This week’s free issue of the newsletter is an excerpt from Jude Blanchette’s book China's New Red Guards: The Return of Radicalism and the Rebirth of Mao Zedong.

As of August 2019 Jude is the Freeman Chair in China Studies at the Center for Strategic and International Studies (CSIS). He spent more than a decade in China, where he advised companies on political risk and the workings of the CCP.

Jude’s book is interesting for lots of reasons, including the historical perspective it gives to the current debate in the US about whether or not the engagement policy failed. As his work shows, there were plenty of people inside the PRC who were very concerned it was working in ways that threatened to corrode the Party’s hold on power by spurring the dreaded “peaceful evolution”.

I hope you enjoy the excerpt, and you can buy the book here on Amazon.

Edited excerpt from China’s New Red Guards: The Return of Radicalism and the Rebirth of Mao Zedong, by Jude Blanchette

As a child, the neo-Maoist economist Han Deqiang idolized Lei Feng, the model People’s Liberation Army soldier celebrated for his unquestioning devotion to Mao and the “masses.” In 1984, however, when Han was seventeen, he read the CCP’s “Decision of the Central Committee of the Communist Party of China on Reform of the Economic Structure,” which redefined China’s economy as a “planned socialist commodity economy,” with “commodity” being a thinly disguised euphemism for “market.” Han later said the document left him devastated. If this was true, he thought, and if China’s economy was governed by material incentives, “Why the heck would [China’s revolutionary leaders] have been tramping through the mountains and valleys conducting guerrilla warfare?”

At school, Han dreamed of a career studying particle physics—“I wanted to explore new sources of energy for the nation”—but with the dramatic changes of the 1980s brought about by Deng Xiaoping’s “reform and opening,” he found himself increasingly drawn to social issues. After graduating from university in 1989 with a degree in management engineering, he became a full-time political supervisor and deputy party secretary at Beihang University in Beijing.

In 1991, Han took his first step toward a career as an intellectual-activist, writing a lengthy article entitled “Where Is China Going?,” which he mailed to all of the country’s provincial party leaders. He wanted them to understand that China was in the midst of a crisis of values brought on by its market reforms and its dismantling of the planned economy. The following year, Deng Xiaoping embarked on his famed Southern Tour to revive the economic reforms, during which he declared, “China should maintain vigilance against the Right but primarily against the ‘Left.’” Han said he was disillusioned with such utterances, “even to the point of despair,” he later said.

He was not alone. Beginning in the mid-1990s, a series of anonymous critiques of the market reforms began circulating within domestic intellectual and Party circles and in overseas publications. They were dubbed “10,000-word manifestos” (wanyanshu), a nod to Wang Anshi, a Song dynasty–era mandarin who delivered his reformist dissent to the emperor in the form of a lengthy political tract. These modern-day incarnations lamented the erosion of the socialist social contract with Chinese workers, the privatization of China’s state-owned assets, and the breakdown of traditional socialist morality.

The first manifesto was published in late 1995 under the title “Several Factors Affecting China’s State Security” and was rumored to be the work of Deng Liqun, an early reform proponent turned arch opponent, or his close associate Li Yanming of the CASS Institute of Political Science. Since being passed over for a seat on the CCP Central Committee in 1987, Deng had grown increasingly caustic as his influence in elite political circles waned. With his wanyanshu, if it was indeed his, he was not only questioning a specific policy but also attempting to undermine the socialist credentials of the party’s leadership, including General Secretary Jiang Zemin. He argued that China’s national security was imperiled by the hollowing out of state-owned enterprises, which, he argued, formed the core of China’s economic stability. Under Jiang, he claimed public wealth in the form of the SOEs was being siphoned off to corrupt cadres and capitalists. The piece concluded with a direct challenge to party leadership:

If these things are not rectified now, the number of people supporting the party and government will probably fall, while the number in opposition or taking a neutral stand will be bound to rise. When a political storm comes, and we find ourselves in an unfavorable position, it may be too late to reverse the situation.

Reformers blasted the tract. Writing in Economic Work Monthly, reformist lawyer Cao Siyuan claimed the piece “completely negates China’s ten years of reform and opening.” Cao also accused Deng Liqun of seeking to “turn back the clock to the Cultural Revolution.”

Six months after Deng’s article was released, another wanyanshu appeared, this one reportedly the work of Wu Yifeng, a Marxist economist at People’s University in Beijing. Entitled “A Preliminary Inquiry into the Major Threats to the National Security of Our Country in the Next One to Two Decades,” it warned of “peaceful evolution” (i.e., regime change) smuggled into China through economic, ideological, and cultural integration with Western economies, particularly the United States. Further, opening the domestic economy to foreign capital and investment in strategically sensitive industries, such as finance and telecommunications, was an existential threat to China’s sovereignty. Only with “real Marxists” in power could China combat “bourgeois liberalism” and stave off a Soviet Union–style collapse.

This burgeoning intellectual pluralism, albeit anti-reformist in nature, was set against the backdrop of growing uncertainty in the external environment, with not only the disintegration of the global communist movement to contend with, but an increasingly fractious relationship with the United States. This deteriorated rapidly in 1996, when the USS Nimitz sailed through the Taiwan Strait, and reached its nadir in May 1999 with the NATO bombing of the Chinese embassy in Belgrade, which many Chinese saw as a deliberate attack, despite US insistence that it was accidental and President Clinton’s apology to Jiang Zemin.

But perhaps the most wrenching and consequential shift during this period was the Chinese government’s 1996 announcement of a deep restructuring to China’s sprawling state-owned sector, which would result in the decimation of entire local economies and tens of millions of workers losing their livelihoods. The plan to “grasp the large and release the small” would consolidate and support those firms believed to have strategic significance, while those seen as nonessential—roughly a thousand small- and medium-sized firms—would be left to fend for themselves. The advocates for the plan argued that China could no longer afford subsidies for loss-making, unprofitable, and highly indebted SOEs. But to the plan’s opponents, the party was hollowing out its industrial core, and in furthering a policy that would eventually lead to millions more layoffs, it was also tearing up the socialist social contract on which its legitimacy rested.

In response, the editorial board of the conservative Contemporary Currents of Thought (what one academic called the “bimonthly of frustration”) released a third and fourth wanyanshu immediately prior to and following Deng Xiaoping’s death in early 1997. The first piece warned, “if public ownership loses its dominant position, there will be serious class polarization, the entire working class will be reduced to mere wage labor, the CCP will lose the economic basis of its rule . . . and the country as a whole will change its socialist character and become an appendage of international capitalism.” The fourth piece, entitled “The Trend and Characteristics of Bourgeois Liberalization Since 1992,” was a collection of thirty-nine remarks made by public figures deemed to be ideologically suspect, including those who had made disparaging remarks about the party’s revolutionary history, had “negated” socialism, or who had called for the abandonment of Marxism.

Like the authors of the wanyanshu, Han Deqiang was convinced the CCP was taking China down the road of capitalism, and in response, his intellectual focus shifted to economics. In particular, he was increasingly concerned about China’s planned accession to the World Trade Organization (WTO), which he worried would leave the country’s private and state-owned firms exposed to unfair competition by stronger multinational corporations. It was also, he believed, a Trojan Horse for smuggling capitalism into China for the benefit of the country’s economic elite. “We are told ‘Join the WTO, so that reform and the opening up policy won’t be reversed,’” he said in a speech to the European Parliament. “This could be translated as ‘Join the WTO, so that the wallets of the rich won’t be under threat.’”

In January 2000, he published Collision: The Globalization Trap and China’s Real Choice, a broadside against the WTO and what he believed was China’s submission to a US-dominated global trading system. “The belief that globalization is irreversible and must be welcomed by humanity is a belief forced by the minority onto the majority,” Han wrote. “The truth is, with the intensification of globalization, more and more people are being pushed into an abyss of unemployment and poverty.” The book was heavily influenced by the 1997 Asian Financial Crisis, which Han believed demonstrated the risks of opening China’s capital markets to the global economy. Han was also outraged by the 1999 NATO bombing of the Chinese embassy in Belgrade, proof, he thought, of the West’s contempt for China. The Chinese government’s own admission that the WTO would necessitate deep structural changes to China’s economy also worried Han. As China’s lead trade negotiator declared, “China’s economy must become a market economy in order to become part of the global economic system.”

Statements like these, which in many ways were intended to convince foreign audiences that China was indeed becoming a country they could do business with, also had the effect of galvanizing anti-reform voices back in China. Just before the release of Han’s book, several young nationalists published China’s Path Under the Shadow of Globalization, which argued, “It is time to wake up. For the third world, economic globalization offers more risks than opportunities and greater costs than benefits.” In May 2000, CASS researcher Yang Bin had published The Covert War Threatening China, which framed the WTO as part of a “soft war” waged by Western powers, particularly the United States and the United Kingdom, to pry open China’s markets for the benefit of Western corporations, and ultimately, to “advance neo-colonialism and to control the entire world.”

In the end, these protests were not enough to block China’s accession to the WTO, which was formally completed in late 2001. But the sense of powerlessness felt by many leftist intellectuals by the end of the 1990s had the unintended effect of creating a sense of unity, born of marginalization.

These sentiments were further enflamed by Jiang Zemin’s controversial “Three Represents” proposal, which called for allowing capitalists to join the Communist Party, a proposal he first raised while touring Guangdong in February 2000 and then formally announced on July 1, 2001, during a speech celebrating the eightieth anniversary of the CCP’s founding. Jiang argued that as China’s private sector expanded, the party had to ensure it was assimilating “productive elements” into the political system. Private entrepreneurs, he argued, should join workers, farmers, intellectuals, cadres, and PLA soldiers as “worthy people . . . who are loyal to the motherland and [to] socialism.”

Even throughout the heady days of “reform and opening” in the early 1980s, the party had viewed the private sector and entrepreneurs with a mix of political and ideological skepticism. While select individuals were lauded for their contribution to China’s modernization efforts, as a class, capitalists were blamed for the “evil winds” blowing into China, including crime, corruption, and the deterioration of socialist values. Official recognition of the private sector was hemmed in by a long ideological tradition of treating the private sector as “exploitative.” Through 1988, private firms had been prohibited from hiring more than eight workers, a limit which purportedly came from a passage in Marx’s Das Kapital. That year, the National People’s Congress amended the constitution to include language that read, “The private sector of the economy is a complement to the socialist public economy.” After the Tiananmen Square protests, conservatives blamed the private sector for its role in inciting social instability, and a ban on recruiting capitalists into the party was put in place.

The period after Deng’s Southern Tour saw a renewal of official support for the private sector, this time under the increasingly enthusiastic leadership of Jiang Zemin. On May 29, 1997, Jiang gave a speech at the Central Party School in which he declared China to still be in the “primary stage of socialism,” a phrase the purged Zhao Ziyang had used in 1987 to justify the increasing prevalence of capitalist activity. In 1999, the constitution was again amended to further elevate the private sector as an important component of the “socialist market economy.”

While conservatives were largely sidelined from power, they were not entirely helpless as the party moved to embrace the market economy. As with the wanyanshu, they published a series of scathing critiques of Jiang’s plan to welcome private entrepreneurs, primarily in two official journals: Pursuit of Truth (Zhenli de Zhuiqiu) and Midstream (Zhongliu). While their circulation was small, they were highly influential in official circles and were two of the only remaining publications willing to publish conservative attacks on the reform agenda. Both publications had powerful backers (called “houtai”), including former Premier Li Peng, Wang Zhen, a former general and one of the Eight Immortals of the CCP (elite party cadres who played a substantial role in the founding of the PRC), and most importantly, Deng Liqun.

In article after article, the two journals savaged Jiang’s capitalist amnesty plan when it was still being formulated.

Among those writing articles protesting the decision to bring capitalists into the party was Zhang Dejiang, who served with Xi Jinping on the Politburo Standing Committee between 2013 and 2018. In a 2000 article for Party Building Research which was excerpted in Pursuit of Truth, Zhang declared, “We must be clear that private entrepreneurs cannot join the Party.” As a vanguard political organization, Zhang said, the party must not allow individuals who would alienate the party from the masses, or weaken the party’s ideological convictions.

Yu Quanyu, a longtime party propagandist who was appointed editor-in-chief of Pursuit of Truth’s in 1999, called Jiang’s proposal an “international joke.” He added:

Over the past few years, owing to the selling-off of SOEs, the shrinking of the collective economy, the huge development of the private sector, and corrupt elements in the Party and government, the masses of this country, especially those who are unemployed, have been laid-off, and those public officials who do not receive their wages on time, are brimming with dissent, complaints, and emotion.

More controversially, in the spring of 2002, Deng Liqun and sixteen other former high-ranking officials addressed an open letter to the Central Committee, nominally Jiang Zemin’s boss, accusing the General Secretary of “political misconduct unprecedented in the history of our Party.” The letter argued that his proposal to allow capitalists into the party was a violation of Marxist theory, violated the basic statutes of the party, and was in opposition to the will of the people. As punishment, “Comrade Jiang Zemin needs to carry out serious self-criticism within the Party regarding his misconduct in order to remove ideological confusions that have been caused by his misconduct and to undo its negative consequences.”

The wanyanshu of the mid-1990s had always been careful to avoid direct attacks on specific leaders and had framed their criticisms as differences over ideology, not politics. Now, however, conservatives felt their old tactics weren’t working, and the pace with which the CCP was “changing its colors” necessitated new methods of dissent. “The open challenge to the party leader by a group of senior party members acting as a group appears unprecedented,” observed Boston University’s Joseph Fewsmith in early 2002.

Jiang’s reaction was swift and severe. He shuttered Midstream and Pursuit of Truth, ordering future leftist opposition to be “exterminated at the budding stage.” Conservatives fiercely protested the closing of these two remaining vehicles for voicing disagreements on official policy, but there was too much at stake for Jiang to back down. The next year was a leadership transition year, always the most sensitive period for China’s political system. “The decisions have already been made, and opposition is futile,” an editor at one party magazine said of Jiang’s actions.

As China approached the Sixteenth Party Congress in late 2002, the prospects for socialism in China appeared dim. After two decades of harassing the reform agenda, it seemed as though the strong-arm tactics of Deng Xiaoping and Jiang Zemin had finally broken the back of leftists and conservatives. The small number publications willing to print their reform critiques had largely been decimated by government censors. Opposition to Jiang’s plan for capitalists to join the party had failed. Under the leadership of Premier Zhu Rongji, painful reforms were being made to China’s state-owned sector, leaving tens of millions of workers unemployed and billions of dollars in state assets in the hands of private investors. In late 2001, China joined the World Trade Organization, a move that seemed to many to portend a fundamental political transformation for the country.

After decades of challenging the reform agenda, the “moral left,” in the words of scholar Michael Schoenhals, “does not pose a threat to stability—and by extension the current Party leadership—in organizational terms, as it lacks even a semblance of cohesion.” Yet by the early 2000s, an embryonic pan-leftist backlash was taking root, and for all its ideological differences (and they were many), it was held together by a common lament—that the Communist Party was abandoning socialism for capitalism, and embracing economic growth at all costs. END

This week’s issues of Sinocism:

More bad economic data; US-China talks; Another Xi inspection tour and speech-9.16

Trade talks; US DoJ announces two new China-related cases; Sports industry gets more policy support -9.17

Xi’s Henan inspection tour; US-China struggle at the UN; National Day preparations-9.18

Trade talks; People's Daily and PropagandAI; Major changes unseen in a century-9.19

Sign up for the 4X weekly Sinocism China Newsletter. Group and education discounts are available.