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Emancipation
“Reform and opening” started from the top with the seminal leadership transition from Mao to Deng. Deng Xiaoping heralded China’s boom in late 1978 when he called for experiments with “economic democracy” and “emancipation” from orthodox ideas. But the boom was not simply a top-down, state-orchestrated phenomenon. In fact, the biggest contribution of the state, especially in the first phase of growth, was to get out of the way. Farmers were liberated from collectives, sparking a wildfire of capitalism in the countryside. Urban markets and industry were freed to “grow out of the plan,” making profits on surplus production and creating powerful incentives for rapid growth. |
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Economics Was a Minor Aspect of Opening in 70sPeriod: Emancipation (1978-84)
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Click to expand On the first trips with Kissinger and Nixon and Ford in the early and mid 70s, the economics situation was very bleak. China was still coming out of the Cultural Revolution, they had suffered under the excessive policies of Mao, including the Great Leap Forward and the Cultural Revolution, and therefore the economic component of the opening between the US and China was very meager. It was almost strictly a geopolitics exercise from the American standpoint to balance the USSR, but also try to improve relations with Moscow to get help ending the Vietnam war, to stabilize all Asia to give the American people a psychological uplift of a major diplomatic move even as we were extricating ourselves from Vietnam, to demonstrate to the world that we have diplomatic flexibility despite that war. From the Chinese standpoint, they wish to come out of isolation from the Cultural Revolution, they had broken off contact with every country, they had only one Ambassador abroad. They also wanted to balance the threat from the north, the Soviet Union. They figured if they made breakthroughs with the US diplomatically that Japan and Europe and others would follow and they would get into the UN. So these were the main impulses on both sides and I must say the objectives of both sides were pretty well served and it was a revolutionary event in geopolitical history. So, the economic component was really a long term vision, it was not a major part of our early discussions, where there were some minor talks on bilateral claims and assets and the principal of establishing trade over time, but we had no idea that China would grow and would turn into the economic giant that it is today. We figured that with 1/5 of the world's population that, over time, trade and economics and investment over time would be significant and we wanted to position ourselves for that, but it was a gleam in our eye at that point and, I must say, in Chinese eyes, and therefore was a very minor of the aspect of the opening in the 70s. Over the years, of course, this changed. And by the time I went back as Ambassador in the late 1980s the economic dimension was extremely important and our relations then were obviously changing dramatically. Even then in China they were beginning to welcome foreign trade and investment and our own trade and investment started to go up--not as big as today but by significant growth.
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