Institutional and Economic changes in China from 1978 to 1989

Discuss about the Political Economy for Deng Xio Ping Era.

The economic reform in China relates to the economic reforms program that started in the beginning of the year 1978 by the reformists during the Deng XioPing era. Despite several economic imbalances during the time of reform in the year 1978, this nation exhibited huge economic growth. Since the year 1978, China has experienced several institutional changes that have been proven to be highly effectual in promoting economic growth. It has led to institutional change in systematic manner during this period. Deng Xiaoping‘s main purpose of economic reforms was to develop socialism with the Chinese characteristics. Owing to these economic reforms, the economy of China has transformed (Zhong, 2015). It has changed from the economy where market forces virtually played no role in organizing the activities of the economy to the one where market forces played major role. Economic reforms occurred in the four major sectors during this period from 1978 to 1989, which involved science and technology, national defense, agriculture, industry. The main goals of  Deng Xiaoping were mainly to open up this nation’s market globally and providing more employment to the people of this nation.

Deng XiaoPing ‘s strategic thought mainly constitutes a scientific system along with rich content. The strategic thoughts of Deng XiaoPing were mainly formed as well as developed under new historical conditions and were based on practice of socialist modernization and peaceful development in the globe (Hayek, 2012). National defense has been one of the high priorities in Deng Xiaoping’s strategic thinking. Deng Xiaoping has mainly observed modernization of the national defense sector as the vital component of the four modernizations. The ideology for this national defense construction has been the foundation for developing common policies for the construction of national defense. In the year 1978, Deng Xiaoping had pointed out that modernization of this sector could be possible after development of this nation’s industry as well as agriculture. He has also opined that if armed forces in this industry had numerous servicemen, then it might impact its modernization. For this, Deng adopted a policy of reducing total number of persons in armed forces in order to save fund for renewal of different equipments. Moreover, Deng  had put forward particular recommendations for some actions- such as – providing support to aviation business of this nation, airforce should vacate few airports for civilian as well as joint military use (Zhong, 2015). For putting these ideas into proper effect, Deng had put forward development strategy that suited the conditions of China. These armed forces were asked to exercise self-control and also made vital decision of cutting military by numerous servicemen. In addition, Deng also established new way of building science and technology of defense sector and reserve force specially for national defense. For meeting the modern warfare requirement and also taking into account the military conditions, Deng has stated that the main issue for China’s military was to increase its ability for fighting modern war (Reform of china’s defense industry, 2018). Deng gradually modernized their command system and improved the conditions of their air force. However, he mainly focused on regularization for building strong revolutionary and modern military. At the conference of Central Military Committee in the year 1989, Deng pointed out that army forces must make more contribution to safeguard their national sovereignty, independence and socialist cause. He had put huge stress on modernizing this industry after the occurrence of political turmoil in the year 1989.

National Defense Modernization and Restructuring

As a result of these adoption of policies by Deng, most of the defense organizations were motivated and hence they made diversification in manufacture of civilian goods as well as engaged in selling more arms for generating income. Hence, the production infrastructure of this industry changed during this period ( Hayek, 2012). It has been evident from the historical study that the total sale of Chinese arms increased by over $1 billion in the year 1987. In fact, new nuclear equipments were designed, which in turn increased the ability of their strategic armed force to counterattack. In addition, a lot of attack planes, helicopters, and unmanned planes were furnished and also advanced warplanes had been designed during the era of Deng XiaoPing. Furthermore, there was also huge advancement in the commercial products of this national defense sector during this period (Yabuki, 2018). However, the proportion of output value of these commercial products in this sector increased from 8.1% in the year 1978 to 62% in 1990. Apart from this, export of the commercial production also increased during Deng XiaoPing era. However, numerous departments of this national defense sector have build up foreign trade enterprises. By end of the year 1987,  around 65 military companies had been assigned to be the base of exporting electronic, commercial and mechanical products.

 It has been found out by some researcher that the military technologies had also shifted to commercial utilization. It has been cited by Selden,  (2016) that, the strategic thinking of Deng Xiaoping also led to restructuring of this national defense industry. Therefore, decline of scale, structural adjustment, increased investment and strengthening of macrocontrol and other effective efforts for development of commercial products also increased the efficiency of several military organizations. Moreover, several new technologies were also developed , which in turn kept proper productive scale during peacetime. Overall, these variety of changes in the national defense sector also propelled this industry forward and solved several problems that occurred before the era of Deng XiaoPeng. In fact, the success as well as experiences also laid to better foundation for more reforms.

During the era of Deng XiaoPing, this science and technology sector of China was established to be one of the modernizations. This leader was the strong promoter of this science and technology sector and also reverses several policies of Cultural Revolution. Deng XiaoPing had seen scientism as one of the foundation to bolster the state power. The reforms brought about by Deng were highly instrumental to bring this nation out of the era of Mao. The historical fascination of this country with international technology as the means to enhance the power of state was influenced by Deng. This nation was encouraged to make experimentation in the science and technology system during this period. The speech given by this leader had changed the scientist as well as engineers roles in the community by declaring that science and technology was the main productive force. In the early 1980, there was huge separation of research and development (R&D) from the economic production. In addition to this, operational mechanisms as well as the R&D management principles were also changed (Science and Technology in Modern China, 2018). In order to increase exposure to the foreign government and other corporate framework for managing as well as organizing science and technology, this nation began to motivate several multichannel approaches to funding (Guthrie, 2012).

Science and Technology Sector Reforms

During this period of 1978-1989, the reform program adopted by the Deng had put science and technologies to work for shifting from economic planning to the market driven system.  In fact, Deng appointed one committee of around 200 scientists for setting strategies for science as well as applied technologies. The universities as well as research laboratories were developed and also transferred technologies to the state owned companies. The foreign producers operating in this nation were required for transferring vital technologies to the local partners. Nature of the import of these technologies also shifted from the equipment contracts to the technology consultation fees, joint production and technology licenses (Fewsmith, 2016).  Owing to acceleration of reforms during the era of Deng, the R &D system had established several links with numerous indigenous entities, which in turn attracted more foreign partners with joint venture projects as well as higher tax incentives. The promotion of STIPs( Science and technology industrial parks) as venues had facilitated this industry to develop in a faster way. The cooperation between state lab and enterprises led to creation research synergies, enhanced production of high technologies and incubated new technology companies. Moreover, one of the successful changes that occurred during this period was that development of science based industrial parks (Gilpin, 2016). However, this spawned and developed several leading high technology enterprises. Apart from this, this nation had also entered into the business of commercial satellite in the year 1986.

Owing to these economic reforms in this science and technology sector during this era, it increased the ability of this industry to adopt international technologies to the export oriented sector production. Even the renewable energy technologies were also developed, which in turn helped to create local market for these new technologies (Chinese Views of Future Warfare, 2018). The strategic thinking of Deng also led to development of information technology sector during this period. By early 1990’s, the policies of motivating development of the software sector as well as integrated Circuit sector also changed. This in turn made this industry highly competitive as compared to other industries of this country.

Therefore, it has been evident from the above study that Deng Xiaoping became one of the eminent leaders of this nation as it modernized these sectors and led to huge economic growth of China.

References

Chinese Views of Future Warfare, Part One. (2018). Au.af.mil. Retrieved 30 April 2018, from https://www.au.af.mil/au/awc/awcgate/ndu/chinview/chinapt1.html

Fewsmith, J., 2016. Dilemmas of Reform in China: Political Conflict and Economic Debate: Political Conflict and Economic Debate. Routledge.

Gilpin, R. (2016). The political economy of international relations. Princeton University Press.

Guthrie, D. (2012). China and globalization: The social, economic and political transformation of Chinese society. Routledge.

Hayek, F. A. (2012). Law, legislation and liberty: a new statement of the liberal principles of justice and political economy. Routledge.

REFORM OF CHINA’S DEFENSE INDUSTRY — Chinese Views of Future Warfare, Part Three. (2018). Fas.org. Retrieved 30 April 2018, from https://fas.org/nuke/guide/china/doctrine/zhenhuan.htm

Science and Technology in Modern China: A Historical and Strategic Perspective on State Power | The Yale Review of International Studies. (2018). Yris.yira.org. Retrieved 30 April 2018, from https://yris.yira.org/essays/1551

Selden, M. (2016). The political economy of Chinese development. Routledge.

Yabuki, S. (2018). China’s New Political Economy: Revised Edition. Routledge.

Young, S. (2015). Private business and economic reform in China. Routledge.

Zhong, Y. (2015). Local Government and Politics in China: Challenges from below: Challenges from below. Routledge.