November 21, 2024 • 45 mins
How did China become the economic behemoth that it is today? One pivotal moment was, obviously, it's ascension into the WTO. Prior to that, the era of reform under Deng Xiaoping was obviously crucial. But obviously no single event or turning point can really tell the story. In a groundbreaking new book -- The Great Transformation: China’s Road from Revolution to Reform -- historians Odd Arne Westad and Chen Jian tell the full story of how China went from being an impoverished, highly planned communist economy to the dynamic capitalist economy it is today. We spoke with Westad, a professor at Yale, about this book, and what people get wrong about China's big opening up.
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Episode Transcript
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Speaker 1 (00:03):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:21):
Hello and welcome to another episode of the Odd Lots podcast.
Speaker 3 (00:24):
I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 2 (00:27):
Tracy now that I'm like a middle aged old man,
I don't know. I've been getting really into reading history lately.
Speaker 3 (00:34):
Is it Roman history? No?
Speaker 2 (00:36):
No, it's actually worse than Roman history. I've been reading
a lot of twentieth century history. And the problem, well,
one problem is a bit of a diversion. But one
problem with reading twentieth century history is that I'm eventually
going to have to get around to really learning what
World War two is all about, and then I'm going
to be a fifty year old man.
Speaker 3 (00:53):
Reading You have to fulfill your destiny.
Speaker 4 (00:55):
I know.
Speaker 2 (00:55):
So I'm going to be a fifty year old man
in a few years reading World War two books and
watching World War or two documentaries. So, but yes, I've
been reading a lot of twentieth century history lately.
Speaker 3 (01:04):
You know how you know that you are really old,
It's when you start reading twentieth century history books and
realize that you were like there and sort of participating
in that time period.
Speaker 2 (01:14):
Well, it's so funny that you mentioned this because this
is increasingly dawning on me when I read history. And again,
slight sidetrack, but I've mentioned before a couple of times.
I lived in Malaysia for a year in nineteen eighty
nine and nineteen ninety and I discovered in reading history
recently that I don't know if they call it the
Malaysian Civil War, but the Ultimate Peace Agreement between the
(01:35):
Malaysian government and the Communist Party of Malaysia was signed
in nineteen eighty nine that ended that conflict, And so
I was there. I had no idea, but reading his.
Speaker 3 (01:45):
Grade school Joe was living through history.
Speaker 2 (01:47):
I was, and it sort of reminds I think this
is an important thing that I've realized reading more history,
is that the modern world as we know it is
so young. It's basically like the length of a person's life,
depending on where you want to start it. Like we're
just getting started here.
Speaker 3 (02:00):
So the history we're going to be talking about specifically
is China. And I was thinking about this because the
first time I went to China was in nineteen ninety four,
and it was completely different to how it is now,
Like there were still rickshaws on the street, Friendship stores existed.
Friendship stores still existed in the early two thousands when
(02:21):
I was there, and I don't know, do you know
what a friendship store is?
Speaker 2 (02:25):
I can guess.
Speaker 3 (02:26):
So it's like where foreigners were basically allowed to go
and like purchase specific goods. They had a lot of
like tourist tat and stuff like that. But if you
went to a friendship store in Beijing in the early
two thousands, it was basically like going to the East Bloc.
It was like a full employment program where you would
find a salesperson on the floor and you would say,
(02:48):
I want this item, and then they would give you
a little like token or receipt and then you would
take that to the cashier and pay, and then someone
else would bring the item to you. So yeah, that
was in the two thousands, And now when I think
about Beijing, like it has changed completely, Like stuff that
used to be one story neighborhoods full of bars like
(03:09):
san Ley Turn is now like luxury shopping centers totally.
Speaker 2 (03:14):
So this is the other thing too, which is that
you know, we talk a lot about China right now
for obvious reasons, but I kind of feel that like,
if we're going to talk about today. There probably is
some justification for like how we got here, and I
have to admit, you know, my understanding is really very
rudimentary and limited. Like in my mind, it's basically like
(03:34):
Maud died Doung Hopeng liberalized the economy, that was the
economy plugged into global.
Speaker 3 (03:40):
Idiot sunflower seeds happened.
Speaker 2 (03:42):
Yeah, and then they allowed a business and then they
entered the wto in here. And I would say, I
know basically four facts about the history of China, and
those you know, nineteen seventy eight wto now, so maybe
that's just three. And so I actually think it's important
to sort of deepen our understanding of how we got
to the China that we are so deeply connected to today.
Speaker 3 (04:04):
I am in favor of you using the podcast as
an excuse to read a bunch of history books.
Speaker 2 (04:09):
It's great, it's other.
Speaker 3 (04:11):
Manifest your middle aged self. That's fine, we should do it.
Speaker 2 (04:14):
Well, it's better because if I have to read books,
that means I'm not just scrolling Twitter all the time.
So if I have to prepare for episodes anyway, we're
going to be speaking with one of the co authors
of the new book came out in October The Great Transformation,
China's road from revolution to reform. And I would say
it complexifies a bit the very rudimentary story of the
(04:35):
last I don't know, forty plus years of China. It's
more than just three specific dates. It complexifies that story.
It sort of fleshes it out in a big way.
The co authors are Odd Arned Westdad and Chen John.
The first time on odd Lots that we'll have a
guest with the name odd.
Speaker 3 (04:51):
Surely the perfect guest.
Speaker 2 (04:52):
So it's truly the perfect guest. So we're speaking with
professor of history at Yale, Odd Earned west Dad. Professor Westdad,
thank you so much for coming on the podcast.
Speaker 4 (05:02):
Thank you for having me on you you almost had
to write we had It's truly, it's really a shame
that you haven't had me on before, I mean your
podcast with me as you first guest.
Speaker 3 (05:13):
We had to wait for Joe to enter his history phase.
Speaker 2 (05:15):
That's right, but you should have. You should have been
the first guest. So why this book, because I imagine
if I go on Amazon, there are probably hundreds of
books that are some version of how China reformed, How
China went from being this backwards economy to dynamic capitalist economy.
I know it's been written about in various forms of
(05:36):
numerous numerous times. Why did you and your co author
still feel at this point that this was an important
story or collection of stories to tell.
Speaker 4 (05:45):
I think there are two reasons. The first one is
quite personal in a way. I mean it almost goes
back to what you were talking about a minute ago.
So I first came to China as and I changed
student back in the late nineteen seventies and Changen. Of course,
my co Walton lived there during that period, so this
is away so personal process. Well, we lived through parts
of the time period that we are talking about in
(06:05):
this book, and there is no better incentive, as you
just touched upon, to go back to look at history
again than trying to understand the period that you lived through.
So that's the first reason. And the second reason is,
of course that we think we do it better than
anyone else. Do it better than anyone else because we
have more access to sources and more access to information
(06:26):
about what actually happened during that time period. So as
you read the book, you can see how, at least
when we do this as well as we can, we
are able to get on the inside of many of
the things that took place during that time period and
show the complexities, I mean, show how complex that period
of very early Chinese reform and opening was and in
(06:47):
many ways how contingent the process was, and how surprising
it is in more than one sense that we ended
up where we are today.
Speaker 3 (06:54):
So speaking of access, you mentioned this, I think in
the very beginning of the book, but you started researching
this in twenty ten, and you said that the research
process and the access you had kind of changed over
the next I guess thirteen or fourteen years or so.
Give us a little bit more detail, like, as a
researcher of Chinese history, how have things actually evolved for you?
Speaker 4 (07:19):
That's right. We started thinking about this and started researching
it in the early twenty teens, and of course back
then we had much better access to sources, much better
access to archives, to talk to people, to travel around
and country, to have informal discussions with people who would
be in the know than what is the case today.
So China has really since twenty sixteen seventeen, there were
(07:41):
closed down in terms of access to historical sources of
all kinds. So we were lucky. We started this process
quite early on and had some good years in which
we actually could collect material. Then we did something really silly.
We put it aside for other projects, hoping that we
would get even better access in a few years. That
happens sometimes that you make the wrong call on these
(08:02):
kinds of things, and instead, of course, it got much
was So what we had to do was to go
back to some of the material that we had gathered
in that early time period before we switch to other
projects that we then completed before we returned to this book,
and then try to feel that in the best we
could with all the materials we could get now. But
the level of access, the level of information is very
(08:24):
different today from what you could get pulled off back then.
Speaker 2 (08:27):
So I want to get into some of the content
of the book obviously, And like I said in the intro,
you know, I have this very cartoonish vision of history
in my head where Mao dies, Don Chopeg becomes the
new leader of the country after a little bit of
tension and turmoil, and then China liberalizes.
Speaker 3 (08:46):
So one of the sort of eye.
Speaker 2 (08:48):
Opening or sort of mind expanding moments in the book,
you talk about the cultural revolution, and how even there,
you know, we think of that as going I guess
from nineteen sixty six to sometime in the nineteen seventy.
You argue that the real intensity of it was two
years where the sort of the youth of China rose
up against the old cadres within the Communist Party. But
(09:10):
even in that time, amid some of this incredible turmoil
that the Communist Party was going through under mau, some
of the seeds of I guess capitalism were actually planted
in that turmoil.
Speaker 4 (09:23):
Yeah, that's right. I mean that I think is one
of the contributions of this book. I mean, your summarized
history of what happened. It is not wrong, okay, It's
just that it was really difficult and, as I said,
very contingent in terms of the various things that are
happening to get from warm to the next of those stages.
And one of the things that we do show in
the book is how the cultural revolution, which was undertaken,
(09:47):
of course, in order to solidify Maltadome's leadership and attack
the old leaders in the Communist Party who he regarded
as being too backle to take China into his new
Communist paradise. This cultural revolution had effects that were in
no way for sea, and part of them was in
many ways the destruction of all China. I mean, they
(10:08):
got rid of many of the traditional ways of thinking
and loyalties, and much of the patriarchal approaches within families.
All of this because of these political campaigns that they undertook,
directed almost against any kind of authority except most of
ohn authority. And in a strange kind of way, when
(10:29):
you get into the nineteen seventies, Mao's still alive, still
ruling from Beijing, things start to change in some places
from the ground up. So this is turning to markets
almost as a kind of revolutionary acts out of desperation,
because people along the coast, in the south, in the
(10:49):
areas that have some experience with capitalism and with markets,
they are worried that when this campaign ends, things have
got to get even worse. And some of these people
have been starving, you know, back during the Great Leap
forward in the late fifties and early sixties. So they
start rating, they start building up the opportunities that they
can take for themselves. In a little way. I mean,
(11:11):
this is not a predominant act in China in the
early nineteen seventies, but it did see something that is
incredibly important for the future, and then comes into full
flow after the party takes a step back off the
mal died and opens up for these console reforms happening
on an until boy Scain.
Speaker 3 (11:30):
I apologize in advance for asking a hypothetical, but do
you think the economic liberalization of the late nineteen seventies
early nineteen eighties would have been able to happen or
would have happened in some form if China hadn't experienced
the Cultural Revolution and all the I guess emotional trauma
and political chaos that came with it.
Speaker 4 (11:52):
It wouldn't have happened when it happened, that's for sure.
That's not even a hypothetical. I mean, I think if
China had continued basic along the Soviet model of development,
which is what they took up after the People's REPROBLEBM
was put in place in the late nineteen forties, Soviet
style everything right, planning, centralization, the wholer. I don't think
(12:13):
the kind of reform that we saw in the late
seventies and nuineteen eighties would have happened because there wouldn't
have been any fundamental reason to undertake it. I mean,
China would probably have chugged along in the same kind
of way as the Soviet Union did until some point
when that model started breaking down. Now, I'm not saying
that the Cultural Revolution was a necessary condition for these
(12:34):
changes in pay place, but the period of Cultural Revolution
activism did in many ways prepare the ground for the
timing of this and when it was to happen alst
be because you know, China at the end of the culture
ablution was a deserted thing. You know, when I first
arrived there in nineteen seventy nine, this was a dirt
poor and terrorized country, you know, a poorer in terms
(12:56):
of income to capital and most African countries and things
are getting work not that. So that kind of desperation
at all levels of Chinese society fitted into these changes.
Something had to be done, and going back to the
Soviet model of development as it existed only on when
you get into the nineteen eighties does not seem as
a viable composition.
Speaker 2 (13:32):
What does it mean when you talk about history being contingent?
You use that word a couple of times, and I
actually don't know if I fully understand what that means.
But when you're telling these stories or this story and
you're keeping in mind the contingency and history, can you
talk a little bit more about this idea.
Speaker 4 (13:48):
So you'll see from the book that we go in
and out from the sort of micro to the macro
level of telling history. And if you look at the
night and the coup against the radicals, the softball gang
of four within the party took place, which we described
in some detail almost you know what happens from hour
(14:09):
to hour.
Speaker 2 (14:10):
That right, This was the moment in which the left
faction after maud Dies was arrested and allowed for a
sort of more moderate path to emerge.
Speaker 4 (14:21):
That's right. And it was in effect the military coup,
and it was undertaken by the military and the security
forces against the people who himself had put in charge
of the party, including his widow was most prominent of
all jiang Qin. Now that night, the following few days,
things could have ended up very differently. In Shanghai, the
(14:42):
biggest city in China by far, was still under control
of the radicals. There were military units that supported the
radical approach to politics. This could have ended up very
differently from what it did. And as we described in
the in the books, some of the protos, some of
the coup makers themselves in those days that followed the
(15:03):
coup itself, were completely surprised by how little resistance there
had been from the left and how chales there had
been on the streets. So that's what I mean with
it being contingent. I mean, this is something that obviously
connects to the larger picture that we see today, going
back to your sort of three level version of what
happened right in China, But it didn't seem that obvious
(15:26):
at the time, and it could have gone in very
different directions from what we're seeing today.
Speaker 3 (15:30):
How important was the fraying of the relationship between China
and the Soviet Union in the sort of nineteen sixties
early nineteen seventies to spurring or catalyzing that opening up,
Because it does feel like the sudden emergence of the
Soviet Union as an external enemy. It feels like that
led China in some respects to open up to the
(15:54):
US and some other countries.
Speaker 4 (15:56):
This is a sort of trajectory that I think is
really important to get right because what Mao and his
group of leaders did in the late nineteen sixties was
to turn to the United States as an ally pseudo
ally security ally against the Soviet Union because they were
so deadly afraid that there would be a war with
(16:18):
the Soviets, a war that China certainly would have lost,
given the state that the Italians communists themselves had put
China into during the Cultural Revolution. So what Mao did
was to turn to the enemy far away in the
United States to help backing against an enemy much closer
to home, the Soviet Union, which that had this falling
(16:39):
out with mainly for our geological reasons. From Mao's perspective,
this was always intended to be a strictly security oriented
pseudo alliance right it was the right state against the
Soviet Union. Mao, to the end of the States, was
puzzled that the United States would support the real Communists
meaning him, against the thing communists meaning the Soviet Union.
(17:02):
But as long as they were willing to do that,
he was certainly willing to reap burnefit. But he never
intended that this would have any effect in terms of
the increasingly radical communist direction that he was taking for
China internally domestically. So that's when what happens in nineteen
seventy six. After Mouse. That becomes so significant because the
(17:25):
people who then took over, they thought, aha, we have
this relationship with the United States. They are supporting us
for their own reasons in the Cold War against the
Soviet Union. We can now also make use of this
to suit the charge Chinese reform. Right, if it hadn't
been for that relationship strictly security orialited that already existed
(17:46):
between China and the United States, I doubt that that
would be possible. So it's very important point about the
longer term US China relationships to think about that origin
and how this actually got started, very different from the
way most people think about it, where the security element
and the reform element that sort of conflated into one.
Speaker 2 (18:07):
It's also just hard in twenty twenty four to imagine
that various communist states would not be natural allies. And
of course China after the Vietnam War, China also went
to war against Vietnam. The fact that they're so concerned
about the Soviet invasion, it just sort of this fascinating
dimension that I don't think fits neatly into our heads.
Speaker 4 (18:30):
You know.
Speaker 2 (18:30):
I also read your co author's book. He recently wrote
a great biography of Joe and Lae, and it occurs
to me like reading that book and the new book. Obviously,
I think Mao associated ideologically with the left faction and
the CCP and the Gang of Four, etc. But he
always seemed to keep a couple of I don't know
if the word is liberals, but to some extent liberals
(18:52):
around So Joe he never got purged, even though it
didn't seem like Mao particularly liked him. For much of
his life. Liberals and dun Chopeng got purged multiple times,
but never lost his membership of the Communist Party and
always seemed to find his way back even during the
Mao era. Why was it that, despite his ideological predilections
(19:14):
towards the left, that in these important roles he couldn't
bring himself to purge some of these perhaps more reformist
minded characters.
Speaker 4 (19:25):
Because he needed to have things stop. I mean, Mao
wasn't just an audiologue, which was the most important aspect
of him. I think when you look at his historical role,
he was also the leader of a country, and he
needed to get certain things to work within the country
or within the pup and for that, having seen time
and again that his ideological allies were not particularly good
(19:47):
at this. They were good at reciting Marx and Lenin,
but they were not particularly good at running things. He
needed people like Joe and I. He needed people like
Dung Show King to get Kingstom. But as chan Jen
Great Joe in biography shows very clearly, there were limits
to how far he would go in working with people
like Joe. Or he was willing to work with them
(20:10):
as long as they served his purposes, and if there
was any sense that they actually tried to have a
direct political influence above or different from his, they would
get into trouble. So I'm not sure if talken liberals
here is the right term. I mean liberals in terms
of their thinking about politics. These people served, as long
as he was alive, served as gelemen, and they served
(20:33):
him at his leisure. So if he got a suspicion
with them, as he did so many other people, that
they were not serving his radical interests, he would act
against them.
Speaker 3 (20:43):
You mentioned earlier that your book brings together the macro
and the micro, and in terms of the micro, it
reminded me a lot of second hand time which is
an oral history of the end of the Soviet Union,
and there are lots of stories in there about individual
experiences and entrepreneurs who suddenly are starting their businesses in
(21:06):
the post communist period and things like that. I've been
trying to get Joe to read this book a lot time.
It's amazing. But can you talk to us a little
bit more about the individual stories that you heard from
this particular period in Chinese history.
Speaker 4 (21:22):
So there are many stories, and both Jan and I
are the kind of historians who are storytellers. We like
to tell these stories. We like to focus on individuals
and their experiences, and that's of course what sets this
period upon. It's such an incredibly dramatic era. I mean,
first to count revolution and instants, and then this period
(21:42):
of almost unbelievable change, which I remember very well myself.
I mean, from one day to the next, things that
have been seen as being true forever were no longer true, right,
And things changed so very quickly, and entrepreneurs who had
a few weeks earlier had been put in prison for
their activities held up as heroes of economic development. Right.
(22:03):
That was China during this time period, and it's wonderfully
fertile ground for historians who like to tell stories, so
we tell some of these. Maybe some of the most
fascinating ones that we came across are the ones of
these early entrepreneurs, I mean people who get started even
before the political changes in Beijing have taken place, very
(22:23):
often coming out of collective enterprises of some sort, people's
communes or whatever you have, and finding that they were
were pretty good at doing what they were set to do.
We have one example in there, which is one little
tract or repair shop that turned out to be incredibly
good at repairing tractors in Guangdong Province in the south
(22:45):
of China, and then started gradually to get payment in
kind kind of bartering system their services against a little
bit of steel or a little bit of machinery or
some silk and that right which they could and trade
or for a while they could actually smuggle it into
Hong Kong and trade it there. By the mid nineteen seventies,
(23:06):
these folks have a Hong Kong Bank account right well
before anything has happened in Beijing in terms sorry for
so if these guys had been caught, they would probably
have been shocked, right for smuggling and currency for when
the reform really gets started in nineteen seventy eight, they
have a leg up, right, and they can do things
that no one else can, and now they're heroes. So
(23:27):
this is the origins of one of the biggest companies
in China today. So these are the kinds of stories
that we'd like to tell. I mean at the political
level as well. I mean, one of the most fascinating
people that we came across is who are Wokong? The
guy who became somewhat unwillingly, most handkicked successful, and who
was actually quite a decent leader in many ways, not
(23:49):
very imaginative, not of the kind of dynamism that Don had,
but still probably someone who was annecessary figure, you know,
in order to facilitate that station. Yeah, that happened in
the in the late nineties.
Speaker 2 (24:03):
Yeah, I get the impression to reading about him that
obviously he was in a difficult position having to uphold
MoU's legacy, who's pushed aside eventually more or less by
Don Chopang, but also sort of went gradually and didn't
put up a huge fight. That probably saved a lot
of turmol, you know, speaking of somebody these early companies.
I hadn't realized that the China's number one electrical appliance manufacturer.
(24:27):
I don't know if I'm pronounce to you right, but mydea,
it looks like that was actually founded in nineteen sixty eight,
as you point out in the book. So really, I mean,
here's this gigantic, publicly traded company and it was founded
right in the heart of the Cultural Revolution.
Speaker 4 (24:41):
Yeah, those are I mean, those were perhaps some of
the most surprising examples. I mean they're not many of
I mean, we should be careful with not exaggerate. Okay,
this is not an attempt that to rehabilitating the control revolution,
but it was possible, under extraordinary circumstances and by extraordinary people,
to few things that probably early on could not be on.
(25:03):
I mean, they didn't do it big because the Communist
Party wanted them to do it. They did it because
the Communist Party lost control and couldn't go on with
the kind of centralized planning that they had done before.
Not everywhere and at all times anyway. So media is
a good example of that, and I'm sure there were hundreds,
if not thousands, of these startups cultural revolution era startups
(25:24):
that didn't succeed, or these people were caught and ended
up in prison camps or whatever. Right, so we shouldn't
overstate the countryvoid importance of these attempts at entrepreneurships. Many
of them ended up not going anywhere, but there was
this opportunity among those that survived to have that fundamental
advantage over others when then countrywide national reform came about
(25:49):
in the late nineteen seventies. And that actually connects to
a point about who are go Phone because at that point,
normally in Chinese politics, someone who fell from grace the
way who all Go Phone did would have met with
quite a terrible fate. Who allowed himself to be replaced
at the top because he simply taught it was better
(26:09):
for China that it went in the direction that it
did peacefully, and then spent the rest of his life
cultivating grapes in his residence in Beijing. He became one
of China's foremost experts of native grape varieties, a subject
of which he published at least two articles. Of course,
andro pseudonym, So you know, this kind of thing earlier
(26:31):
on in China would have be don't think given the
cut throat aspects of Chinese politics.
Speaker 3 (26:51):
I didn't realize that China had native grape varieties, so
that's interesting, okay, But just on this point, what was
the downside for individu rules in accepting market liberalization, Because
nowadays we talk a lot about the social compact in China,
the idea that okay, maybe people don't have as many
democratic rights as in other parts of the world, but
(27:14):
the promise from the CCP is that we're all going
to get rich. And it feels like in the nineteen
seventies nineteen eighties there was some loss of a social
safety net that came about as a result of the
promise that like, Okay, you're not going to get as
much welfare social welfare, but you're going to get a
(27:34):
chance to become really, really wealthy.
Speaker 4 (27:37):
And that was, of course part of this great transformation
that we're talking about, is what happened when much of
that social welfirm net disappeared. It was a very brutal process.
I mean, we have a tendency I think in this
country and knows what to think about Chinese reform as
the good reform in terms of results, and Russian reform
(27:58):
is the bad reform. Right where things went wrong after
the collapse of the solid Union. But these two are
in many ways much more similar, we discovered than what
they generally have been taken to be. The desperation that
you find among a lot of Chinese when these social
welfare systems went away, mainly in the late eighties and nineties,
(28:20):
in the early two thousand was very profound. It was
a market revolution, but as all market revolutions, it has
its winners and its users. And what was remarkable about
the transformation in China was that when one went through
that first period of relative hardship, then of course the
general economy started to pick up, giving more people a
(28:42):
chance to enter into the middle class. But these two
time periods are not the same. There was a period
of real hardship to begin with, and then quite a
bit later this opportunity for many people still not everyone
still draw up about four hundred to five hundred million
poor people in China, a lot of people, but for
(29:03):
many to take that step into division justice. And that's
in a way the story of Channel's reformed that they
were able to make that jump, while in Russia, most
of the efforts that setting up I'm of the economy
that's actually worked domestically failed.
Speaker 2 (29:17):
So one thing that people say a lot is that
the Chinese Communist Party for a long time up until
the day, is obsessed with the fall of the Soviet
Union and figuring out how to avoid a similar collapse
at some point, and part of me wonders, like, the
two countries seem so different and the circumstances seem so
different that it's like hard for me to like say, like, oh,
(29:40):
if you do this, then you do get that outcome,
and like who knows. But there is some school of
thought that part of the problem with Soviet reforms starting
under Gorbachov was the sort of political liberalization that maybe
economic liberalization is okay markets, but you still need that
strong central party, and that maybe Orbitschov's mistake was doing
(30:01):
both at once, or maybe doing the political liberalization at all,
et cetera. You talk also in your conclusion about some
of the missed opportunities of more political liberalization along with
the market liberalization that China has seen over the last
several decades. When you think about the fall of the
Soviet Union and what contributed to that collapse, how much
(30:24):
of it is it the market reforms versus the structure
of the Soviet Union versus the political liberalization. And is
there an argument to be made that the reason that
the CCP and the country is as stable as it
is today is because they didn't also pursue the political liberalization.
Speaker 4 (30:42):
No, not really, I don't think that is the key.
I think the key reason why the CCP succeeded was
more that they were willing to experiment, I mean, under
a situation of political dictatorship. As you pointed out, they
were willing to experiment in ways that the Soviet leadership
was And maybe I mean, and this is pure speculation,
(31:03):
but maybe that goes back to what we talked about
earlier on that the Soviet Union kept chugging along, you know,
with some growth a very very long time. There wasn't
that kind of desperation that you found in China after
everything that the Communist Party had tried had failed. So
these people were really running out of the time both to
transformed China but also to protect the execution right. They
(31:23):
had to do something, and then they introduced gradual reform
and all that gradual economic reform without ever thinking that
they would give up political control. So this is one
of the things that we show in the book, and
I think this is the reason why the Chinese communist
potted today is so obsessed with learning the negative lessons
from the Soviet Union, is that much of this was
(31:44):
of course not just about creating a China that was
rich and strong. It was being able to recreate the
communist party that was in control of mostics. Right. So
that story or how that the dictatorship was reinforced at
the back of reform already in the mid nineteen eighties,
(32:06):
is a very central part of our book. I mean,
we do see a period of openness from the late
seventies to the mid nineteen eighties, when there would have
been a really possibility that China would have moved in
a more democratic, but more pluralistic, more open direction than
what happened what happened later on. But by nineteen eighty
(32:28):
four of their aboats that period is ended. Done is
laying down the law, saying the direction that China will
go in is one of increased deepening, market reform and
communist party control. There will be no pluralism of any sort,
there will be no freedom of speech. All of that
is and this is of course very important in terms
(32:49):
of understanding China today. I mean, this is what created
the kind of situation that we see now, even though
I now, of course, I was in China in the
spring and one of my businessman friends was joking that maybe,
you know, reform and opening should be seen as a
gigantic Yet you know, let in its new economic policy
back in the nineteen twenties where people were allowed to
(33:12):
generate wealth for a while, just for the party to
come back in and confiscate everything. So don't say that
I'm sharing that view, but given what she and King
has been up recently, you can spok of longer standing.
Speaker 3 (33:24):
Since we're up firmly in the nineteen eighties. Now, talk
to us about Coca cola and its presence in the
Chinese market, because I kind of think this is like
a nice little microcosm of the changes that happened to
the Chinese economy around that time.
Speaker 4 (33:40):
So the Coca Cola example is really interesting because it's
a typical example in a way of how it was
possible for a moved the national company to come into China,
to start working in China because of the attractiveness the
symbolism of the product that it delivered, but also was
able to work with local people and local businesses within China.
(34:03):
And what's also fascinating here is the connection between Coca
Cola and its political significance in terms of the American.
Speaker 3 (34:14):
Because Coco is like a symbol of American capitalism, right.
Speaker 4 (34:18):
Yes, and the Chinese leadership wanted to embrace that symbolism
without necessarily having to embrace the full package. So they
were trying to figure out how they could work with
this particular American company and indeed other American companies as well,
in order to be seen as helping bringing Coca Cola
(34:39):
to China, but on conditions that would be acceptable to them.
And this is the story that is repeated over and
over again in China when it comes to foreign companies,
the connections to local partners, how the government oversees this
in seat of political terms, but also how it can
turn out to be immensely emotionally successful under those circumstances.
Speaker 2 (35:03):
You joked about your businessman friend in China saying, maybe
that whole reform period was like Lenin's net period, and
you had the dominance of the party and then wealth
was created, and then now the party re emerges in
strength and Caesar's control of that wealth, so to speak.
I'm curious your take here in twenty twenty four. Do
(35:27):
you find that to have been an inevitable arc? I mean,
I probably doesn't sound like you believe much is inevitable,
given your focus on contingencies of history. But was this
something that like due to this specific leaders who emerged
in China, most prominently Shijinping, but also to some extent
with the more nationalist edge of hu Jintao, Like, was
(35:50):
this something that is like it was the result of
these specific individuals that has bent the curve of history
so to speak, or do you think there was sort
of like structural forces and play that brought back the
sort of like very high level of state control.
Speaker 4 (36:05):
I think it was both. I mean, in the She
and Pink case, I think he was picked by the
party as the what the Chinese could call the core
leader back in the early twenty teens in response to
what was seen as a bunch of real problems from
a Chinese Communist Party perspective over liberalization, decentralization, corruption, strength
(36:30):
of private companies that meddled in a lot of things
that the Communists didn't want them to meddle In. They
wanted to get a strong leader win who could deal
with those issues in a way that his predecessors, youngstermen
Hu Jintao, had not been able to do it. So
they wanted a strong leader. It's just that I think
even for many Communist leaders of that generation, they got
(36:52):
more than they bargained for. So that's where the personality
as state comes in. They got a leader who really
wanted to return digal So issues to the maoist or
even the sort of pre Mao period in terms of
the CCP's history, and emphasizes the party's position over what
even many party leaders back twenty fifteen years ago. Coote
(37:15):
would be good for China. And it's a classic example,
right of responding to real world problems not unknown in
this country, right by going very far in one direction,
hoping that that would resolve the problem that is there,
and then getting stuck in a way in WICKI kind
of leader that you have in this case in Tea
and pain. So, I think that's the story the way
(37:38):
we can tell it now. I hope at some point
to be able to tell that story based on archives
and primary documents. As an historian, we can't do that yet,
but I think at some point we will be able
to do that, and then it will be fascinating to
test that hypothesis about how this happened.
Speaker 3 (37:54):
So just on the revolution from below point, one of
the things that you emphasize the book is a lot
of the stuff that happens in this time period is
a result of people feeling that they are heading somewhere,
that there's like a grander Chinese vision that can be achieved,
and so that motivates people to actually do something. I'm curious,
(38:18):
just going up to the present day, do you get
a sense that people feel that that there's like a
direction that China is heading in that it's clear to
people like what they are trying to do at a moment.
Speaker 4 (38:33):
Absolutely not. I think it's very very clear that a
lot of people in China do not understand where the
country is heading and what the reasons are. And you know,
you don't spend much time in Beijing before you realize
that these days, I think it was very different in
the time period that we are talking about, which was
generally a time or uplift, at least in economic and
(38:56):
social terms. And it's right to say, I mean as
many historians said that there was an element of a
bargament that at least for some Chinese, not everyone, but
for some Chinese, very particularly in business, that one accepted
the dictatorship for what it was and then went on
getting rich and establishing somebodies great middling fortunes that you
(39:17):
find so many in China today. And that is good.
I mean, that was positive. It was much much better
than the dark past that we described at the beginning
of the book. It was just that China wasn't able
to take what in our view is a necessary step
to improve its political system, its overall attempt at trying
(39:38):
to become a more open, more pluralistic country in the
period when the going was good, when there was a
general sense that China was making advances domestically and internationally. Now,
I think even if people from within the Chinese Companist
Party of the Hemping would try to move in a
direction of increased liberalisation, which I think they will have
(40:01):
to do at some point because people are just very
unhappy with the color system that is there at the moment,
it would be much more difficult because the going is
not that good and it probably is never going to
be that good again, and it was a remarkable period
of economic transformation ten percent per year growth rates. It
would have been possible to carry out necessarily reform, but
these people didn't want to do it because they had
(40:22):
become so preoccupied with holding on power themselves. And I
think historically that that might turn out to be the
biggest mistake. That's cover is for us later.
Speaker 2 (40:32):
On, arn Western, Thank you so much, truly the perfect guest.
Really appreciate you coming.
Speaker 3 (40:37):
On nominative determinism. Truly had to come on this.
Speaker 4 (40:41):
Indeedeed we talked about contingency. This is not contingent. This
is right. This is the one.
Speaker 2 (40:46):
This is the one scientific fact of history that was
inevitable regardless of it.
Speaker 4 (40:52):
Was great chatting with you.
Speaker 2 (40:53):
Yeah, thank you so much. Congrats on the book and
encourage people to check it out. And I appreciate it.
Thank you, Tracy. I'm totally down in my dottage to
(41:15):
just turn this into a history podcast where we read
books and then talk to historians.
Speaker 3 (41:19):
I feel like podcasts becoming history podcast is also an
Indepololgi right.
Speaker 2 (41:23):
Well, you run out of things to talk about, so
you gotta start mining the past.
Speaker 3 (41:26):
You know what actually in all your recent reading, you
might know the answer to this question which I forgot
to ask arn about. But why was the Soviet Union
and China in like the nineteen fifties obsessed with steel production?
Speaker 2 (41:41):
Do you know why? I actually don't know the answer.
My guess would be is just like the most sort
of objective thing of what you need to modernize in
a twentieth century economy, you need steel for probably literally
everything that gets built. It'd been a good question. Another
thing that I wish I had asked is how paranoid,
(42:02):
how justified? Was because you asked that great question about
the importance of the tension between China and the Soviet
Union in Mao's turning at least to some extent to
the US, which then expanded greatly over the following decades.
But I never get the impression that there really was
any actual prospect of war. Like there's one point in
the book where like the leaders all scrambled away from
(42:24):
Beijing because they were fear of a nuclear attack from
the Soviet Union. But it's not clear that there was
any real anything happening there.
Speaker 3 (42:31):
I guess hindsight is twenty twenty when it comes to
a lot of this stuff, including the Cold War, is
kind of similar. I guess, like nothing happened in the
end in terms of like a nuclear tech came close
with Cuba as minds, that is true, but like it
didn't happen. Yes, But one thing that I got from
this book is again the importance of an external enemy
(42:52):
when it comes to radical economic transformation. And I think
we've seen so many examples of that throughout his at
this point. So China, China's market liberalization as a result
of its fear of the Soviet Union is a great one.
I guess the return of industrial policy in the US
as a result of its fear of China's economic dominance
(43:15):
is another one. Japan in the nineteen eighties would be
a good one too. It feels like in order for
anything to get done at scale and in an efficient
time period, you have to have like some sort of
threat that's hanging over you.
Speaker 2 (43:29):
This is why we need the Paul Krugman, like, we
need to convince everyone that the threat is the alien. Yes, yes,
and then you catalyze development without actually and then there's
no aliens in the end. But yeah, I though there
was fascinating. I know, it's such a cliche and I
hate to admit it, but it does seem like understanding
the modern world, you can learn something by reading the past.
Speaker 3 (43:49):
I resist incredibly surprising.
Speaker 2 (43:51):
I resisted that reality for a long time in my life,
and now I've succumbed. We have to know how we
got here.
Speaker 3 (43:56):
Okay, now that you've discovered history, shall we leave it there?
Speaker 2 (43:59):
Let's leave it there.
Speaker 3 (44:00):
This has been another episode of the Audlots podcast. I'm
Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 2 (44:06):
I'm Joe Wisenthal. You can follow me at the Stalwart.
Follow our guest Odd arn Westdad. He's OA Westdad, and
definitely check out his new book, The Great Transformation. Follow
our producers Carmen Rodriguez at Kerman Arman, Dashel Bennett at Dashbot,
and Keil Brooks at Keilbrooks. Thank you to our producer
Moses Ondem. For more Oddlots content, go to Bloomberg dot
(44:26):
com slash od Loots. We have transcripts, a blog, and
a newsletter, and you can chat about all of these
topics twenty four to seven in our discord. There's even
a books channel, which is where I think I saw
this book pop up.
Speaker 3 (44:38):
First, and if you enjoy odlots, if you like it
when Joe reads history books, then please leave us a
positive review on your favorite podcast platform. And remember, if
you are a Bloomberg subscriber, you can listen to all
of our episodes absolutely ad free. All you need to
do is find the Bloomberg channel on Apple Podcasts and
follow the instructions there. Thanks for listening.
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:21):
Hello and welcome to another episode of the Odd Lots podcast.
Speaker 3 (00:24):
I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 2 (00:27):
Tracy now that I'm like a middle aged old man,
I don't know. I've been getting really into reading history lately.
Speaker 3 (00:34):
Is it Roman history? No?
Speaker 2 (00:36):
No, it's actually worse than Roman history. I've been reading
a lot of twentieth century history. And the problem, well,
one problem is a bit of a diversion. But one
problem with reading twentieth century history is that I'm eventually
going to have to get around to really learning what
World War two is all about, and then I'm going
to be a fifty year old man.
Speaker 3 (00:53):
Reading You have to fulfill your destiny.
Speaker 4 (00:55):
I know.
Speaker 2 (00:55):
So I'm going to be a fifty year old man
in a few years reading World War two books and
watching World War or two documentaries. So, but yes, I've
been reading a lot of twentieth century history lately.
Speaker 3 (01:04):
You know how you know that you are really old,
It's when you start reading twentieth century history books and
realize that you were like there and sort of participating
in that time period.
Speaker 2 (01:14):
Well, it's so funny that you mentioned this because this
is increasingly dawning on me when I read history. And again,
slight sidetrack, but I've mentioned before a couple of times.
I lived in Malaysia for a year in nineteen eighty
nine and nineteen ninety and I discovered in reading history
recently that I don't know if they call it the
Malaysian Civil War, but the Ultimate Peace Agreement between the
(01:35):
Malaysian government and the Communist Party of Malaysia was signed
in nineteen eighty nine that ended that conflict, And so
I was there. I had no idea, but reading his.
Speaker 3 (01:45):
Grade school Joe was living through history.
Speaker 2 (01:47):
I was, and it sort of reminds I think this
is an important thing that I've realized reading more history,
is that the modern world as we know it is
so young. It's basically like the length of a person's life,
depending on where you want to start it. Like we're
just getting started here.
Speaker 3 (02:00):
So the history we're going to be talking about specifically
is China. And I was thinking about this because the
first time I went to China was in nineteen ninety four,
and it was completely different to how it is now,
Like there were still rickshaws on the street, Friendship stores existed.
Friendship stores still existed in the early two thousands when
(02:21):
I was there, and I don't know, do you know
what a friendship store is?
Speaker 2 (02:25):
I can guess.
Speaker 3 (02:26):
So it's like where foreigners were basically allowed to go
and like purchase specific goods. They had a lot of
like tourist tat and stuff like that. But if you
went to a friendship store in Beijing in the early
two thousands, it was basically like going to the East Bloc.
It was like a full employment program where you would
find a salesperson on the floor and you would say,
(02:48):
I want this item, and then they would give you
a little like token or receipt and then you would
take that to the cashier and pay, and then someone
else would bring the item to you. So yeah, that
was in the two thousands, And now when I think
about Beijing, like it has changed completely, Like stuff that
used to be one story neighborhoods full of bars like
(03:09):
san Ley Turn is now like luxury shopping centers totally.
Speaker 2 (03:14):
So this is the other thing too, which is that
you know, we talk a lot about China right now
for obvious reasons, but I kind of feel that like,
if we're going to talk about today. There probably is
some justification for like how we got here, and I
have to admit, you know, my understanding is really very
rudimentary and limited. Like in my mind, it's basically like
(03:34):
Maud died Doung Hopeng liberalized the economy, that was the
economy plugged into global.
Speaker 3 (03:40):
Idiot sunflower seeds happened.
Speaker 2 (03:42):
Yeah, and then they allowed a business and then they
entered the wto in here. And I would say, I
know basically four facts about the history of China, and
those you know, nineteen seventy eight wto now, so maybe
that's just three. And so I actually think it's important
to sort of deepen our understanding of how we got
to the China that we are so deeply connected to today.
Speaker 3 (04:04):
I am in favor of you using the podcast as
an excuse to read a bunch of history books.
Speaker 2 (04:09):
It's great, it's other.
Speaker 3 (04:11):
Manifest your middle aged self. That's fine, we should do it.
Speaker 2 (04:14):
Well, it's better because if I have to read books,
that means I'm not just scrolling Twitter all the time.
So if I have to prepare for episodes anyway, we're
going to be speaking with one of the co authors
of the new book came out in October The Great Transformation,
China's road from revolution to reform. And I would say
it complexifies a bit the very rudimentary story of the
(04:35):
last I don't know, forty plus years of China. It's
more than just three specific dates. It complexifies that story.
It sort of fleshes it out in a big way.
The co authors are Odd Arned Westdad and Chen John.
The first time on odd Lots that we'll have a
guest with the name odd.
Speaker 3 (04:51):
Surely the perfect guest.
Speaker 2 (04:52):
So it's truly the perfect guest. So we're speaking with
professor of history at Yale, Odd Earned west Dad. Professor Westdad,
thank you so much for coming on the podcast.
Speaker 4 (05:02):
Thank you for having me on you you almost had
to write we had It's truly, it's really a shame
that you haven't had me on before, I mean your
podcast with me as you first guest.
Speaker 3 (05:13):
We had to wait for Joe to enter his history phase.
Speaker 2 (05:15):
That's right, but you should have. You should have been
the first guest. So why this book, because I imagine
if I go on Amazon, there are probably hundreds of
books that are some version of how China reformed, How
China went from being this backwards economy to dynamic capitalist economy.
I know it's been written about in various forms of
(05:36):
numerous numerous times. Why did you and your co author
still feel at this point that this was an important
story or collection of stories to tell.
Speaker 4 (05:45):
I think there are two reasons. The first one is
quite personal in a way. I mean it almost goes
back to what you were talking about a minute ago.
So I first came to China as and I changed
student back in the late nineteen seventies and Changen. Of course,
my co Walton lived there during that period, so this
is away so personal process. Well, we lived through parts
of the time period that we are talking about in
(06:05):
this book, and there is no better incentive, as you
just touched upon, to go back to look at history
again than trying to understand the period that you lived through.
So that's the first reason. And the second reason is,
of course that we think we do it better than
anyone else. Do it better than anyone else because we
have more access to sources and more access to information
(06:26):
about what actually happened during that time period. So as
you read the book, you can see how, at least
when we do this as well as we can, we
are able to get on the inside of many of
the things that took place during that time period and
show the complexities, I mean, show how complex that period
of very early Chinese reform and opening was and in
(06:47):
many ways how contingent the process was, and how surprising
it is in more than one sense that we ended
up where we are today.
Speaker 3 (06:54):
So speaking of access, you mentioned this, I think in
the very beginning of the book, but you started researching
this in twenty ten, and you said that the research
process and the access you had kind of changed over
the next I guess thirteen or fourteen years or so.
Give us a little bit more detail, like, as a
researcher of Chinese history, how have things actually evolved for you?
Speaker 4 (07:19):
That's right. We started thinking about this and started researching
it in the early twenty teens, and of course back
then we had much better access to sources, much better
access to archives, to talk to people, to travel around
and country, to have informal discussions with people who would
be in the know than what is the case today.
So China has really since twenty sixteen seventeen, there were
(07:41):
closed down in terms of access to historical sources of
all kinds. So we were lucky. We started this process
quite early on and had some good years in which
we actually could collect material. Then we did something really silly.
We put it aside for other projects, hoping that we
would get even better access in a few years. That
happens sometimes that you make the wrong call on these
(08:02):
kinds of things, and instead, of course, it got much
was So what we had to do was to go
back to some of the material that we had gathered
in that early time period before we switch to other
projects that we then completed before we returned to this book,
and then try to feel that in the best we
could with all the materials we could get now. But
the level of access, the level of information is very
(08:24):
different today from what you could get pulled off back then.
Speaker 2 (08:27):
So I want to get into some of the content
of the book obviously, And like I said in the intro,
you know, I have this very cartoonish vision of history
in my head where Mao dies, Don Chopeg becomes the
new leader of the country after a little bit of
tension and turmoil, and then China liberalizes.
Speaker 3 (08:46):
So one of the sort of eye.
Speaker 2 (08:48):
Opening or sort of mind expanding moments in the book,
you talk about the cultural revolution, and how even there,
you know, we think of that as going I guess
from nineteen sixty six to sometime in the nineteen seventy.
You argue that the real intensity of it was two
years where the sort of the youth of China rose
up against the old cadres within the Communist Party. But
(09:10):
even in that time, amid some of this incredible turmoil
that the Communist Party was going through under mau, some
of the seeds of I guess capitalism were actually planted
in that turmoil.
Speaker 4 (09:23):
Yeah, that's right. I mean that I think is one
of the contributions of this book. I mean, your summarized
history of what happened. It is not wrong, okay, It's
just that it was really difficult and, as I said,
very contingent in terms of the various things that are
happening to get from warm to the next of those stages.
And one of the things that we do show in
the book is how the cultural revolution, which was undertaken,
(09:47):
of course, in order to solidify Maltadome's leadership and attack
the old leaders in the Communist Party who he regarded
as being too backle to take China into his new
Communist paradise. This cultural revolution had effects that were in
no way for sea, and part of them was in
many ways the destruction of all China. I mean, they
(10:08):
got rid of many of the traditional ways of thinking
and loyalties, and much of the patriarchal approaches within families.
All of this because of these political campaigns that they undertook,
directed almost against any kind of authority except most of
ohn authority. And in a strange kind of way, when
(10:29):
you get into the nineteen seventies, Mao's still alive, still
ruling from Beijing, things start to change in some places
from the ground up. So this is turning to markets
almost as a kind of revolutionary acts out of desperation,
because people along the coast, in the south, in the
(10:49):
areas that have some experience with capitalism and with markets,
they are worried that when this campaign ends, things have
got to get even worse. And some of these people
have been starving, you know, back during the Great Leap
forward in the late fifties and early sixties. So they
start rating, they start building up the opportunities that they
can take for themselves. In a little way. I mean,
(11:11):
this is not a predominant act in China in the
early nineteen seventies, but it did see something that is
incredibly important for the future, and then comes into full
flow after the party takes a step back off the
mal died and opens up for these console reforms happening
on an until boy Scain.
Speaker 3 (11:30):
I apologize in advance for asking a hypothetical, but do
you think the economic liberalization of the late nineteen seventies
early nineteen eighties would have been able to happen or
would have happened in some form if China hadn't experienced
the Cultural Revolution and all the I guess emotional trauma
and political chaos that came with it.
Speaker 4 (11:52):
It wouldn't have happened when it happened, that's for sure.
That's not even a hypothetical. I mean, I think if
China had continued basic along the Soviet model of development,
which is what they took up after the People's REPROBLEBM
was put in place in the late nineteen forties, Soviet
style everything right, planning, centralization, the wholer. I don't think
(12:13):
the kind of reform that we saw in the late
seventies and nuineteen eighties would have happened because there wouldn't
have been any fundamental reason to undertake it. I mean,
China would probably have chugged along in the same kind
of way as the Soviet Union did until some point
when that model started breaking down. Now, I'm not saying
that the Cultural Revolution was a necessary condition for these
(12:34):
changes in pay place, but the period of Cultural Revolution
activism did in many ways prepare the ground for the
timing of this and when it was to happen alst
be because you know, China at the end of the culture
ablution was a deserted thing. You know, when I first
arrived there in nineteen seventy nine, this was a dirt
poor and terrorized country, you know, a poorer in terms
(12:56):
of income to capital and most African countries and things
are getting work not that. So that kind of desperation
at all levels of Chinese society fitted into these changes.
Something had to be done, and going back to the
Soviet model of development as it existed only on when
you get into the nineteen eighties does not seem as
a viable composition.
Speaker 2 (13:32):
What does it mean when you talk about history being contingent?
You use that word a couple of times, and I
actually don't know if I fully understand what that means.
But when you're telling these stories or this story and
you're keeping in mind the contingency and history, can you
talk a little bit more about this idea.
Speaker 4 (13:48):
So you'll see from the book that we go in
and out from the sort of micro to the macro
level of telling history. And if you look at the
night and the coup against the radicals, the softball gang
of four within the party took place, which we described
in some detail almost you know what happens from hour
(14:09):
to hour.
Speaker 2 (14:10):
That right, This was the moment in which the left
faction after maud Dies was arrested and allowed for a
sort of more moderate path to emerge.
Speaker 4 (14:21):
That's right. And it was in effect the military coup,
and it was undertaken by the military and the security
forces against the people who himself had put in charge
of the party, including his widow was most prominent of
all jiang Qin. Now that night, the following few days,
things could have ended up very differently. In Shanghai, the
(14:42):
biggest city in China by far, was still under control
of the radicals. There were military units that supported the
radical approach to politics. This could have ended up very
differently from what it did. And as we described in
the in the books, some of the protos, some of
the coup makers themselves in those days that followed the
(15:03):
coup itself, were completely surprised by how little resistance there
had been from the left and how chales there had
been on the streets. So that's what I mean with
it being contingent. I mean, this is something that obviously
connects to the larger picture that we see today, going
back to your sort of three level version of what
happened right in China, But it didn't seem that obvious
(15:26):
at the time, and it could have gone in very
different directions from what we're seeing today.
Speaker 3 (15:30):
How important was the fraying of the relationship between China
and the Soviet Union in the sort of nineteen sixties
early nineteen seventies to spurring or catalyzing that opening up,
Because it does feel like the sudden emergence of the
Soviet Union as an external enemy. It feels like that
led China in some respects to open up to the
(15:54):
US and some other countries.
Speaker 4 (15:56):
This is a sort of trajectory that I think is
really important to get right because what Mao and his
group of leaders did in the late nineteen sixties was
to turn to the United States as an ally pseudo
ally security ally against the Soviet Union because they were
so deadly afraid that there would be a war with
(16:18):
the Soviets, a war that China certainly would have lost,
given the state that the Italians communists themselves had put
China into during the Cultural Revolution. So what Mao did
was to turn to the enemy far away in the
United States to help backing against an enemy much closer
to home, the Soviet Union, which that had this falling
(16:39):
out with mainly for our geological reasons. From Mao's perspective,
this was always intended to be a strictly security oriented
pseudo alliance right it was the right state against the
Soviet Union. Mao, to the end of the States, was
puzzled that the United States would support the real Communists
meaning him, against the thing communists meaning the Soviet Union.
(17:02):
But as long as they were willing to do that,
he was certainly willing to reap burnefit. But he never
intended that this would have any effect in terms of
the increasingly radical communist direction that he was taking for
China internally domestically. So that's when what happens in nineteen
seventy six. After Mouse. That becomes so significant because the
(17:25):
people who then took over, they thought, aha, we have
this relationship with the United States. They are supporting us
for their own reasons in the Cold War against the
Soviet Union. We can now also make use of this
to suit the charge Chinese reform. Right, if it hadn't
been for that relationship strictly security orialited that already existed
(17:46):
between China and the United States, I doubt that that
would be possible. So it's very important point about the
longer term US China relationships to think about that origin
and how this actually got started, very different from the
way most people think about it, where the security element
and the reform element that sort of conflated into one.
Speaker 2 (18:07):
It's also just hard in twenty twenty four to imagine
that various communist states would not be natural allies. And
of course China after the Vietnam War, China also went
to war against Vietnam. The fact that they're so concerned
about the Soviet invasion, it just sort of this fascinating
dimension that I don't think fits neatly into our heads.
Speaker 4 (18:30):
You know.
Speaker 2 (18:30):
I also read your co author's book. He recently wrote
a great biography of Joe and Lae, and it occurs
to me like reading that book and the new book. Obviously,
I think Mao associated ideologically with the left faction and
the CCP and the Gang of Four, etc. But he
always seemed to keep a couple of I don't know
if the word is liberals, but to some extent liberals
(18:52):
around So Joe he never got purged, even though it
didn't seem like Mao particularly liked him. For much of
his life. Liberals and dun Chopeng got purged multiple times,
but never lost his membership of the Communist Party and
always seemed to find his way back even during the
Mao era. Why was it that, despite his ideological predilections
(19:14):
towards the left, that in these important roles he couldn't
bring himself to purge some of these perhaps more reformist
minded characters.
Speaker 4 (19:25):
Because he needed to have things stop. I mean, Mao
wasn't just an audiologue, which was the most important aspect
of him. I think when you look at his historical role,
he was also the leader of a country, and he
needed to get certain things to work within the country
or within the pup and for that, having seen time
and again that his ideological allies were not particularly good
(19:47):
at this. They were good at reciting Marx and Lenin,
but they were not particularly good at running things. He
needed people like Joe and I. He needed people like
Dung Show King to get Kingstom. But as chan Jen
Great Joe in biography shows very clearly, there were limits
to how far he would go in working with people
like Joe. Or he was willing to work with them
(20:10):
as long as they served his purposes, and if there
was any sense that they actually tried to have a
direct political influence above or different from his, they would
get into trouble. So I'm not sure if talken liberals
here is the right term. I mean liberals in terms
of their thinking about politics. These people served, as long
as he was alive, served as gelemen, and they served
(20:33):
him at his leisure. So if he got a suspicion
with them, as he did so many other people, that
they were not serving his radical interests, he would act
against them.
Speaker 3 (20:43):
You mentioned earlier that your book brings together the macro
and the micro, and in terms of the micro, it
reminded me a lot of second hand time which is
an oral history of the end of the Soviet Union,
and there are lots of stories in there about individual
experiences and entrepreneurs who suddenly are starting their businesses in
(21:06):
the post communist period and things like that. I've been
trying to get Joe to read this book a lot time.
It's amazing. But can you talk to us a little
bit more about the individual stories that you heard from
this particular period in Chinese history.
Speaker 4 (21:22):
So there are many stories, and both Jan and I
are the kind of historians who are storytellers. We like
to tell these stories. We like to focus on individuals
and their experiences, and that's of course what sets this
period upon. It's such an incredibly dramatic era. I mean,
first to count revolution and instants, and then this period
(21:42):
of almost unbelievable change, which I remember very well myself.
I mean, from one day to the next, things that
have been seen as being true forever were no longer true, right,
And things changed so very quickly, and entrepreneurs who had
a few weeks earlier had been put in prison for
their activities held up as heroes of economic development. Right.
(22:03):
That was China during this time period, and it's wonderfully
fertile ground for historians who like to tell stories, so
we tell some of these. Maybe some of the most
fascinating ones that we came across are the ones of
these early entrepreneurs, I mean people who get started even
before the political changes in Beijing have taken place, very
(22:23):
often coming out of collective enterprises of some sort, people's
communes or whatever you have, and finding that they were
were pretty good at doing what they were set to do.
We have one example in there, which is one little
tract or repair shop that turned out to be incredibly
good at repairing tractors in Guangdong Province in the south
(22:45):
of China, and then started gradually to get payment in
kind kind of bartering system their services against a little
bit of steel or a little bit of machinery or
some silk and that right which they could and trade
or for a while they could actually smuggle it into
Hong Kong and trade it there. By the mid nineteen seventies,
(23:06):
these folks have a Hong Kong Bank account right well
before anything has happened in Beijing in terms sorry for
so if these guys had been caught, they would probably
have been shocked, right for smuggling and currency for when
the reform really gets started in nineteen seventy eight, they
have a leg up, right, and they can do things
that no one else can, and now they're heroes. So
(23:27):
this is the origins of one of the biggest companies
in China today. So these are the kinds of stories
that we'd like to tell. I mean at the political
level as well. I mean, one of the most fascinating
people that we came across is who are Wokong? The
guy who became somewhat unwillingly, most handkicked successful, and who
was actually quite a decent leader in many ways, not
(23:49):
very imaginative, not of the kind of dynamism that Don had,
but still probably someone who was annecessary figure, you know,
in order to facilitate that station. Yeah, that happened in
the in the late nineties.
Speaker 2 (24:03):
Yeah, I get the impression to reading about him that
obviously he was in a difficult position having to uphold
MoU's legacy, who's pushed aside eventually more or less by
Don Chopang, but also sort of went gradually and didn't
put up a huge fight. That probably saved a lot
of turmol, you know, speaking of somebody these early companies.
I hadn't realized that the China's number one electrical appliance manufacturer.
(24:27):
I don't know if I'm pronounce to you right, but mydea,
it looks like that was actually founded in nineteen sixty eight,
as you point out in the book. So really, I mean,
here's this gigantic, publicly traded company and it was founded
right in the heart of the Cultural Revolution.
Speaker 4 (24:41):
Yeah, those are I mean, those were perhaps some of
the most surprising examples. I mean they're not many of
I mean, we should be careful with not exaggerate. Okay,
this is not an attempt that to rehabilitating the control revolution,
but it was possible, under extraordinary circumstances and by extraordinary people,
to few things that probably early on could not be on.
(25:03):
I mean, they didn't do it big because the Communist
Party wanted them to do it. They did it because
the Communist Party lost control and couldn't go on with
the kind of centralized planning that they had done before.
Not everywhere and at all times anyway. So media is
a good example of that, and I'm sure there were hundreds,
if not thousands, of these startups cultural revolution era startups
(25:24):
that didn't succeed, or these people were caught and ended
up in prison camps or whatever. Right, so we shouldn't
overstate the countryvoid importance of these attempts at entrepreneurships. Many
of them ended up not going anywhere, but there was
this opportunity among those that survived to have that fundamental
advantage over others when then countrywide national reform came about
(25:49):
in the late nineteen seventies. And that actually connects to
a point about who are go Phone because at that point,
normally in Chinese politics, someone who fell from grace the
way who all Go Phone did would have met with
quite a terrible fate. Who allowed himself to be replaced
at the top because he simply taught it was better
(26:09):
for China that it went in the direction that it
did peacefully, and then spent the rest of his life
cultivating grapes in his residence in Beijing. He became one
of China's foremost experts of native grape varieties, a subject
of which he published at least two articles. Of course,
andro pseudonym, So you know, this kind of thing earlier
(26:31):
on in China would have be don't think given the
cut throat aspects of Chinese politics.
Speaker 3 (26:51):
I didn't realize that China had native grape varieties, so
that's interesting, okay, But just on this point, what was
the downside for individu rules in accepting market liberalization, Because
nowadays we talk a lot about the social compact in China,
the idea that okay, maybe people don't have as many
democratic rights as in other parts of the world, but
(27:14):
the promise from the CCP is that we're all going
to get rich. And it feels like in the nineteen
seventies nineteen eighties there was some loss of a social
safety net that came about as a result of the
promise that like, Okay, you're not going to get as
much welfare social welfare, but you're going to get a
(27:34):
chance to become really, really wealthy.
Speaker 4 (27:37):
And that was, of course part of this great transformation
that we're talking about, is what happened when much of
that social welfirm net disappeared. It was a very brutal process.
I mean, we have a tendency I think in this
country and knows what to think about Chinese reform as
the good reform in terms of results, and Russian reform
(27:58):
is the bad reform. Right where things went wrong after
the collapse of the solid Union. But these two are
in many ways much more similar, we discovered than what
they generally have been taken to be. The desperation that
you find among a lot of Chinese when these social
welfare systems went away, mainly in the late eighties and nineties,
(28:20):
in the early two thousand was very profound. It was
a market revolution, but as all market revolutions, it has
its winners and its users. And what was remarkable about
the transformation in China was that when one went through
that first period of relative hardship, then of course the
general economy started to pick up, giving more people a
(28:42):
chance to enter into the middle class. But these two
time periods are not the same. There was a period
of real hardship to begin with, and then quite a
bit later this opportunity for many people still not everyone
still draw up about four hundred to five hundred million
poor people in China, a lot of people, but for
(29:03):
many to take that step into division justice. And that's
in a way the story of Channel's reformed that they
were able to make that jump, while in Russia, most
of the efforts that setting up I'm of the economy
that's actually worked domestically failed.
Speaker 2 (29:17):
So one thing that people say a lot is that
the Chinese Communist Party for a long time up until
the day, is obsessed with the fall of the Soviet
Union and figuring out how to avoid a similar collapse
at some point, and part of me wonders, like, the
two countries seem so different and the circumstances seem so
different that it's like hard for me to like say, like, oh,
(29:40):
if you do this, then you do get that outcome,
and like who knows. But there is some school of
thought that part of the problem with Soviet reforms starting
under Gorbachov was the sort of political liberalization that maybe
economic liberalization is okay markets, but you still need that
strong central party, and that maybe Orbitschov's mistake was doing
(30:01):
both at once, or maybe doing the political liberalization at all,
et cetera. You talk also in your conclusion about some
of the missed opportunities of more political liberalization along with
the market liberalization that China has seen over the last
several decades. When you think about the fall of the
Soviet Union and what contributed to that collapse, how much
(30:24):
of it is it the market reforms versus the structure
of the Soviet Union versus the political liberalization. And is
there an argument to be made that the reason that
the CCP and the country is as stable as it
is today is because they didn't also pursue the political liberalization.
Speaker 4 (30:42):
No, not really, I don't think that is the key.
I think the key reason why the CCP succeeded was
more that they were willing to experiment, I mean, under
a situation of political dictatorship. As you pointed out, they
were willing to experiment in ways that the Soviet leadership
was And maybe I mean, and this is pure speculation,
(31:03):
but maybe that goes back to what we talked about
earlier on that the Soviet Union kept chugging along, you know,
with some growth a very very long time. There wasn't
that kind of desperation that you found in China after
everything that the Communist Party had tried had failed. So
these people were really running out of the time both to
transformed China but also to protect the execution right. They
(31:23):
had to do something, and then they introduced gradual reform
and all that gradual economic reform without ever thinking that
they would give up political control. So this is one
of the things that we show in the book, and
I think this is the reason why the Chinese communist
potted today is so obsessed with learning the negative lessons
from the Soviet Union, is that much of this was
(31:44):
of course not just about creating a China that was
rich and strong. It was being able to recreate the
communist party that was in control of mostics. Right. So
that story or how that the dictatorship was reinforced at
the back of reform already in the mid nineteen eighties,
(32:06):
is a very central part of our book. I mean,
we do see a period of openness from the late
seventies to the mid nineteen eighties, when there would have
been a really possibility that China would have moved in
a more democratic, but more pluralistic, more open direction than
what happened what happened later on. But by nineteen eighty
(32:28):
four of their aboats that period is ended. Done is
laying down the law, saying the direction that China will
go in is one of increased deepening, market reform and
communist party control. There will be no pluralism of any sort,
there will be no freedom of speech. All of that
is and this is of course very important in terms
(32:49):
of understanding China today. I mean, this is what created
the kind of situation that we see now, even though
I now, of course, I was in China in the
spring and one of my businessman friends was joking that maybe,
you know, reform and opening should be seen as a
gigantic Yet you know, let in its new economic policy
back in the nineteen twenties where people were allowed to
(33:12):
generate wealth for a while, just for the party to
come back in and confiscate everything. So don't say that
I'm sharing that view, but given what she and King
has been up recently, you can spok of longer standing.
Speaker 3 (33:24):
Since we're up firmly in the nineteen eighties. Now, talk
to us about Coca cola and its presence in the
Chinese market, because I kind of think this is like
a nice little microcosm of the changes that happened to
the Chinese economy around that time.
Speaker 4 (33:40):
So the Coca Cola example is really interesting because it's
a typical example in a way of how it was
possible for a moved the national company to come into China,
to start working in China because of the attractiveness the
symbolism of the product that it delivered, but also was
able to work with local people and local businesses within China.
(34:03):
And what's also fascinating here is the connection between Coca
Cola and its political significance in terms of the American.
Speaker 3 (34:14):
Because Coco is like a symbol of American capitalism, right.
Speaker 4 (34:18):
Yes, and the Chinese leadership wanted to embrace that symbolism
without necessarily having to embrace the full package. So they
were trying to figure out how they could work with
this particular American company and indeed other American companies as well,
in order to be seen as helping bringing Coca Cola
(34:39):
to China, but on conditions that would be acceptable to them.
And this is the story that is repeated over and
over again in China when it comes to foreign companies,
the connections to local partners, how the government oversees this
in seat of political terms, but also how it can
turn out to be immensely emotionally successful under those circumstances.
Speaker 2 (35:03):
You joked about your businessman friend in China saying, maybe
that whole reform period was like Lenin's net period, and
you had the dominance of the party and then wealth
was created, and then now the party re emerges in
strength and Caesar's control of that wealth, so to speak.
I'm curious your take here in twenty twenty four. Do
(35:27):
you find that to have been an inevitable arc? I mean,
I probably doesn't sound like you believe much is inevitable,
given your focus on contingencies of history. But was this
something that like due to this specific leaders who emerged
in China, most prominently Shijinping, but also to some extent
with the more nationalist edge of hu Jintao, Like, was
(35:50):
this something that is like it was the result of
these specific individuals that has bent the curve of history
so to speak, or do you think there was sort
of like structural forces and play that brought back the
sort of like very high level of state control.
Speaker 4 (36:05):
I think it was both. I mean, in the She
and Pink case, I think he was picked by the
party as the what the Chinese could call the core
leader back in the early twenty teens in response to
what was seen as a bunch of real problems from
a Chinese Communist Party perspective over liberalization, decentralization, corruption, strength
(36:30):
of private companies that meddled in a lot of things
that the Communists didn't want them to meddle In. They
wanted to get a strong leader win who could deal
with those issues in a way that his predecessors, youngstermen
Hu Jintao, had not been able to do it. So
they wanted a strong leader. It's just that I think
even for many Communist leaders of that generation, they got
(36:52):
more than they bargained for. So that's where the personality
as state comes in. They got a leader who really
wanted to return digal So issues to the maoist or
even the sort of pre Mao period in terms of
the CCP's history, and emphasizes the party's position over what
even many party leaders back twenty fifteen years ago. Coote
(37:15):
would be good for China. And it's a classic example,
right of responding to real world problems not unknown in
this country, right by going very far in one direction,
hoping that that would resolve the problem that is there,
and then getting stuck in a way in WICKI kind
of leader that you have in this case in Tea
and pain. So, I think that's the story the way
(37:38):
we can tell it now. I hope at some point
to be able to tell that story based on archives
and primary documents. As an historian, we can't do that yet,
but I think at some point we will be able
to do that, and then it will be fascinating to
test that hypothesis about how this happened.
Speaker 3 (37:54):
So just on the revolution from below point, one of
the things that you emphasize the book is a lot
of the stuff that happens in this time period is
a result of people feeling that they are heading somewhere,
that there's like a grander Chinese vision that can be achieved,
and so that motivates people to actually do something. I'm curious,
(38:18):
just going up to the present day, do you get
a sense that people feel that that there's like a
direction that China is heading in that it's clear to
people like what they are trying to do at a moment.
Speaker 4 (38:33):
Absolutely not. I think it's very very clear that a
lot of people in China do not understand where the
country is heading and what the reasons are. And you know,
you don't spend much time in Beijing before you realize
that these days, I think it was very different in
the time period that we are talking about, which was
generally a time or uplift, at least in economic and
(38:56):
social terms. And it's right to say, I mean as
many historians said that there was an element of a
bargament that at least for some Chinese, not everyone, but
for some Chinese, very particularly in business, that one accepted
the dictatorship for what it was and then went on
getting rich and establishing somebodies great middling fortunes that you
(39:17):
find so many in China today. And that is good.
I mean, that was positive. It was much much better
than the dark past that we described at the beginning
of the book. It was just that China wasn't able
to take what in our view is a necessary step
to improve its political system, its overall attempt at trying
(39:38):
to become a more open, more pluralistic country in the
period when the going was good, when there was a
general sense that China was making advances domestically and internationally. Now,
I think even if people from within the Chinese Companist
Party of the Hemping would try to move in a
direction of increased liberalisation, which I think they will have
(40:01):
to do at some point because people are just very
unhappy with the color system that is there at the moment,
it would be much more difficult because the going is
not that good and it probably is never going to
be that good again, and it was a remarkable period
of economic transformation ten percent per year growth rates. It
would have been possible to carry out necessarily reform, but
these people didn't want to do it because they had
(40:22):
become so preoccupied with holding on power themselves. And I
think historically that that might turn out to be the
biggest mistake. That's cover is for us later.
Speaker 2 (40:32):
On, arn Western, Thank you so much, truly the perfect guest.
Really appreciate you coming.
Speaker 3 (40:37):
On nominative determinism. Truly had to come on this.
Speaker 4 (40:41):
Indeedeed we talked about contingency. This is not contingent. This
is right. This is the one.
Speaker 2 (40:46):
This is the one scientific fact of history that was
inevitable regardless of it.
Speaker 4 (40:52):
Was great chatting with you.
Speaker 2 (40:53):
Yeah, thank you so much. Congrats on the book and
encourage people to check it out. And I appreciate it.
Thank you, Tracy. I'm totally down in my dottage to
(41:15):
just turn this into a history podcast where we read
books and then talk to historians.
Speaker 3 (41:19):
I feel like podcasts becoming history podcast is also an
Indepololgi right.
Speaker 2 (41:23):
Well, you run out of things to talk about, so
you gotta start mining the past.
Speaker 3 (41:26):
You know what actually in all your recent reading, you
might know the answer to this question which I forgot
to ask arn about. But why was the Soviet Union
and China in like the nineteen fifties obsessed with steel production?
Speaker 2 (41:41):
Do you know why? I actually don't know the answer.
My guess would be is just like the most sort
of objective thing of what you need to modernize in
a twentieth century economy, you need steel for probably literally
everything that gets built. It'd been a good question. Another
thing that I wish I had asked is how paranoid,
(42:02):
how justified? Was because you asked that great question about
the importance of the tension between China and the Soviet
Union in Mao's turning at least to some extent to
the US, which then expanded greatly over the following decades.
But I never get the impression that there really was
any actual prospect of war. Like there's one point in
the book where like the leaders all scrambled away from
(42:24):
Beijing because they were fear of a nuclear attack from
the Soviet Union. But it's not clear that there was
any real anything happening there.
Speaker 3 (42:31):
I guess hindsight is twenty twenty when it comes to
a lot of this stuff, including the Cold War, is
kind of similar. I guess, like nothing happened in the
end in terms of like a nuclear tech came close
with Cuba as minds, that is true, but like it
didn't happen. Yes, But one thing that I got from
this book is again the importance of an external enemy
(42:52):
when it comes to radical economic transformation. And I think
we've seen so many examples of that throughout his at
this point. So China, China's market liberalization as a result
of its fear of the Soviet Union is a great one.
I guess the return of industrial policy in the US
as a result of its fear of China's economic dominance
(43:15):
is another one. Japan in the nineteen eighties would be
a good one too. It feels like in order for
anything to get done at scale and in an efficient
time period, you have to have like some sort of
threat that's hanging over you.
Speaker 2 (43:29):
This is why we need the Paul Krugman, like, we
need to convince everyone that the threat is the alien. Yes, yes,
and then you catalyze development without actually and then there's
no aliens in the end. But yeah, I though there
was fascinating. I know, it's such a cliche and I
hate to admit it, but it does seem like understanding
the modern world, you can learn something by reading the past.
Speaker 3 (43:49):
I resist incredibly surprising.
Speaker 2 (43:51):
I resisted that reality for a long time in my life,
and now I've succumbed. We have to know how we
got here.
Speaker 3 (43:56):
Okay, now that you've discovered history, shall we leave it there?
Speaker 2 (43:59):
Let's leave it there.
Speaker 3 (44:00):
This has been another episode of the Audlots podcast. I'm
Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 2 (44:06):
I'm Joe Wisenthal. You can follow me at the Stalwart.
Follow our guest Odd arn Westdad. He's OA Westdad, and
definitely check out his new book, The Great Transformation. Follow
our producers Carmen Rodriguez at Kerman Arman, Dashel Bennett at Dashbot,
and Keil Brooks at Keilbrooks. Thank you to our producer
Moses Ondem. For more Oddlots content, go to Bloomberg dot
(44:26):
com slash od Loots. We have transcripts, a blog, and
a newsletter, and you can chat about all of these
topics twenty four to seven in our discord. There's even
a books channel, which is where I think I saw
this book pop up.
Speaker 3 (44:38):
First, and if you enjoy odlots, if you like it
when Joe reads history books, then please leave us a
positive review on your favorite podcast platform. And remember, if
you are a Bloomberg subscriber, you can listen to all
of our episodes absolutely ad free. All you need to
do is find the Bloomberg channel on Apple Podcasts and
follow the instructions there. Thanks for listening.
Hosts And Creators
Joe Weisenthal
Tracy Alloway
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