T HOUGH IT DOES not believe in saints, the Communist Party of China came close to canonising its former paramount leader, Deng Xiaoping, back in 2004. On the centenary of his birth, Deng—who died in 1997—was hailed as the immortal “chief architect” of reforms that had made China prosperous and strong. The eulogies had some basis. Thanks to his support for policies dubbed “reform and opening up”, Deng can take credit for a secular miracle: the greatest economic recovery in history.

With cunning and pragmatism, Deng and his aides dismantled a broken economy and dystopian society left behind by Mao Zedong. They re-awoke the country’s slumbering genius for capitalism and found a way to call it socialism, albeit “with Chinese characteristics”. By 2004 the economy was 44 times larger than it was on December 18th 1978 (as measured in current Chinese yuan, the method used in Chinese official commemorarations of the anniversary. When measured in constant 2010 American dollars, the economy in 2004 was 11 times larger, as can be seen in chart 1). It was on that date that party leaders began a meeting that is now officially called the start of the era of gaige kaifang. Though growth has been slowing of late, the trend has been impressive. As China prepares to mark the 40th anniversary of the opening of the conclave, the country’s GDP in current yuan is more than five times larger than it was in 2004 (in constant 2010 American dollars China’s economy is more than three times larger than in 2004).

Like many who endured the Mao era, Deng was also something of a martyr. That story is hidden in the architecture of a museum that was opened in 2004 by the party’s then boss, Hu Jintao. It lies next to a black-and-white farmhouse that was Deng’s boyhood home in rural Sichuan province. The museum has a roof made of three sloping planes rising to a spire. It symbolises how Deng was repeatedly purged under Mao before recovering each time and finally rising “as high as heaven”, a guide explains.

On opening day, 14 years ago, few would have predicted that Deng might be purged again, or at least lose his central place in the Communist pantheon. Yet Deng and his reformist aides are being sidelined during this anniversary. This should be a time for swagger and confidence. After all, the past 40 years have seen hundreds of millions of Chinese lift themselves out of poverty, and China become a global power. Instead the anniversary is being observed by an odd smallness of spirit and by semi-public squabbling among the country’s secretive elites. Official propaganda is playing down the achievements of past leaders, to focus on extolling the “new era” announced in late 2017 when President Xi Jinping secured a second term as party leader. Image-makers are also promoting a specific vision of reform and opening that casts private business in an important but supporting role, with state enterprises dominating the most sensitive and advanced sectors.

A gaige counter for the president

The largest anniversary exhibition, at the National Museum in central Beijing, devotes vastly more space to Mr Xi, and to what he has done since he came to power in 2012, than to the achievements of all previous Chinese leaders combined. In its halls, packed on a mid-week afternoon with school groups, workplace delegations and squads of soldiers in uniform, “reform” is treated as a synonym for progress and modernity, rather than as an economic programme of tearing down barriers to free competition and trade. In chest-swelling displays about China’s space programme, aircraft-carriers and high-speed trains, state firms are the champions. Private firms and self-employed entrepreneurs are praised too, but as a “complement” to the economy, with special strengths in innovation and job creation.

When Mr Xi visited the exhibition, the state press did—to be fair—record him inspecting inscriptions by Deng dating from 1984, urging more rapid development of coastal cities earmarked as “special economic zones”, or pilot areas for experimenting with market forces. But the reports quickly moved on to the important point: that Deng’s inscriptions reminded Mr Xi of his own arrival as deputy mayor in one such zone, Xiamen, in 1985.

To China’s liberal intelligentsia—an embattled band including free-market economists, reformist lawyers, retired officials and some business executives—such propaganda stokes fears that Mr Xi is only paying lip service to reform while harking back to the bad old days under Mao, when dogma trumped pragmatism.

Thinkers who suffered in the Mao era express horror at the revival of Maoist slogans. They recall that economic debates had always been tolerated in the reform era, even after the crushing of pro-democracy protests in June 1989. Now speaking out even on technical subjects can be perilous. Unirule, an independent economics think-tank founded in 1993, recently lost its business licence. It has suspended public activities. Its apparent offences include criticising state-backed monopolies and calling for changes in the tax system.

Strong but wrong

A longtime advocate of reform describes how Chinese rulers fit onto two axes: one representing the extent of their power and the other the quality of their thoughts. The worst, like Mao, are strong with bad ideas. The best, like Deng, are strong with good ideas. He calls Mr Xi a strong leader whose philosophy remains unclear. Yet he fears that the party chief was marked, durably, by his upbringing during the Cultural Revolution, leaving his ideas “perhaps more aligned with Mao’s”.

Outsiders may find that outlandish. After all, in Maoist times those accused of capitalist tendencies lost property and even their lives. Today, billionaires can be party members, and—if they toe the line—feted as patriots. Mr Xi’s chief economic adviser and deputy prime minister, Liu He, is a reformist who is trusted by business leaders. Mr Xi has gone out of his way to promise support for private firms as the economy slows (see article).

But this is a divisive anniversary. After all these years of reform and opening there is surprisingly little consensus about why gaige kaifang has worked. The period can be divided into stages. First came a break with Mao and a return to common sense, prudence and respect for expertise. That led to experimentation: “crossing the river by feeling the stones”, as Deng put it. Farmers were allowed to manage their own smallholdings. Villages and townships opened businesses. Entrepreneurs began to build private empires. At the same time, state-owned firms (while contributing less to the economy, see chart 2) continued to enjoy unique privileges, such as cheap land and other subsidies. They faced unique burdens too, from price controls to demands to provide welfare for employees. Finally, in the early 1990s, something like a market economy began to emerge.

The lessons of each stage remain contested. Pro-market reformers think that China has grown rich despite state meddling in the economy. A rival camp, which liberals fear has Mr Xi’s ear, thinks that China has prospered because officials temper and guide the forces of capitalism. Other big disputes divide the camps. Liberals believe that Deng enjoyed public backing because he symbolised a break with failed Maoist policies. They hold that Team Deng’s great idea was to distance the party from the government, then get both out of businesses’ affairs. Liberals are convinced that only further reforms, including political opening, can see China through the transition to an advanced middle-income nation, after relatively easy decades of catch-up growth. A rival, statist camp is strikingly reluctant to criticise Mao, seeing him as a source of the party’s legitimacy. To this group, state firms stand for strength and control. They see a “China model” that outshines free-market capitalism. Shunning political opening, they put their faith in party discipline, not external accountability. There are hints of tension among princelings, or the heirs of early Communist leaders. In September Deng Pufang, Deng’s eldest son, defended his father’s legacy in a speech to the China Disabled Persons’ Federation, of which he is the honorary chairman (he was paralysed during the Cultural Revolution). Mr Deng said that reforms introduced by his father were “irreversible”, and had won support because of the public’s loss of faith after the chaos of Mao’s era. In October Mr Xi visited Shenzhen, on the border with Hong Kong. Many Chinese associate the city with the “southern tour” in 1992 by Deng, then retired, which led to a dramatic revival of economic reform after a prolonged attack on his policies by hardliners. But during his recent trip, Mr Xi did not even mention Deng’s name publicly. Other officials have gone further, using the anniversary to promote the role of Mr Xi’s father, Xi Zhongxun, who helped to launch Shenzhen as a hub for foreign-funded manufacturing.

So far this year almost 3m people have visited the park in Deng’s birthplace, Paifang. On a chilly, overcast morning, some of them explained that they had come to remember “Uncle Deng” for putting “money in our pockets”. The gift shop’s best-selling item is a wooden plaque bearing a gilded character for “prosperity” (in Deng’s calligraphy, staff say), which businessmen buy to put on their office desks.

Deng’s last living close relative in Paifang, Dan Wenquan, still helps at a restaurant opened by his children in 2004. A recent lunchtime found him sorting chopsticks at a round table. Mr Dan’s father and Deng’s mother were siblings. Those ties brought violent persecution during the Cultural Revolution, a time he now calls “quite challenging”. An 81-year old ex-farmer who never went to school, Mr Dan offers a definition of reform and opening that his powerful cousin would have recognised: a social contract that stresses nationalism and material prosperity, rather than theoretical “-isms”. China must become technologically advanced to be rich and powerful, says Mr Dan. “Once your science is powerful, others won’t bully you. When the country is prosperous, people are happy, and the people trust the government.”

Different views can be found in fields outside Paifang. The changes that began in 1978 produced winners and losers. Many industrial workers were laid off as the planned economy was dismantled. Ordinary Chinese associate reforms with rising living standards, but also with rampant corruption. On Paifang’s fringes, a gaggle of ageing farmers heatedly share a tale of officials taking land without promised compensation. Asked about reform and opening, one scoffs: “The opening’s for officials, us common folk are still common folk.”

Corruption divides elites, too. An anti-corruption drive led by Mr Xi has netted more than 100,000 officials. The campaign is wildly popular with the public, but is blamed by some officials for paralysing the work of government. Some in policy circles murmur that Mr Xi is far less supportive of private enterprise than he claims to be, and that he believes his beloved party is being poisoned by bribes from privilege-seeking private firms. Reformers retort that bribery exists because officials wield excessive power over business. In the 1980s and 1990s the best officials used to be entrepreneurial risk-takers, says one veteran of those times. They sought powerful positions in order to do the right thing for the country. Now, he sighs, too many officials think like bureaucrats, merely concerned with doing things the “correct” way.

A handful of entrepreneurs are willing to speak out. In late November Sun Dawu, whose firm owns large egg farms and other rural operations, hosted a scholarly forum on land rights and private enterprise at his spa and hotel complex near Baoding, two hours’ drive from Beijing. Attendees included liberal economists, lawyers and businessmen. “The real corruption is at state enterprises,” says Mr Sun. “The biggest crime private enterprises can commit is providing bribes. It is the people demanding bribes who are detested. The party doesn’t like private entrepreneurs because they don’t do as they are told.”

Happily for Mr Xi, some in business welcome his approach. Zhang Huamei, a button and clothing-accessories trader from Wenzhou, was the first person in China to be granted a self-employed business licence, back in 1980. She was 19. At a time when private trading was still illegal she began supplementing her family’s meagre income by selling cheap goods from a stand in front of her home. When officials told her of a scheme to grant trading licences, she applied, sick of having to run and hide whenever she saw anyone in authority. “After we got the initial licence we would go out there knowing the government had our back,” she said in an interview at her small shop in central Wenzhou. Ms Zhang is proud that Wenzhou is famous for daring and canny traders, who have founded businesses worldwide. Some might hear her tale as an example of the government getting out of the way. But she is deferential to the state that protected her in 1980. On her shop’s walls, button samples jostle for space with pictures of her attending official gatherings and meeting the prime minister, Li Keqiang. A copy of her original licence is on display at the National Museum in Beijing. Without government support, it is hard for any business to survive, Ms Zhang avers. Private businesses can seek out new markets. But they cannot be compared to state-owned champions making advances in science and technology, she says. “If China did not have these big state-owned enterprises to grow, how would we be this well off?”

Deng might have liked Ms Zhang. Though missed by economic reformers today, he was no liberal. He had faith in technocrats and was willing to delegate authority to them. He saw the power of material incentives to drive efficiencies and progress. But he saw a role for a scientific, modern state too, in common with the leaders of such Asian tigers as South Korea or Singapore.

Down memory lane at Beijing’s reform exhibition

Most important, Deng bequeathed China a lopsided version of reform, in which economic freedoms were not matched by political opening. That explains problems today, says Mao Yushi, a free-market economist and outspoken critic of Mao Zedong’s poisonous influence on Chinese society. He speaks with some authority, having been purged in the 1950s as a “rightist” and whipped during the Cultural Revolution. Mr Mao, who is the honorary chairman of the Unirule think-tank, recalls the 1980s as “the most democratic time in Chinese politics”, until progress was “stopped by the shots fired on June 4th [1989]”. Deng, he says, “contributed greatly to the marketisation of the Chinese economy, but he interrupted the political advancement of China. That was his big mistake.” Today Mr Mao sees China’s development being threatened by a tightening of curbs on free speech which he says is stifling badly needed debate about policy. Many economists, including those within the government, privately agree. But at the age of 89, he is unusually able to speak without fear.

Donald Deng

In this moment of doubt and dissent, many Chinese liberals put their faith in a surprising champion: President Donald Trump. They hope that pressure from Mr Trump will force Mr Xi to keep promises made in recent speeches—to open markets further to foreign investors, better protect intellectual property and encourage fair competition. By way of precedent, such optimists cite beneficial foreign pressure on China when it entered the WTO . Not all are so confident. “People want political change. I think getting political change through a trade war is hard,” says Mr Mao, drily. China’s liberals do not exactly admire Mr Trump. It is more that they hope he will prove a bigger bully than Mr Xi. On this somewhat gloomy anniversary, reformers will take what help they can get.

Correction (December 7th 2018): An earlier version of this story incorrectly reported that President Xi Jinping, in a speech on November 23rd to commemorate the 120th anniversary of the birth of Liu Shaoqi, a former head of state deposed by Chairman Mao Zedong, failed to refer to Liu’s purging or Maoist excesses. In fact in his speech Mr Xi did note that Liu was killed as the result of wrongs committed by Mao’s acolytes, Lin Biao and the Gang of Four. We apologise for this mistake.

Clarification (December 9th 2018): This piece previously only measured the growth in China’s economy between 1978 and today in current Chinese yuan. We have added the conversion in constant 2010 American dollars, which is the rate we used in chart 1.