Deng Xiaoping’s Economic Reform

1. Deng Xiaoping’s Economic Reform 1978-1997

2. Contents 1. Deng Xiaoping 2. The Economic Reform 3. The Open-door policy 4. Economic miracle 5. Foreign policy 6. Deng Xiaoping’s Legacy

3. 1. Deng Xiaoping1904-1997 • Family background: a landlord • Work-Study in France • Joined the Chinese Communist Party • Deng and Mao • The Economic Reform and the open-door policy • Deng Xiaoping & the Transformation of China – Ezra F. Vogel

4. 2. Deng Xiaoping Resumed his Power and Launched China’s Economic Reform in 1978

5. 2-1 A Major Shift in Thinking • Seek truth from facts • Deng Xiaoping: It doesn’t matter whether its is a white cat or a black cat, it is a good cat as long as it catches mice” • Pragmatism • Cross the river by stepping over stones (Doing by learning)

6. 2-2 Agricultural Reform • The household responsibility system • Township & village enterprises

7. 2-3 Centrally-planned economy transformed into market economy • “ Planning and market forces are not the essential difference between socialism and capitalism. A planned economy is not the definition of socialism, because there is planning under capitalism; the market economy happens under socialism, too. Planning and market forces are both ways of controlling economic activity.” • “We mustn't fear to adopt the advanced management methods applied in capitalist countries (...) The very essence of socialism is the liberation and development of the productive systems (...) Socialism and market economy are not incompatible.”

8. 2-4 Breakthrough • Market-determined price • Breaking the “iron rice bowl” • The Tiananmen Square Confrontation Gate of Heavenly Peace of – Carma Hinton • 70% of China’s GDP is in the private sector

9. 2-5 Reform in Education • Resumed the College Entrance Examination • Encouraged study aboard

10. Resume the college entrance examination in 1977

11. 3 The Open-Door Policy • Work hard to join the world • Welcome international trade & foreign direct Investment • China entered the WTO in 2001 • China’s tariffs dropped to 6% from an average of 41% in five years • Study abroad

12. Deng Xiaoping in the US

13. Deng and Carter

14. Deng Xiaoping and Overseas Students

15. 4. China’s Economic Miracle • GDP has grown at an annual average rate of 10 % for 30 years • China becomes world’s second largest economy • Largest exporter, second largest importer, second largest trading nation in the world • Foreign reserves: $2,447 billion (Mar 2010; ranked 1st), 1 billion per day

17. Improvement of Living Standards • Since 1978 400 million people have been lifted out of poverty in China—about 75 percent of the world's total poverty reduction over the last century. • Agriculture tax exempt in 2006 • Free education up to 9th grade • life expectancy reached 73 by 2010

18. China’s Progress in Technology • China’s GPS • Walk in the space • Canton-Wuhan high-speed train at speed of 165 miles per hour; 4 hours from Beijing to Shanghai (600 miles) • It now has the second largest R & D budget

19. Examples of Speed of Development • Total length of highways: 39th in world in 1997, 2nd in 2002; The total length of China's expressways is 65,065 km in 2009 (1989-2009), the second longest only after the United States. • Number of telephones: 83 million in 1997, 1.1 billion in 2010 • 5 million college graduates a year, including 700,000 engineers, 10 times as many as the U.S. • Largest auto maker and consumer (more than 10 million in 2009)

20. In two decades China has experienced the same degree of industrialization, urbanization and social transformation as Europe did in two centuries - Newsweek, Issue 1, 2008 “Rome is not built in one day.” But a new “Manhattan” appeared in Shanghai in 15 years.

21. In 2007 China contributed more to global growth than the United States, the first time another country had done so since at least the 1930s. • Since 1978 400 million people have been lifted out of poverty in China—about 75 percent of the world's total poverty reduction over the last century. • Lawrence Summers has recently pointed out that during the Industrial Revolution the average European's living standards rose about 50 percent over the course of his lifetime (then about 40 years). In Asia, principally China, he calculates, the average person's living standards are set to rise by 10,000 percent in one lifetime! • Newsweek, Issue 1, 2008

22. China’s Influence in the World • The Beijing Consensus vs. the Washington Consensus • The Forum of China-African Cooperation of 2006 • Chinese language is fastest growing foreign language in the US while other foreign languages declined significantly • “People should pay attention to China. It is a phenomenon in every respect.” Bill Gates

23. China and Chinese are Everywhere! Thanks to Chinese art, films, cuisine, martial arts, acupuncture and high school world history courses, Chinese culture is becoming more mainstreamed into the American way of life.

24. 5. China’s Grand Diplomatic Strategy • “Bide time, hide brightness, don’t take the lead, but do something.” • Peaceful rise/development • To be a responsible great power

25. 5. Comparison between Mao’s Cold War Mentality& Deng’s Post-Cold War Mentality • Mao: China should make preparations “for an early world war, a major war and nuclear war.” If you are not with us, you are against us. Deng: China’s foreign policy in the 1980s, and in fact in 1990s, even in the 21st century, can be summarized in two sentences. China makes efforts to maintain world peace and oppose hegemony. China always belongs to the third world.” If you are not against us, you are with us.

26. “Missions impossible” Accomplished in China Centrally-planned economy transformed into market economy, with growth the fastest ever New rising power has not resulted in a war, territorial expansion, or a challenge to the world order Relations between China & other powers & neighbors better rather than worse

27. 5. Deng Xiaoping’s Legacy • Pragmatism becomes dominant force • Creates an economic miracle • Raises Chinese people’s living standards significantly • Competes in soft power rather than in hard power war • Brings China into the world

28. Thank you! Questions?