This was written in September 1997. It will be updated soon.

Two events dwarfed everything else in Chinese political life in academic year 1996-1997--the death of Deng Xiaoping on 19 February and the return of Hong Kong to Chinese rule on 1 July. Neither event was unexpected, yet both will have a deep impact, only the outlines of which are now clear.

The Death of Deng Xiaoping

The 92 year-old Òparamount leaderÓ had hoped to live long enough to attend the ceremonies marking the return of Hong Kong, but that was not to be. DengÕs death came several years after he had given up any real day-to-day political role. He was, however, a powerful symbol of both Chinese economic reform and its continued political hard line. Deng also served to maintain a degree of unity among the leaders which may not long survive his passing.

So far, the transition has progressed smoothly enough. Jiang Zemin had already been named leader-designate and had become President of the PRC, General Secretary of the communist party, and Chair of the Central Military Commission long before DengÕs death. His most serious challenger in the past, Li Peng, remains premier but is due to retire in 1998. The real question will be what happens in the next few years. Despite all his offices, Jiang is thought to have a relatively weak power base, especially with the PLA. Moreover, there is a group of economic policy makers who are looking to expand their influence. The most visible of these is Vice Premier Zhu Rongji who has openly stated that he would like to be premier when Li retires. It should also be ponted out that these and most other key leaders are all in their mid-60s or solder.

There is still concern among more pessimistic observers that China might even disintegrate under these Òthird generationÓ leaders who lack the revolutionary credentials and political clout of Deng and CCP leaders before him. They point, for instance, to a history of dynastic decline in Chinese history. Perhaps more importantly for our purposes, they note that there has been a series of violent protests already in the non-Han peripheral regions. A bomb exploded in Lhasa, Tibet on Christmas day. In the Uigher-dominated region of Xinjiang, a series of bomb blasts left at least 20 Chinese soldiers dead; the government responded by executing at least 100 supposed separatists.

Whether those critiques are on target or not, what still looks like the built-in contradiction of a country that is liberalizing its economy but not its political system continues. The party began 1997 by announcing a "spiritual civilization" campaign against "immoral" authors and publishers who were Òsliding towards pornography.Ó More generally, the campaign reflected the eliteÕs worries about losing control of the cultural ÒmarketÓ and, by implication, much of the rest of daily life. Moreover, demands for a more democratic state are only likely to grow now that Hong Kong is part of China again.

Hong Kong

When Britain and China ÒagreedÓ to a 99-year lease for Hong Kong in 1898, their leaders probably didnÕt give a momentÕs thought to what would happen in 1997. But as the deadline neared, Britain and China again entered into a series of very different and more even-handed negotiations which determined when and how the colony would return to BeijingÕs authority. The Chinese conceded little in their acceptance of a Òone country, two systemsÓ formula in which Hong Kong would remain in charge of most of its domestic affairs, including its booming economy.

Nonetheless, there was a good bit of concern as the date for the handover neared. The PRC announced that Chinese troops would move into Hong Kong at midnight on 1 July (some actually entered earlier). It named the prominent business tycoon Tung Chee-hwa as the new leader of Hong Kong and announced that it would replace the recently but democratically elected legislative council with an appointed body. Limits were imposed on the right to demonstrate. The transition itself went smoothly (despite a massive downpour), but no one knows how the one country two systems arrangements will work or what they will mean as China turns its attention to Taiwan.

Other News

On the economic front, the news is rather good. The economy as a whole grew at a rate of 9.7% in 1996 which was far higher than the retail price inflation rate of 6.1%. The most important weakness in the economy remains the state sector in which 40% of all enterprises lost money in 1996. In addition, there are still concerns about the use of prisoners and other forced labor in manufacturing for export which contributed to the continued international complaints about human rights abuse in China. And, because the population is so large, it will take many years for average standard of living to improve dramatically, since GDP per capita is still only about $700 a year. Meanwhile, corruption remains a major problem. The official figures released in early July showed that 5,421 people were arrested for embezzlement and other abuses of public funds.

1996-7 did not produce any events as wrenching as the Tiananmen Square crackdown of 1989. Nonetheless, it did produce ever more signs that China is walking a fine political line. In 1989, the ability of students in Beijing to communicate with friends and relatives abroad via fax helped make the Democracy Movement possible. Now, the new technology is the Internet. So far, the PRC government has tried to restrict access to the Net in general and to non-Chinese sites in particular. Now, it seems they are beginning to fail. Having an email address on your business card is apparently the newest status symbol. As of early 1997, there were only about 6,000 personal computers and 40,000 Internet users in the entire country, most of whom worked for foreign companies. Those numbers were expected to at least triple in 1997, and who knows what comes next either for the web surfers themselves or for Chinese politics?

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