Reflecting the Impact of the Fall of the Berlin Wall and the Collapse of Soviet Union on the Domestic Reform in China and East Asia

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1 Reflecting the Impact of the Fall of the Berlin Wall and the Collapse of Soviet Union on the Domestic Reform in China and East Asia Hairong Lai There is no doubt that the fall of Berlin Wall in 1989 and the collapse of Soviet Union in 1991 were the most important events in the world since the second half of last century. However, it is not clear how far-reaching these events are in affecting the social-economic-political change in places other than the above regions. In this article, I will try to reflect the impact of these events on the domestic change in China and some other East Asia countries or regions. 1. Ending the Debates on Planning Economy vs. Market Economy in China The collapse of Berlin Wall and Soviet Union was rooted in its unsustainable system. However, the clear process that led to their collapse didn t start until the problem of sustainability began to be explosive in mid 1980s. China started its reforming and opening strategy that deviated from Stalinism (or Maoism, the Chinese version of Stalinism) in late 1970s, many years before the process of leading to the collapse of Berlin Wall and Soviet Union. Reform and Opening Up in Hairong Lai is the Executive Director of China Center for Overseas Social and Philosophical Theories. The views in this article are his personal observations. They do not represent the position of the organization to which he is affiliated.

2 China after late 1970s was basically domestically driven without much international experience for reference. Debates on reform strategy and the target economic pattern were fierce in 1980s. Some political struggles were built upon these debates. Although it was obvious that planning economy (or command economy) was not sustainable and that market should be allowed to play some role in coordinating economic activities, the ruling elite as well as the society divided along the question whether the target economic institution should be a planning economy with the complementary role of market or a market economy with the complementary role of planning. The collapse of Berlin Wall and Soviet Union put an end to the above debates in China. The biggest open question in 1980s about the viability, the changeability, and the sustainability of planning economy disappeared because of the collapse. All the argumentation in China for planning economy lost its credibility overnight. It is not accidental that in , planning economy was abandoned by the Chinese Communist Party and market economy was introduced to the Party s program and to the state s constitution. The fundamental shift from planning economy to market economy in 1992 was more than extraordinary, because the ideology in early 1990s, as a consequence of the tragic 1989 events in Beijing, was in particular hostile to market economy which was considered as Western Capitalist economic institution. It is not surprising that the collapse of Berlin Wall and Soviet Union had such a far reaching impact on the domestic economic reform in China, because Soviet Union had been the role model for China in terms of systemic building and development, even though after 1960s China and Soviet Union broke up with each other in terms of international relations. The command economy dominating China between 1949 and 1978 was a copy of the command economy in Soviet Union. The uncertainty hanging over Gorbachev s reform was equally hanging over China s reform in 1980s. Thus, nothing could be more sweeping over Chinese mentality than the demise of its tutor Soviet Union.

3 Following the denunciation of planning economy and the introduction of market economy, China quickly abandoned the dual-track pricing system. In mid 1990s, most of commodity and service price became determined solely by the market. Privatization started to spread in early 1990s, first from collectively owned enterprises, then to small and medium scale state owned enterprises subordinated to county and prefecture levels, and finally to large scale state owned enterprises subordinated to higher levels. The ownership structure of Chinese economy changed fundamentally since 1990s. Measured by the output, the share of GDP contributed by the private sector changed from 0.9% in 1978 to 24.2% in 1996 and to 65% in China cautiously opened itself to the outside world in 1980s. In 1990s, China began to embrace the world economy, to such an extent that it managed to accomplish in late 1990s the negotiation with major economies about its entering WTO. After China did enter the WTO, according to the negotiation, in 2002, its integration into the world economy proved faster than any other countries and far more beneficial than most people could imagine. The introduction of market economy to China was a milestone not only in its economic development, but also in its political development. By introducing market economy, China has to search its own development path, because market economy was revolutionary to the so far dominating Stalinist ideology. Thus Stalinism is no longer a line to follow. Meanwhile, those developed countries like US, UK, and other Western European countries were ideologically different from China, which means China will not take them as role models, although China will study and accommodate the particular merits of their system. Today, there are some discussions on the so called China Development Model. Some believes there is such a model. Some believes it is a fiction. It is debatable whether it is legitimate to use this concept. What is for sure is that China did begin to have increasing special characters in its development path. And it is to some extent a by-product of the collapse of Berlin Wall and Soviet Union.

4 2. Ending the Radicalism in Political Reform in China Although the lessons on economic institution from the collapse of Berlin Wall and Soviet Union for Chinese were absolutely clear, the lessons on political institution were obscure or controversial. The debates on lessons from Berlin and Moscow for political reform went along two opposite lines. One line believed that Soviet Union political system wouldn t have collapsed had it not Gorbachev s reform. The other line believed that Soviet Union political system collapsed just because Gorbachev s reform came too late and was handled in a bad manner. The voice of the former line was laud and dominating in early 1990s, reinforced by the shock of the political turmoil in 1989 in Beijing. However, the argumentation following the second line was also strong though in a low profile, in particular because China already started to explore different forms of political reform since late 1970s. One political lesson common to Soviet Union before 1992 and China before 1978 seems to be: 1) there was no ordered succession; 2) power was too much concentrated into one single leader. In early 1980s, Deng Xiaoping, the architect for the Reform and Opening Up Policy in China launched a program of institutionalizing the power holding and power transferring. He initiated retirement for those revolution veterans who had been in power for decades since the establishment of the People s Republic of China in Younger generations began to emerge to higher power ladder with a prospect of holding power in limited terms and of handing over the power to younger generation. The consequence of personal cult of Mao in China was as tragic and painful as that of Stalin in Soviet Union. As a lesson from it, Deng Xiaoping and his colleagues invested great efforts in building the institution of collective leadership. Power had to be shared among the leadership collective so that the influence of any single leader, be it good or bad, will

5 be somehow checked. The hasty transfer of power from dying Brezhnev to dying Andropov, then to dying Chernenko, then to a quite young Gorbachev without much experience, reinforced the lesson for China from its own bad succession experience under Mao. An institution that ensures ordered succession thus became the top priority of the political reform agenda. Since late 1990s, the world began to witness the achievement of the reform effort in China. In 1997, a few politburo standing committee members retired in their ago of 70s. In 2002, most of the politburo standing committee members retired in their age of 70s. The highest power was peacefully transfer to a younger generation. In 2007, two politburo standing committee members who were over 70 retired. 4 new members who are in their 50s and 60s joined the politburo standing committee. It is pretty sure that 7 out of the current 9 members would retire in And the highest power would transfer to younger generation. Thus, miraculously, the previously most uncertain succession issue in communist politics becomes quite predictable in China. Perestroika and Glasnost was directed by Gorbachev and only by him. The whole success and failure depends on a single top leader. This is a frightening picture for Chinese. The fact that the whole communist party was apathetic when Gorbachev announced the dissolution of Soviet Union and Yeltsin declared the dissolution of Soviet Union Communist Party was especially shocking to their Chinese counterpart. It was interpreted in China as a result of ordinary playing no role in the political process of the Party. Thus they have no interest in the Party. Therefore, there is an urgent need for diluting the concentration of power into one single leader. There is an urgent need to increase the participation of the ordinary party members in the decision-making process of the Party so that ordinary party members have a stake in the Party. This became an issue in China. There has been an increasing talk about intra-party democracy since 1990s. However, there has been little concrete institution introduced to ensure intra-party democracy. It shows that the lessons from Soviet Union and Berlin Wall were not clear in

6 this aspect. Another obscure political lesson is how open the party should be toward the state and the society. In 1980s, a mainstream perception among the leadership was that the party was too much intertwined with the state, that the party had substituted the state, and that the party was degenerated into bureaucracy. Thus there was a need to separate the party from the state so that the party could politically lead the state which is supposed to focus on implementation and administration. There were radical efforts in separating the party structure from the state structure in 1980s. But the 1989 events in Beijing, together with the fall of Berlin Wall and the dissolution of Soviet Union, alarmed the leadership. One frequently referred perception by Chinese about the failure of Soviet Union was that Gorbachev too quickly shifted too much power from the party to the state, which fundamentally and irreversibly weakened the party. With such a lesson in mind among Chinese, the once heated discussion about separating the party from the state disappeared from the public in 1990s and 2000s. The effort of separating the party from the state stopped. Moreover, there seemed a tendency of strengthening the party s supervising over the state since 1990s. If what was learned from the collapse of Soviet Union was to stop the separation of the party and the state, the lesson was clear. However, the problem was that not all political reform measures taken by Gorbachev were perceived as mistakes. Some extent of openness of the party structure was needed. Bureaucratism in the Chinese Communist Party was equally serious as that in Soviet Union. Thus the need for reform was equally urgent. Nevertheless, the obscurity was what exactly should be done was far from being clear. 3. Helping Promote Democratization in South Korea and Taiwan The impact of the collapse of Berlin Wall and the fall of Soviet Union on domestic

7 economic-political development could not only be felt in China, but also be seen in other Eastern Asian states or regions, for example, South Korea and Taiwan. The impact on the development in South Korea and Taiwan was basically political. It was not accidental that democratization in South Korea and Taiwan started in late 1980s and basically accomplished in 1990s. The collapse of Berlin Wall and the fall of Soviet Union contributed greatly to the democratization in these places. However, the way in which events in Soviet Union and East Europe influenced the political development in South Korea and Taiwan was different from that in Mainland China. In Mainland China, it was the ruling elite that drew serious lessons from the failure of its former comrades. In South Korea and Taiwan, it was the United States who liberated from the pressure from Soviet Union that could encourage or even impose democratization agenda to South Korea and Taiwan, its allies in East Asia. Under Cold War, United States had to ally with any country or region that was against Soviet Union, no matter how authoritarian the particular regime was. United States would not intervene its allies domestic politics if the intervention would infuriate the rulers thus would risk driving the ally to the Soviet Union block. It was also the case for Soviet Union. Soviet Union didn t mind allying with those capitalist or even feudalist states that were against the United States block, although ideologically speaking, capitalism and feudalism were condemned by Soviet Union. Once the pressure of Cold War alleviated, United States had room for promoting democratization in its allies. The military regime in South Korea organized the first free election for the president in 1988 since general Park Chung-Hee took over the power through coup d etat in late In Taiwan, opposition party the Democratic Progressive Party was for the first time allowed by the long-time dictator Chiang Ching-Kuo to organize in Restriction over freedom of speech was lifted both in South Korea and Taiwan in late 1980s. In 1998 in South Korea and in 2000 in Taiwan, there was a change of ruling party out of free election, marking a new stage of

8 democratization in these two places. Naturally, a number of factors promoted the democratization process. Among them, the push from United States played a crucial role. This push couldn t have been possible without the collapse of the Berlin Wall and the fall of Soviet Union. 4. Opening a New Possibility: Peaceful Political Sea Change The fact that Berlin Wall collapsed peacefully and Soviet Union dissolved basically peacefully also had and will continue to have a huge impact on the politics in East Asia. Before these two events, few people could imagine regime change, dissolution of a state, and reunification of a nation-state could be peacefully done. History before 1980s showed that regime change and the dissolution or mergence of states inevitably involved massive violence, blood-shed, and killing. The peaceful collapse of Berlin Wall and Soviet Union wrote a promising new page in the history of human being. It is especially illuminating to China and Korea that have the pending problem of reunification. The several wars in 2000s in Middle East and Central Asia show that violence is far easier to prevail than peace when different states face disputes. Therefore, the peace in the collapse of Berlin Wall and the fall of Soviet Union was even more precious than people had realized. It was fortunate that Czech and Slovakia had a peaceful divorce in 1990s, following the peaceful reunification of Germany and the peaceful dissolution of Soviet Union. But it was tragic that former Yugoslavia didn t follow the example of the peaceful process of the collapse of Berlin Wall and the fall of Soviet Union. Hundreds of thousands of lives died in the dissolution of former Yugoslavia, as millions of people died during the divorce between Pakistan and India in 1940s. It is not very clear if the great legacy of the peaceful process of Berlin Wall in 1989 and of Soviet Union in 1991 has been fully taken by China and Korea. The Chinese

9 Communist Party in Mainland China and its former enemy Kuo Ming Tang (the Nationalist Party) in Taiwan reached high level of reconciliation in 2005 after decades of antagonism toward each other. The reconciliation greatly eased the tension across the Taiwan Strait. Meanwhile, South and North Korea began to engage with each other since late 1990s. Although the reconciliation between South and North Korea is not comparable with that between Mainland China and Taiwan, the tension in Korea peninsular had decreased greatly because of this engagement. The increasing possibility of peace in these two splitting countries could be partly a result of people in these countries learning the peaceful process of Berlin Wall in 1989 and Soviet Union in Easing the Tension among States in East Asia The demise of cold war, together with the domestic change following the demise of the cold war, greatly improved the international security in East Asia. Early 1990s witnessed the third wave since 1949 of China s establishing or restoring official ties with many countries, in particular with its Asian neighbors, for example South Korea, Vietnam, Singapore, Indonesia, Saudi Arabia, Israeli, etc. It also established official relations with South Africa and Namibia during this period. This new wave of developing foreign relations with various countries helped China improve the international security with the outside world. Without the massive political change in Berlin and Moscow, this wave of establishing or restoring ties could not have been possible. For example, Vietnam had to give up its aggression in South East Asia because of the collapse of its ally Soviet Union, paving the way for the restoration of the official ties between Vietnam and China. Similarly, due to the fall of Soviet Union, North Korea a member state in the Soviet Union block lost possibility of invading South Korea a member state in the United States block. The tension on the peninsular eased greatly, making it possible for China and South Korea to develop foreign relations.

10 Even the relations between China and India got improved since late 1980s when Gorbachev and Chinese leadership began to seek normalizing their relations. Backed by Soviet Union, India had been antagonist toward China for decades. After Soviet Union decreased its support to this antagonism, India and China began to engage with each other. Probably the more far-reaching impact on international relations was that the approach of dividing the world along ideology, be it communism or nationalism or liberalism, no longer prevailed. The most powerful driving force in shaping international relations changed to the promotion of economic interests through trading among different nations. This new approach helped many Asian states put aside their ideological difference, and develop economic cooperation. Moreover, as discussed afore, the collapse of Berlin Wall and the fall of Soviet Union provoked great domestic change in various countries and regions, the ideological difference among different states or regions had actually been reduced greatly. Thus even there is still tension caused by ideological difference. The magnitude of this tension is not comparable with those before 1980s. Thus from a Chinese point of view, the collapse of Berlin Wall and the fall of Soviet Union had greatly improved the international security. Whether the world is safer is another question. Newly emerged extremism might disturb the peace in the world. However, a world without the frenzied Cold War is surely much safer than one with it. The collapse of Berlin Wall and the fall of Soviet Union was a sweeping event among the educated Chinese who was born before mid 1970s. For those who were born after mid 1970s, they either grow up in an age without Soviet Union, or were too young in 1980s to be internalized into the Cold World before it collapsed. Thus they are unable to fully understand the implication of the events of the collapse of Berlin Wall and the fall of Soviet Union. These events have much less influence on them than on those who are older.

11 The influence of these events could have touched upon more people if the information infrastructure had had been as developed in early 1990s as it is now. In late 1980s and early 1990s, TV just began to be popularized in China. Internet was not introduced to the public yet. Only a relatively small proportion of the population was fully exposed to the unfolding of the Berlin Wall event and the Soviet Union event in late 1980s and early 1990s through the limited channel of information flow. Thus only limited people had contemplated about these events. The repercussion of these events therefore was limited. Now that the events have passed for around 20 years, less and less people have vivid experience and memory about these events. The interests in examining these great events gradually decline. In order for the lessons of Soviet Union and Berlin Wall to be illuminating to the future generation, scholarly works on them are more and more valuable. And this special volume of commemorating these events would hopefully stimulate more researches in the future on their great legacies.