Chinese Communists Leading Reform and Opening Up

Starting with Special Economic Zones

For China, the late 1970s was a crucial period of transition. At the time, the “cultural revolution” (1966-1976), which had plagued China for 10 years, finally came to an end. Where to go next and how China’s socialist cause would move forward after such a bumpy road were major problems facing the country and the CPC.

In late 1978, the Third Plenary Session of the 11th CPC Central Committee was held. The plenary session unanimously endorsed a policy decision that shifted emphasis of the Party’s work to socialist modernization in the next year, ushering in a new historic period for China’s reform, opening up and socialist modernization. Deng Xiaoping, who became known as the chief architect of China’s economic reform and opening up, led Chinese Communists in new explorations in building socialism with Chinese characteristics.

In 1979, Xi Zhongxun, then governor of Guangdong Province, proposed during the Central Working Conference that because Guangdong is the origin of so many overseas Chinese people and is adjacent to Hong Kong and Macao, it should capitalize on its advantages and carry out economic and technical exchange with the outside world. He further requested that the CPC Central Committee delegate some power to Guangdong and let the province take a first step forward. At the same meeting, Fujian Province also requested to set up an export-oriented manufacturing base in its coastal city Xiamen. Deng Xiaoping expressed support and approved such requests. Soon, the CPC Central Committee and China’s State Council decided that Guangdong and Fujian provinces would carry out special policies and flexible measures in foreign trade activities. And four pilot special export zones — Shenzhen, Zhuhai and Shantou in Guangdong, and Xiamen in Fujian — were established. In May 1980, these four special export zones became “special economic zones.”

As the special economic zones were established, a group of Chinese Communists with open minds and bravery carried out reform and became pioneers of the country’s reform and opening up. In Guangdong, as early as late 1978, Yuan Geng, an early proponent of China’s reform and opening up and then vice chairman of the China Merchants Group in Hong Kong, created the Shekou Industrial Zone. The industrial zone covered 2.14 square kilometers in what was formerly known as Bao’an County, in today’s Nanshan District of Shenzhen. It was the first export processing industrial zone on the Chinese mainland and inspired Chinese Communists to carry out a series of reforms with world-changing significance, including those on housing, personnel systems and income distribution. In Fujian, then Secretary of the Provincial Party Committee Xiang Nan, who was dubbed an “explorer and pioneer of Fujian’s reform and opening up,” began reforming enterprises, commercial distribution and commodities pricing, electrifying urban reform in the province. Xiang further proposed streamlining administration and delegating more power to enterprises, which was quite progressive and innovative for that time. Later in 1983, the CPC Central Committee decided to grant Hainan Island preferential economic policies. In April 1988, Hainan, which was formerly administered as part of Guangdong, became a separate province and the largest special economic zone in China.

The reform and opening up began snowballing throughout China, and gradually spread from coastal areas to other parts of the country. Generally speaking, China’s opening up went through four phases. The first was establishing the special economic zones, followed by opening of coastal port cities and setting up coastal open economic zones. By the 1990s, China opened cities along rivers and borders as well as inland cities. By 1993, the country had formed a comprehensive pattern for opening up through persistent efforts.

Freeing the Mind

Although the Third Plenary Session of the 11th CPC Central Committee decided to shift the emphasis of the Party’s work to socialist modernization and special economic zones were already established in the country in the early 1980s, the choice between a market economy and a planned economy remained a highly controversial issue from the late 1970s to the late 1980s. During that period, many people still considered the market economy and political restructuring representative of capitalism.

In 1979, when meeting with American guests, Deng Xiaoping presented the idea that socialism could promote its own market economy. In 1992, Deng toured some southern Chinese provinces, calling for greater courage and renewed efforts in reform. “A planned economy or a market economy is not the essential difference between socialism and capitalism,” he remarked. This view creatively cleared some of the long-standing doubts in China about the market economy’s relationship to capitalism, and stressed the importance of economic development.

The idea of “emancipating minds and seeking truth from facts,” put forward by Chinese Communists, is not only exhibited at the macro level, but also at the micro level of people’s everyday lives. In the late 1970s, when Xi Zhongxun had just arrived in Guangdong to take his post, sneaking into Hong Kong had become a common practice locally. Through research and investigation, he learned that farmers of the Chinese mainland, separated from their Hong Kong neighbors by only the Shenzhen River, were earning annual per capita income of 134 yuan, while that figure on the other side of the river was 13,000 Hong Kong dollars. “We should take the blame,” Xi lamented. “We failed to help our people lead quality lives or formulate good policies to protect their interests.” He cut to the heart of the matter and pointed out that the key to solving illegal immigration was to develop the local economy and improve people’s living standards. Yuan Geng condensed his understanding of reform and opening up into “time” and “efficiency.” He coined one of the most famous slogans of the era: “Time is money; efficiency is life.” When the planned economy was still on many minds, the introduction of views of the market economy deeply influenced and impacted Chinese society at that time.

By the turn of the 21st century, the Chinese economy had developed by leaps and bounds, and great changes were happening throughout the country. Chinese people, who had once only cared about politics and class struggle during the early stage of reform and opening up, shifted focus to creating economic returns and social wealth. This change, a result of social and economic progress, also brought about materialism and hedonism. Chinese Communists began attaching greater importance to freeing the mind and placing greater emphasis on promoting spiritual civilization. During the past 40 years, emancipating minds and reform and opening up worked hand-in-hand. Emancipation of minds, theoretical innovation and reform breakthroughs have become crucial steps in a process that has become the inevitable choice for China to embark on each new journey during the past four decades.

Developing the Economy

Beginning with developing the economy and emancipating minds, China has achieved much over the past 40 years. Some analysts believe that during the 1980s and 1990s, when the world political situation was chaotic and turbulent, China, under the CPC leadership, spared no efforts in its reform and opening up, reaping fruitful results. China’s gradual reform process formed a sharp contrast to the “shock therapy” recommended to the former Soviet Union by the West.

The time for China to open its door and embrace the world was right for the international situation and environment as well. At that time, China started to break the ice with the United States and actively sought to become integrated as a constructive member of the international community. In 1980, China regained its lawful seats in the International Monetary Fund (IMF) and the World Bank in succession. A series of positive results from the worldwide economic revolution beginning in the 1970s, such as computerization and the emergence of container ships, were also introduced into China through reform and opening up.

Facing fierce international competition in the new millennium, China began to place more emphasis on gaining knowledge and technologies and building its own international enterprises. And China’s success in reform and opening up is not limited to economics. At present, the country is injecting positive energy into global economic growth and embarking on a new journey to build a new type of international relations and a community of shared future for mankind.

In 1978, under the leadership of the CPC, China started unprecedented reform, the most successful case for national development in human history. From then on, China gradually made its way to the center of the world stage. Without the right choices made by Chinese Communists at the moment that determined China’s fate in the contemporary era, as well as their commitment to these choices in the years to come, China’s achievements today would not have been possible.