The Economic Reforms of Deng Xiaoping
China History

Research Report
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"Marx sits up in heaven, and he is very powerful. He sees what we are doing, and he doesn't like it. So he has punished me by making me deaf."
--Deng Xiaoping, 1985


  The Era of Deng Xiaoping was one of great economic growth for the People's Republic of China. After a tremendous struggle to achieve the position of Chairman of the People's Republic, Deng saw potential for China that changed the future of the state and the path that it has taken in the last twenty years. Holding power of the People's Republic of China from 1980 till November of 1989, Deng took an opposite approach to Mao's governing styles and took a capitalist view on the economy in order to build a new system which enabled new freedoms and reforms.

Historical Background

  When the People's Republic of China was formed in 1949, the social and economic structures of the state changed.  Following Marxist beliefs, the commune and shared wealth were implemented across China.  Those these ideas worked in theory, in reality it was an economic disaster.  At this time, Deng Xiaoping rose to power within the communist party.  With the support of Mao Zedong in 1949, he became Vice Chairman of the Southwest Regional Commission until1952 he then became Vice Premier of the State Economic Commission until 1954.  Deng then became Secretary General of the Central Committee until 1966. While serving as secretary general, having the intentions saving China's economy, Deng worked to develop economic policies after Mao's Great Leap Forward ended in complete failure. Mao along with other officials saw his actions and ideas as counter revolutionary and Deng was attacked for being a capitalist roader.  He was removed from office and placed under house arrest. With the help of Zhou Enlai, Deng returned to Beijing in 1973 and was promoted to Vice Premier of China, and then Vice Chairman of the PRC in 1975. When Zhou Enlai died in 1976, Deng was again removed from power and punished by the radical Gang of Four, the leaders of Cultural Revolution. He went into exile in Guangdong and lived under the protection of local leaders. When Mao died in September of 1976, Premier Hua Guofeng reinstated Deng as a member of the ruling Politburo. By 1980 Deng forced Hua from office and became the official leader of China.

Research Report

  When Deng Xiaoping took office he started China on a new path.  When Mao died, the revolutionary ideology also died.  In 1978, Mao's slogan, "take class struggle as the key link", was abandoned and the party's priority was changed from political campaigns to economic development (Shiping).  The years that Deng Xiaoping headed the PRC has been called an era of reform, it was a time that shaped China into the country it is today.  Over the twenty-one years of his rule of the People's Republic of China, Deng Xiaoping personally shaped the economic policies about five times.  The fact is that within those five distinct times each action was crucial and had longstanding effects.  It has been said that one of his greatest accomplishments was his ability to shift the Communist party to economic construction. In 1979, Deng's government ended China's Soviet based Five-Year Plan that focused on heavy industry, like steel mills and transformed it into producing consumer goods.  Deng Xiaoping was a true believer in the Communist cause, but he understood the ways of the world and wanted China to be strong and up to date with other western powers.  Mao's programs sent China backwards and Deng put a halt on maters and tried to get moving in the right direction.  Deng knew that the only way for China to get up to better standards was through reforming the economy.  Deng allowed for the privatization of small businesses, which went against the Marxist practice.  It was allowed for the first time for families to open up shops in their homes and sell goods to make a profit. In 1985, the government put an end to the Communes and stopped trying to control production and distribution of certain crops, such as fresh fruits and vegetables.  The state still owned the land but let the peasants lived and work the land as long as they were producing and paying their taxes.  This allowed farmers to grow and sell what they wanted in order to make a profit.  Street venders were legalized and outside markets were formed.  Deng's government had a hands off policy when it came to the large peasant population.  The reason this approach was taken was because the government did not see the peasants as a threat so it would not have a negative effect.  In the end this was all allowed by the government in order to increase the spending power of the people and in turn boost the economy.   It was also known that if the populations were happy with their life they would hold no problems with the government and work harder to support the state. Deng Xiaoping saw great things in line for China and he knew the proper ways to achieve them without loosing control.  He was able to bend the rules of the revolutionaries in order to take on western ideals without disrupting Communist principles.  With the economy growing at a steady rate the lifestyles of the people were improving.  Deng knew that Mao and or Marx would never tolerate his reforms, but it was the only way for the state to survive.

   Chinese farmers increased food production around eight percent each year since 1978, about two and a half times the rate in the preceding twenty-six years.  The economic freedoms the government placed on the people have had nothing put positive effects.  It has been noted that the growing private sector has been important and necessary in creating a more competitive and efficient environment even for the state sector.  When Deng's goal of positive economic growth was achieved within China he set his sights abroad.  His government looked toward the future and saw that international trade and opening up the nation to foreign investors was the next step.  Foreign machinery and goods were imported to China in order to benefit working conditions and the production of better products. By opening up certain parts of the economy, by 1980, Deng enabled the gross national product to double.  This solved the food and clothing problem in China.  It was hoped that by the end of the century the GNP was to be quadrupled and in fifty years China would rank with the wealthiest of the western powers.

Historical Significance

   Today China is considered a world supper power in terms of strength and its economy is still growing.  With a growing stock market comparable to those in the United States and Japan, China has changed dramatically over the last twenty years.  Deng Xiaoping is responsible for many positive things that led to the formation of the modern Chinese state.  He wanted a Socialist system ruled with Chinese characteristics.  The major metropolitan cities of China are filled will people working for profit to better their own lives first before the lives of everyone in the community as it was thirty years ago.  The Soviet Union fell because the government would not reform economically and the people suffered. Deng did what he could to maintain the state but satisfy the people for a greater China.  The idea of "One Country two Systems", for Hong Kong and Macao was his experiment that he never got to see take place.  Deng Xiaoping died February 1997 due to complications of Parkinson's disease, five months before the return of Hong Kong.  Deng Xiaoping was a visionary who was able to risk his power to save China.


Deng, Maomao. My Father Deng Xiaoping. New York: Basic Books, 1995.

Franz, Uli. Deng Xiaoping. Boston : Harcourt Brace Jovanovich, c1988

Shambaugh, David. Deng Xiaoping: Portrait of a Statesman .  Oxford:  Clarendon Press,

Shiping, Zheng. Party vs. State in post 1949 China: The Historical Dilemma. Cambridge:
 Cambridge University Press, 1987.

Yang, Benjamin. Deng: A Political Biography.  New York: M.E. Sharpe Inc, 1998.

Web Resources

China:  a shared poverty to uneven wealth?:

World Socialist Web Site :

Man of the Year Deng Xiaoping:

Mr. Deng Xiaoping:

Asia Week:

Report by Michael Defilippis