Creeping Toward Reform

IN ITS recent Communist Party Congress, the Chinese government renewed its commitment to liberalization and reform Nonetheless, China is still caught in that murky zone between the stagnation of its communist-planned past and progress toward a more liberalized future.

Deng Xiaoping, the leader responsible for cleaning up the shambles of Mao's Cultural Revolution and introducing free market reforms into the slumbering giant, stepped down from all but one of his leadership posts. Zhao Ziyang, a 68-year-old reformer in Deng's mold--but lacking his expertise and broad support--was annointed the new leader.

If Zhao acts in line with his past initiatives and recent statements, he is destined to accelerate the pace of China's plodding reform. In the 1970s Zhao designed policies that transformed huge, inefficient communes into privately-run plots. Three years ago he traveled to Africa, a sign of concern for China's role as an independent global power. If anyone has the right mindset about reform, it's Zhao.

In the opening session of the Congress, Zhao called for the adoption of more Western economic reforms and the expansion of the private sector's role. In addition, he attacked the party bureaucracy for hindering efficient government.

The Congress backed up Zhao's rhetoric with action, proving that the reformers will be taken seriously. The Congress slashed the size of party committees, dumped the ruling gerontocracy, and packed committes with new, educated members, to spearhead progressive movement.

Nine years ago, Deng started his country walking, and now Zhao is ready to quicken the pace.

But Zhao must proceed cautiously; conservative forces lurk behind the scenes, ready to criticize any failing innovations. While most hardliners were booted out of the Central Committee in this Congress, there are three new leaders in the party's inner circle who are steeped in Soviet training and poised to slow the reforms. Based on the negative effects capitalist initiatives have had on China recently, conservatives already have sufficient gripes.

CHINA HAD experienced virtually no inflation for decades, but in the first six months of this year prices rose 9 percent generally, while food prices soared 20 percent. Farmers, freed from communes by the reforms and allowed to sell their produce at market prices, are now selling record harvests and spending gains on new goods. The central government is running up a budget deficit to accomodate this consumption.

Corruption unfortunately is a problem, as people are using state subsidies to buy goods cheap and sell them for private gain. In the first half of this year, the state found 240,000 violations of price controls.

These omens for conservative uprising are worsened by the tenuous hold the liberals maintain in the first place. This January, the conservatives proved their facility at regaining power when they forced out Deng's designated successor, Hu Youbang. Hu's progressive pronouncements sparked students to rally for greater democracy. This brought a heavy-handed conservative backlash against "bourgeois liberalism" which many feared would turn into another Cultural Revolution.

And when the chips were down for reformers, Deng cowtowed to the conservatives to maintain his power--clamping down on protests and toning-down reforms. He held back on plans to reform the political structure, including separating the Communist party from day-to-day governing. Despite the best intentions, Deng was able to push his countrymen only so far.

The perspective is not entirely bleak, however. In Zhao's speech in the 13th Congress, the proposal to reform the political structure popped up. So much for the naysayers. The country knows what it needs to do--and it ought to get to it.

TODAY'S CHINA is not the rigid ideological model set up by Mao and Soviet planners in the 1950s. China is eager to break free from these strictures, as the doubling of its foreign trade and increase in its foreign investment to $2 billion during the last seven years indicates.

But the infusion of capital from abroad is on the line; investors have been scared off by inefficient bureaucracy and the conservative threat. Last year investments were half what they were a year earlier.

China has a lot to gain from continuing the reforms, aside from attracting the technical aid and investment that it desperately wants. An expanding economy can only boost China's position in the world power equation. As the world financial community awaits--and fears--Hong Kong's 1997 reunification with the mainland, a constricted party role in the economy can only help calm the transition.

Those who have most to gain from reforms are the 1 billion Chinese citizens. One-fourth are illiterate, and most have yet to benefit from the bounty in new production and construction. The world's most populous country owes it to itself to overcome the opposition and speed up the pace of reforms.