December 1987

Is the post-Mao era truly a transition toward free-market capitalism, or is it yet another nominal “rightward” shift in the swinging pendulum of the Chinese Communist Party, to be offset in the future by more drastic elements of plunder by the radical left wing? That only time will tell is a true but wholly unsatisfying answer. One thing, however, is clear: since the beginning of 1987 the reforms in China have lost their momentum. It is not that the party leaders are dizzy with success. Indeed, the opposite may be true: the development of a stronger, more rational economy has created much strain in the political hierarchy. A strong central party destroys an economy, whereas a strong, rational economy weakens a party. To understand the current situation, we must understand the nature and history of China’s economic reforms.