, what they called the “calamity” of the Cultural Revolution to Mao’s declining years, implying that the aging Mao could no longer think clearly. At that time, they were not yet questioning Mao’s many other contributions before 1966. As the Reform gathered steam in the 1980s, Deng and his supporters began attacking the Great Leap Forward, the formation of Communes, as well as the 1956 transfer of ownership of the means of production in industries to the State. Their attacks also included the permanent employment system in State-owned enterprises. For awhile, the attack, though not openly, went as far back as the Land Reform ); therefore, limiting Mao’s contribution solely to his role in winning the Chinese Revolution in 1949.[iv]

What has been most interesting, however, is that while denouncing all the major achievements during the socialist period, and eagerly demonstrating how they had hurt China’s economic development, to this day, the Reformer have never been able to publicly denounce Mao. The reason is that those who have hold power in China since the Reform fully realize the prestige and admiration Mao has among the broad masses, so they put him up on a pedestal while denounce everything he represents. Mao’s portrait still hangs in the most prominent place in Tiananmen Square, in all public offices, factories and schools. On the other hand, workers and peasants have shown their genuine love and respect for Mao by hanging Mao’s portrait in their homes. Recently, more and more people, including some lower level government officials, are wearing Mao’s button to show their allegiance to Mao.[v]

So what exactly is Mao’s legacy, and why has Mao become more popular today after two and half decades of Reform"#6" name="_6" title="">[vi] The principles in the Anshan Constitution represent a spirit, which lead toward the direction of eventually phasing out the wage labor.[vii]

In the essay, we went on to say that before the Cultural Revolution began, factories only paid lip service to the Anshan Constitution. Management in State-owned factories did not see any need to change and workers were rather passive; they were content with their State endowed privileges and benefits and assumed that the conditions of their employment were there to stay. In addition, we stated that the political struggle within the Chinese Communist Party during this period over the direction of the transition was reflected in the factory by changes in wage and employment policies:

At times, policies issued from above pushed the implementation of the piece wage rate and expanded the employment of temporary workers. Then, often during mass movements, these policies were criticized and reversed. Before the Cultural Revolution, however, workers did not comprehend the reasons behind these reversals of policies. They were not aware that Liu had made numerous attempts to abolish permanent employment status. Without the Great Leap Forward and the Cultural Revolution, Liu and his supporters might have succeeded in their attempts to repeal the laws that protected the state employees. If that had been the case, permanent employment status and other benefits endowed to state employees might have become history decades ago. When workers participated in the mass movements in the 1950's and 60's, their class consciousness was gradually raised; but workers did not realize, until the Cultural Revolution, that class struggle continued after the judicial transfer of the ownership of the means of production to the state. It was during the Cultural Revolution -- a period of intensive political struggle in the factory and in society at large -- that many crucial issues were raised.[viii]

Workers and cadres openly discussed and debated many other important issues relating to wages and benefits and labor processes in factories, such as material incentives, cadres' participation in production work, workers' participation in management, and what constituted unreasonable rules and regulations. Through these debates, State enterprise workers grasped the meaning of “putting politics in command” and other principles in the Anshan Constitution.

The kind of labor system a socialist country adopts is only one of many major issues regarding the direction and nature of a socialist vs. capitalist transition. Questions regarding the transition’s direction existed before 1979 and they still exist in all political, economic, social, and cultural spheres in China today. While this short essay does not allow a more comprehensive overall analysis, we can understand how programs in transition toward socialism are diametrically opposed to programs in transition toward capitalism from the example of the labor reform.

Programs, or projects, in transition toward socialism are completely different from the programs in transition toward capitalism, as are the methods of implementing them. During the socialist period, programs were carried out by mass line and often through mass movements. The meaning of mass line is rather simple. It means involving those who are directly affected by the program. When policies were formulated, cadres were urged to talk to the masses, take surveys, or even live with them for periods of time. When policies were implemented, cadres engaged the masses in discussions, debates, campaigns, and protests. All major changes in China during 1949-1979, including the Land Reform, were accomplished through mass campaigns/movements. In the past, mass movements provided the only opportunity for the masses to validate government policies. Policies so validated by the masses had a better chance to succeed.[ix]

Clearly, however, there were plenty of cases, when “mass line” in practice did not match the ideal described. Instead of soliciting opinions and ideas from the masses, cadres often saw themselves as carrying out orders from above. Whenever cadres failed to follow the mass line, commandism and bureaucracy inevitably occurred.[x]

In the past, mass movement was also a vehicle for the appropriation of new ideology. During Land Reform the new appropriated ideology was: “It is wrong for landlords to take rent (the product of the peasants’ labor) from the peasants. Rent is a form of exploitation.” Using mass movements to appropriate new ideology helped turn the logic of exploitation upside down and gave moral validity to policies that would right past wrongs. It is not unlike what anti-war demonstrations have done in the past three years to undo the logic of the US invasion and occupation of Afghanistan and Iraq. The only difference is that the ideology appropriated during China’s past mass movements came directly from the center of power while the ideology of the anti-war demonstration came from the protesters themselves. Critics charge that during mass movements, ideas were often imposed from the top, and such ideas had little relevance to the problems and concerns of the masses. It is a valid criticism in that workers and peasants oftentimes had a difficult time grasping the meaning of ideas, if they were detached from their reality, let alone adopting or owning them. This happened during the latter part of the Cultural Revolution and possibly happened in other mass movements as well. When it did happen, open discussion and debate disappeared and indoctrination set in, discarding the practice of the “mass line”.[xi]

However, overall, mass movements during 1949-78 politicized the Chinese population. One of the most important legacies of Mao is that he believed that mass participation is the only way to prevent the party bureaucrats from hijacking the transition and turning it to capitalist without workers’ and peasants’ knowledge and resistance. With the practice of initiating mass movements, Mao was able to communicate his beliefs to the masses at large in the process.

In contrast, all of the Reform programs since 1979 were implemented by passing laws and issuing decrees/regulations strictly from above. In the early stages of the Reform, the Reformers introduced material incentives, such as piece wage rate and bonuses, because Deng and other Reformers believed that material incentive would increase competition among workers, thus promoting efficiency and productivity. Workers in State enterprises, however, were very suspicious, because using piece wage rate and bonuses to increase the pace and intensity of work were not new to them. They decided to resist the piece wage rate and, instead of competing for the bonuses, they shared this the extra pay more or less equally (allowing for small differences based on seniority). They used the bonus money instead to compensate for the loss of purchasing power due to inflation. Deng and other Reformers could not, as long as the workers were able to resist, change the culture of cooperation to the cultural of competition by simply issuing decrees and passing laws from above. Workers knew enough not to take the bribe.

Obviously, the Reformers would not dream of getting workers’ support through discussion and debates; clearly the programs they wanted to implement would take away workers’ rights to work, wages and benefits, and to make decisions about work rules and voice their opinions in the factories. How could any worker be expected to support programs that are designed to intensify their own exploitation and lower their political, economic, and social status to that of wage labor"#12" name="_12" title="">[xii] Without any means to openly express themselves, people have found ingenious ways to let voices be heard. One popular method is making up verses and sayings and circulating them privately. Most of these verses/sayings creatively speak the minds of those who made them up, as well as those who pass them on so they can be widely circulated. Some of them are very long and complex – here are two short ones that have remained popular:

On corrupted government officials: “If you were to line up all the high level government officials and shoot every other one you would still let many guilty ones go free.”
On smashing the iron rice bowl: “Chairman Mao gave us a rice bowl, Deng Xiaoping drilled a hole in it, the capitalists connected a siphoning tube to the hole, and Jiang Zemin shattered the bowl into pieces.”

When Deng said that the Reformers were “crossing the river by touching the stones,” he tried to impress on those who clearly remembered Deng’s line in the past, and how it had been criticized. It seemed to be a deliberate effort on Deng’s part to imply that the Reformers did not have a set of well thought out programs to implement. Thus, there was no need for people to be alarmed. Another saying of Deng’s is “It doesn’t matter whether the cat is black of white. If it catches mice, it’s a good cat.” The black cat vs. white cat saying sent the message that politics does not really matter what's important is that the Reform will develop the productive forces and raise people’ standard of living. The Reformers used these sayings as a ploy to deemphasize “politics in command” and “class struggle is the key link”. At the same time, they have carried out the fiercest whole scale class struggle against the workers and peasants. I think it is rather interesting to observe how the Left in the United States in recent years has tried many ways to politicize the general public without much success, while the current regime in China has tried their best to de-politicize the Chinese population – their efforts have not been very successful either.

III. The Relevance of China from the Left Perspective.

The representatives of international monopoly capital obviously think China is relevant. They set China up as, in the words of Hart-Landsberg and Burkett, their “poster country” for good reasons. In an era of global crisis and economic stagnation, China has become one country where the economic growth rates have stayed high. Multinational corporations have profited from China by investing their surplus capital and exploiting its cheap labor. Deng’s Reform to open up China to foreign goods and investments, and China further liberalizing its economy since its accession into the WTO, came at an opportune time for global monopoly capital. They seized the time to expand to this large piece of virgin land and into what they see as a gargantuan market for their surplus products.

Moreover, the development in China in the past two and half decades has been relevant ideologically to the representatives of the global capital and the ruling class in imperialist countries. The scholars on the Right regard China as one more piece of evidence in their argument that capitalism has won and that history has indeed come to an end. They argue that China abandoned socialism and embraced capitalism to save itself from its turbulent past that left its economy in ruins. Since the Right conveniently possesses the power to interpret freedom and democracy, they have further asserted that capitalism will eventually bring freedom and democracy to the Chinese people.

The question then is: Why should China be relevant to the Left?

After China was on its way to restore capitalism and the former Soviet Union and Eastern European countries collapsed, many on the Left lost their confidence that socialism would one day replace capitalism. The Right, on the other hand, had a well-planned strategy to aggressively attack and discredit socialism and proclaimed the triumph of capitalism at a moment when capitalism itself was in deep crisis. In the West, most on the Left had a difficult time defending those former socialist countries; they also had trouble explaining why attempts to institute socialism ended so disastrously. Some on the Left, however, did offer some explanations.

In May 1998 the Monthly Review published a special issue commemorating the 150 year anniversary of the Communist Manifesto, which included an article written by Ellen Meiksins Wood --“The Communist Manifesto After 150 Years.”[xiii] In her article Wood returned to Marx’s manifesto to explain the historic “failures” of socialism. She said, “...[W]e should not underestimate the significance of his [Marx’s] assumption that a socialist revolution would be most likely to succeed in the context of a more advanced capitalism. In that sense, it could be argued that the ultimate failure of the Russian revolution, which occurred in the absence of those preconditions, fulfilled his predictions all too well”[xiv]. (Note: Three of us disagreed with her analysis and conclusions and we responded by writing a letter to the Monthly Review editors. I am integrating portions of that letter below.)

Wood’s article represented a good number of people on the Left, who were at a loss to defend the former socialist countries. Since they felt defenseless from the vicious attacks of the Right, they tried to disassociate and unburden themselves from the histories and realities of those countries. In making that choice, they also disassociated themselves from the heroic struggles of the Russian people in winning the revolution, the liberation of Russian people after the revolution, and the achievements made in the early decades of the Soviet Union. They relieved themselves of the burden of explaining or understanding how and why so called communist leaders betrayed the revolution, why a country that began with such great hopes, degenerated into the conditions that we all witnessed, until its final collapse.

Wood chose to explain the failure of socialism by asserting that the former socialist countries did not meet what she called “Marx’s prerequisites for a transition from capitalism to socialism...” – an assertion with some rather serious implications. One of these implications is that all former attempts to develop socialism were doomed to fail from the beginning, because those countries did not meet the prerequisites set forth by Marx. It’s unfortunate then, that people in the past did not understand Marx’s prerequisites, and as a consequence sacrificed their lives for an unattainable goal. It also implies that oppressed people living in less developed countries today, would do well to learn from the mistakes made by revolutionaries in the past and not to engage in any revolutionary struggles lest they repeat them. If we were to believe her analysis and conclusions, then this argument would have the same impact as arguments made by the Right, who debunk Marxism and socialism as utopian dreams.

We responded in our letter:

What Marx did not foresee was the emergence of imperialism. Its dominance changed the landscape… For the most part, imperialism does not develop the productive forces in its “client” countries. In countries such as the Philippines, Indonesia, Thailand, and Mexico (to name a few), there is no illusion that the exploitation of their labor forces and natural resources will lead to any kind of advanced capitalist development. They are merely pools of disposable workers for low skill, low pay jobs in factories and in fertile fields that agribusiness seized and converted from sustainable agriculture to huge cash crops. The factories manufacture goods and the plantations grow food for export that the native people cannot use or afford. They are environmental dumping grounds that are destroying the land, water, and air. Marx’s prediction about capitalism developing productive forces can only be taken in context of the time in which he wrote, and reexamined in the context of the world today. But, as it is laid out in the context of his other work, culminating in his masterpiece Das Capital, his overall analysis of capitalism is still dead on. [xv]

Why then, did the Soviet Union collapse"#16" name="_16" title="">[xvi]

The Chinese people, before the 1949 revolution were among the poorest, the most oppressed, and disadvantaged. Chinese peasants suffered thousands of years under the cruel land tenure system of feudalism, that entitled landlords to take all (if not more) of the agricultural surpluses through exorbitant rent on their land and usury interests on their loans. In more recent history, the Chinese people suffered more than one hundred years of war imposed upon them by imperialist aggressors. The 1911 revolution, led by the bourgeoisie, did not terminate the land tenure system, nor did it lead to any economic development. China remained weak and defenseless against foreign aggression. The founding of the Chinese Communist Party in 1921 brought hope to the China. The Chinese people, under the leadership of CCP in a coalition with the Kuomingtang (KMT), fought eight long years against Japanese invasion and occupation and finally won the war against Japan in 1945.

In June 1945, on the eve of the victory against Japan, Mao wrote “The Foolish Old Man who Moved the Mountains.” He used an old Chinese folklore as a metaphor, showing the Chinese people that the two big mountains blocking their way and pressing down upon them were imperialism and feudalism. He urged the Chinese people to learn from the foolish old man who proved that he could move the two mountains, one shovelful at a time, to work as diligently to dig their way out from under the oppression of these two big mountains.[xvii]

In the next four years, the Chinese people, under the leadership of the CCP, won the revolution. And during the 30 years of socialist construction that followed, China was able to achieve rapid development in agriculture, industry, transport, and construction. The annual growth rate for agriculture, industry and transport, and construction grew at the average rates of 3.4%, 9.4% and 10.7%, respectively during the period of 1952 and 1978.[xviii]

China was able to develop both its heavy and light industries and lay the foundation for long-term and sustainable growth. It achieved in those thirty years, a balanced growth between industry and agriculture, so that the peasants’ standard of living in the countryside, though still behind urban residents, improved, narrowing the gap between the two. The peasants worked extremely hard to build the foundation of agriculture, including irrigation and drainage systems, basic infrastructure such as roads and bridges, and land conservation and improvement. The State also gradually reduced agricultural taxes, improving the terms of trade in favor of the agricultural sector, and increased State investment in large agricultural infrastructure, such as the Red Flag Canal and Yellow River Project among many others.

One of the most important accomplishments in those 30 years, was that by the end of the 1970’s, even though China was still a poor country, it was able to raise the welfare of its population at large. In that relatively short span of time, indicators such as life expectancy, infant mortality, nutrition levels, and literacy rates in China, were closer to those of developed countries than of the underdeveloped countries.[xix] China was able to make those accomplishments in the most unfavorable and hostile international environment. China developed its economy by relying on its internal savings, without any outside help.[xx] During those years, China was under an economic embargo by the United States and other Western countries. Moreover, China had to spend a lot of its scarce resources to build its military defenses, as it faced constant military threats during the twenty years between the Korean War and the Vietnam War.

Some may argue that the China has achieved even higher rates of economic growth in the post-Reform years.xxi In addition to the question of who has actually benefited from the high rates of growth, China’s current development is unsustainable. The high rates of growth, on the one hand, were generated by large sums of foreign investment, in the magnitude of $50 billion a year, for the past few years. Foreign investment coupled with government investment in infrastructure, buildings and industries has been used to combat recession in the few years after 1998 and has created excess capacity of over 90% of China’s industries.[xxii] [xxiii] In 1995 excess capacity for bicycles, color TV’s, washing machines, and air-conditioners, was 45%, 54%, 57% and 70%, respectively. Moreover, China’s overwhelming dependence on exports for growth can no longer continue. European Union and Japanese economies are stagnated and US trade deficits (one third of which is with China), which have been financed entirely by external borrowing, has reached an alarming level; China’s exports will soon run out of places to go. China’s financial institutions, heavily burdened by bad debts, are very fragile and will have to face increasing competition from foreign banks in China. The real estate bubble in China’s big cities looks increasingly like those experienced by the Southeast Asia countries in the late 1990s. Even some mainstream economists agree that the crisis is China is inevitable.

Hart-Landsberg and Burkett accurately stated that China’s development since the Reform cannot serve as a model for other less developed countries. The crisis when it does occur in China will further destroy the myth that in the long run a country can depend on export to develop its economy. However, China’s revolutionary victory against imperialism and the socialist development in the thirty years that followed, served and still serves as a model of development for other Third World countries. The Chinese people under Mao’s leadership did remove the two big mountains pressing down on them, and in the process they empowered themselves. Workers who have been laid-off or forced into retirement in China today still say with full knowledge and confidence, “We built this country. We have a glorious past. No one can deny that.” For these reasons China’s socialist development is relevant to the poorest, the most oppressed, and disadvantaged people of the world and, therefore, should be relevant to the Left.

In conclusion, Deng’s Reform programs implemented since 1979 have their origins in the previous socialist period. The legacies from the socialist period have not only shaped China’s current development – they will continue to play a dominant role in China’s future, as well as the futures of many other countries, where the poorest, most oppressed and disadvantaged people are engaging in their struggles against imperialism and capitalism. It has been in Marx’s name and with Marx’s teaching, the workers and peasants in China and elsewhere brought about and will continue to bring great changes and progress. It is their achievements that have made the Communist Manifesto worth celebrating after 157 years. As Mao said, “The road has many twists and turns but the future is bright.”

[i] Martin Hart-Landsberg and Paul Burkett, China & Socialism -- Market Reforms and Class Struggle, Monthly Review Press, 2005, first published in Monthly Review, July-August 2004.

[ii] "The History of Our Contract Labor System" in Labor Contract System Handbook edited by Liu Chiang-tan, Science Publisher, 1987, pp. 1-18.

[iii] D. Y. Hsu and P. Y. Ching, “Labor Reform : Mao vs. Liu-Deng,” in Mao Zedong Thought Lives, Vol. I, Center for Social Studies & New Road Publications, 1995, pp. 189-190.

[iv] Some pro Reform scholars in the West quickly supported this unofficial view held by the Reformers One good example is: Chinese Village, Socialist State,(Yale University Press, 1991) written by Edward Friedman, Paul Pickowicz, Mark Seldon and Kay Johnson.

[v] Taxi drivers have for a long time have displayed Mao’s photo on their rear view mirrors as good luck charms. The more recent wearing Mao’s button seems to be more political indicating that people want to show that they are taking a pro Mao stand. In addition, revolutionary songs and films including the ones from the period of the Cultural Revolution have also become popular.

[vi] See Charles Bettelheim, Cultural Revolution and Industrial Organization in China, Monthly Review Press, 1974.

[vii] D. Y. Hsu and P.Y. Ching, “Labor Reform: Mao vs. Liu-Deng,” in Mao Zedong Thought Lives, Vol. I, Center for Social Studies & New Road Publications, 1995, p. 190.

[viii] Ibid., p.191.

[ix] D. Y. Hsu and P.Y. Ching, “Mass Movement” Mao’s Socialist Strategy for Change.” in Mao Zedong Thought Lives, Vol. I, Center for Social Studies & New Road Publications, 1995.

[x] Ibid.

[xi] Ibid.

[xii] When the Reformer amended the Chinese Constitution in 1979 to abolish workers’ right to strike they also abolished peoples’ right to freedom of expression, namely the four da’s: daming, dafang, dabianlun, and dazebao (big openness, big voice, big debates, and big character posters.)

[xiii] Ellen Meiksins Wood, “The Communist Manifesto After 150 Years”, Monthly Review, May 1998, pp. 14-35.

[xiv] Ibid., 29.

[xv] Dao-yuan Chou, Fred Engst, and Pao-yu Ching, Response to Ellen Meiksins Wood’s article “The Communist Manifesto After 150 Years,” Monthly Review, May 1998, pp. 14-35.

[xvi] Harry Magdoff, “A Note on the Communist Manifesto,” Monthly Review, May 1998, p.13.

[xvii] Mao Zedong, “The Foolish Old Man who Moved the Mountains,” in Selected Works of Mao Zedong, Peoples’ Publishing Co., 1964, pp. 1101-1104. Another version of “the Foolish Old Man who removed he mountains has three mountains and the third one was bureaucratic capitalism.

[xviii] Thomas Rawski, Economic Growth and Employment in China, Oxford University Press, 1979.

[xix] Sidel, Ruth and Victor W. Sidel, The Health of China, Beacon Press, 1982.

[xx] Soviet Union pulled back its original aid projects after the ideological disputes between China and the Soviet Union began. China had since paid back all loans extended by the Soviet Union.

[xxi] According to some estimates, the official rates of growth posted by Chinese officials are overstated. The World Bank estimated that the real rate of growth between 1978 and 1995 was 1.2% below the official figure. Research published by OECD estimated China’s growth rate in 1986-1994 was only 6%. See Nicholas R. Lardy, Integrating China into the Global Economy, (Brookings Institution Press, 2002) pp. 11-15 for further discussion.

[xxii] New York Times Magazine, July 4, 2004, p. 30.

[xxiii] China’s Industrial Development Report, 2003, p. 27.