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After Deng, China still faces tough problems

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February 21, 1997
Web posted at: 10:39 p.m. EST (2239 GMT)

From Correspondent Mike Chinoy

HONG KONG (CNN) -- Deng Xiaoping will be long remembered for reforming China's vast economy, but the late Chinese leader, who died this week, left behind plenty of unfinished business.

"Deng orchestrated and brought about a fundamental restructuring of the entire Chinese economy that has produced one of the most spectacular bursts of economic growth that any country in the world has ever seen," historian Joseph Esherick said.

Explosive growth, however, has brought equally explosive social and economic dislocations. Along with booming factories that produce goods for London and Los Angeles have come repeated bouts of inflation, forcing many ordinary workers to struggle to survive.

Elimination of the anti-capitalist, Maoist police state has allowed the development of stock markets, successful entrepreneurs and Chinese millionaires, but the new freedom has also allowed rampant crime and corruption. Lawlessness is so pervasive that the government has been unable to control it despite a highly publicized nationwide crackdown.

Destruction of the communes and the socialist "iron rice bowl" life-long employment has released a tidal wave of unemployed Chinese -- by some estimates 100 million strong. Displaced peasants are flooding the cities in search of work.

Specter of mass unemployment

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After liberalizing its markets and permitting the formation of vigorous new businesses, the Chinese government is still stuck with tens of thousands of obsolete, money-losing, state-run factories. The government is afraid to privatize many of them for fear of putting millions of unemployed workers onto the streets.

Moreover, the Chinese Communist Party also is facing a crisis of identity and legitimacy.

"The biggest anxiety of the leadership is...can you keep the lid on this political system, can you somehow continue to be a 'in name' Communist Party, believing in Marxist-Leninism, running what is essentially a capitalist economy," Fan Gang of the Chinese Academy of Social Sciences said.

Deng gambled that as long as the Communist Party delivered the economic goods to the people it would be able to remain in power. So far that gamble has paid off.

But managing such a sweeping economic and social transformation in a country as vast and complex as China would be a colossal challenge for any government. And with Deng no longer at the helm, it remains to be seen if his chosen successors will be up to the task.


Expanded coverage:

  • World reaction
  • Clinton reaction
  • Deng's successors
  • China's challenges
  • China's milestones 1911-1989
  • Time Deng: One in a Billion

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