tions and the availability of cheap Chinese labour
attracted large-scale investment from Hong
Kong. No doubt Deng was trying to kill two
birds with one stone. By showing that capitalism
and socialism could exist side by side he furthered
the reunification of all of China – the British
colony of Hong Kong, the Portuguese enclave of
Macao and hostile Taiwan. Most of Hong Kong
would revert to China when the British lease
ended. In 1984 the British and Chinese govern-
ments concluded an agreement that embodied
Deng’s formula ‘one country, two systems’. After
the British lease ended in 1997 Hong Kong
would be allowed to maintain its capitalist system
and its freedoms for fifty years as a Special
Administrative Region of the People’s Republic.
While it seemed that Deng and the reformers
were transforming China, opening the country to
the West, attracting tourists and foreign capital,
developing new joint enterprises and placing
orders for machines and whole factories with the
US, Britain, West Germany and other countries,
problems were emerging which, in 1989, were to
place question marks over Deng’s decade of
reform.
Free-enterprise agriculture was concentrating
on the production of more profitable crops than
grain, such as jute and tobacco. In 1985 grain
production fell as China’s population, despite
intensive birth-control campaigns enforcing ‘one
couple, one child’, inexorably grew. Greater pro-
ductivity on the land meant less need for labour.
China’s urban population almost doubled
between 1980 and 1986 – another 180 million
mouths to feed in the cities. There was under-
employment and unemployment in the cities;
housing shortages grew more severe. The mixed
state and free market encouraged corruption.
Favouritism and bribery became widespread.
Price rises unsettled the population, more used to
the stability of stagnation. Economic develop-
ment has been uneven, fastest in the last 1980s
in the coastal cities. Agricultural output from
what are predominantly small farms has little
scope to increase and so match China’s popula-
tion growth. With an economy in which prices are
not yet market-oriented there is confusion and
dislocation. Corruption is rife and China is still
overburdened with a vast bureaucracy, whose
planning functions continue to shrink. Vested
interests damaged by these changes did their best
to slow up or undermine Deng’s reforms.
The biggest problem was Deng’s recognition
of the need to transform the attitudes of the indi-
vidual Chinese, to make them more independent-
thinking, responsible and enterprising. To the
extent that he succeeded he also raised expec-
tations beyond what the party could fulfil.
Educational reform created a larger professional
class and more idealistic students, who demanded
new freedoms and ‘democracy’. This set Deng’s
reformers and the party leadership on a collision
course with a vociferous, educated, urban minor-
ity which wanted political reforms on the Western
model. The West had come to expect more from
the Chinese leadership as China’s economic and
diplomatic involvement with the rest of the world
had grown. Tourists visited China and found its
people generous and friendly; Beijing even
allowed discreet nightclubs to open, offering the
services of hostesses. It looked as if China would
adopt the Western way of life, importing not only
Western capital and goods but also some of the
West’s values. But in 1989 the Chinese leadership
showed a different face that should have been
expected. The West recoiled with horror but only
for a short time.
In the China of the twentieth century there is a
tradition of student and intellectual protest. The
calendar is marked by events such as the anti-
foreigner demonstrations of 4 May 1919, which
became the focus for new demonstrations in the
1980s. Student idealism and frustrations were
manipulated from time to time by the aged party
leadership against their rivals, not least by Mao
himself, with the launch of the Red Guards in
- It was a dangerous tactic and those who
used student protest for their own purposes then
had to contain what they had helped to arouse.
Deng and his chosen successor, the man he had
placed in the position of party leader, Hu Yaobang,
together with the head of the government Zhao
Ziyang, decided to allow freer expression of views.
Deng, however, kept his lines open to the more
conservative aged Politburo in deploring decadent
Western ‘bourgeois’ influences.
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