China at the Dawn of the Post-Deng Era

Where is China headed? At the dawn of the post-Deng era, there is no clear answer to this central question. Instead, what we see is conflicting evidence about the state of affairs in China and the country's future prospects. China in the mid-1990s continues to do better economically than most have expected.

Economic and political trends in China have recently been moving in opposite directions. The regime consistently uses the rhetoric of reform, claiming that they are making reasonable changes to create a better, but still socialist society. This rhetoric masks a reality in which the party has combined revolutionary economics with reactionary politics. China claims that its reforms are creating a socialist market economy. In practice, the leadership is embracing the methods of capitalism. Beijing also claims that its reforms are creating a socialist democracy. The reality is that China's leaders resist any concessions that might indicate a shift away from the party's monopoly on political power or to allow their regime to be constrained by either law or popular sovereignty.

China's economic achievements continue to impress most observers. Just when many thought the economy was spinning out of control after 1992, the regime initiated a three-year tight monetary and fiscal program to reduce inflation without producing a major economic contraction. The result has been a largely successful "soft landing" that brought inflation under control and continued growth at a pace designed to double the economy's size at intervals shorter than ten years.

The Communist Party justifies the essentials of one-party rule as necessary for continued economic development. In practice this means a draconian crackdown on alleged criminal activity (the "strike hard" campaign) that plays fast and loose with respect for the rule of law. It means rounding up democracy and labor-rights activists, "troublemakers" who dangerously rock the boat. Rounding up, or exiling proponents of political reform serves a dual purpose for the Communist Party: it demonstrates the regime's determination to maintain the party's prerogatives, and deprives politically disgruntled elements of spokesmen for at least the opening phase of the post-Deng era.

To reinforce this repressive turn, the regime is, once again, attempting to steer culture in its ideologically preferred direction, criticizing and banning the internationally renowned work of Chinese filmmakers, restricting the foreign content of advertising and programming in the mass media, and screening independent news pouring into China via wire services and the Internet. These efforts, not surprisingly, have been largely ineffective as economic openness and the triumph of modern communications technology overwhelm the Party's propaganda department. Still, the party seems determined to fight this losing battle every step of the way.

The leaders in Beijing clearly believe that these attempts to keep the lid on are not sufficient. They require an ideological appeal that can reduce the need for coercion and enable the regime to ride out the inevitable economic downturn, whenever that comes. With Marxism dead, the only appeal that evokes much enthusiasm from the country's citizens is nationalism. The regime has recently encouraged not simply a nationalist spirit of pride in Chinese civilization and the accomplishments of the past fifteen years, but also engendered a strong spirit of resentment directed at foreign rivals and critics. Whether it is anger over U.S. involvement with Taiwan, negative coverage of Chinese athletes at the Olympics, or renewed conflicts with Japan over historical sensitivity and disputed territory, Beijing has discovered that it does not have to massage public opinion much to evoke the desired response in support of government policy. The regime also discovered, however, that stirring up Chinese nationalism may be a risky business. Last summer, after encouraging outrage at Japan's reassertion of its claims to disputed islands, the regime faced the prospect of mass demonstrations. Though they might be organized in support of government policy, the communist leaders feared that demonstrators might redirect their movement in politically dangerous ways, as had happened in 1989 at Tiananmen Square. Thus, Beijing prohibited the protests and announced that the government would handle the matter through regular diplomatic channels.

The country's meteoric rise to prominence in the international economy continues. China's trade volume expands each year, with total trade now approaching 300 billion dollars, and the country continues to amass huge foreign exchange reserves, now approaching $100 billion. Other such indicators are equally impressive. But China's growing participation in the international economy has also generated conflict with its trade partners, especially the U.S. Sino-American disputes over intellectual property rights laws, textile exports, and the coming trade imbalances which are on a par with those we have experienced with Japan, have led to tough negotiations in which each side threatens terrible sanctions then reaches agreement at the eleventh hour. The pattern has become so familiar that one has to wonder whether these postures are still taken seriously. But so far, the common interest in maintaining economic ties has triumphed over attempts to gain special advantage. This principle now seems likely to lead to a compromise that will finally enable China, undoubtedly after some tough last minute bargaining, to join the World Trade Organization, a step that is expected to reduce the need to confront China piecemeal on issues such as market access and abiding by international business standards.

Military tension in the Taiwan Straits, reminiscent of crises that took place in the 1950s, has reemerged as a major problem in Sino-American relations. Over the past two years, the regime on Taiwan, and some of the island's emerging political parties, have been moving in the direction of asserting a more self-confident, independent political role internationally. An alarmed Beijing immediately responded by reiterating its resolve on national reunification and dramatically asserting its claims to sovereignty over the island by staging a series of military maneuvers including live missile firings perilously close to Taiwan. In response, the U.S. positioned two aircraft carriers in the vicinity, reminding China that it could not rule out American involvement of some sort if Beijing abandoned the peaceful approach to reunification. While the U.S. hedged its bets against an improbable Chinese assault on Taiwan, China expressed its outrage at U.S. interference in its internal affairs. It reminded the U.S. of a key difference between the risks in the 1990s and the 1950s by rattling its own nuclear saber. Then, believing that they had demonstrated their resolve and the limits to their tolerance, China's leaders quickly stepped back from the brink.

What purpose had Beijing's manipulation of tensions served? China's actions may well have been designed to demonstrate that although it cannot compel Taiwan's leaders to accept reunification on the mainland's terms, the Chinese military's improvement, especially its advancing guided missile capabilities, enable China to punish Taiwan and that this should be enough to dissuade the island's political leaders from moving much further in the direction of independence. But the confrontation had another unintended and undesirable consequence. It established a precedent for U.S. policy in the post-Deng era. The events of March 1996 clearly revealed that China could not bank on U.S. indifference and inaction in the Taiwan Straits, regardless of the dubious international legal grounds for American involvement.

Disagreements between China and the advanced industrial countries over human rights remain an issue that simply won't go away. The dispute focuses on matters that Beijing deems crucial to the country's "unity and stability" - the handling of democracy and labor activists, as well as the control of independent-minded Tibetan and Muslim minorities. China asserts an absolutist position on sovereignty and rejects criticism from others as interference in its internal affairs. The West asserts universal standards of human rights, and national self-determination. At the dawn of the post-Deng era it is hard to see where there is room for compromise between these two positions. Symbolic agreements to release a few dissidents, and discuss prison conditions with the International Red Cross, are unlikely to satisfy either China or the West. And while the latest resumption of dialogue about human rights is better than nothing, it is not clear that the process will yield results that can withstand the predictable opposition from domestic critics in the West and Beijing.

In general, one can't help but notice that China's relations with most of the world's major powers, especially the U.S. and Japan, seem to be increasingly troubled. The one clear exception is the warming relationship with Russia, an exception best explained by the two countries' economic compatibility and their newly discovered common strategic interests in coping with the unrivaled power of the U.S. in the post-Cold War world.

Lastly, a comment on the issue that in the middle of 1997 will be transformed from an international into a domestic matter - Hong Kong. Beijing has attempted to devise arrangements for the colony that will maintain political tranquillity and economic confidence. Although China's leaders recognize the importance of an economically vital Hong Kong, it is not clear that they have the political skills to manage the novel problems they will face in the former colony. Beijing's clumsy recent efforts at limiting what were supposedly guaranteed political rights, are not encouraging. Despite the best-laid plans of London and Beijing, the potential remains for local disagreements that could unpredictably escalate into open clashes with the political and military agents of China's central authorities.

Economic achievement, political assertiveness, and anxiety about the future characterize China at the dawn of the post-Deng era. Some analysts have predicted and policy-makers have promised that the increasing marketization of China's growing economy will provide the basis for more tolerant, if not liberal, polity likely to pursue a benign and cooperative foreign policy. That may indeed be the prognosis for the more distant future. For the near future, however, it seems that China's post-Deng leadership may be able to tap the resources of its increasingly productive economy to co-opt its citizenry into accepting one-party authoritarian rule at home and to pursue a more assertive, confrontational, policy abroad.

Avery Goldstein is associate professor of political science and chair of the graduate program in the Department of Political Science. He is the author of From Bandwagon to Balance of Power Politics: Structural Constraints and Politics in China, 1949-1978 and contributes to a large number of publications including International Organization, The China Quarterly, The Journal of Strategic Studies, Security Studies, Comparative Politics, Polity, and many more. He is currently conducting research on the strategic theories of second-ranking powers in the postwar world. His research and teaching interests include theories of international politics, strategic studies, and Chinese politics.