China After Mao by Frank Dikötter — the grand deception

A young couple with boutique bags stand by their Ferrari while an older, poorer man, a courier, rides past on his bike loaded with boxes
China’s young new rich shopping at the boutiques of Shanghai © Jacques Lange/Paris Match/Getty Images

Have China’s “reform and opening up” policies, proclaimed from the late 1970s onwards, been the key to the country’s spectacular growth? Or are they little more than a smokescreen for retrograde statist control to bolster the last major communist regime on Earth?

These may seem odd questions about a country that has, over four decades, risen from its basket-case condition of the late Maoist era to become a potent global rival to the US — perhaps the dominant superpower of the 21st century. But it is one prompted by China After Mao, historian Frank Dikötter’s latest examination of the recent history of the People’s Republic. Especially so, given the current travails of the Chinese economy, as it grapples with falling growth, escalating debt, a yawning property crisis and huge misallocation of capital, not to mention the impact of its zero-Covid policy.

After three revelatory books about China under Mao Zedong, Dikötter, chair of humanities at the University of Hong Kong, moves on to the years after the death of the Great Helmsman in 1976, drawing on an array of primary sources. These include some 600 documents from provincial and municipal archives and the secret diaries of Mao’s one-time secretary, Li Rui, who subsequently became vice-director of the party organisation department. Dikötter thus offers a blow-by-blow account of the uneven, reactive and sometimes chaotic course of economic policies with a wealth of detail about their impact as the leadership veered between hectic growth and retrenchment.

As in his previous works, Dikötter is bracingly direct in his account of the policy contortions of a regime he characterises as being marked by “bitter back-stabbing and fighting for power among endlessly changing factions”, intrinsic corruption and a leadership most of whose members “do not understand even basic economics”.

Blind production regardless of demand was tolerated in the name of growth, as decreed by Mao’s successor, Deng Xiaoping, in the late 1970s, as China abandoned the collectivisation of the Mao years, private enterprise was tolerated and trade and foreign investment encouraged. Local authorities were often allowed to go their own way, creating baronies in their regions that fanned inefficiencies by going after the same targets and the same self-enrichment. Speculation ran amok, with the result, as one Chinese academic noted, that “everything is overleveraged”. The build-up of credit and debt by local governments, officials and state companies was there from the start, with state banks acting as the feeding trough. A bank inspector in the 1980s is quoted as remarking that “some cadres walk into a bank to get cash because it is more convenient for them to do so than to go back home and fetch their wallets”.

Some elements of the book are open to debate, such as Dikötter’s downplaying of the private sector, which has provided most of the growth and job creation, even if it is kept on a tight rein and often depends on state contacts. But China After Mao provides an important corrective to the conventional view of China’s rise through reform.

It also shows how the difficulties China now faces in its debt burden, its imbalances and its reliance on fixed asset investment can be tracked back to the early stages of the surge launched by Deng, both in his early reforms and again with the southern tour he undertook in 1992 to reignite expansion and turn back conservative policies after the crushing of the protests in Beijing and other cities in 1989.

The basic lesson to be drawn, from the days of Deng to the present under Xi Jinping, is that Chinese economic policy is a function of politics whose core concern is to maintain Communist rule. If necessary, this is by force, as in the 1989 crackdown and the continuing repressive machinery, but also in implementing policies seen to buttress the regime, however ineffective or inefficient.

Book cover of Frank Dikötter’s ‘China After Mao’

Dikötter repeatedly cites statements by leaders in Beijing, many of whom appeared to the world as reformers, that they would never deviate from Marxist socialism. As he argues, “without political reform market reform cannot exist”. Given their resistance to political change, leaders from Deng to Xi have never even considered opening up the economy to real market competition. Rather, they have indulged only in “tinkering with a planned economy”, he writes. As for openness, “what the regime has built over the past four decades is a fairly insulated system capable of fencing off the country from the rest of the world”.

As he prepares to be granted an unprecedented third term as supreme leader, Xi continues the tradition, putting economic policy under politburo control and proclaiming repeatedly that “government, military, civilian and academic; east, west, south, north and centre, the party leads everything”. All the while, however, Xi urges China to pursue “self-reliance” and reject foreign ideas such as competitive democracy, the rule of law and the separation of powers.

Ending his account in 2012, when Xi became party leader and Li Rui closed his diary, though adding an epilogue on the subsequent period, Dikötter conjures up a comparison of China with “a tanker that looks impressively shipshape from a distance with the captain and his lieutenants standing proudly on the bridge while below deck sailors are desperately pumping water and plugging holes to keep the vessel afloat”.

As for the task Xi faces, the easy options in the form of a huge, cheap labour force, access to foreign technology and investment plus a benign international climate have been contracting or are proving self-destructive. So the challenge for the leadership is, as the book concludes, “how to address structural issues of its own making without giving up its monopoly on power and its control of the means of production”. That may seem “very much like a dead end”, but it looks like shaping Chinese policy for the years ahead, with major consequences for the world at large.

China After Mao: The Rise of a Superpower by Frank Dikötter, Bloomsbury £25/$30, 416 pages

Jonathan Fenby is the author of ‘The Penguin History of Modern China’ and ‘Will China Dominate the 21st Century?’

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