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China's Real Great Leap Forward and Economic Cultural Revolution Under Deng Xiaoping


Nobody can dare deny that China has become a big superpower. I remembered I went to China last 2007 (which would be more than 10 years ago). China had become such a huge metropolis of power that I'm amazed at it. I was thinking about how Shanghai, Shenzhen, and Beijing were truly magnificent cities before the pollution problem (which should call for eco-capitalist measures). I was thinking about how I never realized China was once dirt poor. 

Did you know China used to be so dirt-poor? The "economic legacy" of Mao Zedong was a disaster with the so-called "Great Leap Forward". It was a great leap forward all right--a great leap forward to ruin. Mao seeking to avoid the use of foreign resources to launch China proved disastrous. The 1970s would see a dramatic change when Deng Xiaoping finally took over the Chinese Communist Party (CCP). The beginning of the rise of Communist China under Deng's new political policy would pave the way to China becoming a great superpower. China would never be the same under Deng.

We need to study history to know how China had a real great leap forward

Mao's program was a big failure. Deng was about to turn the tables around with new economic policies. Deng himself was practically defying traditional communism. Instead, Deng did away with Maoism and created Socialism with Chinese Characteristics which defied traditional socialism. The new free-market system introduced in Communist China was a radical departure from Mao's closed doors. Instead, China now had an open-door policy that changed the way China did its course.

In 1978, Deng would visit Singapore and met the late Lee Kuan Yew, father of the incumbent Lee Hsien Loong. A deepening friendship happened between a communist country and a democratic country. One book I pretty much wish I had would be something Lee Kuan Yew wrote back in 2013 called One Man's View of the World. It would be interesting to know that China would find its way. Also, I think about how Lee Kuan Yew renounced Maoism as a failed economic system in one of his many speeches. In fact, Deng was later called a great man even if he was the head of the Chinese Communist Party (CCP).

It would be interesting how Shenzhen, next to Hong Kong, in the 1980s, became the next Special Economic Zone (SEZ). This was the beginning of Deng's economic experiments. Deng did this to attract foreign investment. The results were indeed glorious. Even Lee Kuan Yew, though a democratic man, praised Deng as a great man for adopting reforms. In 1989, the first stock market opened in both Shanghai and Shenzhen--something unheard of during Mao's time. All of these became a road map to how China would adopt its new policies--toward a real Great Leap Forward.

In spite of the controversial Tiananmen Square Massacre, China still managed to build its economic ground. The 1990s became a new stepping ground as China would start with more Western and Eastern factories kicking in. I remembered having a Toybiz action figure which had the label "Made in China". A lot of stuff ended up being "Made in China" as a result of China's aggressive acceptance of foreign investments in contrast to protectionist economies. China became a hub for international marketing as a result of Deng's economic reforms.

Deng's economic cultural revolution

Deng practically launched his own cultural revolution. This time, it practically changed a culture influenced by Mao's lethargic idealism to a culture of a sense of achievement. It would be very interesting to think of how Deng launched a cultural revolution with a business-minded mindset. Such can be said as this quotation:
Under Deng, pragmatic leadership emphasized economic development and renounced mass political movements. At the all-important December 1978 Third Plenum (of the 11th Party Congress Central Committee), the leadership adopted economic reform policies that included expanding rural incentives to generate income there, encouraging experiments in the market economy and reducing central planning. The plenum also decided to accelerate the pace of legal reform, culminating in the passage of several new legal codes by the National People's Congress in June 1979. [Source: Countries of the World and Their Leaders Yearbook 2009, Gale, 2008]

Even more, Deng's new policies had their socio-cultural forces. These can be read about Deng's cultural revolution that shaped China for the better--having a sense of achievement. It was something China never had during Mao's protectionist regime.

In their book, "China’s Megatrends: The Eight Pillars of a New Society", futurologist John Naisbitt and his wife Doris argue that China liberated itself from its Maoist ideological mindset and reactivated China’s “entrepreneurial gene” when Deng Xiaoping came to power in 1978.” On China’s fundamental transformation between the Cultural Revolution and the present the Naisbitts wrote: “China in 1978: A visionary, decisive, assertive CEO takes over a very large, moribund company that is on the verge of collapse. The workforce is demoralized, patronized, and poorly educated. The CEO is determined to turn the run-down enterprise into a healthy, profitable, sustainable company, and to bring modest wealth to the people. And he has a clear strategy for achieving this goal.” China in 2009: The company has changed from an almost bankrupt state into a very profitable enterprise, the third largest of its kind in the world. It has made clever moves in its challenges and crisis, and its economic success is now recognized around the globe.” [Source: William A. Callahan, China Beat, November 15, 2010, William A. Callahan is Professor of International Politics at the University of Manchester and author of China: The Pessoptimist Nation (Oxford University Press, 2010)] 

It would be seen Deng also introduced a culture of business management into China. Just thinking about this example of how Deng's cultural revolution introduced a revolution in China's culture. Culture isn't as static as we think as to how China dumped several old traditions that never worked.

Vogel also provides enlightening details of Deng's efforts to use ties with the United States and Japan to China's advantage. While Mao opened China to the West as a way to counter the Soviet Union, Deng realized that American and Japanese technology, investment and knowledge would be keys to his country's advance. They were. Indeed, no nation has been more important to China's modernization than the United States - a fact that no Chinese official has ever acknowledged. Vogel also has a skewed view of the events that forced Deng to reform China's economy,” Pomfret. According to him, Deng and his lieutenants, such as Wan Li, engineered the reforms. In reality, it seems that the Chinese people demanded them by, among other things, dismantling the commune system, and Deng and others were smart enough to get out of the way. Indeed, the Chinese people get short shrift in this book about China. 

Applying the principles that made China great to the Philippines 

I remembered years ago that I often argued about why the Philippines doesn't improve. Standards have been mediocre. I frequently blamed Filipino time for the lack of progress. Another one is not raising the standard. Then, I thought beyond the classroom. The Philippines' lack of participation in the global market from within is also a problem. Deng knew that traditional Communism wasn't fixing things.

I would recommend removing the Negative List entirely. The "Foreign Investment Act of 1991" was amended several times to see which sectors needed easing. Those amendments were done from the time of Fidel V. Ramos up to President Rodrigo R. Duterte. Anybody who should be the next president should consider calling everyone to remove the excessive restrictions immediately. This, in turn, will invite more foreign investors to do business in the Philippines. Foreign investors can do business in the Philippines as long as they pay taxes, provide jobs for locals, pay their tenants properly, and follow laws. 

The result of removing the excessive restrictions would result in more business opportunities. True, foreign investments can be threats but they are also opportunities. The threat of your service provider might be your key to progress. Getting better services, whether local or foreign, can help in the growth of local industries. Deng said that it doesn't matter if the cat is black or white--as long as it catches mice. In business, it doesn't matter if the business is foreign or local--as long as it delivers results. I could settle for a local supplier of raw materials while having a foreign Internet Service Provider (ISP). A local business can benefit from foreign investors buying supplies from them. A foreign investor would want to get Filipino supplies first because it's the most readily available ones. A foreign investor who refuses to use local resources wherever the person goes is just foolish.

This will also encourage Filipinos to develop their own resources. Do you think Xiaomi would exist if China didn't accept companies like Samsung and Sony into the country? Samsung is from South Korea and Sony is from Japan. Samsung was developed in South Korea and faced off against the competition. Xiaomi managed to learn new tricks to become the newest dominant player. Do you think China could suddenly develop such brands if they didn't face competition? If the Philippines had more competition--I simply could imagine a Filipino global brand soon enough. Think about what if the Philippines ended up establishing its one smartphone that may one day dominate the market? Who would have thought China would one day so do? I believe the Philippines can be great only if it truly has a better free market than it has now. 

References

"China’s Xiaomi overtook Samsung and Apple in June smartphones sales" by Saheli Roy Choudhury (August 5, 2021)

"DENG XIAOPING'S EARLY ECONOMIC REFORMS"

"The Deng Years: An Impressive Turnaround" by China Mike 

"What Was the Great Leap Forward?" Written by The Investopedia Team, Reviewed by Michael J. Byle (Updated: September 22, 2021)

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