GOOD MORNING FROM LONDON
The West revels in policy changes coming out of Beijing. They see them as examples of fundamental errors that reflect the irreconcilable contradictions of the policies pursued by China’s Communist Party. More errors + more humiliation for the Party which hastens, they hope, the end of the Communist Experiment commenced in 1949.
Let’s look at Deng Hsiaoping’s famous early 1980’s comment following his visit to the new Special Economic Zones – small areas of China set aside for economic experiment. Remember the context – the failure of the Cultural Revolution with its constant diet of red-blooded politics had left the Chinese people with little to enjoy from the 10 years of strife + struggle. The priority, therefore, was to stress economic development so as to bring about more clothes, more restaurants, more accommodation, more railways. China had stood still. It needed to accelerate. The People needed to be respected.
One solution was to embrace the positive side of capitalism + allow entrepreneurs the freedom to bring their initiative, creativity + organisational skills into play in pursuit of progress, development + profit. This was the meaning of Deng’s famous comment about the Two Cats. “Development is the priority so let’s allow the Capitalists to play their part” And they did + the capitalists contributed significantly to the surge in economic growth that has led China shortly to become the biggest economic power in the world and made the 1.4bn Chinese proud of their country’s achievements.
The Party always knew that embracing Capitalists came with risk. At the end of the day they were capitalists with a thirst for profit, accumulation and power. The negative side of the decision to work with Capitalists was always known to the Party but the situation in China after the Cultural Revolution prioritised speedy economic development over political orthodoxy. The time for correction would come later. And that brings us to tomorrow + to Common Prosperity.