With an Official O.K., Capitalism Takes Off

When on Jan. 19, 1992 Deng Xiaoping's special train rolled into the freewheeling Shenzhen special economic zone just across the border from Hong Kong, China was still in the throes of a neo-Maoist restoration triggered by the June 4, 1989 massacre in Beijing. At 87 years of age, Deng knew the trip might be his last chance to save his economic reform program and to remove some of the stain that June 4 had left on his legacy. There is no other option open to us, he was reported as saying before he left Beijing. If the economy cannot be boosted, over the long run we will lose people's support at home and be oppressed and bullied by other nations throughout the world. A continuation of such a situation will only lead to a collapse and disintegration of the Communist Party.Deng at the time was neither party chief, premier nor president--but remained China's paramount leader. He chose Shenzhen as the site for his call to accelerate reforms because the entrepreneurial boomtown symbolized the power of the marketplace. After all, while China then had an average per capita income of only about $380 a year, Shenzhen's had already risen to more than $2,000. Deng told the assembled and somewhat incredulous Shenzhen officials that if China insisted on being like a woman with bound feet and refused to stride boldly forward into the marketplace, it would founder. Deng's trip quickly became known as his nanxun, or southern inspection tour, a term that harked back to the trips emperors once made around China. Their presence was said to xunxing, or bring heavenly fortune, on the regions they visited. Accompanied by his son and a daughter plus a coterie of advisers, Deng turned the trip into a whirlwind of capitalist evangelism, making one stunning utterance after another challenging the canons of orthodox Marxism-Leninism. Making revolution means liberating the productive forces, he declared in a manner calculated to antagonize party neo-Maoists still enamored of central planning and state ownership. Deng called on Chinese to forget distinctions between socialist and capitalist means of production and to adopt whatever economic strategies worked to produce goods and services, just as so many entrepreneurs were doing in Shenzhen. Deng even surfaced at Shenzhen's just-opened stock exchange, unrepentantly insisting that there was no reason such institutions should be viewed as the exclusive preserves of capitalists. For Marxists, such pronouncements were the equivalent of a fundamentalist preacher extolling the virtues of gambling from inside a casino. But perhaps the most provocative thing Deng said on his hegira south was that, while good party members must watch out for the right, they must mainly defend against the left. Why? Because the left is more dangerous than the right, because the former has more power, he declared. This was a direct attack on Maoist hard-liners, who embargoed almost all news of Deng's nanxun from China's party-controlled media. It was a reminder that even a titanic, authoritarian figure like Deng could find himself thwarted by factionalism. It was not until a month later, after an edited collection of his Shenzhen speeches was finally published by allies as Document No. 2, that others in the leadership hierarchy began grudgingly to endorse Deng's important remarks. By the end of February, the People's Daily was finally editorializing in favor of Deng's call to kick-start China's flagging economy with capitalist methods. By intervening so resolutely in the leftward policy drift of the time, Deng not only set China off on a radical new program of economic reform, but cast a die that continues to serve as an important mold for the economic policies of leaders like Premier Zhu Rongji today. Orville Schell, dean of the Graduate School of Journalism at the University of California, Berkeley, is the author of the forthcoming Virtual Tibet