The Shocks in China That Were Heard (and Not Heard) Around the World

November 4, 2021   •   By Lev Nachman

How China Escaped Shock Therapy: The Market Reform Debate

Isabella Weber

June Fourth: The Tiananmen Protests and Beijing Massacre of 1989

Jeremy Brown

FOR STATES LIKE Bolivia, Hungary, Russia, and the People’s Republic of China (PRC), the 1980s were defined by shocks. Some shocks were economic, such as the revamping of state-controlled planned economies into liberalized open economies. Other shocks were social — civil societies revolted against their authoritarian governments and demanded more liberties and freedoms. Some shocks succeeded in integrating economies into the global market while also granting more civil liberties. Some shocks led to disaster.

It may seem odd to pair here a book, Weber’s, that is a largely top-down look at economic reform with a book, Brown’s, that is a largely bottom-up look at a massacre. But when it comes to China in the 1980s, the protagonists, narratives, and tragedies in the stories told in these books by an economist, in one case, and a social historian, in the other, are closely intertwined. And there is another connection between the books: both provide insights that redefine the importance of the 1980s in China. Through in-depth interviews, archival work, and deep readings of primary and secondary sources, both books tell interwoven tales of reformers striving to make China a better place.

Weber tells the story of the shocks that were not heard. “Shock therapy” refers to an aggressive, abrasive, and ultimately destructive short-term economic reform package that, on paper, can lead to successful market reform. It is exactly what China in the 1980s did not do. Instead, the Chinese Communist Party opted for a more progressive reform strategy that slowly liberalized some industries while keeping others under state control, called the “dual-track” approach. Typically, Chinese economic debates are filtered through the dichotomy of “reformers” versus “conservatives,” but that is not where the battle for “dual track” versus “shock therapy” lay. Instead, Weber paints a picture of the variation within the “reform” camp. Bitter fights broke out for years between pro-reform economists as to which strategy would lead to stable markets while doing the least harm to Chinese society.

Weber uses the game of Jenga as a metaphor for understanding the debate. The game of Jenga involves pulling rectangular bricks out of a tower and stacking them back on top. The goal is to pull one brick out at a time without making the tower of bricks collapse. Shock therapy is akin to knocking the whole tower of bricks down at once and building the tower back from scratch with a liberalized market economy. The dual-track approach involves taking one brick out at a time. Rather than destroying the old system in one go, the system is incrementally liberalized and select industries are slowly opened to free-market competition.

Both systems on paper had their advantages and disadvantages. The shock approach would hurt civil society by pulling the economy out from under their feet by removing all mechanisms of a planned economy all at once. The damage would impoverish millions, but it would also allow for the cleanest start to a new system that removed all former planned practices. The dual-track approach that slowly reformed would still hurt civil society, but much less drastically. The dual-track approach however was more susceptible to corruption, and economists worried if a slow change would eventually regress back into old ways. It was a choice similar to pulling a Band-Aid off at once or slowly peeling it off. To a degree, inflation, corruption, and public trust in the government would all be shaken regardless of which choice reformers made. It was the job of these economists to figure out which choice would do the least harm to Chinese citizens while maximizing China’s ability to liberalize and grow.

But the substance of these debates is only part of Weber’s story. The true drama lies in whom they were trying to convince: Premier Zhao Ziyang. Zhao eventually sided with the dual-track approach, but only after years of research, testing, evaluation, arguing, and slow implementation. Zhao and his young economists also closely studied and engaged with their Eastern European counterparts, especially in Hungary — which also avoided shock therapy. Weber also elaborates how Latin American economists heavily influenced China’s plans for economic reform. The Party went through laborious efforts to carefully plan its economic reform — not because they were operationally slow, but because Zhao and his team of economists genuinely wanted to make sure they were helping China as best they could without causing major societal harms. Once Zhao selected the dual-track approach, it was up to him to defend it to his boss: Deng Xiaoping. At different times, Deng supported or opposed the dual-track reform and even demanded shock therapy in 1988.

But that year, despite Zhao and his economists’ best efforts, inflation was on the rise and civil society was unhappy with the state of economic and political reforms. The tragic irony is that, in 1988, Deng backed off from pushing for shock therapy due to worries about its potential to undermine the CCP’s authority and the Party’s ability to contain society. Of course, just months later in 1989, the Party faced these threats nonetheless.

Weber argues, furthermore, that there is no such thing as uniquely “Chinese” or “Western” economic thought. Instead, the debates that the PRC had in the 1980s over political economy, the state’s relationship to the market, and when that relationship should change, are topics that people in China and most other countries have historically debated long before the modern era. Weber goes so far as to spend a dedicated chapter on classical Chinese economic texts including the Salt and Iron Debate (discussions on which industries the state should control as well as —specifically — if and how the state should monopolize the salt and iron industries). She uses these texts not to suggest that the PRC leadership was looking to classical texts to decide its economic policy, but rather that the common wisdom of the time — that China had no historical point of reference for economics — is blatantly false. Weber uses these old debates within China as a useful metaphor for the 1980s throughout the book. Her critique of how we discuss Chinese economics historically is an important intervention, but the metaphor of classic texts at times feels like a hammer for whichever example in the book becomes a nail.

Weber’s book ends where Brown’s begins — with the 1989 protests. If Weber focuses on shocks that were not heard, Brown tells the story of shocks that were heard. The state violence that ended the 1989 upheaval definitely shocked many people around the world, especially when images of tanks rolling into Beijing appeared on television screens across the globe. Despite Party reformers’ meticulous efforts to avoid big bangs in the 1980s, the decade ended with one of the biggest bangs imaginable in the form of nationwide protests and civil disobedience. Weber and Brown both convincingly argue that the economic contexts of the late 1980s are necessary to understand the protest movements that erupted all over the country in 1989. It was not just the protests that shocked China though — the shock also came from Deng’s decision to quell protests using violent means, which is what most narratives of 1989 center on.

Brown’s book tells what he describes as the “victim-centered” approach to 1989. In a powerful and sometimes almost personal account of the 1989 protests, Brown retells the story of what happened in Beijing and elsewhere in China using perspectives often overlooked by scholars. Rather than focus primarily on the same handful of student leaders and the PRC leadership, Brown ties in forgone voices that were central to the events surrounding 1989. One of his biggest interventions is a critique of the male, Han-student-centric perspectives that traditionally predominate in studies of Tiananmen. For example, Brown makes a compelling argument to reconsider the case of Chai Ling, a woman who has faced much sexist victim blaming by much of the Tiananmen scholarship.

Another one of Brown’s most powerful contributions is his retelling of the Beijing Massacre (instead of the Tiananmen Square Massacre) — a title for the event he argues has merit since the majority of violent killings happened around Beijing en route to Tiananmen Square rather than in the Square itself. In his recreation of the Beijing Massacre, Brown shares a series of individual stories about the people killed, taking extra care to name them, describe who they were, their profession, and how they came to be out and about during the crackdown. Brown describes these average citizens — not student protesters — as the unsung heroes of 1989. According to Brown, many of these individuals were out on the streets to push back against the PLA’s use of martial law and brutal military crackdown. Brown connects these narratives to show that, as the crackdown began, Beijingers who were not initially participating in the protests began to resist. Since so many average citizens who were not necessarily protesters were killed during the massacre, Brown argues, they should be more central in our understanding of what happened in 1989.

Another novel analytical frame Brown employs is the counterfactual — asking a series of “what if” questions ranging from what if Zhao Ziyang and Li Peng were able to successfully engage with the students to what if the PLA refused to fire on protesters. Each section of his book is dedicated to these alternative paths and offers some well-educated hypotheses about what might have happened if events had taken different turns. Many of these thought experiments are fascinating, while some others fall flat. For example, at one point the question of “What if Chai Ling had self-immolated?” is proposed in a way that feels slightly careless in an otherwise extremely thoughtful discussion of her involvement.

The shared tragedy in both of these books is that the main protagonists in each ultimately meet the same end: purge. The two different groups, the protestors and the young economists, were by no means natural allies. But both groups ultimately shared the same goal: reform and the betterment of China. Neither wanted to tear down the system and start from scratch but wanted instead to liberalize institutions that were in clear need of reform. In the end, the economists who argued for dual-track reform — who should be credited with saving China from shock therapy — were punished for their affiliation with Zhao Ziyang. Protesters around China — who put their lives at stake to demand a more open and just society — shared a similar fate, many of whom paid the ultimate price.

In other parts of the world, shocks unfolded differently. Hungary escaped shock therapy and successfully transitioned away from a planned economy while avoiding the type of mass civil unrest seen in China. Russia utilized shock therapy, leading to hyperinflation and harsh economic conditions across the country. The residual effects can still be seen today. Places like Poland saw civil liberalization that shocked the world, with its anticommunist Solidarity campaign winning 100 seats in Poland’s senate the same day as the Beijing Massacre. As both these books reflect, no outcome of shocks, economic or civil, are inevitable.

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Lev Nachman is a postdoctoral fellow at the Harvard Fairbank Center for Chinese Studies and holds a PhD in political science from the University of California, Irvine.