Deng's Reforms

Imposing a bit of capitalism

This week China's Senior Vice Premier Deng Xiaoping was expected to step down from his government post, along with Premier Hua Guofeng, in favor of a new team of trusted, younger technocrats. But first Deng saw to it that the National People's Congress, whose 3,500 delegates have been meeting in Peking for the past ten days, approved a parcel of new measures. Among the miscellany: the debut of the personal income tax* and a raise in the legal marriage age (20 for women, 22 for men). The important changes, however, were a series of economic reforms designed to carry out Deng's plan to revitalize the economy and raise the standard of living.

Some of the new schemes, providing for tax incentives, more autonomy for businesses and the like, sounded downright capitalistic. One of the most surprising revelations was the fact that the government had incurred a deficit last year of $11 billion. It went largely for higher wages, farm subsidies and other benefits to workers. Some $700 million alone was spent to compensate former officials who had been unjustly deprived of their jobs during the Cultural Revolution.

Other economic measures were aimed at creating more incentives and encouraging competition. Factories and businesses will pay taxes on their earnings rather than simply turn over their entire profits to the state as in the past. This means that they will be able to keep a share of the profits for reinvestment, housing for workers and higher salaries. Provincial and regional governments will also be responsible for their own fiscal affairs. If they take in more than other provinces or regions they will be allowed to keep proportionately more as well.

Some of the programs have already been tested successfully in Sichuan, the country's most populous province, under the governorship of Zhao Ziyang, 61, who is Deng's choice to replace Hua as Premier. In an interview with Italian Journalist Oriana Fallaci, published in the Washington Post last week, Deng conceded that his program may well bring in "some decadent influences of capitalism, but I think that this is not so terrible." In any case, Deng added, "capitalism is superior to feudalism."

In discussing Mao Tse-tung, who has been downgraded since his death in 1976, Deng said that "we shall not do to Mao what Khrushchev did to Stalin." But Mao's "unhealthy thinking, ultra-leftist ideas, and patriarchal behavior" had led to the Cultural Revolution, "a civil war in which many people died." When Fallaci suggested that more people died under Stalin than during the Cultural Revolution, Deng responded: "I am not sure about that. Not sure at all."

The Vice Premier nonetheless defended China's support for the genocidal regime of Pol Pot in Cambodia and disparaged accounts that 1 million people had died under Pol Pot's rule. By its occupation of Laos and Cambodia, Viet Nam, he said, had become "the Cuba of the East." China's own attack against Viet Nam last year was not very successful, he noted, because many countries disapproved of it. But "we reserve our right to give them another lesson."

Deng's most trenchant comments were reserved for the "imperialist" Soviets, whose expansionism he said will lead to the Third World War. "The next ten years are very, very dangerous. They are frightful," he said. Talk of peace and detente, especially by Europeans, is comparable to the "appeasement of Chamberlain and Daladier toward Hitler." It serves only to make the Kremlin "more and more arrogant." Even the Soviet invasion of Afghanistan, said Deng, was aimed indirectly at Europe. "Once the Soviets control the oil sources, what will Europe do? Get down on its knees and accept Finlandization or fight? Choosing now means to place the frontline in Afghanistan and Cambodia. In fact, these are the two places where we must try very hard to tie down the Soviet Union for several years. If we do so, the war is postponed." And where will the Soviets strike next? asked Fallaci. "The next target," said Deng, "can only be Iran or Pakistan." -

* Applicable mostly to foreign residents, because only about 20 Chinese have a monthly income exceeding the new tax base of 800 yuan ($545); China's average monthly salary is 60 to 80 yuan ($41 to $54).

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