CHINA: THE CONSERVATIVE CHALLEGE TO REFORM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00907R000200290001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 23
• Document Creation Date: December 22, 2016
• Document Release Date: May 21, 2012
• Sequence Number: 1
• Publication Date: September 1, 1987
• Content Type: REPORT

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Directorate of Seeret
Intelligence
Challenge to Reform
China: The Conservative
An Intelligence Assessment
Secret
EA 87-10042
September 1987
Copy 2 5 9
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Directorate of Secret
Intelligence 25X1
Challenge to Reform
China: The Conservative
Division, OEA,
This paper was prepared byl (Office
of East Asian Analysis. Comments and queries are
welcome and may be directed to the Chief, China
Secret
EA 87-10042
September 1987
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China: The Conservative
Challenge to Reform 25X1
Key Judgments Since the student demonstrations in late 1986 and the ouster of Hu
Information available Yaobang as General Secretary of the Chinese Communist Party in
as of 1 July 1987 January 1987, a group of party elders distrustful of the rapid pace and
was used in this report.
broad scope of reform in recent years has forcefully reasserted its
influence. This group, which for convenience both we and the Chinese call
"conservative," consists of leaders who initially supported Deng Xiaoping's
reform program but have grown alarmed by the direction of reforms in
recent years, which they fear threatens party authority and China's
socialist system. Among the conservatives are many of China's most
influential party figures: Chen Yun, Peng Zhen, Bo Yibo, Wang Zhen,
Yang Shangkun, Hu Qiaomu, and Deng Liqun. Some of these men are
close confidants of Deng Xiaoping, others-especially Peng Zhen-long-
time rivals.
Although they share concerns, we believe the conservatives represent at
most a loose coalition. Their success in imposing ideological strictures on
reform and in increasing the power of their supporters at the expense of
younger reform leaders will depend largely on whether they can maintain
their uncharacteristic unity or, as in the past, are outmaneuvered by Deng
Xiaoping.
In our view, this group can be roughly subdivided into economic thinkers,
party stalwarts and military conservatives, and ideologues. Economic
conservatives want tighter central control over the economy. They believe
some liberalization was needed but that in many ways reforms have gone
dangerously far. Their concern is that the loosening of central control will
lead to economic and social disorder. They represent organizations such as
the State Planning Commission and the Ministry of Finance whose
bureaucratic clout stands to be reduced by reform. In addition, they draw
support from sectors of the economy where central planning has tradition-
ally played an important role and where, consequently, officials are more
comfortable with that approach. These include heavy industry, foreign
trade, and banking.
Party stalwarts, in many ways the political mirror image of the economic
specialists, emphasize the need for a strong party role in economic and
government affairs. They oppose some of Deng's proposed political reforms
and fear the political fallout of economic reforms. Party stalwarts reflect
the views of the many party cadres unhappily anticipating the lowered
Secret
EA 87-10042
September 1987
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profile and reduced powers of the party under reform. We believe that, at
the middle levels of the party, such cadres may well be a majority. Many
within the military and security services are also conservatives of this
stripe, attracted by the emphasis on discipline and dedication.
The ideologues see themselves as guardians of Marxist-Leninist orthodoxy;
they probably have less influence on policy than the other groups, but have
frequently been the most outspoken and troublesome-in part because
reformers are, in our judgment, vulnerable on ideological grounds. The
institutional base of the ideologues is primarily within the propaganda
apparatus. They also have adherents among the older generation of
academics, artists and writers, and other intellectuals.
Although they have not been dominant at the center for several years,
conservatives have a number of ways to influence policy:
? The most effective probably is to take advantage of their personal
relationships with Deng Xiaoping to influence him, appealing to concerns
he shares or raising problems they believe he cannot afford to ignore.
? Conservatives can employ the wide networks of contacts they have built
up over many years to obstruct or vitiate reform, drawing on the support
of those who feel threatened by reform.
? By harping on acknowledged problems that have arisen in the course of
reform, the conservatives have had some success in forcing modification
or delay of reform measures.
? Conservatives have used propaganda channels to press their case against
some reforms and to challenge them on ideological grounds.
In our judgment, the 13th Party Congress, scheduled for October, will test
the strength and cohesion of both the reform and conservative wings of the
party. Both sides will be seeking to win personnel battles and to put their
mark on the document the congress will issue. We believe key points on the
conservative agenda include:
? Slowing market-oriented economic reform and limiting price reform to
adjustments that reflect scarcity.
? Strengthening controls over agricultural production, rural industry, and
rural credit.
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? Limiting management reform in factories and preserving a greater role
for party committees.
? Tightening the reins on intellectuals and restricting investigative press
stories that cast party officials in an unfavorable light.
? Increasing political study sessions in schools and the workplace, and
reinstituting political requirements for such things as graduate study.
Conservatives and reformers are closer on foreign policy issues, and we do
not expect foreign policy to become a contentious issue at the congress,
although some conservatives would probably prefer to keep greater dis-
tance from the West and pursue a harder line on regional issues, such as re-
lations with Japan. Similarly, there is no great disagreement on policy
toward the military, but the conservative wing might press to give the
military a greater voice to ensure a powerful political ally.
The conservative wing has inherent weaknesses that have prevented it from
overturning Deng's reform program. Despite recent successes, we believe
these weaknesses will persist. Among the most important are:
? Lack of a strong leader. The conservatives have no one who combines the
stature, vision, connections, and energy of Deng Xiaoping. As a result,
the conservatives have been unable to sustain a united front against
reformers, often bickering over who should call the shots and what goals
take priority.
? Tired policies. Conservative policies tend to be reactive and negative--
conservatives know what they do not like but offer no alternative. They
favor policies and methods-tighter central control and motivation by
exhortation, not incentive-that, in the eyes of many Chinese, are proven
failures.
? Age. Most conservative leaders are in their seventies and eighties, and
many are in ill health. Conservative leaders may not have time, even were
they to attain sufficient power, to install a successor generation.
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Despite the weaknesses of the conservatives, we believe conflict between
the reformers and conservatives will remain a feature of Chinese politics.
Conservative misgivings about reform reflect fundamental social ten-
sions-many people are frightened by the strains of modernization and
reform. As party elders die, we expect the nature of conservatism will
change, becoming less concerned with ideology and more with defending
party privileges and power. The basic conflict will persist, however, and
reformers will have to find ways to compromise with conservative constitu-
encies and concerns that will, in our judgment, remain too powerful to
ignore.
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Key Judgments
Conservative "Ideology": Nostalgic Leftism
1
The Conservative Coalition and How It Works
3
Key Conservatives in Economic Policy
3
Party Stalwarts and Military Conservatives
5
Ideologues
7
The Conservative Agenda for the 13th Party Congress
9
Propaganda, Ideology, and Education
10
Policy Toward the Military
10
The Age Factor
12
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China: The Conservative
Challenge to Reform
Since the fall 1986 student demonstrations and the
ouster of Hu Yaobang in January (see inset), a group
of party leaders whom both we and the Chinese tend
for convenience to call the "conservatives" has force-
fully reasserted its influence, exercising, we believe,
greater power and authority than it has enjoyed for
years. Capitalizing on the opportunity, these party
elders have attempted to impose ideological strictures
on reformist policy and reduce the power of younger
leaders unsympathetic to their concerns. It is unclear
how successful they have been, and it probably will
not become apparent until the horsetrading over key
personnel decisions is concluded and the preparations
for the 13th Party Congress in fall 1987 unfold. Much
will depend on whether they can maintain their
uncharacteristic cohesiveness or whether Deng
Xiaoping is able to co-opt or coerce some of them, as
he has in the past.
The most prominent of these leaders-Chen Yun,
Peng Zhen, Wang Zhen, Bo Yibo, and Deng Liqun-
represent at most, in our judgment, a loose and
shifting coalition bound by certain attitudes and
policy preferences, rather than consistent and clearcut
ideological tenets. These men strongly supported the
reform package launched by Deng Xiaoping in the
late 1970s, and they continue to support some re-
forms. In our view, what justifies calling them conser-
vatives is their opposition to the direction of reform in
recent years.
by retiring members of the old guard-like them-
selves. Despite the elders' lipservice to the ideal of
turning the reins over to a new generation, we believe
many see this policy not only as a threat to their
position and prestige, but also as a ploy by Deng and
his supporters to monopolize power.
Underlying conservative preferences is what Deng has
termed "nostalgic leftism," a yearning for the Com-
munism of the 1950s, a period many of these leaders
hark back to as a golden age for China. Although not
"Maoists" in the radical leftist sense that that term
has taken on since the Cultural Revolution, many see
themselves as the spiritual heirs of the early Mao,
whose policies were less extreme. Several key points at
which conservative and reformist views diverge
emerge from conservatives' writings and speeches:
? In economics, conservative leaders prefer a mix that
depends more on central planning and direction and
less on market forces. This preference is dictated
partly by ideology-a strong market role looks like
capitalism-but also by a fear of the "chaos" of the
market. Chen Yun's famous description of the
economy as a "bird in a cage," with the cage
representing central control, sums up their
philosophy.
? Conservatives tend to be ideological hardliners,
believers in the Chinese brand of Marxism-
Leninism and intolerant of any suggestion that
Marxism is outmoded and inappropriate.
Conservative "Ideology": Nostalgic Leftism
In general, these conservative party elders fear that
increased experimentation with market forces, the
devolution of decisionmaking authority, and the loos-
ening of restraints on intellectual debate threaten to
undermine the ideological underpinnings and eventu-
ally the power of the Communist Party. Most also
resist Deng's efforts to rejuvenate China's leadership
? A corollary to their ideological inflexibility is a
strident insistence on party control and a readiness
to see threats to that control. Conservatives favor
retention of strong party control in such areas as
education or factory management, where reformers
have been moving to reduce it.
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Causes of Hu Yaobang's Downfall
Although the student demonstrations were the imme-
diate pretext for dismissing Hu Yaobang as General
Secretary, in fact his fall was the result of a number
of factors working together:
? We view Hu as in part the victim of his own
idiosyncratic personality. His independence, failure
to consult on major decisions and propensity for
verbal gaffes-such as his remarks on China's
policy on nuclear-capable ships that led to cancella-
tion of a US ship visit-alarmed and alienated
many senior leaders.
? Hu's well-documented tolerance for intellectual
dissent and his-to many leaders-reckless lack of
concern about party control also contributed to his
downfall and probably helped undermine Deng's
confidence in him.
? Hu pushed policies that many powerful elders
opposed. High on the list of his alleged mistakes
were attempts to retire these men, but the elders
also objected to his support for political reforms
and aspects of his foreign policy, especially his
strong advocacy of closer ties to Japan.
? According to the party documents leaked to the
press, Hu's interference in areas such as economic
policy, where he had little expertise, upset even
reformist figures like Zhao Ziyang. Many believed
that Hu pushed the system faster than was safe.
? The same documents suggest that Hu angered
many by his active promotion of his own proteges,
which in the post-Cultural Revolution Chinese
? One consequence of traditionalist fears about party
control is hypersensitivity about the party's image.
The conservatives believe that the party should not
tolerate open criticism of its motives or policy line,
even when the criticism is accurate, because that
might undermine faith in the party's leadership and
historical mission. This attitude is most apparent in
political context occasioned alarm that Hu might
be trying to monopolize power for his own faction.
He also failed to recognize the necessity of allow-
ing his opponents a portion of patronage jobs to
reduce their animosity.
? In the spring of 1986, Hu and others mounted a
harsh and temporarily successful attack on conser-
vative opponents that included arresting and sen-
tencing some of their family members for corrup-
tion. This drastic action, plus the flood of extreme
political and economic reform proposals that sur-
faced in the media after the conservatives were
cowed, apparently succeeded in uniting and galva-
nizing the loose conservative coalition.
? Ultimately, Hu fell because he lost the confidence
of Deng Xiaoping.
the party elders, who include some of
Denosest friends and advisers, made clear
their implacable opposition to Hu, which called
into question Hu's ability to lead after Deng's
death. Deng also agreed with these men that Hu
had allowed party control to slip too far. Finally,
Hu in our view became more of a liability than an
asset to Deng, and he
compounded the error by suggesting on at least one
occasion that Deng should retire, taking other party
elders with him-and leaving Hu and his proteges
in charge. Deng reacted angrily to the suggestion
and withdrew his support, effectively putting the
stamp on the decision to oust Hu.
conservative approaches to policies on intellectuals.
For example, in April conservative ideologues led
by Deng Liqun denounced as "an effort at rebel-
lion" a 1984 Writer's Congress that had officially
approved creative freedom.
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? Conservatives distrust the reliance on material in-
centives to promote economic development that has
characterized reform policies; they believe in the
efficacy of indoctrination and propaganda, and in
the rightness of applying political requirements in
such areas as college admissions. In recent months,
conservative spokesmen such as Yu Qiuli, Politburo
member and Director of the Army's General Politi-
cal Department, have held up the People's Libera-
tion Army (PLA) as an exemplar of self-sacrifice
and other "revolutionary values" to offset what they
believe is excessive reliance on material incentives
by reformists.
? Although closer to reformers on foreign policy
issues than on most domestic issues, the conserva-
tives generally would prefer that China distance
itself from the West, especially the United States.
This does not imply a pro-Soviet stance, but proba-
bly would mean greater Chinese efforts to demon-
strate a balanced line between the two superpowers.
Conservatives probably would follow an even tough-
er line than reformers on some regional issues, such
as Sino-Japanese relations-a reflection of their
greater insularity and Sinocentrism.
In part these differences reflect a generational gap,
we believe. Most prominent conservatives are in their
seventies or eighties, in contrast to the reformists, who
can boast several leaders in their fifties and sixties. In
recent months some younger conservative leaders
have emerged as the reformers' grip on the personnel
process has loosened, and we believe that conservative
views still have strong support among this generation
throughout the party, government, and Army. State-
ments by Chinese leaders and analysis of press arti-
cles indicate, however, that conservative views attract
relatively few from the younger generation of Chinese
and are held in especially low regard among the better
educated.
role for an opposition. For convenience, we have
distinguished three principal groupings within the
conservative camp-economic conservatives, party
stalwarts and military conservatives, and ideologues.
These groupings are based on the members' chief
concerns and policy interests, although the distinc-
tions are artificial and there is a great deal of overlap.
Moreover, a leader can be conservative on some issues
and support reform on others; this is particularly true
of a number of old associates of Deng.
Key Conservatives in Economic Policy
Politburo Standing Committee member Chen Yun, at
82 considered the dean of China's economists, is the
leading figure in this group, whose main quarrel with
reform is that it has taken China too far in the
direction of a market economy.
Chen has said that he fears reforms may
create an economy the party cannot control; like
many of the conservatives, he believes that anarchy is
never very far away in China and can be prevented
only by firm control.
Chen and his supporters even have doubts about
recent agricultural policies, the centerpiece of reform-
ist success. They regard self-sufficiency in grain as
critical, reflecting a deep-seated fear that a fall in
grain production could trigger social instability. After
grain production fell in 1985, Chen delivered a speech
at the Party Conference of Delegates that sharply
criticized reformers for having paid too little attention
to grain production in their rush to promote rural
industries and a more varied rural economy.
Chen is the most prestigious of the conservative old
guard; he is the senior Communist cadre alive today,
having become a Politburo member in the 1930s,
years before any other living leader. He also enjoys
considerable respect because of his opposition to
Mao's disastrous economic theories. Indeed, Chen
may be the only leader whose personal prestige rivals
Deng Xiaoping's. Because of this, we believe he has
been able on occasion to force modifications in reform
policies and to criticize Deng for usurping authority.
Although the conservatives have not been dominant at
the center for at least five years, they represent
important constituencies in various segments of the
party and government apparatus. This allows them to
exert influence in a system that has no institutional
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Chen Yun (left) and Wang Zhen, at the Septem-
ber 1985 party conference. Wang retired from the
Politburo, probably unwillingly, at this meeting.
Chen, however, has not been able to challenge Deng's
control. He lacks broad support within the party
bureaucracy, and has not demonstrated Deng's skill at
building coalitions and holding them together. More-
over, Chen is in failing health, according to a number
of press accounts. He has appeared rarely in public in
recent months and, while still a rallying point for like-
minded officials, may be increasingly less active.
Two other leaders who, in our judgment, share many
of Chen's beliefs are Advisory Commission Perma-
nent Vice Chairman Bo Yibo and Vice Premier Yao
Yi1in. Of the two, Bo, 80, is the more powerful. An
active party member since the 1920s, Bo can claim
membership among the elite revolutionary founders;
he may have inherited Chen's mantle as the leading
conservative economic theorist. Bo played a leading
role in Hu Yaobang's downfall,
and has been an active and vocal advocate
of the conservative viewpoint since then. According to
a Hong Kong press account, Bo accused Hu of
maiguo (sell out the country) politics, implying that
Hu espoused policies that betrayed Chinese ideology
and interests. Bo has since said that China still has
problems with maiguo economics-which we believe
is a slap at Acting General Secretary Zhao Ziyang,
who, as Premier since 1980, has been a principal
architect of the economic policies.
Yao lacks the stature of Bo and Chen, being a few
years too young at 70 to qualify as a revolutionary
elder, but he is an important supporter of conservative
policies at the level just below the top. He is a close
associate of Chen Yun. This June, Yao was put in
charge of the State Planning Commission, where he
had served from 1980 to 1983. We believe Yao's
appointment was part of a conservative drive to
reestablish control over economic policy.
Vice Premier Li Peng is one younger official who, in
our view, generally supports the conservative line. Li
has been prominently mentioned by some Chinese
officials as a candidate to succeed Zhao Ziyang as
premier, assuming Zhao relinquishes that job and
keeps the top party post, as seems likely. Li believes in
modernization, especially technological moderniza-
tion, but favors greater central control over China's
economy than do reformers. Li is also conservative on
social issues, especially education, one of his areas of
responsibility. Li was
behind a recent decision to set up a "Youth Ideologi-
cal Research Center," a sort of "detoxification" cen-
ter to reeducate students who may have been influ-
enced by Western ideas while studying abroad.
There are signs that conservative economic thinkers
have regained some clout in setting policy. Although
reform is being stressed again in the press and is on
the agenda for the congress, the reforms being dis-
cussed are much less far reaching than those floated
last year; several resemble policies of the early years
of reform that many of the group we label conserva-
tive supported. For example, price and ownership
reform have been deemphasized, and attention has
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shifted to management reforms. Although some of
this shift probably is a cautious response to economic
problems by reformers themselves, we believe re-
newed conservative authority is an important factor.'
The influence of this group extends beyond economic
issues. When Yao Yilin took over the State Planning
Commission, its former head, Song Ping-another
economist who leans toward greater central plan-
ning-took charge of the party's Organization De-
partment. Having Song as head of this department,
the party's personnel office, probably will give the
conservatives considerable say in personnel decisions,
especially at the middle level.
Conservative economic thinkers, we believe, retain
considerable support in some sectors of the bureaucra-
cy, particularly the State Planning Commission, with
its vested interest in strong central planning. Other
organizations that in our view harbor conservative
supporters include the Ministry of Finance; some of
the heavy industry ministries such as power that need
sizable central funding and where, consequently, plan-
ning has traditionally had a strong role; parts of the
central foreign trade apparatus; and, at least in its top
leadership, the People's Bank of China. In addition,
party cadres who have lost power under reform,
factory managers unhappy with their new responsibil-
ities, and some urban workers and peasants who have
not fared well under reforms represent inchoate con-
stituencies for conservative economic leaders.
Party Stalwarts and Military Conservatives
Another group that has been more active on the
political scene since Hu's fall consists of party elders
who oppose the diminution in party power that has
occurred under reform, and who fear that further
reforms may lead to loss of party control. These men
are most concerned about Deng's political reforms
and the political consequences of economic liberaliza-
tion. This group numbers among its leaders many of
the most illustrious elders, men such as Politburo
' Another instance of growing conservative influence in economic
policy is that, the State Council-under
the influence of a Bo Yibo associate-is turning more and more for
advice to scholars from People's University, reputedly one of the
member Peng Zhen, 85; Advisory Commission Vice
Chairman Wang Zhen, 79; and President Li
Xiannian, 78. It also includes important military
leaders such as party Military Affairs Commission
Vice Chairman Yang Shangkun and Yu Qiuli; Wang
Zhen, in fact, had a long and distinguished military
career although since the 1970s he has been involved
largely in party work.
This group is difficult to characterize. Although these
leaders go along with Deng on most issues, they share
a hostility to political reform proposals that question
or limit the party's authority. While admitting China
must open more to the outside world to develop its
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out Western ideas-which they regard as subver-
sive-about everything from politics to art. It was this
sentiment that led to the campaign against "total
Westernization" in early 1987. We believe Deng
shares many of their concerns (see inset), but is more
willing to take risks and has a greater sense of
urgency about reform.
The many revolutionary founders in this group give it
greater status than any of the other loose groupings
within the conservative wing; it also represents a more
complex category than the economic planners. Many
of Deng Xiaoping's oldest friends and closest advis-
ers-including Wang Zhen and Yang Shangkun-
belong to this group, which also includes Deng's
strongest rival, Peng Zhen. Because of their revolu-
tionary credentials and long careers, they are uniquely
able to maintain their relationship with Deng even
when they oppose his plans. That access to Deng
makes them particularly effective advocates of conser-
vative views.
We believe Peng Zhen poses the greatest threat in this
group to Deng and the reform program. Since Hu's
fall, Peng has been extremely active.
he has mounted several attacks
in recent months on Deng or his proteges in attempts
to undermine Deng's primacy. Peng has long experi-
ence in legal and political affairs, including security
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used his connections in t ose sectors to obstruct LDA1
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Although he is widely considered to be China's
leading reformer, in important respects Deng Xiao-
ping sympathizes with the conservatives. Like other
elders, he is concerned first and foremost about party
control and social order. Although moreiiexible in
his thinking than many of the old guard, he often
supports them against younger reformers on some
issues. The clearest examples are in intellectual
matters, where Deng has frequently instigated harsh
crackdowns or criticized individuals. In 1981, Deng
sided with military leaders in criticizing Army writer
Bai Hua, because some of his writings were highly
critical of the PLA and, even worse, one famous
screenplay of his ended on a note of doubt and
despair over the party's commitment to the people.
Deng has sharply criticized other writers who have
gone too far in satirizing the military, and he has
been particularly hard on intellectuals who have
dared to express doubt about the ultimate realization
of Communism and the party's role in achieving it.
We believe the 1983-84 "spiritual pollution" cam-
paign-an effort to stem the influx of Western social
and philosophical ideas-was at least in part the
result of Deng's anger at a growing tide of skepticism
in intellectual circles. Most recently, we believe that
Deng was in agreement with much of the conservative
rhetoric aimed at "bourgeois liberalism" and "total
Dengist reform policies. He has expanded the power
of the National People's Congress (NPC), of which he
is chairman, and in recent sessions succeeded in
blocking promulgation of several measures sought by
reformists, such as a bankruptcy law. In an unprece-
dented press conference during the March session of
the NPC, Peng also took an indirect slap at Zhao
Ziyang by saying that, of present Politburo Standing
Committee members, only Deng Xiaoping was indis-
pensable.
Yang Shangkun has also become increasingly promi-
nent in the months following Hu's dismissal. A
Chinese official told a US Embassy officer that
Yang's responsibilities had broadened since January,
especially in domestic affairs. Yang is one example of
Westernization." Deng shares the emotional commit-
ment of the party elders to their revolution and on
occasion joins them to defend it from criticism. He
differs from them largely in that his commitment to
modernization is even stronger, and typically he calls
a halt to the campaigns after a few months to
preserve economic reforms. In our view, Deng may
use these occasional campaigns to act as a brake on
the overzealousness of some reformers.
Deng is not a believer in Western-style democracy.
Although he has called for greater democratization
as part of political reform, in essence Deng means
broadening input at low levels into party decisions,
and providing more candidates in some elections-
although the party will still choose these in most
cases and will be able to overrule election results it
dislikes. Deng revealed his autocratic side in 1979
when he shut down the famous "Democracy Wall,"
where citizens had been able to post "big-character
posters" expressing a remarkable range of opinion.
Deng had supported this phenomenon when he was
consolidating power and could use it to his advan-
tage, but he soon moved to suppress it; moreover, he
permitted the prosecution of some leading dissident
proponents of greater democracy.
a leader who has generally supported Deng but who,
on certain issues-such as last year's student demon-
strations-ranks as a conservative, and can on occa-
sion oppose Deng without losing Deng's trust. In fact,
we believe Yang's May visit to the United States was
at least in part a move by Deng to enhance Yang's
leadership credentials.
Yang is being groomed to get a higher post at the
coming congress.
We believe that the constituency for the defenders of
party control includes many middle-level cadres who
resent their loss of power under reform, or believe that
relaxing party control will lead to instability. They
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Figure 2. Peng Zhen (right
foreground) inspecting an enter-
prise in south China. Peng used
his trip to project a moderate
image and garner reformist
also have some backing within the military; one US
academic estimates that many commanders at the
division through army level are distrustful of reform-
ist moves to reduce the party's role in the military,
believing that a healthy dose of indoctrination is
necessary to inspire the soldiers-who cannot easily
reap the benefits of economic growth. Yu Qiuli's
statement that, in the PLA, the anti-bourgeois-liber-
alization drive would not be confined to party mem-
bers, directly contravening limits Zhao Ziyang had
drawn, exemplifies this attitude. We believe some
military leaders may also resent reformist moves to
pare down the Army's political influence.
Ideologues
A third conservative group consists of those who
appeal primarily to Marxist-Leninist orthodoxy as a
standard for policy. Other conservatives stress ideo-
logical purity, of course, but this group distinguishes
itself by attacking reform policies solely on theoretical
grounds. It is, in our view, the group least sympathetic
to the pragmatism of the reformers and probably most
intolerant of intellectual experimentation. Its strong-
hold is the party propaganda apparatus, but it also
draws adherents from intellectuals, mostly of the
older generation, who have followed an orthodox line
in their work and complain that reformers have
pushed them aside and denied them an audience.
Although they have had recent successes in making
party propaganda conform more closely to their views,
the ideologues, in our judgment, have less direct effect
on policymaking across the board than other conser-
vative groupings. However, they have been in many
ways the most persistent and troublesome critics of
the reform program. Their ability to snipe at reforms
as heretical reflects the weakness of the reform
platform; reformers justify their policies through re-
sults, but the lack of ideological legitimacy leaves
them vulnerable to attack, especially when their poli-
cies falter as they did in 1985 and 1986.
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Chief spokesmen for the ideologues are Politburo
member Hu Qiaomu, 75, and Secretariat member
Deng Liqun, 72. Both are longtime propaganda spe-
cialists and orthodox theorists; both were active in the
"spiritual pollution campaign" of 1983-84 that, like
this year's anti-bourgeois-liberalization campaign, at-
tacked foreign influence in China and targeted many
reformist intellectuals. Although they have parted
company with Deng Xiaoping in recent years, Deng
Liqun and Hu Qiaomu supported him in earlier
ideological battles when he was consolidating his
power. Hu, as a Politburo member, outranks Secretar-
iat member Deng, but Deng has been much more
visible and active since Hu Yaobang's resignation,
entitling him, we believe, to be considered the chief
figure in this group today.
Hu, Deng, and their allies have pushed hard to
capitalize on their opportunity. Hu Qiaomu, accord-
ing to one story in the Hong Kong press, criticized
Zhao Ziyang for "not knowing what politics is about
and acting like a money-minded merchant." In April,
Deng Liqun organized a conference of conservative
ideologues to produce 500 essays plugging the conser-
vative line. The ideologues have been successful in
removing reformist-minded figures and replacing
them with their choices in key posts such as that of
director of the Propaganda Department.
They also increased conservative influence over the
arts, literature, and the media in the weeks after Hu's
fall. In one province, 39 publications were shut down
during the anti-bourgeois-liberalization movement.
According to US Consulate reporting, artists and
writers have adopted self-censorship under conserva-
tive scrutiny. Helped by those seeking a way to instill
discipline in the students, the ideologues have boosted
the amount of political indoctrination required in
universities.
There are some signs, however, that the ideologues
have overreached, as they did during the 1983-84
"spiritual pollution" campaign. According to well-
connected Hong Kong political journals, both Zhao
and Deng Xiaoping have recently criticized Deng
Liqun by name, and since May the press has begun to
carry articles exploring reform ideas again. Moreover,
the orthodox theorists have been frustrated by their
inability to attract able intellectuals. Credible press
accounts claim Deng Liqun's April conference fizzled
when only a handful of the essays met minimum
standards. Nonetheless, the ideologues remain power-
ful; their arguments may be unappealing to a majority
of intellectuals, but we believe their message appeals
to many poorly educated, run-of-the-mill officials who
feel threatened by reform.
How They Exercise Influence
The conservative leaders have several methods they
use to influence policy or to try to block or modify
reform initiatives:
? In our opinion, probably their most effective tactic
is to lobby Deng Xiaoping. Historically, they have
been able to change Deng's mind by persuading him
that party control is threatened or that a given
reform policy carries an unacceptable risk to politi-
cal stability. Deng, we believe, sympathizes with the
conservatives on these issues. The reaction to the
student demonstrations is an example of the effec-
tiveness of this tactic.
? Similarly, conservatives have been adept at pointing
out legitimate problems, leading to reformist retreat
from some policies. We believe conservative com-
plaints about a drop in grain production and declin-
ing acreage committed to growing grain were in
part responsible for moves last year to tighten up
rules on grain contracts and to tie certain inputs to
grain production.
? Conservatives have had some success in manipulat-
ing press and propaganda channels to voice their
complaints and stir up opposition, although their
ability to do this has varied considerably with the
balance of power. After Hu Yaobang's fall, the
official press took a marked turn toward the conser-
vative, and even reformist leaders were mouthing
conservative slogans.
? Conservatives have built up extensive networks of
supporters and proteges within the bureaucracies
that they can tap to frustrate reforms. A particular-
ly effective ploy is to appeal to groups that stand to
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lose authority and privileges, or gain unwelcome
new duties and responsibilities, under reform. One
weapon we believe the conservatives used to delay
introducing a bankruptcy law this year was the
protests of factory managers who felt threatened by
the measure.
? At the highest levels of leadership, conservatives can
work to affect swing votes-that is, those who favor
some reforms but oppose others or who want to
proceed more slowly. For instance, Yang Shangkun
has supported many of Deng's military and econom-
ic reform policies, but we believe he is conservative
on party control issues. Other conservative leaders
can use such classic political strategies as logrolling
to get Yang's support on issues where his own
interests are not deeply enough engaged to lead him
to argue against proposed reforms.
We believe that many of the conservatives see the
13th Party Congress, slated for October, as their last
chance to put their stamp on policy. From the summer
preparatory meetings right up to the Congress, re-
formers and conservatives almost certainly will ma-
neuver to influence the decisions of congress. To
strengthen their position, the conservatives realize
they must install more of their own choices in key
positions. At the same time, both sides will be trying
to shape the document now being prepared that is
intended to be the policy blueprint for the next several
years. There are a number of areas where the conser-
vatives would, in our view, like to reverse or modify
state-set price schedules for a number of goods.
Many production decisions, especially in key heavy
industries, would continue to be administratively
determined.
? Agriculture and rural industry. Conservatives such
as Chen Yun and Bo Yibo support China's rural
responsibility system but want to implement tighter
controls over some aspects of agricultural produc-
tion, particularly of grain, and restrain the rapid
growth of rural industry and rural credit. They
would do more than the reformers have to control
growing income disparities between rich and poor
peasants and between the city and countryside. We
believe conservatives would more actively search for
ways to mandate peasant investment in production.
? Enterprise management reform. Conservatives ob-
ject to the sweeping management reforms aimed at
giving managers more autonomy and more responsi-
bility for their factory's performance. They fear that
these measures would undermine the power of the
party organizations in factories; they are also con-
cerned at the probable loss of central control over
the economy if factory management becomes too
independent.
? Ownership reform. Some reform thinkers have pro-
posed major changes in China's ownership system
that, in some cases, would amount to de facto
privatization of important sectors of the economy as
state enterprises are leased to individuals. Conserva-
tives believe that these changes are ideologically
unsound and, as with many other reforms, under-
mine central authority.
policy.
Economic Policy
Although conservatives are not uniformly hostile to
Deng's economic program, they nevertheless demon-
strate a consistently clear preference for administra-
tive controls over a more freewheeling, market
approach:
? Foreign borrowing. Although they recognize the
need to finance development, especially technology
purchases, through borrowing, conservatives are
very cautious about borrowing from abroad. If they
are able to gain sufficient influence, we expect a
reduction in China's willingness to incur foreign
debt, and increased pressure to obtain government-
to-government concessionary financing.
? Plan versus market. If conservatives have their way,
further moves toward a market economy would be
curtailed. Fewer items would be released from
Central planning and price reform would be recon-
strued to mean revising, but not doing away with,
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? Banking reform. Conservatives generally have not
objected to reforms aimed at strengthening China's
central bank. They probably believe banking re-
forms that make credit levels more responsive to
monetary tools and administrative dictates are com-
patible with central planning-and are an inprove-
ment over past policies that allowed low-level offi-
cials to use banks as private treasuries for local
construction projects. We believe conservatives have
qualms, however, about other financial reforms,
particularly experiments aimed at developing stock
and bond markets.
Propaganda, Ideology, and Education
Conservatives, led by Deng Liqun and Hu Qiaomu
but probably with the support of elders such as Wang
Zhen, will argue for a strong conservative slant to the
congress document that they can use to hamper
reform initiatives. We doubt they will try to enshrine
specific proposals in the document; instead, they will
concentrate on winning personnel battles, then rely on
their proteges to achieve their specific objectives,
which include:
? Restricting the number of nonparty publications
and carefully monitoring their content.
? Increasing required political study sessions in the
workplace and, especially, the schools.
? Instituting formal political requirements where re-
formers have been moving to abolish them, notably
for college admissions and study abroad.
? Tightening the reins on artists and writers and
reducing or eliminating works that contain social
criticism, that satirize the party, that are negativ-
ist-that imply serious flaws in socialist society-or
that are pornographic under the extremely narrow
conservative definition.
? Discouraging investigative reporting and exposes in
the press-both of which have flourished under the
reformers-on the grounds that these undermine
the people's faith in the party.
Political Reform
Political structural reform-never clearly defined-is
basically a Dengist slogan, shorthand for reducing the
party role in economic activity and day-to-day govern-
ment administration. Used by some of the more
radical reformists to justify last year's airing of such
heterodox ideas as a multiparty system for China, the
slogan was eclipsed temporarily. Deng has resurrected
it; his definition is fairly narrow, we believe, encom-
passing largely administrative measures to increase
accountability and efficiency and broaden support for
reform. However, conservative leaders would construe
political reform even more narrowly. For example,
conservatives would probably agree that the party
secretary in a factory should not make decisions on
product mix but would argue he must preserve his role
in such areas as hiring and firing, a power reformers
would take away. Conservatives, moreover, would
probably interpret the party secretary's remaining
authority broadly. For instance, conservatives might
press for the party secretary to have a say in a
decision that would change a factory's product mix to
include more expensive, and fewer low-quality but
cheap, items on the grounds that such a change would
hurt poorer members of society.
Policy Toward the Military
We believe there is broad consensus among the
various groups that the military's first priority should
be professionalism, not politics, and that the military
must accept a reduced budget share so scarce re-
sources can be devoted to economic modernization.
Nonetheless, there are some important points where
conservatives depart from reformers:
? Conservatives would probably pay more attention to
the views of senior soldier-politicians holding top
party posts, thereby according the military a greater
voice in policymaking than reformers favor. Many
prominent conservatives are also military leaders,
and the military is an important reservoir of conser-
vative sympathies; conservative leaders need the
military's support and therefore, we believe, might
accept a broader policy role for top military leaders.
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Figure 3. Contrasting images: Marxist icons and
signs of a new age. Leftist ideologues fear an
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? Conservative preferences for distance from the West
and self-reliance might translate into less contact
between the Chinese military and its foreign coun-
terparts and more effort to build up the Army's
technological base with domestically produced
weapons. However, this would put the conservatives
at odds with those in the PLA who want greater
access to Western technology to hasten moderniza-
tion.
Until Hu's fall, the conservatives went from one
setback to the next, betraying some fundamental
weaknesses. We believe that despite recent successes
these weaknesses remain, and that the conservatives,
though they will probably continue to disrupt the
implementation of reform, cannot overturn the reform
program.
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Lack of Cohesiveness
The leading members of the conservative coalition
have failed to find a way to work together over an
extended period. At best, they have united briefly to
counter a common threat or to pursue a specific
goal-they can often agree on what they do not want
and work to get rid of it (or him)-only to fall out over
what to do next.
The chief cause of this tendency to fragment is, in our
judgment, the lack of a single strong leader. Within
the conservative camp there is no supreme power
broker, no trusted arbiter of disputes and setter of
policy directions. There is no one who combines the
stature, connections, vision, and energy of Deng Xiao-
ping. Chen Yun has wide respect, but his active
support is confined largely to certain economic fig-
ures, and in any case his health is probably too poor.
Similarly, Peng Zhen has support only from some
sectors. Peng Zhen is also personally unpopular with
many of the powerful elders
Peng seems a pure political player with little
overarching vision, and the senior leaders may be
distrustful of his ambitions and motives.
The group is characterized by fractiousness. Accord-
ing to a Hong Kong press report, for example, conser-
vative leaders Wang Zhen and Bo Yibo recently fell
out over the selection of delegates to the 13th Con-
gress. In 1985, an effort by
three of the most influential party e ers-Chen,
Peng, and President Li Xiannian-to reverse certain
economic reforms fell apart when Peng and Chen
quarreled over a relatively low-level patronage ap-
pointment. Personal jealousies can also weaken the
conservative alliance. For instance,
Peng once accused Li of selling out
his principles for a seat on the Politburo Standing
Committee-a post Peng himself has long coveted.
Tired Policies
The conservative coalition has little to offer as an
alternative to reformist ideas. Its methods-central
planning and motivation by exhortation-are seen as
bankrupt by many Chinese, and its policies tend to be
reactive and negative. We believe there is consider-
able disillusionment and even popular disgust with
much of the conservative program. At the outset of
the recent anti-bourgeois-liberalization campaign, one
party newspaper editor told a US official, "The people
hate this stuff. I hate this stuff." Such sentiments
from a party journalist suggest to us that opposition to
conservative beliefs and policies is strong
The Age Factor
Another factor working against the conservatives is
age-most of their leaders are in their seventies and
eighties. Many are in ill health, which cuts down on
their ability to play an active political role. We can
identify a few younger figures who could emerge as
leaders of this group (see foldout), but generally the
younger leaders who are ready to move up are
identified with the reform wing. Conservative leaders
may not have time, even were they to accumulate
sufficient clout, to install a generation to follow them.
The point is not lost on their reformist opponents, who
have worked hard to control appointments and shut
out challengers. We believe the reformers' earlier
success in this area means conservatives must play
catch-up to identify, promote, and protect their
choices.
It would be rash to predict winners and losers in the
struggle between reformists and conservatives. Re-
forms could founder for a number of reasons apart
from conservative opposition-several years of bad
weather, a severe international economic downturn,
splintering of the reform camp-and the course of
politics for at least the next few years will be deter-
mined partly by the order in which the elders die.
We believe, however, that conflict between the two
wings of the party will probably be a long-term
feature of Chinese politics. Conservative misgivings
about reform reflect fundamental tensions in the
society. Nearly 40 years of Communist rule have
shaped expectations and attitudes that reform seeks to
change-guaranteed employment, egalitarian distri-
bution of wealth, strict social discipline. Aspects of
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this socialist legacy resonate with Chinese tradition,
so that reformers are trying both to modernize a poor,
traditional society and to remake Chinese socialism.
Conservatives speak for those frightened by the politi-
cal and social strains or those skeptical of the benefits
Therefore, even after the present generation of party
elders dies, we believe conservatism will remain a
powerful political force. Its character is likely to
change, becoming less ideological and more concerned
with defending narrow party and policy interests. We
expect, though, that future conservative leaders will
continue to use Marxism-Leninism to cloak their
arguments and embarrass reformers. Reformers, for
their part, will be forced to accommodate conserva-
tives, not only because some will be personally influ-
ential but also because they represent concerns and
constituencies too powerful to ignore or override.
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