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14 September 2022

The long shadow of Chairman Mao

How China’s uneven ascent has been driven by debt and the Communist Party’s obsessive pursuit of social stability.

By Katie Stallard

How should we understand modern China? The most common narrative is also the most reductive: that, following the death of Mao Zedong in 1976, the Chinese Communist Party (CCP) endeavoured to stabilise the country and embarked on a path of “reform and opening up”, welcoming foreign investment and international trade. This led to the so-called economic miracle as China ascended into the neoliberal order (it joined the World Trade Organisation in 2001), built a high-tech empire of “instant cities”, special economic zones, high-speed rail networks, innovation hubs and globe-spanning infrastructure projects, and achieved regional superpower status.

But the truth was more complicated, and more interesting, as Mao’s successors wrestled with how to reconcile the horrors of his dictatorship with the need to preserve the CCP’s legitimacy. All but lost to the popular narrative is the memory of Mao’s successor, Hua Guofeng, who became party leader in 1976 before he lost an internal power struggle to Deng Xiaoping in 1978. Hua clung on to his formal titles as party chairman and chairman of the Central Military Commission for three more years, but it was Deng who would be remembered as the architect of China’s economic rise.

As the historian Frank Dikötter details in his new book, China After Mao: The Rise of a Superpower, the story of China’s economic development, and the CCP’s approach to economic reform, was more contested than is commonly believed. Dikötter, the author of numerous books on China, including a trilogy on the Mao era, argues that focusing on the country’s remarkable growth rates obscures the extent to which that growth was built on debt, creating economic problems – such as the crisis in the highly speculative property sector – that could undermine national stability. As Xiang Songzuo, a senior economist at Beijing’s Renmin University and a former deputy director of the People’s Bank of China, warned in 2019, “China’s economy is all built on speculation, and everything is over-leveraged.”

[See also: Why China won’t ditch Vladimir Putin]

For Dikötter, China’s economic history doesn’t show a ruling regime possessed with a “clear vision of how to steer the country towards prosperity”, but one beset by “interminable struggles for power” and fixated on the short-term maintenance of political control. “China resembles a tanker that looks impressively shipshape from a distance, with the captain and his lieutenants standing proudly on the bridge,” Dikötter writes, “while below deck sailors are desperately pumping water and plugging holes to keep the vessel afloat.”

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Dikötter’s study is not the “myth-shattering history of China” that its publisher claims, nor will it contain many surprises for close observers of the country. In the last five years books by George Magnus (Red Flags: Why Xi’s China is in Jeopardy), Carl Minzner (End of an Era: How China’s Authoritarian Revival is Undermining Its Rise) and Dexter Roberts (The Myth of Chinese Capitalism) have given cautionary assessments of the world’s second-largest economy. Like these, Dikötter’s highly readable primer provides a valuable corrective to the popular and more alarmist image of an unstoppable China that will supplant the US as the global hegemon.

Going behind the state’s formidable facade, Dikötter details the cheap labour and lack of workers’ rights; the influx of foreign investment and cheap credit that fuelled the country’s economic growth in the late 1990s and early 2000s; and the countless warehouses full of unsold goods. “By 2005 roughly 90 per cent of all manufactured products were in chronic oversupply,” he notes. Yet rather than unprofitable factories being forced to close, they were invariably propped up by new loans, taking on more debt and churning out more unwanted goods in the pursuit of economic targets and the party’s all-consuming pursuit of social stability.

The effects of China’s manufacturing boom extended beyond its borders: it drew away manufacturing jobs from Mexico and the US and flooded Asian markets with cheap goods that undermined domestic producers. While US officials had presented China’s accession to the WTO in 2001 as an opportunity to open up its markets to Western firms, it soon became apparent that Beijing was protecting the financial interests of Chinese companies. By 2003, roughly 70 per cent of goods in American Walmart stores came from China.

The global financial crisis in 2008 intensified Beijing’s belief in the superiority of its political and economic system compared to Western disarray and decline. Speaking at the World Economic Forum in Davos, Switzerland, in January 2009, China’s then premier Wen Jiabao railed against what he called the “blind pursuit of profit” by Western financial institutions. “It looked very much like Karl Marx’s prediction about the collapse of capitalism was finally coming true, as unemployment soared and growth rates fell in the West,” Dikötter writes. That conviction has only been strengthened in the decade since, following the chaotic presidency of Donald Trump, the Brexit referendum in 2016, and the early mishandling of the Covid-19 pandemic in much of Europe and the US in 2020.

A persistent misconception about post-Mao China among Western leaders is the hope that economic reform would be followed by political reform. Chinese leaders have consistently dispelled this fantasy. “What we are setting up are special economic zones, not special political zones,” explained a group of senior officials in 1980 after the decision to establish the first four economic zones on China’s south-eastern coast. In 1998, almost two decades later, China’s premier Zhu Rongji explained to the former US president George HW Bush that it had no intention of ceding state control over the economy, never mind embracing further reforms; Bush believed he knew better, Dikötter writes, replying with a wink, “we know what is going on”.

Unlike Mao, who stoked revolutionary fervour among the masses when it suited his political purposes, his successors prize social stability above all else, employing increasingly advanced technology to help ensure it. Dikötter’s book ends in late 2012, when Xi Jinping rose to power. In Surveillance State: Inside China’s Quest to Launch a New Era of Social Control, Josh Chin and Liza Lin, two correspondents for the Wall Street Journal, pick up the story with an investigation into China’s present and future trajectory under Xi.

Building on years of reporting across the country, Chin and Lin explore the CCP’s attempts to harness Big Data and near ubiquitous surveillance networks to scrutinise, track, and even pre-empt the demands of Chinese citizens. The most dystopian use of this technology is in the far western region of Xinjiang, where credible estimates find at least one million Uyghur Muslims have been confined to internment camps in recent years. Surveillance State documents in excruciating detail the process by which Uyghur citizens have been forced to submit to iris and facial scans, as well as having their fingerprints taken, voices recorded, and blood drawn so that they can be more effectively monitored.

[See also: Xinjiang: a region of suspicion and subjugation]

The book also examines the less sinister applications of this technology, from traffic enforcement to mobile payment systems and the use of QR codes to trace potential Covid exposures. But even here, data capture evolves into yet another system for social control. In June, local government officials in the city of Zhengzhou were accused of tampering with the health codes of people who had been defrauded in a banking scandal in order to prevent them from travelling to a protest.

Chin and Lin avoid reducing “the story of this country of 1.4 billion down to a narrative of simple oppression”. They also emphasise that this is not just a Chinese story. Police forces in many countries, including the US and the UK, are trialling the use of facial recognition, while Western companies supply much of the underlying technology. “Many of these surveillance tools were invented in Silicon Valley, where tech giants use them to compile behavioural portraits of their users to sell to advertisers.” But where Google, Facebook and Amazon exploit this technology for profit, they write, “the Communist Party has adopted it as a means to maintain power”.

As Dikötter helps puncture the image of China’s inexorable economic rise, so Chin and Lin reveal the weaknesses of China’s “surveillance state”, a system that is more committed to delivering “the impression, if not the reality, of omnipotence”. Together, both books depict a regime that paranoically works to maintain political control even at the cost of sustainable economic growth, as Xi is demonstrating with his “zero Covid” policy. With Xi expected to secure a third term in power at the party congress this October, China has neglected the dire lessons of the Mao era and returned to personalised dictatorship. If China’s past remains contested, its future remains equally far from certain.

China After Mao
Frank Dikötter
Bloomsbury, 416pp, £25

Surveillance State
Josh Chin and Liza Lin
St Martin’s Press, 320pp, £22.99

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This article appears in the 14 Sep 2022 issue of the New Statesman, Succession