Few would have dared to predict the remarkable economic transformation China has undergone in the 30 or so years since Deng Xiaoping’s reforms opened the country to the world in 1978.   

That the Communist Party of China (CPC) not only survived the process, but thrived as the driving force behind market reforms that turned a country reeling in the aftermath of the “cultural revolution” (1966-76) into the second largest economy in the world is a remarkable feat of adaptability.

Martin Jacques, British academic and author of When China Rules the World, appreciates more than most the impact China’s economic miracle has had – and is still having – on the world.

“This is definitely the most remarkable economic transformation of its kind since 1945,” says Jacques. “In many ways, it stands comparison historically with any since Britain’s industrial revolution started in the late 1780s.

“It is one of the great paradoxes of this era. At the same point Communist parties in Europe were collapsing after 1989, the most extraordinary economic transformation was being presided over on the other side of the world by the Chinese Communist Party.”

Jacques’ book provoked an impassioned academic debate upon its release two years ago, with some appalled that US economic and political hegemony was being questioned. Yet the seeds of China’s economic takeoff were sown by the CPC not as a challenge to Western power, but out of the necessity of a strong, independent China.

“I think there was a recognition by the end of the 1970s – after Mao – amongst those who assumed the leadership of the CPC that China needed to grow at a much faster rate. They acknowledged that the previous period had many limitations. There were also examples in East Asia of what was possible in what we know as the Asian Tigers. There was a desire and willingness to draw on other experiences as a learning process for China’s transformation.

“Deng Xiaoping was quite clear that the reason economic takeoff was so important was to enable China to be strong. China’s bitter experience of being weak was essentially a humiliation, which in the 1970s was still a vivid memory. It was not just economic; it clearly had very powerful political motivation as well.”

To achieve these aims, the Party had tough choices to make. Perhaps the biggest challenge was to strike a balance between allowing a greater degree of economic freedom within China, while maintaining the power to centrally coordinate.

“Clearly the Party did relinquish control, over time, over very significant areas of the economy, but I think this is sometimes presented in the wrong way, as if the State isn’t very important to the Chinese economy. It is inconceivable that what has happened in China could have happened without the State playing the absolutely pivotal role in this process.

“You might be talking about economics but these things require a very well conceived, flexible political strategy. Without that it wouldn’t have worked. It is not true that these things take place by luck or by chance or by the right combination of fortuitous factors.”

Jacques praises the flexibility of the CPC during the period, particularly the Party’s willingness to experiment with new economic models, only expanding them nationwide if they proved successful. The implementation of special economic zones throughout the 1980s and 1990s is just one such example of this attitude.

Also key to the success was the willingness of the CPC to engage globally – a lesson learned from the failures of the Soviet Union’s isolationist Communist party.

There’s been a steady process of integration of the Chinese economy into the global economy which contrasted completely with what happened with the Soviet Union. The USSR didn’t really seek any integration and therefore was relatively marginalized.

On the other hand as China’s manufacturing industry grew, the country grew closer to the international community through its exports. This relationship was formalized in 2001 with admission to the World Trade Organization, and in the last 10 years has been cemented as China emerges as a major importer, particularly of natural resources.

Whether Deng and the rest of the CPC foresaw such a comprehensive integration back in 1978 is unclear, but the significance of 1978 in forming the China we see today is not to be underestimated.

“1978 is obviously an absolutely crucial date in China’s development because what it heralded was the beginning of a growth rate which was more like double what it had been during the Mao period,” says Jacques. “It was the State and the capacity and ingenuity of the State – which crucially is the Communist Party – which enabled all this to take place.”

– David Bartram