40 Years of Reform and Opening Up: What China Got Right, and What It Still Has to Do | Living With the Future No. 13

In this installment: what the greatest achievement of reform and opening up actually was; what we got right; the path our achievements depended on … and, of course, the confusions and the problems still waiting to be solved.

"Sometimes what matters is not to change the world, but to explain it."

At a moment like this one, on how to explain this world and how to live with the future, we need to hear wise, independent voices.

We invited more than 20 professionals from economics, law, sociology, communication studies and other fields to answer our questions.

The questions are many and complicated, but they bear directly on the future lives of the younger generation. Our interviewees hope the world left to that generation works well and keeps moving toward civilization — and that in a complicated, bewildering world, people can hold on to independence and reason.

In an interview with QDaily, Wang Xiaoyu said: "Reform has to go together with opening up. If reform means concentrating power rather than opening it up, it is heading in exactly the wrong direction. … So you can't talk only about reform and leave out opening up — and opening up isn't only outward, it's inward too." Wang Xiaoyu is a well-known cultural critic and now an associate professor at Tongji University.

Reform and opening up is 40 years old. The "universal" support it once had has slowly given way to hesitation, and on the relationship between reform and opening — as Wang Xiaoyu put it — more and more people now see it differently. As for when reform and opening up happened, every scholar we spoke with had his own answer: some say the real thing unfolded across the 1980s and lasted about a decade; some take China's WTO accession as the point where the country finally got onto the right track; some insist the first twenty years and the second twenty years mean entirely different things, with entirely different consequences for China's development; and some, of course, start the clock at the Self-Strengthening Movement of the 1860s …

Some are talking about ideas, some about the process of modernization, some about building institutions, some about globalization — and some, in effect, about the awakening of public spirit and where popular sentiment went.

On one point there is consensus: reform and opening up was attempted because of poverty, because people "couldn't survive." Ian Johnson, who spent years in China as a foreign correspondent, said: "Why did China have economic reform? Because the Cultural Revolution ended. It had been 30 years since Liberation and China was still very poor. Its neighbors — Taiwan, Thailand, Singapore, Malaysia — were at about China's level in 1949, but they moved ahead fast while China stayed poor. So there was a lot of pressure on China to push reform. If it hadn't reformed, China would have been finished."

Pressure is why reform and opening up began. And the hesitation about it, the argument over what really drove it, the discussion of how it should continue — all of that arrived once the original pressure had eased, or had seemed to vanish altogether.

Every expert who joined our conversations was also trying to answer one question: China has, beyond any doubt, achieved a great deal in these 40 years — but what exactly is that achievement owed to?

When the economist Sheng Hong came to the difference between the first twenty years and the second twenty, he singled out a phrase that those who lived through it may no longer bother to mention and that later generations may miss entirely: the emancipation of the mind.

As Fudan University professor Hong Tao remembers it, that "emancipation" was bound up with "hope." In the first decade or so after reform and opening up began in the 1980s, China really did take on an air it has rarely had — an age of ideals, confidence and hope. "The 1980s were probably the era in which Chinese people enjoyed comparatively the most freedom in several thousand years. Many who lived through it look back on it with longing. Material things were still scarce and most people's lives were still hard, but the intellectual atmosphere was full of vigor and vitality: the idealism of the Mao era had not yet been shattered by the utilitarianism of power and the market, and at the same time there was a freedom the Mao era never had."

In any case, this enormous thing is worth thinking about seriously. It has been China's most important label for 40 years. In any case, it has changed China deeply, in every sense of the word.

In this installment: what the greatest achievement of reform and opening up actually was; what we got right; the path our achievements depended on … and, of course, the confusions and the problems still waiting to be solved.

This is not a full review of 40 years of reform and opening up. In our conversations with scholars it was one topic among several, one tied to the situation we find ourselves in now — but a few threads can be traced from it.

1. The Greatest Achievement of Reform and Opening Up Is That the Market Economy Gave Rise to a Civil Society

Lei Yi, Researcher, Institute of Modern History, Chinese Academy of Social Sciences

The market economy is not only an economic structure, it is a social structure. That includes where people stand inside it: your circumstances, your position, whether you can move. So I think this is a more important meaning of reform and opening up, one beyond its economic meaning.

For more than a hundred years, for all sorts of reasons at home and abroad, China kept "just missing" modernization, letting one chance after another slip. But in 1978 China finally caught what would be her last chance in this century. In that sense China's "new century" began in 1978. And the greatest achievement of reform and opening up is the rise of a civil society.

Ever since the Opium War, Chinese society has faced the passage from a traditional society to a modern one, with every kind of detour and difficulty. Ever since the Opium War, the road the Chinese nation has walked has been a hard one. So in 1978 the basic orientation was settled: reform and opening up would take the market economy as its direction.

At first the market economy was not stated openly, because our earlier understanding of socialism was "big and public" — meaning people's communes on a large scale and a high degree of collective ownership — and a planned economy. But the Soviet Union's experience, China's own, and that of other socialist countries all showed that the planned economy was a road that led nowhere.

So a new road had to be taken. What was it? At the start it was treated as no more than an experiment — in the countryside, for instance. Decades had proved that the people's communes did not work, so farmers were allowed to contract land out to households. At the time it was called the household contract responsibility system. It gave farmers a certain amount of freedom: I decide myself what I can produce, which was impossible under the people's communes. And once I produce something myself, I have to take it out and sell it. Selling means a market, means exchange.

Reform moved from the countryside into the cities. The cities had several problems, real problems that forced this kind of reform. First, ten years of the Cultural Revolution had left the economy in bad shape — people said at the time it was close to collapse — and state-owned enterprises could not absorb that many workers. And what was to be done with the huge numbers of educated youth returning to the cities after those ten years? State enterprises had no room for them, so, even if only as a stopgap, educated youth were allowed to find work for themselves. That is where the getihu — self-employed individual businesses — came from. In the previous 30 years this had almost never been allowed.

Once getihu existed, documents had to be written for them. The commodity economy was undeveloped then, so almost any getihu running even a small trade could get quite rich. And once you were rich, what to do with the money? Could I invest it? Could I expand production? Could I hire people? That went through a whole series of discussions and struggles, arguments and contests, back and forth, before it was decided that hiring was allowed. And once you could hire, this was no longer an individual economy but a private one.

Once a market had gradually taken shape, some economists in academic circles put forward an idea that the top leadership of the Chinese Communist Party then made into the Party's theory of reform and opening up: socialism with Chinese characteristics. Part of it was a socialist market economy with Chinese characteristics. It had always been held that the market economy belonged to capitalism and that socialism could not have one. Now it was formally decided that socialism could have a market economy, and so raise people's standard of living.

One important part of this is that there is a civil society. It means people have relatively more mobility, a widening of freedom. Today I can be at this company, tomorrow at that one. Under the old system you had only one work unit; if it fired you, you had no way to live.

In other words, the market economy is not only an economic structure, it is a social structure. That includes where people stand inside it: your circumstances, your position, whether you can move. So I think this is a more important meaning of reform and opening up, one beyond its economic meaning.

2. Private Enterprise Is the Most Important Result of Reform and Opening Up

Wei Sen, Professor, School of Economics, Fudan University

Back then it was very, very hard to recognize the market economy. It was first called a "planned, market-adjusted economy," then a "planned commodity economy," and later a "commodity economy" was recognized while the market economy still was not. Only in 1994 was the market economy recognized, and the economy grew. So these 40 years are, in human history, a truly great thing.

China has had almost 40 years of high-speed growth, though strictly speaking the growth started after 1994, or after the 1990s. That growth is a result of market-oriented reform. Every other factor, I think, is secondary. A large part of it is the rise of private enterprise. Private firms now account for more than 84% of employment, more than 83% or 84% of foreign-trade exports, more than 60% of tax revenue, even more than 70% of fixed-asset investment — every area. That private enterprise has become the main body of the economy is a result of marketization. That much, I think, cannot be denied.

Also, if you look at the course of the Chinese economy on a long horizon, you should see what a great thing these 40 years of reform have been. Historically, the Chinese economy was a smallholder or natural economy for thousands of years, and right through the late Qing it basically did not grow. By Angus Maddison's account, per capita GDP was only 500 euros. But here is a statistic I found: in the early-to-mid Ming, in the Hongzhi reign, our GDP was roughly a quarter of the world's. Through the High Qing of Kangxi and Qianlong it kept growing. At its peak, in the Daoguang reign, China's GDP was a third of the world's. Even in the late Qing, after the Boxers, the Nian Rebellion, two Opium Wars and the First Sino-Japanese War, as the economy slid downward until the 1911 revolution toppled the dynasty, China's GDP was still more than 8.8% of the world's in 1913. Even after eight years of war against Japan and four years of civil war, China's GDP in 1950 was 4.5% of the world's. But after twenty-seven or twenty-eight years of planned economy, by 1978 China's GDP was only 2.8% of the world's. With 960 million people, a quarter of the world's population, per capita GDP was just 381 yuan (US$222 at the official exchange rate of the day). The planned economy was proved to be an unworkable system. Looking back today at those first 30 years, our reform was, to a degree, entirely forced on us. By 1978 China's total GDP was 364.5 billion yuan — less than a mid-sized city produces now; Shanghai alone is close to 1 trillion.

A country of 960 million, seven or eight hundred million of them poor, very poor. I was in southwestern Shandong then, and we did not have enough to eat. Reform was forced out of conditions like those. Back then it was very, very hard to recognize the market economy. It was first called a "planned, market-adjusted economy," then a "planned commodity economy," and later a "commodity economy" was recognized while the market economy still was not. Only in 1994 was the market economy recognized, and the economy grew. So these 40 years are, in human history, a truly great thing. China's economy shot up to a total GDP of US$12 trillion (in 2016). This year, with the yuan depreciating, it has become US$13.4 trillion — number two, in effect. Foreign-trade exports are also second in the world. Per capita GDP will pass US$9,000 this year, up from US$8,400. That is already a very large figure. This year we passed Russia in per capita GDP. Compare India, which is only a bit over US$2,000 now — yet back then, say from 1978 to 1990, India's per capita GDP was higher than China's almost throughout.

In little more than 20 years, China's economy grew at that speed. It really is a miracle, a great event. And this is exactly the moment for our country to reflect: why did we achieve something so great? The answer should still be market-oriented reform.

3. In Its Broad Logic and Direction, Reform and Opening Up Was Right

Zhang Qianfan, Professor, Peking University Law School

As those constraints were broken down bit by bit, mobility in Chinese society kept rising. One result is that China's economic reform has broadly followed a Pareto-optimal process — everyone got something out of it.

Reform and opening up is almost 40 years old. It is called "opening up" because, on the whole, these 40 years have been a steady loosening and liberalization. The old planned economy tied people down in every direction — you couldn't do this, you couldn't do that — so the whole country was poor. As those constraints were broken down bit by bit, mobility in Chinese society kept rising. One result is that China's economic reform has broadly followed a Pareto-optimal process: everyone got something out of it. Farmers who went to the cities to work earned higher incomes and gained. Had they stayed in their home villages, for one reason or another — crop prices too low, or too little farmland — their lives would have stayed desperately poor. Migrant workers are treated unequally in the cities, but that is still a considerable improvement on life in the countryside. The starting points were so unequal to begin with — the urban-rural gap was wider than the gap between migrant workers and city residents — that moving to the city to work still improved their lot. City residents don't have an easy life either, of course, but they rode free on the city's vested interests and picked up the many conveniences that come with urban privilege; if even migrant workers aren't complaining, they have even less to complain about. As for officials at every level who got rich through one form of rent-seeking or another, that goes without saying — and that includes some capable or well-connected entrepreneurs, the biggest beneficiaries of reform.

In short, nearly everyone got solid, tangible benefits out of this "great leap forward in development." The air, the water and the soil have been polluted, resources have been used up, and certain public goods once taken for granted have been hollowed out by warped development — but not to the point where people cannot survive. More precisely, the various kinds of pollution cannot yet be tied to public-health disasters in any immediate, visible way. Some people really may have had their welfare stripped from them — workers who got "black lung" from bad working conditions, for instance — but because there are not enough of them, or because reporting on them is restricted, or because the overwhelming majority are lost in their own carnival of "quietly getting rich," what happened to these people has drawn too little attention. The overwhelming majority at least believe themselves to have gained from reform.

4. We Should Stay Humble — That Too Is Part of What Reform and Opening Up Achieved

Ma Yong, Researcher, Institute of Modern History, Chinese Academy of Social Sciences

Chinese history cannot possibly produce a unique road of its own. How could there be a unique road? Marx himself was not arguing for a unique road. This is a question of one's knowledge structure.

We have no model of our own. If we had an open public-opinion environment, there would be no room at all for self-satisfaction. China should carry a far stronger sense of danger, should hold the modesty and caution Japan has kept since modern times, should learn from the outside world, and should look at whatever gains it has made with gratitude toward the world.

In the 1980s we thought China was one step away from drawing close to the world and joining it, and that only after joining the world would China really be able to change it. When China became the center of the world, the world would also adjust in line with our values. I have made this point before in articles and talks: in 1941, the moment the Pacific War broke out, China came back to the center of the world after nearly 100 years on its margins. From the outbreak of the Pacific War in 1941 to the end of the war in 1945 and the founding of the United Nations, China not only returned to the center but poured its own wisdom into the postwar rebuilding of world order. Look at the Charter of the United Nations and the Universal Declaration of Human Rights: the content of Chinese wisdom in them is very high.

The first article of the Universal Declaration of Human Rights is "the benevolent love others" — a saying of Confucius. Zhang Boling's younger brother Zhang Pengchun, one of the drafters, used Confucian thought to shape the world. From that point on we came to think capitalism was good, because capitalism had taken up China's own way of putting things. At the end of the First World War, Yan Fu said that 300 years of capitalist development came to "profiting oneself by killing others, shameless and without scruple." But by the end of the Second World War, the Chinese had handed Confucian ideas to the world. After that, Western capitalism of course also developed along highly scientific, highly organized lines, and wealth grew fast. At that point, with Eastern ethics added in, the whole world slowly began to change. This shows that China's own entry into the world was itself a way of contributing Eastern wisdom to the world.

Chinese history cannot possibly produce a unique road of its own. How could there be a unique road? Marx himself was not arguing for a unique road. This is a question of one's knowledge structure. As a historian I can see the problem clearly. But not everyone does, and our public-opinion environment is held under absolutely tight control, with no space at all for free speech. So people simply have no idea about any of this. With no space for speech, everything ends up being indoctrination — and not even indoctrination in universal values. Universal values can't monopolize everything either, of course; other values have to appear as well. This is probably something we should think through carefully.

The direction China has been moving in for more than 100 years — into the world — has not been reversed by these few decades of economic growth, and let's hear no talk of being "the world's second-largest." China has been "the world's largest" plenty of times. With a population your size, what is impressive about being number one? You simply cannot keep accounts that way, and it is absurd of us to do it.

For more than 30 years the countryside has only gotten worse, and so has education. Looking at education today: in 40 years of reform and opening up, the only stretch when we had higher education worth the name was probably that one decade, from 1978 to 1989.

Modern education in China began around 1900, and looking across the more than 100 years since, education genuinely in step with the world has not lasted 50 years. That is why a whole series of problems in China are so hard to solve, and why we are going to run into big trouble — the trouble may well lie in education.

Modern education was never China's own to begin with. It was brought in from the West, and we had nothing original to add; you can only follow closely in other people's steps. And what did they do? I have studied several university presidents — I've written about Cai Yuanpei, Jiang Menglin and Hu Shi. Look at their educational thinking, Zhu Kezhen's included, and it was very simple: bring the American system over whole and run things on that model. Do it that way and ten years is enough to change things. The most successful universities — Yenching, the Southwest Associated University, Peking University — succeeded in the 1920s and 1930s, and in fact ten years was all it took to see results. Your thinking and your approach have to be brought in line with the world before there can be dialogue and exchange. If we can't be in line — if our modern-history textbooks keep drilling in concepts like "semi-colonial, semi-feudal" — how do we discuss anything with American scholars? We are not on the same frequency. Problems in our higher education are problems that touch the foundations of the country.

In our overall thinking, in China's larger direction, we need to be in step with the world. Only when China is completely in step with the world can China arrive at a distinctive character of its own. Take Japan: once it fell in step with the world, everything we see when we visit Japan today is Japanese — the kimono, the way of life, the food, all thoroughly Japanese — while its values and its sense of belonging are global. China hasn't gotten there. We have not accepted the world's values. So we are twisted out of shape: our clothing, food, housing and travel have kept almost nothing distinctively Chinese, while in values we have held on to Chinese particularity.

5. Reform and Opening Up Was Right. Why Is It Doubted More and More?

Lei Yi, Researcher, Institute of Modern History, Chinese Academy of Social Sciences

But these past few years, look at what happens when reform and opening up comes up: many people feel they have to say we must defend it, and supporting it is no longer something said with a clear conscience. More and more people question it, criticize it. This is the moment to reflect: what did it achieve? What problems are inside it? That reflection has to be provoked.

When did every class most visibly benefit from reform and opening up? In the first ten years. From 1979 to the mid-to-late 1980s, starting with the farmers. Farmers had been at the very bottom, in the worst poverty, so even a small improvement counted as a real gain for them: from not having enough to eat to having enough; from coarse grain all year round to wheat flour. When I was sent down to the countryside, the one extravagance the farmers there dreamed of was this: one day we'll be like you city people, eating white-flour steamed buns every day of the year. Around Sichuan, I suspect, just having enough to eat would have been dream enough.

Reform and opening up began by dissolving the rural people's communes and moving to the household contract responsibility system. Things improved fast. After that came the implementation of policies for intellectuals, veteran cadres restored to their posts, and the "rightist" label lifted almost across the board — of the 500,000 to 600,000 people so labeled nationwide, only a handful kept it, so you can say it was swept away at a stroke. That included the children of so-called landlords and rich peasants: their family labels were taken off, and class origin no longer counted for things like exams. Factory workers' incomes rose from before, and educated youth came back to the cities. In that period every class visibly gained.

But after it, as reform and opening up moved into deep water, the various mechanisms for distributing the gains were never effectively built. On the whole every class still gained, but how much they gained began to differ enormously. From then on, criticism and doubt about reform and opening up — and about parts of it — grew louder and louder.

This is also what we should be reflecting on as we mark the anniversary of reform and opening up. Why was reform and opening up almost the loudest voice of the first ten years, so that anyone opposing it had no ground to stand on? But these past few years, look at what happens when reform and opening up comes up: many people feel they have to say we must defend it, and supporting it is no longer something said with a clear conscience. More and more people question it, criticize it. This is the moment to reflect: what did it achieve? What problems are inside it? That reflection has to be provoked.

Broadly speaking: first, the market economy has to be maintained. Public space should keep widening. In that process there will have to be a mutual adjustment, including between the government and citizens. Once public space is wider, what do citizens do? And what does the government do? With public space wider, will the government regulate it, suppress it, or keep it under a kind of surveillance? That is a mutual process of adjustment. And then there is building the rule of law.

These are the things reform and opening up should keep holding to, or the places where it has not done enough and should keep pushing. Because so-called social transformation really is a change in social structure. The interests of different classes are adjusted to different degrees — some gain more, some less, and some even lose. And it is exactly when interests are shifting sharply that conflict is most likely.

Take demolition and relocation. A great many mass incidents today have to do with forced demolition. How do you make sure demolition stays inside the rule of law? That is the problem we face. How do you keep conflict to a minimum? If your home is being demolished, you do everything you can to maximize your own interest. The government certainly cannot do everything exactly as you wish. But how can the two sides settle this within a framework of law? I actually think good experience in this area should be summed up and spread.

That is one example. Reform and opening up as a whole is a change in the social structure of every class — that is, the interests of every class being adjusted and shifted, constantly. In that shifting, those who lose out get very angry, and even those who gain relatively little get angry and deeply dissatisfied. It really is an extremely hard thing. Keeping society stable is hard.

How do we get the political system to fit and adapt to the new economy? This too is a problem we will face for a long time.

6. Lumping These 40 Years Together as "Reform and Opening Up" Ignores the Ruptures Inside Them

Hong Tao, Professor, School of International Relations and Public Affairs, Fudan University

This year is the fortieth anniversary of reform and opening up. More useful than parading its banner would be to study when reform and opening up died, and why.

The 1980s were probably the era in which Chinese people enjoyed comparatively the most freedom in several thousand years. Many who lived through it look back on it with longing. Material things were still scarce and most people's lives were still hard, but the intellectual atmosphere was full of vigor and vitality: the idealism of the Mao era had not yet been shattered by the utilitarianism of power and the market, and at the same time there was a freedom the Mao era never had. There is a song that goes — "Hold freedom tight through wind and rain, a lifetime of wavering struggle, sure that the future can be changed" — and that is a portrait of the spirit of the time. It was an age full of confidence and hope. It was also a rare age in Chinese history, because in China the great majority of people have always been fated to keep their heads down and stay in their place; staying alive counted as luck, and hope was a luxury.

To take the forty years from the late 1970s to today and call all of it "reform and opening up" is self-deception. The vast ruptures inside those forty years should not be ignored. Can idealism, naked self-interest and cynicism be spoken of in the same breath? Can an age full of vitality and inner freedom be set beside an age in which control reaches into people's nerves? Can an age that talked about seeking truth from facts and emancipating the mind be set beside an age in which a post can be deleted at will, with no reason given? Since the end of the 1980s the antagonism between officials and the public has kept sharpening, and how far it has come today is enough to make one sigh. This year is the fortieth anniversary of reform and opening up. More useful than parading its banner would be to study when reform and opening up died, and why.

7. Treated as a Tool, Reform and Opening Up Stalled at a Certain Point and Lost Its Goal

Ren Jiantao, Professor of Political Science, Tsinghua University

Reform and opening up was launched, as Deng Xiaoping stressed, to deal with poverty: let some people get rich first, and pursue common prosperity in the end. It was a plain, material objective.

Speaking for my own generation — I call myself a participant in, observer of and researcher on reform and opening up, and I come to it as a political scientist — my overall judgment stays optimistic. But on specific matters, I think we should keep a cautious pessimism about how things will move. Cautious optimism and cautious pessimism together are, I believe, the most responsible attitude. To think China can, without lifting a finger, reach some ideal state of modern institutions in three to five years is an absolutely naive fantasy — yet we are unwilling to give up the ideal of China becoming a modern country. On the ideal we are cautiously optimistic; on concrete progress we are cautiously pessimistic.

The reason is that in concrete implementation reform runs into too many interest groups, and those interest groups are a huge obstacle to China's reform and opening up. That is the most important real-world reason we must stay cautiously pessimistic. For China's reform and opening up, one question has never been put on the table: what is our realistic vision? We have an enormous vision of the future — we will certainly achieve communism. That is an enormous, distant, long-range vision. But what is the vision for China's reform over the next thirty or fifty years? At the moment we express it with a grand phrase: the "China Dream," or the "dream of China's national rejuvenation."

But what are the concrete indicators of that "dream of national rejuvenation"? Politically, what kind of country are you building? Economically, what level of development are you reaching? Socially and culturally, what state of innovation are you aiming for? On concrete indicators we are still short, still fairly vague. The reason is that treating reform and opening up as a tool has blocked us from stating an overall political vision for it. Because reform and opening up was launched, as Deng Xiaoping stressed, to deal with poverty: let some people get rich first, and pursue common prosperity in the end. It was a plain, material objective.

8. What Else Should Be Done

Ren Jiantao, Professor of Political Science, Tsinghua University

Rule of law must come before democracy, otherwise social unrest can't be avoided — that is an extremely naive view. Yet it turns out to be extremely popular in China, and it runs badly against the basic common sense of the discipline.

So what about institutions? After the 18th Party Congress there was in fact an effort to break through. Political-system reform is not mentioned much anymore — a term once used often has become one used rarely — but the Fourth Plenum of the 18th Central Committee pointed to what may be the most important goal of political-system reform, one that in a sense carries the weight of a vision: China should move toward rule of law. And in a sense, some colleagues in China's legal and political-science circles have always designed their vision of reform by cutting the modern state into pieces. For instance: rule of law must come before democracy, democracy cannot come before rule of law, democracy before rule of law brings chaos while rule of law before democracy secures order. As if rule of law, democracy, freedom, and the other values folded into the "core socialist values" could each be pulled out on its own and used separately whenever we like. That is simply wrong.

On building a modern political system, or building a modern state, one thing has to be stressed: ever since Britain, the first normative modern state, came into being, none of the elements of a modern state can be separated from the rest. All the elements of a modern society — market economy, democratic politics, cultural pluralism, or democracy, constitutional government, rule of law, freedom — are locked into one another, and you have to advance them together, as a whole. Because without a basic democratic system, think about it: who is going to deliver rule of law to you? The force behind rule of law comes from popular sovereignty. Popular sovereignty, through the mutual pressures of democracy — especially under what Robert Dahl called "polyarchy" — leaves you no choice but to settle onto the platform of law. So to say rule of law must come before democracy, otherwise social unrest can't be avoided, is an extremely naive view. Yet it turns out to be extremely popular in China, and it runs badly against the basic common sense of the discipline. That is one point: we need a modern vision for China's political system, or for state-building. Put another way, democracy and rule of law are tightly bound together. And what would most help us Chinese realize our own national ideology is exactly what Marx stressed: the passage from the realm of necessity to the realm of freedom. The degree of freedom citizens have absolutely must rise.

Second, when you plan political-system reform, or plan the building of a modern state — or, to put it a third way, build a modernized system of national governance and raise the modernization of governance capacity, which is the new formulation used since the 18th Party Congress — that sits on the same platform, within the same scope, as political-system reform. So whatever changes these three formulations go through, underneath them there has to be a relatively open state of reform.

So look back at what the basic spirit of reform and opening up was. It must be the courage to face problems and plan reform accordingly. In recent years we have on one hand worked very hard at planning reform, and on the other hand put heavy stress on tight control of society. There is a contradiction here. The tight control, and the reform you are trying to plan — the reform atmosphere and the wave of reform you want to stir up — are themselves the things you are trying to control. Your motives and your actions can't be squared that way. So this year, marking 40 years of reform and opening up, we need to stir up a new wave of reform and stop treating political-system reform as taboo.

I published an article in the journal of the Central Institute of Socialism arguing that for China, building a democratic political vision could start from the managerial democracy in the economic sphere we have had since reform and opening up began — look at how much effect it produced. Now look at the administration of party and government bodies: so many agencies, so many people, that the fiscal burden has become unbearable. Zhu Rongji was saying twenty-odd years ago that we run a "headcount fiscal system," and we still do. So can we carry out administrative democratic reform? Our democracy-oriented reform does not have to jump straight to regime-level democracy — party alternation, press freedom and so on. Regime-level democracy needs the right conditions, and of course it cannot be avoided forever either. It is only that in political reform, or building a modern state, or the modernization of the governance system and governance capacity — three names for the same thing — the planning does need some sense of what comes first and what comes later, what is urgent and what is not.

But one thing has to be clear: the whole institutional framework of the modern normative state is, first, not something we reject, and second, not something for which we can chart an entirely separate path of our own.

9. You Can't Talk Only About Reform and Leave Out Opening Up — And Opening Up Isn't Only Outward, It's Inward Too

Wang Xiaoyu, Associate Professor, Department of Chinese, Tongji University

Does reform open power up or concentrate it? Personally I think reform should open power up. That is the most important thing of all.

Reform has to go together with opening up. If reform means concentrating power rather than opening it up, it is heading in exactly the wrong direction. Does reform open power up or concentrate it? Personally I think reform should open power up. That is the most important thing of all. Whether power gets concentrated or opened up usually depends on whether reform is driven from the top down or from the bottom up. Ideally both drive it together; if it is purely top-down, it will mostly concentrate power. So you can't talk only about reform and leave out opening up — and opening up isn't only outward, it's inward too.

Unfortunately, the tradition of reform we see in Chinese history has tended to concentrate power. Shang Yang's reforms and Wang Anshi's alike took wealth from the people. Shang Yang-style reform can build a rich state and a strong army, an empire — but it offers ordinary people no future: the deeper the reform goes, the more severely their interests and rights are stripped away. How to escape Shang Yang-style reform is the puzzle Shang Yang left for later generations.

10. Having Delivered Development, the Government Now Has to Learn to Serve

Zhang Bin, Researcher, Institute of World Economics and Politics, Chinese Academy of Social Sciences

Putting most of its energy and money into growing the economy and enlivening local economies has looked like a successful formula for government in the past. But should the government's energy still be allocated that way from here on? That is a real question.

That China, starting from such a poor country, could complete industrialization, with such a large rise in per capita income and such a large improvement in welfare, is remarkable. Only a handful of countries have managed it.

Looking back at these 40 years of reform and opening up, two points stand out for me. First, the core reason 40 years of reform succeeded on this scale is market-oriented reform. Sometimes that reform brought change by way of opening up, sometimes by way of reform itself. What we achieved, I think, we owe to marketization, and that should be counted as the greatest legacy.

But China's market-oriented reform was, in essence, accomplished by pushing reform of government policy and government functions. Every eight or ten years we run into fairly sharp challenges and problems, but broadly speaking, each time a sharp problem came up, market-oriented reform measures left behind some institutional legacy. Twenty or thirty years ago our institutions were not set up the way they are now: the People's Bank of China then was not the People's Bank of China of today, our commercial banks were not today's commercial banks. None of it was the same; enormous changes have taken place. Behind these economic achievements and changes lies a great deal of institution-building. Don't say China has no institution-building; China's institutions have changed enormously. And what that institution-building has mostly done is sustain and nurture the growth of the market, and let the government perform its public functions better. Over the past 40 years the direction has been fairly clear, and it has already left us a great deal.

Second, the sharper problem ahead is that the center of gravity may be moving. In the past the main task was to protect, develop and extend the market, and that stays just as important. But something else matters too: the central tension has shifted, and it is no longer simply a question of development. What satisfies people's lives is not only material things but, increasingly, non-material ones — things in the realm of services. As the tension shifts, we should not let what looked like a successful formula during the earlier stage of development turn into a burden. The so-called successful formula of government supporting economic growth — and academics do not all agree on this — has been for government to put most of its energy and money into growing the economy and enlivening local economies. That has looked like a successful formula in the past. But should the government's energy still be allocated that way from here on? That is a real question. Adjustments need to be made from here, I think: the government's priorities need adjusting. What worked as a successful formula in the past may genuinely have succeeded, but going on using it is not necessarily right.

Development zones, tax breaks, infrastructure — I myself think these were right for a stretch of time. Without bridges, without roads, without those things, a market cannot grow. When the market is especially weak you subsidize it a bit — though how you subsidize makes a big difference, and broad, universal subsidies can have their advantages. But once the market's gaps have gradually been filled, the gaps the market itself cannot fill should be filled too.

This is the change of mind governments at every level urgently need today. Put simply: from a development-oriented government to a service-oriented one. A development-oriented government may well have been right for a long stretch of the past, but from here we should not be bound by it. Society has changed, the market has changed, the market grows bigger by the day, and what is missing is what the market cannot do — services — which the government needs to step in and supply. In the past the government did a great deal to fill the market's gaps; from here it needs to fill its own, by providing better public services.

(More reporting to follow, updated as it comes.)

Interviewees in this report:

Graphics: Feng Xiuxia

The cover image and banner are stills from the documentary China's New Rise (《中国，新的崛起》), via Douban.