CHINA: THE NATIONAL POLITICAL SCENE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00447R000201680001-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: June 8, 2010
• Sequence Number: 1
• Publication Date: June 6, 1985
• Content Type: MEMO

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Central Intelligence Agency .
DIRECTORATE OF INTELLIGENCE
China: The National Political Scene
6 June 1985
Summary
Reformers led by Deng Xiaoping have experienced a tense
spring as they prod the querulous Chinese bureaucracy
forward on a broad political and economic agenda. Economic
policies approved last year have stimulated growth but have
created both economic and political problems. Bureaucratic
streamlining and rejuvenation have been resisted by
midlevel officials anxious to protect their positions and
perquisites. A party conference planned for September has
become the self-imposed deadline for pushing through
substantial changes in the national and provincial
leadership. Although we assume that the behind-the-scenes
politicking over impending personnel moves is particularly
intense--a generational struggle between party elders and
younger technocrats--Deng's problems amount to managing
conflicting opinions and recommendations within the reform
group rather than contending with implacable political foes
seeking to topple his rule. The reformers will continue to
manage tensions through tactical policy adjustments while
continuing to apply pressure on the all important personnel
questions.
A Sense of Urgency
Beijing's current policies all share a succession angle. Deng, 80 and
China's paramount leader, intends to pass full authority to party General
Secretary Hu Yaobang and Premier Zhao Ziyang, his designated political
This memorandum was prepared by I Domestic Policy Branch,
China Division, Office of East Asian Analysis in response to a Treasury
Department request. Questions and comments are welcome and should be
directed to the Chief, Domestic Policy Branch, OEA
85-10102
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heirs. To facilitate a smooth succession, the three want to achieve as
much as possible while Deng is physically able to remain personally
involved. Moreover, the reformers have sought to capitalize on the
momentum generated by last autumn's party plenum, which endorsed the
sweeping decision to restructure the Chinese economy. Beijing has
consistently sought to justify its push for speed by maintaining that
China's problems are interrelated and that piecemeal approaches cannot
solve them.
Durable reform in China hinges upon personnel issues, not only in the
areas of bureaucratic reorganization and party rectification but also in
economic reform. The reformers have generally succeeded in placing their
own men at the bureaucratic nerve centers, atop the main national and
provincial hierarchies. Deng and his allies have consistently made the
personnel issue their number-one priority and this year are determined to
produce better results in rejuvenating China's economic and military
bureaucracies.
Bureaucratic rejuvenation remains a volatile issue, however, because it
directly threatens the personal livelihoods of countless superannuated,
incompetent, or politically unreliable officials. To implement
comprehensive reform, Beijing must overcome the resistance not only of
midlevel officials who refuse to comply with retirement guidelines, but
also of national leaders who have so far failed to set an example by
retiring. Deng himself, by retaining the key post of party Military
Commission chairman, provides unintended encouragement to his generational
peers, who in many cases will not step aside until Deng does.
Political Forces
It is impossible to overstate the centrality of Deng. Although he
routinely disclaims a key role in most policy formulation, his influence
and personal involvement are more evident than ever. In almost every
important instance, he remains the principal expositor of Chinese policy.
The party wants to convey an impression that a single strong leader is
controlling political events, and in doing so, Beijing's propagandists have
created a small personality cult around Deng.
Deng, Hu, and Zhao--along with leaders such as Vice Premier Wan Li and
Secretariat member Hu Qili---are the heart of the group conventionally
identified as "reformers." The working consensus that Deng seems to have
formed within the leadership changes composition over time, however, as
Deng's policies cut deeper and deeper through the beliefs of the party's
old guard. Several senior leaders who at one time or another have been
identified as Deng's allies--for example, Ye Jianying, Wei Guoqing, Peng
Zhen, and Chen Yun--have fallen away from Deng as his program gradually
departed from Chinese Communist precedent. The growing importance of a
younger generation of leaders is symbolized by the shifting locus of
day-to-day decisionmaking power from the geriatric Politburo to the more
active Secretariat and State Council.
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Although the Central Committee endorsed Deng's economic program at the
October'plenum, the reforms continue to face. opposition at middle and lower
levels of administration. Such opposition as exists, however, is
amorphous: it is not concerted and has no single spokesman, nor is it
directed at a single issue or personality. Basically, it is composed of
disgruntled party and army veterans, beneficiaries of the Cultural
Revolution, and incompetent party hacks, all of whom perceive that their
interests are jeopardized by the new policies and the emphasis on youth and
expertise. There are also signs that economic policy and related issues
have created strains and disagreements with the Politburo, pitting
conservative party elders against younger reformers. Although Deng and his
allies take these diverse interests into account and have demonstrated a
willingness to compromise, pressures within the leadership may continue to
grow as the sequence of personnel and policy deadlines advances.
Issues
The Economy. The blueprint for economic reform endorsed by the October
party plenum represented a clear victory for Deng and his successors and a
setback for leaders like Chen Yun who advocate a greater degree of central
planning. The plenum called for such controversial measures as
decentralization of planning authority, comprehensive wage and price
reform, greater reliance on material incentives and competitive business
practices, clear separation of party and managerial responsibilities, and
appointment of technically competent personnel.
Policy implementation, however, will be long and difficult. Deng and
his allies have given themselves five years and are prepared to ride out
expected problems such as the inflation, excessive investment in fixed
assets, and rise in official corruption-that were criticized at the recent
session of the National People's Congress. Hu himself suggested resistance
will come from planners in Beijing and local administrations who stand to
lose authority. Enterprise managers and party officials are also
concerned: Beijing plans to replace 40 percent of all managers and 70
percent of party committee members in China's 3000 key industrial
enterprises within the year. Threatened officials appear already to have
seized upon early problems and dislocations to challenge the correctness of
current policy and press for changes in their favor.
Party Rectification. Beijing views the three-year rectification
process--a combination of indoctrination, recruitment, and political
purge--as a key to policy implementation, restoration of the party's
damaged credibility, and the political survival of Hu and Zhao. Although
Beijing has recently softened its stance on membership suitability, Hu
recently told foreign journalists that some 60,000 members failed to
qualify for reregistration during the first year of rectification, which
involved nearly a million party members at the top national and provincial
levels.
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Party reform is now in its-second stage and will-involve some 13.5
million members over the next year. Beijing has stressed the need to
reassert discipline over wayward party members who have taken advantage of
reform to enrich themselves. Another key problem is the continuing legacy
of the Cultural Revolution. The national party leadership is still
struggling to undo the damages wrought by the extreme radicalism and
factionalism of the 1960s and to put that era behind them. In our view,
however, the Cultural Revolution as an issue, and the divisions it spawned,
will not die until its participants do.
Organizational Reform. Beijing seeks to install, at every
administrative level, officials who are younger, technically competent, and
in tune with Deng's political and economic reforms. According to the
Chinese press, initial reorganization efforts are complete down to the
county level, and a large force of "reserve cadre"--some 100,000
prospective leaders awaiting headroom for promotion--has emerged through a
careful selection process. Hu Yaobang recently told foreign correspondents
that some 900,000 overaged officials had retired through 1984 and that
approximately 1.1 million more would go this year. He also allowed that
Beijing would undertake a host of personnel moves early this summer,
affecting the national party leadership, ministers and their deputies, and
provincial party secretaries and governors.
These changes should help Beijing inch closer to improved bureaucratic
compliance in policy implementation, but problems remain. Some
organizations almost certainly will continue to stall on enforcing
retirement guidelines and will allow superannuated officials to hide in
bureaucratic anonymity. A variety of means still exist for outgoing
officials to maintain their authority through proteges. New appointees who
fail to produce immediate results are targets of charges that their youth
and professionalism are poor substitutes for the experience of their
predecessors.
Army-Party Relations. Since he assumed the chairmanship of the party's
Military Commission in late 1980, Deng has generally been able to win the
cooperation of conservative senior soldier-politicians. Army-party
relations have been relatively smooth under his leadership. Recently, Deng
has called on the Chinese military to support more fully his economic and
political reforms, renewed pressures on veterans to retire, and proposed an
extensive army reorganization for 1985 that includes a force reduction of
approximately 1 million troops. These efforts, along with reports that Hu
Yaobang will replace Deng as chairman of the party Military Commission some
time this year, have troubled some senior military personnel. Their
concerns do not appear to have slowed Deng, however.
Deng's main effort has begun to pay off: the superannuated or
incompetent officers he seeks to retire are gradually yielding to the
combination of attractive retirement benefits, lenient rectification
treatment, and political prodding. This year he is focusing on shaking up
the broad corps-to-military region layer of command, and--judging by the
number of younger officers moving into important posts--seems to be making
significant progress.
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Ideology and Control. Recent statements by Deng and Hu impart the
determination of China's reform leadership to create a "socialism with
Chinese characteristics." Practically, this translates into "socialism
with fewer Stalinist characteristics"--less reliance on comprehensive
planning, heavy industry, and agrarian collectivism and greater attention
to market forces in determining prices and allocations. In departing from
their orthodox ideological inheritance, the reformers have been hard
pressed by party traditionalists to justify current policy in familiar
socialist terms. The response has been largely to redefine how "socialism"
should be understood. Recent remarks by both Deng and Hu point to an
impending shakeup in the party propaganda apparatus to bring it into line
with reformist thinking.
Although Beijing may have discarded many Marxist and Maoist ideological
tenets, the principle of Leninist party control remains securely in place.
Nevertheless, some reform leaders have sought to woo China's educated elite
to their cause by relaxing party restrictions on creative freedoms, and Hu
Yaobang especially seems willing to go farther than most party leaders to
grant Chinese intellectuals piecemeal concessions. Hu's relative
liberality has a flip side, however: in a recent speech he insisted that
creative license does not apply to the official party media and that
freedom to write does not necessarily imply freedom to publish.
Unfinished Business
Party Conference. An extraordinary party Conference of Delegates is
scheduled to convene in September, and Deng and his allies have made no
secret of their intention to pack the party's top organizations--the
Central Committee, Secretariat,. and Politburo--with supporters of reform.
Hu has indicated that between 30 and 50 new Central Committee members would
be named and claimed that his protege, Hu Qili, would be elevated to the
Politburo. Deng may also chose that forum to announce his "retirement"
from the chairmanship of the Military Commission. The Conference is also
slated to take up the next five-year plan.
Succession. When Deng dies or becomes incapacitated, Hu Yaobang must
contend with Deng's generational peers, men such as Peng Zhen, Chen Yun,
and Li Xiannian, whose standing and influence are basically independent of
Deng. In our view, the structure of party power is such that Hu cannot
expect to fill Deng's key role as undisputed arbiter of policy immediately
upon Deng's death. Hu does not enjoy his mentor's prestige, personal
relations, or bureaucratic connections. Although Hu has become a
formidable political figure in his own right and will remain in the key
party post, his authority in the post-Deng period will be tested by others,
including revolutionary elders such as Peng and Li, who may aspire to the
role of final decisionmaker.
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1 - Douglas Mulholland, Special Assistant Secretary for National
Security, Room 4326, Main Treasury, Department of Treasury
1 - Mary Yee, Office of East-West Economic Policy, Room 4426, Department
1
of Treasury
- Executive Director (7E12)
1
- DDI (7E44)
1
- NIO/EA
(7E62)
1
- C/EA
5D10)
1
- C/PES
7F24)
1
- PDB Sta
ff (7F30)
1
- CPAS/IL
S (7G50)
5
- CPAS/IM
C/CB (7G07)
1
- D/OEA (
4F18)
1
- Researc
h Director/OEA
.(4G48)
2
- C/China
Division (4G3
2)
1
- C/China
Division/FOR
(4G32)
1
- C/China
Division/DOM
(4G32)
1
- C/China
Division/DEV
(4G32)
1
- C/China
Division/DEF
(4G32)
2
- OCR/ISG
(1H19)
1
- C/EAi
(5D38)
1-- FBIS/NEAD/CE (304 Key Building)
1 - C/DO/PPS (3D10)
DDI/OEA/CH/DOM (6 June 1985)
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