The 1970s-80s Start of China’s Rise in Local Rural and Suburban Industries
The 1970s-80s Start of China’s Rise in Local Rural and Suburban Industries
And China’s Re-Centralizing Leaders in Decades after the 1980s.
The following is excerpted from a recent summary of a presentation in Qingdao, China, by Lynn T. White III, Professor of Politics and International Affairs, Emeritus; Senior Scholar, Princeton School of Public and International Affairs. (Where yours truly is now a student in its Master in Public Policy program.)
Local politics and development on the Yangzi delta flatland around Shanghai is at the center of much of Lynn’s work. He provides evidence that China’s “reforms” (considered as a behavioral phenomenon) grew from an advent of agricultural mechanization and triple-cropping in the late 1960s and early 1970s, not in 1978 as most writers still claim. Socialist planning for many commodities ended by 1986 because rural factories bid up the prices of rural factors that they processed to levels that state industries lacked budgets to buy. These economic changes changed China’s politics, and Party reaction after 1989 largely aimed to re-centralize governance to extend party-state longevity. Lynn looks at politics in non-state institutions, at their effects on state structure, and at both unintended situations and leaders’ intentions (those of local and medial leaders, not just central ones who advertise themselves a great deal).
The 1970s-80s Start of China’s Rise in Local Rural and Suburban Industries
Why did China begin to become richer and stronger in the 1970s and 1980s? What caused quick economic growth at the “grassroots” (rice roots) degree of zoom?
Local leaders put more machines and high-yield rice seeds into paddies during the late 1960s and early 1970s. The new agronomy justified them in establishing repair shops, which they expanded into multi-task workshop-factories - despite opposition from central leaders in the “Gang of Four” who foresaw that this change would impede planning. Farmers used new seeds that put more of the sun’s energy into growing edible rice rather than just making plant stems taller.1 Short-stalk rice, like traditional varieties, begins growth in nursery paddies. By the late 1960s, rice-transplanting machines moved sprouts to larger pools for ripening before harvest.
Machines Replaced Labor
Pumps were required to keep water levels optimal for growth of the new low-height plants, lest the grain fall down into the pond. In dry seasons, pumps extracted water from tube wells, and in soggy seasons, they moved water to or from canals that other machines helped dig. Maintenance of new rural engines required more workshops. The reformed agronomy also used larger amounts of inorganic fertilizer. It took more capital as well as more labor, because it allowed expansion of triple cropping that needed frequent work and shorter slack seasons - while also delivering more grain tax. Rice-roots reform meant more resources for rural Chinese leaders, especially local cadres in production brigades and teams. These reforms ignited China’s “rise” because they led to more independent rural factories.
Shanghai’s rural and suburban fields were extensive in 1965. They were most of the land in the provincial unit of Shanghai. In 1965, they were just 17% machine-tilled. By 1972, that portion was already 76% (and by 1984, up to 89%).2 This was an explosive growth of reform agronomy in the late 1960s and early 1970s. The total wattage of all agricultural machinery in Shanghai's rural areas rose 19% annually (compounding) between 1965 and 1978 — a very high rate for a long period, all before the December 1978 plenum that is still officially advertised as the start of reforms.3 In later years, from 1979 to 1989, the annual rate of increase of electricity use in the same area was lower, less than 3% per year from the high base already set. Agricultural reforms — before they were centrally announced as such — were more salient, in this traditionally rich part of East China, than were such reforms after 1978. The Jiangnan landscape, not just in the immediate environs of its largest city (whose boundaries from 1966 to 1978 still included extensive green areas) was becoming mostly industrialized.
Such growth was not just on the Yangzi delta. Rural change during this era was quick on the flat deltas of rivers all along the China coast, especially in Jiangnan and near the Pearl River. Reform was also relatively quick at fairly early times near Shantou, Xiamen, Fuzhou, Wenzhou, Ningbo, and rich parts of Sichuan far inland, although more research on these areas in the 1970s is needed. Reforms much later influenced poorer inland areas, such as Gansu or Guizhou, and did so more slowly.
The main change took off during the Cultural Revolution (no matter whether that event is dated 1966-69 or 1966-76). Many phases of that political movement hurt intellectuals, who write history.4 But peasants, as they became farmers, had a better experience in this period: they, like their leaders, began to become richer.5
Published evidence from 1966 to 1976, including statistics, may well be less reliable than from other times; so this paper uses such information only when the degree of change it claims is extremely sharp and can be confirmed by further findings. The early 1970s is still the least-well-researched half decade of People’s Republic history in China. The main reason is that the green revolution coincided with the Cultural Revolution, which has received more published attention because of its tragic aspects.
The importance of the agronomy-to-industry transformation was clear to many Chinese at the time, even if writing and publishing about it was affected by radical politics. When the process began, a national majority of the population was still in agriculture; but especially in the 1970s, more started to go into factories and commerce. The change made most of them happier. Their local leaders – often petty tyrants, far more decisive than democratic – gained access to new wealth.
Suburban and rural factories took raw materials that had earlier gone under state plans to urban industries. The continuing green revolution after 1970 created or revived millions of small and medium enterprises, enriching the cadres who fostered it but taking resources out of socialist planning. Centralist radicals in the Gang of Four denounced these “sprouts of capitalism (zibenzhuyi mengya).”6 A glance at the Chinese countryside today suggests their analysis was accurate, even if their policies were not in the interests of most Chinese people. These radicals are often mislabeled “leftists”; but they were conservatives, wanting to preserve bureaucratic planning over local resources.
Reformers and conservatives have long co-existed in the politics of China (and many other countries) at all sizes of zoom: families, neighborhoods/villages, counties, prefectures, provinces, the whole nation, and in global relations too. These zooms are sometimes called “levels,” but the question of which are influential at any time is an empirical matter, an issue of behavior rather than ideology. The answer varies over times and places.
Some local leaders took political risks, hiding their entrepreneurship (because leaders such as Shanghai’s radical Zhang Chunqiao might punish them). Local reformists set up factories within production brigades or production teams. Other leaders, unwilling to take political risks, refrained from doing so. For example in Shanghai’s Chuansha County, the Dengyi and Shanhuang brigades had nearly identical net incomes in 1966; but by 1978, Dengyi's income had doubled, while Shanhuang's had risen more than ten times.7 That difference is almost surely attributable to local leaders who were more risk-acceptant in the economically more successful unit. Over time, at least during the 1970s-1980s period that this paper explores, a syndrome of “contagious capitalism” encouraged local leaders to use policies that made their clients and themselves richer.8
Local traditions of risk-taking or risk-aversion also relate to the agricultural ecologies that local soils breed. Chuansha’s name literally means “river sand,” and the ground there has a comparative advantage for growing cotton rather than rice. Chuansha may be contrasted with other Shanghai counties, for example Songjiang, which has a higher portion of carbon rather than silica-sand in its soil. Songjiang grows rice rather than cotton on its (fast-decreasing) rural fields. That county evinces generally more conservative and statist traditions.
County ecologies are not new. Chuansha in the early 20th century was notable for religious activities, especially Buddhist and Christian, and for secret society Green Gang members. (A century later Chuansha, now called Pudong, is a hotbed of reforms, famous for skyscrapers. That is a flash-forward in its history.)
Throughout Jiangnan in the 1970s and 1980s, local leaders hired nearby workers, not just to meet employment needs under more triple-cropping with the new field machines, but mainly to take advantage of new financial resources that factory workers could generate. They made cement, bricks, motors, glass, cigarettes and other easily salable items, including rice transplanting machines that could pluck seedlings from nursery plots and help put them in large paddies. The engines that hauled the rice transplanters were also walking tractors to aerate soil, to pull a plowshare, or to power a thresher or reaper. With a cart hitched behind, the same gas engine might also become a small truck, bringing produce to market.
The green revolution allowed increases in grain taxes. Ideological centralists and worriers about “sprouts of capitalism” were in no position to grumble about the raised revenues that the new agronomy brought to government coffers. Grain tax collections rose, and this gave local leaders effective excuses to set up factories.
As China’s premier anthropologist Fei Xiaotong wrote, at least some of these factories were kept secret:
In the later stages of the Cultural Revolution [the early 1970s], many small enterprises emerged in Sunan [southern Jiangsu]. These enterprises, established by local cadres, were illegal at that time. They were "underground." Because of the Cultural Revolution, higher level cadres had no time to deal with such things; so more and more enterprises emerged. Peasants did not mind what the nature of ownership was. The only thing they did mind was to keep up their livelihood.... Capital came from collective accumulation; communes used a portion of their funds to develop [industrial] production.... The government did not give money or invest.... But this was the only way for peasants to make their living at that time.9
As Fei suggests, the Cultural Revolution was not irrelevant to this green revolution – because it demoralized and delegitimized the staffs of the city or town offices that had previously monitored more rural areas. So local leaders could act more independently in their own interests and the interests of their immediate clients, who in single-surname or few-surname villages often included their kin.
China’s central and provincial governments were also not irrelevant to the late 1960s-early 1970s rural change. Agricultural research institutes that they funded had developed the new rice seeds. But because the effectiveness of “miracle” rice types depends on local climates and soils, most Chinese genetic rice research was in mid-sized provincial or prefectural units. At the Northern Areas Agricultural Conference of 1970, representatives mainly from regions of China that grew more maize or wheat than rice espoused the “Dazhai model” of rural development. Early reformers and conservatives vied against each other then, as at many meetings for years thereafter.
Some of the rural factories that prospered in the 1970s and 1980s were resuscitations of plants that had been established during the Great Leap Forward of 1958. Local cadres remembered the disastrous results that had come from following orders of planners who had caused 1959-61 famines and shortages. These memories justified medial and local leaders two decades later to make decisions in tacit neglect of orders from higher levels of the bureaucracy.10 Parallel motives in networks of local leaders, allowed but not initiated by early free-thinking national leaders, were the main spurs of reform.
These reforms did not start at the top – specifically not from Chairman Mao or from the historical accident of one famous man’s death in 1976. Mao had inconsistent policies in many fields. He was one of a billion Chinese when he died. Mao did many things, but rural industrialization was more attributable to local leaders. The ignition of reforms predated the period of tension between Hua Guofeng and Deng Xiaoping, who succeeded Mao in 1976 and 1978 respectively. Deng certainly became China’s most important reformer. But he knew China is large, and he was not a micro-manager.11 Deng did not claim credit for himself (or any other central politician) in steering the green revolution to become China’s industrial revolution. Deng was candid enough to admit that local Chinese leaders made the initial reforms. Meeting a group of foreign journalists in semi-retirement, Deng was startlingly honest12:
Generally speaking, our rural reforms have proceeded very fast, and farmers have been enthusiastic. What took us by surprise completely was the development of township and village industries.... This is not the achievement of our central government. Every year, township and village industries achieved 20% growth.... This was not something I had thought about. Nor had the other comrades. This surprised us.
Deng was surely qualified to report what he and his colleagues did not do. In December 1978, the Third Plenum of the Eleventh Party Congress passed a resolution specifying that "contracting to households" was illegal.13 If 1978 is deemed the watershed toward reforms, this was a very odd way to begin them. Conservatives wanting greater control of rural resources liked this 1978 ban on local contracting. Reform-minded leaders might have guessed the prohibition would be unenforceable anyway. In the spring of 1979, Daniel Kelliher claims, "The top leadership in Beijing was against the experiment in family farming.”14 The Plenum was ambiguous; it had both reactionary and reformist aspects that persisted among central politicians through the 1980s and later. Local leaders were likewise divided on rural industrialization and its competition with planning. They followed the mandates they liked and ignored others whenever they could.
……
China’s Re-Centralizing Leaders in Decades after the 1980s
Many rural entrepreneurs who led China’s early “rise” were surely proud of their titles as state cadres (guojia ganbu). They had hard jobs balancing pressures from the government bureaucracy and from their own clients.15 Many became prosperous as active businesspeople, satisfying both their local dependents and their official minders at higher administrative ranks. But others were passive bureaucrats. Even in later decades, productive local reformists were praised as “entrepreneurs,” while those with sinecures could be chastised as “capitalists.” Both groups included members of the Communist Party.
New factory bosses consciously competed with rival state firms — to make sales and profits, certainly not to weaken the government. A mid-1980s survey of 5,600 rural enterprises shows that the managers were keenly aware of the state enterprises in their fields. Fully 48% responded they were in "competition" with state factories that produced similar products, and 19% indicated they were in a mixed situation of both "cooperation and competition.”16
The main short-term loser in this game was the state at provincial and central degrees of zoom. It lost money because of local cadres' transactions, and it failed to stop the process by which rural industries ended economic planning for most commodities. Marketization in China was not any single leader's idea, although some generally supported it (notably Deng Xiaoping) and others loathed it. The change to markets resulted from conflicts over resources that central conservatives were losing to local reformers for a while from about 1970 to 1990. But the state also profited from this syndrome, because the government had a huge new source of popular legitimacy in the increasing rate of economic fortune for hundreds of millions of Chinese people.
High inflation cast a shadow over enthusiasm for the rise in prosperity. Inflation contributed to social unrest that built gradually. Supremo Deng Xiaoping chose reformer Hu Yaobang as Chairman of the Party in 1981 and then as General Secretary in 1982. By 1987, Deng replaced Hu with Zhao Ziyang (who had overseen Sichuan’s reforms) as General Secretary – while in that same year, Deng balanced the central government by making conservative Li Peng the Premier.
Social tensions reached a climax in 1989, when young intellectuals and various workers demonstrated at Beijing’s Tiananmen Square and in many other large Chinese cities, demanding that the regime adopt democratic electoral methods that they hoped would bring more responsiveness in government. They were crushed when Deng and Li Peng chose violence to destroy the protests. These traumatic events came at the end of the period covered by this paper, and they occurred at a more centralized degree of zoom than is the focus here on local origins of China’s economic prosperity. They have been covered in other publications, although the Party favors amnesia about them. This author thinks Deng and the Party center in 1989 could have chosen better policies for the Chinese people who live both in and outside the mainland. But as a foreigner, he does not presume to run China.
After 1989, General Secretary Jiang Zemin and Premier Zhu Rongji initiated policies to reverse the 1970s-1980s localization of economic power. They developed measures to reconcile the Party with the market. China’s economy has been “converging” on slower growth rates as product-per-capita has risen. This is an entirely normal pattern in the course of many countries’ development.17
Successful rural and suburban Chinese factories increasingly came under private ownership. A minority of them became large companies that over decades from the 1970s into the following century sold consumer products abroad, as China opened to global trade. In many cases, they did so by enlisting help from equally independent ethnic Chinese investors and traders based outside the mainland. The archetype of what is too abstractly called “globalization,” i.e. trans-Pacific trade between China and America, was largely organized by Hong Kong tycoons – not by any government: Chinese, American, British, or other.18
New leaders in Beijing, ruling with Deng’s approval until he died in 1997, recouped some powers that relatively central authorities had lost in the 1970s and 1980s. Political centralization accelerated after 2012, when Xi Jinping became the top leader. Zhongguo is now more ‘zhong’ (in that sense) than ever before. Centralization is nearly publicized as the quintessential “Chinese characteristic.” But the country remains very large. Will the centralist trend continue forever? Some foreign scholars speculate that it may not.19 But studying the past is somewhat more reliable than predicting the future.
For the entire paper by Lynn T. White III
See Lynn White, Unstately Power: Local Causes of China's Economic Reforms (Armonk: M.E. Sharpe/Routledge, 1998); Chris Bramall, The Industrialization of Rural China (Oxford: Oxford University Press, 2007); Sigrid Schmalzer, Red Revolution, Green Revolution: Scientific Farming in Socialist China (Chicago: University of Chicago Press, 2015); and Joshua Eisenman, Red China's Green Revolution: Technological Innovation, Institutional Change, and Economic Development Under the Commune (New York: Columbia University Press, 2018). In comparison with White’s early attempt, which looks less at published policies and more at local results in traditionally rich parts of China, Bramall rightly stresses that rural entrepreneurs all over the country learned from Maoist experiments, though he says less about agronomy. Schmalzer stresses ideological contributions, both scientific and socialist, to rural change. Eisenman’s book is closest to White’s in exploring both contextual and local developments while also, following his UCLA mentor Richard Baum, including information about central factionalism that accompanied reforms especially after 1978. These four books, despite variations of emphasis, can be read as mostly compatible.
Kojima Reeitsu, Chûgoku no toshika to nôson kensetsu (Chinese Urbanization and Rural Construction) (Tokyo: Ryûkei Shosha, 1978), pp. 293-94 and p. 299.
The 19% annual increase is calculated from Shanghai shi nongye jixie hua fazhan zhanlue yanjiu (Studies on Strategy for Developing Agricultural Mechanization in Shanghai Municipality), Xie Zifen, ed., (Shanghai: Shanghai Kexue Puji Chuban She, 1991), p. 104.
A book on that topic, which the present author unsurprisingly recommends, is Lynn White, Policies of Chaos: The Organizational Causes of Violence in China’s Cultural Revolution (Princeton: Princeton University Press, 1989).
Kate Xiao Zhou, How the Farmers Changed China (Boulder: Westview, 1996).
Peer Moller Christensen and Jorgen Delman, “A Theory of Transitional Society: Mao Zedong and the Shanghai School,” Bulletin of Concerned Asian Scholars 12:2 (1981), p. 10.
See Frank Leeming, Rural China Today (London: Longman, 1985).
Mary E. Gallagher, Contagious Capitalism: Globalization and the Politics of Labor in China (Princeton: Princeton University Press, 2005).
Fei Xiaotong and Luo Yanxian, Xiangzhen jingji bijiao moshi (Comparative Models of the Village and Town Economy) (Chongqing: Chongqing Chuban She, 1988), pp. 5-9.
Dali L. Yang, Calamity and Reform in China: State, Rural Society, and Institutional Change Since the Great Leap Famine (Stanford: Stanford University Press, 1998), shows statistical correlations among counties of post-Leap calamity and reform decollectivization two decades later. (Like Mary Gallagher and Kate Zhou cited above, Yang Dali was a dissertation advisee of the author.) On the Leap’s “decentralization to middle levels,” see uses of Durkheim, Mannheim, Weber and Mao in the best-ever book on modern China by a Westerner, Franz Schurmann, Ideology and Organization in Communist China (Berkeley: University of California Press, 1966), which is old but still worth reading.
Ezra Vogel, “The Leadership of Xi Jinping: A Dengist Perspective,” Journal of Contemporary China 30:131 (2021), pp. 693-96.
Renmin ribao (People’s Daily), June 13, 1987. Emphasis added.
"Contracting to households" is baochan dao hu. Work by Kate Xiao Zhou referred to the text of this resolution in Yang Jianwen, et al., Dangdai Zhongguo jingji sixiang (Economic Thought in Contemporary China), (Shanghai: Sanlian Shudian, 1991), pp. 395-412.
Daniel Kelliher, Peasant Power in China: The Era of Rural Reform, 1979-1989 (New Haven: Yale University Press, 1992), p. 63.
Helen Siu, Agents and Victims in South China: Accomplices in Rural Revolution (New Haven: Yale University Press, 1989).
Helen Siu, Agents and Victims in South China: Accomplices in Rural Revolution (New Haven: Yale University Press, 1989).
For example, see Leonid Grinin and Andrey Korotayev, Great Divergence and Great Convergence: A Global Perspective (Springer Link, 2015).
Extensive new evidence that no government much affected what Hong Kong tycoons did is in Peter Hamilton, Made in Hong Kong: A New History of Globalization (New York: Columbia University Press, 2021). Hamilton’s historiography, emphasizing independent local actors, is like that in the current paper.
See also Lowell Dittmer, “On the Sixth Generation: Preliminary Speculations about Chinese Politics after Xi,” Asian Survey 29:122 (July 2019), pp. 253-65.