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"The long road stretches out before us–we will seek it out wherever it goes." In 1978, the Third Plenary Session of the 11th CPC Central Committee was held, marking the beginning of a new period in China’s history. After the catastrophe of the Cultural Revolution and the ideological mistake of the "Two Whatevers", the principal question before the Chinese people was how to go on following the road of Chinese socialism. The entire Party and nation struggled to find an answer. It was at this moment that the Chinese path was given a new beginning and reform and opening up began, a period that would become a hallmark in China’s grand trajectory.
China’s reform and opening up has its origins in a village called Xiaogang. In the winter of 1978, a groundbreaking change took place at this site when 18 farmers from the village risked their lives and the chance of being sentenced as "counter revolutionaries" by meeting in an old worn-down hut for discussion and debate. Eventually, they made the courageous decision to practice "Dabaogan", the beginning of China’s rural reform, which they marked by signing a contract with their thumbprints. This made the place "China’s First Reform Village". It was the first brave step for these "country dwellers",but marked a giant leap for the entire country.
At that time, a popular song known as the "Dabaogan Song" was spreading through Fengyang County, where Xiaogang Village was located, with the following lyrics: "Dabaogan, dabaogan, straight and upright, no change or turn, give first to the government, then to our collective, the rest is our very own."
At one point during that period, the practice of "Dabaogan"was criticized for being a backward measure. However, Deng Xiaoping, driven by great political courage and a spirit of integrity and pragmatism, took the lead in setting policy at a crucial moment and gave his full support to outlining farm output quotas for each household. He said, "Now that more flexible policies have been introduced in the rural areas, the practice of fixing farm output quotas on a household basis has been adopted in some localities where it is suitable. The results have been very good, and the change has been fast… Some of our comrades are concerned that this production might affect the collective economy. In my view, this is a needless concern."
This was a new phase of exploration in China’s path, whereby structural economic reforms first took place in rural areas. The policy known as the "household responsibility system", in which "remuneration was linked to output", was put into practice. This measure significantly increased the farmers’drive for production. Rural areas were quickly transformed and pulled out of extreme poverty. The household responsibility system became the primary driving force for China’s economic reform. It unleashed and developed rural productivity, opened the way for immense agricultural harvests, freed up surplus labor in rural areas, and gave rise to China’s town enterprises. Gradually, it came to support half of the country’s economic structure.
As rural economic reform progressed, the focal point shifted from the rural areas to the cities. The core of this urban reform was the policy of opening up, the establishment of special economic zones, and the creation of a new path.
China’s development is linked to the rest of the world. Lagging behind leads to defeat, and there’s no way out if doors are closed. With this in mind, the decision was made to open up to the outside, but China still had to face the difficult issues of how to proceed, where to start, and where to aim for a breakthrough. The creation of the special economic zones under Deng Xiaoping was an innovative part of China’s opening-up development model. Under this theory, China gradually formed an all-around framework for opening up that integrated several different channels and models, was comprehensive, covered wide areas, and included special economic zones, open coastal cities, open coastal areas, and the hinterland. Deng Xiaoping consistently showed a special preference for these "special zones" and would show his approval for these by saying, "The special zones are windows; they’re windows to technology, management, and knowledge, and they’re also windows to foreign policy."
In 1979, the leading comrades of Guangdong Province reported local problems, as well as the region’s advantages and disadvantages, to Deng Xiaoping. They hoped that the central government would transfer more authority to Guangdong and give it more autonomy to engage in foreign economic activity. Deng Xiaoping listened to the report in silence and bowed his head. He thought for a while and decided it was time to voice the matter he had been pondering. Looking up, he slowly turned his gaze toward the two leading officials standing by his side and said, "You can outline an area and call it a special zone."As the two comrades did not understand, he added, "Shaanxi, Gansu and Ningxia used to be ‘special zones’! There’s no money in the central government. You can rely on your own efforts. It’s time to blaze a trail." A few months later, the central government issued an official approval for Guangdong and Fujian to set up pilots for special economic zones in Shenzhen, Zhuhai, Shantou, and Xiamen. At this point, the areas were known as "Special Export Zones".In March of 1980, the name was changed to"Special Economic Zones".
China’s establishment of these special zones was tantamount to "blazing a trail", which allowed the country to follow its own path for opening up and development. Shenzhen did not fail Deng Xiaoping’s high expectations for this idea. The city has been seen time and again as China’s fi rst and foremost example of "blazing a trail". Shenzhen’s fast development and practices have spread throughout the whole of the country. The concept of a special economic zone is a Chinese innovation and encompasses many different models. They constitute an important platform for us to use foreign investment, technology, talent, and management experience for economic development. These zones have become an important strategic model for realizing economic development in China’s different regions.
Implementing the policy of opening up and establishing the special zones was an unprecedented and significant undertaking. It called for exceptional wisdom and took much courage. A series of practices under the new reform and opening-up policy gave China a new lease of life during the 1980s. In certain areas, individual, private, and township enterprises appeared. A gap was opened in the rigidly planned economic system, while original state-owned enterprises began to decentralize, make a profit, and carry out many different kinds of reforms, including contract management.
The success of the reform and opening-up experiment gave the CPC a better understanding of China’s path. In 1985, Deng Xiaoping confidently announced, "Reform has promoted the development of productivity and has brought about a series of fundamental changes in economy, society, ways of working, and people’s spirits. Reform is the way to self-improvement for the socialist system. In certain areas, there have also been revolutionary changes to some degree. This is a major event that shows we have already begun on the path of socialism with Chinese characteristics."
In 1987, the theory about the primary stage of socialism was put forward at the 13th Party Congress. It stated that in that period, in order to be rid of poverty and avoid lagging behind, it was necessary to implement the idea of "One Central Task, Two Basic Points"; that is, to continue to put the economy at the center, to adhere to the Four Cardinal Principles, and to uphold the policy of reform and opening up. This became a basic line for the CPC and the Chinese people during the primary stage of socialism. It also constitutes the quintessential representation of China’s path.
In the late 1980s and early 1990s, the socialist movement experienced an unprecedented low with the dissolution of the Soviet Union and upheaval in Eastern Europe. Within a short time, the members of the socialist family fell one by one and waved their flags in defeat. The seriousness of the situation gave rise to many questions. What would the world look like from that point on? What would be socialism’s future? Where would China be in the future? And should China’s reform continue?China’s developmental path had reached a new crossroads.