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From Party Chairman to Board Chairman

FOREIGN AFFAIRS

IN CANTON every year, when the flies disappear from the halls of the Dongfang Hotel and the humidity begins to subside, the People's Republic of China opens her doors to foreign businessmen for the annual trade fair. In the city's great exposition hall, German, Japanese, British and American dealers come to push their wares, examine Chinese products and take advantage of a little bit of foreign hospitality.

About three years ago, the members of Peking's foreign trade establishment decided that aside from the usual complement of light handicraft, textiles and the like, they should be pushing Chinese technology. And among the products shipped down to the fair for display were several brands of Shanghai-produced batteries.

At the end of the fair, when they counted the receipts and examined the prospects for profits, the Chinese noticed that one line of batteries hadn't sold too well. The "Swan" line had gone over fine but the type embossed with palm trees and the brand name "White Elephant" had claimed very few buyers. Sure, they had listened when the Americans told them that the brand would not sell--something about the connotations of the name--but they had not heeded the advice.

If everything goes according to plan, that will never happen again. In the "new" Chinese ago of pragmatism, the era when the onetime "capitalist roaders" and the "stinking ninth category" of the intellectual elite will entrench themselves in power and Deng Xiaoping will not bat a hairy eyebrow when he labels Mao Zedong an "ultraleftist," people will lose their jobs for mistakes like that. For the signals emanating from the Great Hall of the People in the last two weeks tell us that in the ongoing struggle between economic growth and ideology, profits have become more important than politics.

The giant portraits of Mao and Stalin and Lenin and Marx that used to hang in Tien An Men Square have already begun to gather dust in a Peking warehouse and the Chinese are speaking a new language. Call it the language of capitalism or pragmatism or Deng but the vocabulary is different: market forces, decentralization, small-scale enterprise, "special economic zones." If you listen to the speeches long enough, the sounds coming from the Great Hall resemble a Raytheon board room more than a conference of command economy planners. "The only test now is whether it works," one young party member told a visiting journalist recently. "We couldn't care less about ideology."

Some of the new Peking vocabulary sounds unexpected--a national income tax, and incredible stress on incentive--but China's new course is not the "sudden shift" that some have labeled it. Faintly tinged with ideas tried after the great failure of the Great Leap Forward, it is more the culmination of post-Gang of Four policies than a clean, radical break with the past. More than anything, in fact, it is a symbol of Deng's new muscle--finally, he feels, he is powerful enough to do what he has always wanted to do.

BUT DENG'S ATTEMPT to correct what he now publicly calls "the Cultural Revolution mistake"--a period of Maoist excess which, some analysis believe, threw China 20 or 30 years back in technology--will be much more difficult to effect than the Chinese leaders, or foreign journalists, would have us believe. There was a great optimism following the last bang of the gavel in the Great Hall: a new leadership, a reaffirmation of will, a "new" plan. But beyond the talk of economic modernization--a goal that China must undoubtedly pursue--lie obstacles that the best rhetoric and the most carefully laid plans may not overcome as quickly as the Chinese want. It's easy enough to study the Japanese, Yugoslavian and even (God forbid) the Taiwanese models but it is another thing altogether to succeed in implementing such policies. And the barricades that Deng and his men must tear down will not fall easily.

The new stress on decentralization in economic planning--allowing provincial "corporations," for example, to trade directly with the outside rather than going through Peking middle men--is partially an attempt to circumvent the massive Chinese bureaucracy. Hopelessly out of touch with the rest of the nation, and filled with left-leaning officials from the Cultural Revolution who are none too sympathetic to Dengist ideas, the bureaucracy may prove a terrible trap. Even if the Chinese do succeed in stimulating local production, upgrading provincial technology and putting locales into competition with one another, they must still break through the government's rigid top-to-bottom structure. Anhui province may succeed in upgrading electrical equipment factories but nothing guarantees that those new techniques will spread. In fact, in the atmosphere of 'to each according to his work," there may be new resistance to the sharing of ideas for, as in freer economies, to the victor will belong the spoils.

It may also be true that China's stocks of resources are vast--in oil, for example, the Pohai Gulf, the grand Daqing field and other "new finds" in Harbin--but China must still look outside for the methods to recover its materials. Once thought to be the solution to China's technology problems, joint ventures--in which Western nations supplied the expertise and technology and the Chinese supplied the raw goods--have fallen on hard times. The Chinese have proved willing to share the wealth, but not always to the satisfaction of foreign firms. And once the plants have been constructed, China has proved unable to take its state-of-the-art knowledge--state of the art in the 1950s and 1960s, that is--and keep the plants running.

An even greater problem--highlighted by the recent deaths of Chinese experts in an oil drilling platform accident--is China's continuing inability to produce the scientific and technical elite that new economic plans require. Opportunities to enter higher education remain strictly controlled; recent studies by manpower experts indicate that the demand will continue to outstrip the supply. The forced exodus of experts to the countryside during the Cultural Revolution has caught up with China; the government's recent decision to spend $670 million to upgrade the salaries for those purged is evidence enough of the manpower drought.

BUT MOST IMPORTANT, the economics of pragmatism threaten to exacerbate China's two great silent schisms. The urban standard of living--coupled with increased opportunities for education and advancement--will continue to outpace the lifestyle in rural areas. The problem is already acute--the memory of extended country vacations during the Cultural Revolution are vivid--and new incentive systems and the influx of industry into provincial urban areas can only make things worse. The embarrassing stresses produced by the city/country gap--including much-publicized visits by impoverished farmers to Peking to demand high standards of living--may multiply to the point of instability.

Behind the unified air of the People's Party Congress and the monotonous calls for economic growth, there lurks political dissent. What analysts once called a move toward democracy in China, highlighted by the campaigns on Peking's Democracy Wall, has halted. But banning wall posters and installing lieutenants in the bureaucratic grooves does not insure stability. By saying they could 'not care less" about ideology, party leaders have taken a strong ideological position. No matter how hard Deng tries to prepare China for his passing, no matter how hard he chips away at the myth of Mao, the so-called left wing of the party will not be stilled.

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