China: China in Transition

China in Transition

In 1971 long-standing objections to the admission of the People's Republic of China to the United Nations were set aside by the United States; that October, Communist delegates were seated as the representatives of all China and, despite the opposition of the United States, which favored a “two-China” membership, the Nationalist delegation was expelled. A breakthrough in the hostile relations between the United States and Communist China came with the visit of President Richard M. Nixon to Beijing in Feb., 1972. Although U.S. support of Taiwan remained a sensitive issue, the visit resulted in a joint agreement to work toward peace in Asia and to develop closer economic, cultural, and diplomatic ties.

Although Mao had resigned his position as chairman of the People's Republic during the failures of the Great Leap Forward, as chairman of the central committee of the Communist party he remained the most powerful political figure in China. (Liu Shaoqi, who succeeded Mao as chairman of the Republic in 1959, was deposed during the Cultural Revolution.) By the mid-1970s, political power was balanced between the moderates, led by Deng Xiaoping and Premier Zhou Enlai, and the more radical heirs to the Cultural Revolution, led by the Gang of Four, which included Jiang Qing (Mao's wife), Wang Hongwen, Yao Wenyuan, and Zhang Chunqiao. Mao mediated between the two factions.

With the death of Zhou in Jan., 1976, the Gang of Four convinced Mao that Deng's economic plan, the Four Modernizations, would overturn the legacy of Mao's Cultural Revolution. Deng was purged in April, along with many of his supporters, as the Gang of Four consolidated their power. After Mao's death in Sept., 1976, however, a coalition of political and military leaders purged the Gang of Four, and Hua Guofeng, who had succeeded Zhou as premier, became party chairman. Deng was rehabilitated in 1977 and soon was recognized as the most powerful party member, although he was nominally deputy chairman to Hua. In 1980, Hua stepped down from the premiership in favor of Zhao Ziyang, who was Deng's choice.

From 1977, Deng worked toward his two main objectives, to modernize and strengthen the economy and to forge closer political ties with Western nations. To this end, four coastal cities were named (1979) special economic zones in order to draw foreign investment, trade, and technology. Fourteen more cities were similarly designated in 1984. China also decollectivized its cooperative farms, which led to a dramatic increase in agricultural production. In order to control population growth, the government moved (1978–80) to limit families to one child. Protests and widespread infanticide forced the government to moderate its policy somewhat, but the policy became the standard for roughly two thirds of the population. By 2016, however, the radical decrease that had been achieved in population growth led to concerns over the degree to which continuing the policy would decrease the size of the workforce as the number of elderly increased, and government permitted all families to have two children.

The People's Republic of China reached a political milestone when formal diplomatic relations were established with the United States on Jan. 1, 1979. In 1980, the People's Republic took Taiwan's place in the International Monetary Fund and the World Bank. China had a brief border war with Vietnam in 1979 over Vietnam's invasion of Cambodia, but China has generally been able to maintain peaceful foreign relations in order to advance its domestic agenda.

In the early 1980s, China reorganized the structure of the government and the CCP, rehabilitating many people purged in the Cultural Revolution and emphasizing the maintenance of discipline, loyalty, and spiritual purity in the face of increasing international contact. Declaring a policy of “One Country, Two Systems,” China reached agreements with both Great Britain (1984) and Portugal (1987) to return to Chinese sovereignty the territories of Hong Kong (in 1997) and Macau (in 1999). In 1987, following a series of student demonstrations, Hu Yaobang, a reformist who had been named general secretary in 1980, was replaced by Zhao Ziyang, who was in turn replaced as premier by Li Peng.

The death of Hu in Apr., 1989, led to the series of protests that culminated in the violent military suppression at Tiananmen Square. The government arrested thousands of suspected dissidents and replaced Zhao, who favored negotiating with the protesters, as Communist party secretary with Jiang Zemin, who became China's president in 1993. The incident brought on international economic sanctions, which sent China's economy into decline. International trade gradually resumed during the course of the next year, and in June, 1990, after China released several hundred dissidents, the United States renewed China's most-favored-nation trade status.

In the wake of the Tiananmen Square massacre, China sought to avoid sharp political conflict with the West, as by supporting the United Nations coalition in the Persian Gulf War, but tensions continued over such issues as Taiwan. In 1995, in reaction to a U.S. visit by Taiwan's president, Lee Teng-hui, Beijing conducted missile tests in the Taiwan Strait, and in early 1996 China conducted military exercises and missile tests close to the shores of Taiwan, in an attempt to inhibit those voting in the Taiwanese presidential election. Although it released some dissidents, the regime continued to clamp down on dissent; examples of its hard line were the long sentences given out to human-rights activist Wei Jingsheng in 1995 and political activists Xu Wenli and Qin Yongmin in 1998. In July, 1999, the Chinese government outlawed the Falun Gong (Buddhist Law) spiritual movement after a group of several thousand rallied to urge the sect's official recognition. Official corruption, economic, social, and ethnic inequality, and oppressive rural taxes sparked an increasing number of public protests beginning in the late 1990s.

Economic change continued, with the encouragement of Deng Xiaoping, and in 1993 a revision of China's constitution called for the development of a “socialist market economy” in which the Communist party would retain political power while encouraging a free market economy. Deng died in 1997, and Zhu Rongji replaced Li Peng as prime minister in 1998. Floods inundated the Chang (Yangtze) River valley in Aug., 1998, killing over 2,000 people and leaving millions homeless.

In May, 1999, during the Kosovo crisis, the Chinese embassy in Belgrade was mistakenly bombed by NATO, unleashing large anti-American demonstrations in Beijing. In the same month, China was accused by the United States of stealing nuclear design secrets that enabled it to substantially accelerate its weapons program. Nonetheless, a trade agreement was signed in November with the United States that led to Chinese membership (2001) in the World Trade Organization. Also in November, China advanced its space program with the test launching of an unmanned space capsule.

Relations with the United States again became tense in Apr., 2001, after a Chinese fighter and U.S. surveillance plane collided in mid-air, killing the Chinese pilot. Three months later Russia and China signed a friendship and cooperation treaty that seemed in part a response to the G. W. Bush administration's arms sales to Taiwan and push to develop a ballistic missile defense system.

Beginning in 2001 the Chinese Commmunist party began yet another transition, both in its membership and leadership. That year, Jiang Zemin urged the party to recruit business people as members, declaring in the doctrine of the “three represents” that the party must represent capitalists in addition to workers and peasants. The following year, Jiang resigned as party leader and was replaced by Hu Jintao. Hu replaced Jiang as president in 2003, and Wen Jiabao became prime minister. Jiang remained extremely influential, however, in both the party and the government, and retained his chairmanship of the powerful national and party military commissions until Sept., 2004.

The government's handling in 2003 of an outbreak of SARS (severe acute respiratory syndrome) that began in S China harmed the nation's international image when the outbreak went unreported (and then underreported), enabling it to spread more readily. Severe measures instituted subsequently to curb the illness hurt the service sector of the economy, but by the end 2003 China had experienced a robust growth rate of more than 9% and a major urban building boom, resulting in part from the migration of rural inhabitants to the cities (22 cities had more than 2 million residents). In 2003, China and India signed a border pact that represented an incremental improvement in their relations, and two years later a new agreement called for the settlement of border issues between the two nations. Also in 2003 a trade pact giving Hong Kong businesses greater access to China's markets also was signed. In Oct., 2003, China became the third nation to put an astronaut into orbit when Shenzhou 5, carrying Yang Liwei, was launched; ten years later (Dec., 2013), it landed a rover on the moon.

Continuing vigorous economic growth in 2004 led the government to put in place a series of measures designed to slow growth to control inflation and reduce overinvestment. Also in 2004, relations with Taiwan become more strained with the reelection of Chen Shui-bian, who had previously called for Taiwan to declare formal independence from China, as the island's president. In Mar., 2005, China passed an antisecession law that called for the use of force if peaceful means failed to bring about reunification with Taiwan; the law sparked protests in Taiwan. At the same time, China welcomed visits from Taiwanese opposition leaders, who pledged to follow less confrontational approaches to relations with the mainland.

Early 2005 also saw increased tensions with Japan over how Japanese actions during World War II were treated in Japanese textbooks, over the possible appointment of Japan to a permanent UN Security Council seat, and over a disputed exclusive economic zone in the East China Sea. The issues sparked sometimes destructive demonstrations in China. Meanwhile, in Nov., 2004, China signed a free-trade agreement with the Association of Southeast Asian Nations (ASEAN); under the accord, tariffs on many goods will be eliminated with the richer ASEAN members by 2010 and with the rest by 2015. Trade was also an issue with the United States, which called in early 2005 (and subsequently) for China to revalue its currency because of its large trade imbalances with China, whose economy continued its booming growth during into the following year. The tensions with Taiwan and Japan also continued into 2006, and the government became increasingly concerned with the disparity between richer urban and poorer rural China, which had become even more marked since the turn of the century and sparked a growing number of sometimes violent demonstrations. Shanghai's local Communist party leader, who was also a member of the politburo, was dismissed in Sept., 2006, for corruption, but the move was largely seen as a consolidation of power by President Hu rather than a concerted attempt to weed out corrupt officials.

North Korea's test of a nuclear weapon in Oct., 2006, highlighted China's complex relations with its northeastern neighbor. Although China is widely regarded as having more influence than any other nation with North Korea and objected to the test, it was unable to prevent it. Concerned about instability on the Korean peninsula and a potential influx of Korean refugees into NE China, China supported a resolution condemning North Korea and imposing sanctions but expressed reservations about searching North Korean ships and other trade traffic. China did, however, pressure the North to back down on conducting a second nuclear test.

Trade relations with the United States again became problematic in 2007. Following extremely strong economic growth in 2006, which contributed to China huge trade surplus and foreign currency reserves, the United States, under growing domestic pressure, instituted tariffs on some Chinese goods, asserting that the goods were illegally subsidized. China denounced the move, which appeared in part to have been made because of China's reluctance to revalue its currency more quickly. In May, 2007, China announced it would ease restrictions a little on the daily fluctuation of its currency, a largely symbolic move. Relations with the United States were also complicated by a successful Chinese antisatellite weapon test (Jan., 2007), which suggested that China might cripple U.S. navigation and communication satellites if the Americans aided Taiwan in the event of a Chinese-Taiwanese war. Inflation became an increasing problem during 2007 in the fast-growing Chinese economy, despite Chinese measures to control it, and China's trade surplus continued to grow (by almost 50% in 2007).

In Jan.–Feb., 2008, some of the harshest winter weather in a century caused hardships in central and E China, and severely stressed China's transportation and energy systems, leading to some industry slowdowns and stranding millions of Chinese New Year travelers. More than 300,000 troops and 1.1 million auxiliary forces were mobilized to clear roads, deliver supplies, and the like. In Mar., 2008, there were anti-Chinese protests and riots in Tibet, and Tibetans elsewhere in China, especially in neighboring provinces, also demonstrated against Chinese rule. The Tibetan protests also led international supporters of Tibetan autonomy or independence to use world events associated with the 2008 Beijing summer Olympics to demonstrate against Chinese rule in Tibet. In April, President Hu met briefly with Taiwan's vice president–elect; the highest ranking meeting with the Taiwanese since the Communist revolution, it signaled the likelihood of much less confrontational relations with the newly elected Kuomintang government of Taiwan. Regular commercial air service between China and Taiwan began three months later.

A devastating earthquake struck SW China in May. Centered on N central Sichuan prov., it killed at least 69,000 persons, many of whom died when substandard new buildings, including a number of schools, collapsed. Some 18,000 people were listed as missing, and more than 374,000 were injured. The disaster was notable for the largely uncensored media coverage it initially received in China, but after several weeks coverage was limited and public displays of mourning were suppressed by the police. In July, 2008, China and Russia signed an agreement that finalized the demarcation of their shared borders; the pact was the last in a series of border agreements (1991, 1994, and 2004).

In Sept., 2008, in response to signs that economic growth in China was slowing during the global financial downturn, the government reversed a five-year monetary-tightening policy intended to fight inflation and abruptly cut interest rates while also easing lending restrictions on Chinese banks. That same month a series of product contamination scandals (2007–8) involving pet-food ingredients, toys, and other products produced by Chinese companies culminated in a powdered-milk adulteration case that sickened more than 50,000 Chinese infants and affected both domestic and exported products and led many nations to ban or restrict imports of Chinese food products containing milk.

In a marked improvement in relations, China and Taiwan in November signed agreements that would increase direct trade and transportation between them; additional agreements have since been signed, leading to a landmark trade accord in June, 2010. Also in Nov., 2008, the Chinese government announced a major economic stimulus package, including infrastructure investments, in response to the global financial crisis and economic downturn that began in 2008 and slowed the growth rate of the export-driven Chinese economy. That helped reverse the slowdown significantly as 2009 progressed, and the economy grew by 8.7%, with growth surging higher (10.3%) in 2010. At the same tine, however, such spending also led (as had instances of lavish government spending earlier in the decade) to expenditures on new residential and business districts that were significantly underutilized.

Continuing export growth revived international concerns about the undervaluation of China's currency. China also used its enormous foreign reserves (more than $2 trillion) to provide international economic aid and increase its international influence. By mid-2010 robust growth led the government to impose restrictions on property sales in an attempt to prevent a speculative bubble, and interest rates and bank-reserves requirements were increased during the year. Meanwhile, in July, 2009, a Uigur protest in Ürümqi, Xinjiang, led to deadly anti-Chinese rioting and then anti-Uigur rioting by Chinese; hundreds were arrested, and the government sent troops into the city to reestablish control there. Xinjiang continued to be the site of recurring ethnic unrest in subsequent years.

China's extensive offshore territorial claims have become an increasing source of conflict in the region since 2010. In Sept., 2010, after a Chinese trawler collided with Japanese patrol boats near the Senkaku Islands, an island group controlled by Japan but claimed by China, Japan accused the captain of intentionally crashing into the Japanese vessels. After he was not released when his ship and crew was, China demanded his release, canceled high-level intergovernmental meetings with Japan, and was reported to have halted the export of industrially important rare earths to Japan (and later to other Western nations). The captain subsequently was released, but the events strained relations between the two nations. China's increasingly influential and assertive foreign policy, to a large degree a natural outgrowth of its economic power, also complicated relations with other Asian neighbors, especially when disputed islands (and the potential surrounding resources) were involved. Chinese claims to the entire South China Sea led to tensions with Vietnam and the Philippines in 2011 and 2012, and its claim to the Senkakus led to renewed tensions with Japan in 2012, including sometimes violent anti-Japanese demonstrations in China and a significant reduction in purchases in Japanese products.

In Oct., 2010, Vice President Xi Jinping was appointed vice chairman of the powerful party and government military commissions, a move regarded as signaling his likely appointment as Hu Jintao's successor. A 2011 World Trade Organization decision that China had violated trade rules in a 2009 case by restricting sales of magnesium and other raw materials led to renewed criticism of China's export limits on rare earths, and in 2014 the WTO concluded that those limits were also a violation. The Chinese government continued its efforts to battle inflation during 2011, but slower growth in the latter half of the year led to the easing of some of those efforts at the end of 2011; growth slowed further in subsequent years.

China's most significant political conflict and scandal in many years erupted in early 2012. Bo Xilai, the ambitious and charismatic Chongqing party boss who was known as anticorruption crusader as well as a neo-leftist populist not of the more businesslike mold characteristic of Chinese leaders, was removed as the municipality's party leader after his deputy fled to the U.S. consulate in February. The incident was followed by accusations of corruption and abuse of power involving Bo and his family. By April Bo had also lost his party politburo and central committee posts; Bo, his wife, and his deputy were subsequently convicted (2012–13) of various charges.

Xi Jinping succeeded Hu Jintao as Communist party leader in Nov., 2012. Xi became Chinese president in Mar., 2013, and Li Keqiang succeeded Wen Jiabao as premier. Xi subsequently mounted a far-reaching anticorruption campaign that ensnared a number of high-ranking officials by 2014 and in later years. At the same time, however, a number of anticorruption activists were also tried by the government on charges of disturbing the public order, and the anticorruption campaign appeared to focus on potential political opponents to Xi and was accused of using torture to obtain forced confessions. In subsequent years the perceived political opponents of Xi and the Communist party became more likely to be subjected to arrest and trial than they had prior to Xi's presidency, and politically the country became increasingly repressive. At times individuals were arrested or disappeared abroad and subsequently reappeared in China in government custody. In late 2013 terror attacks by Uigur militants, which had been increasing and more deadly since 2011, began to target Chinese in areas outside Xinjiang. The subsequent government crackdown in Xinjiang led, after 2016, to a significant expansion of internment camps there; more than a million Uygurs and other minority Muslims are believed to have been held in such camps at various times. The government also increasingly pursued a policy aimed more broadly at sinicizing Islam and reducing its influence, and in 2020 there were reports of the forced participation of rural Tibetans in factory training and indoctrination programs.

Chinese assertion (Nov., 2013) of an air defense zone that encompassed the Senkakus and an area claimed by South Korea was criticized by the United States, Japan, South Korea, and Taiwan. In Jan., 2014, Hainan province announced new fishing rules for the 60% of the South China Sea claimed by China (a claim not recognized by China's neighbors and other countries); the United States criticized the move as provocative, and other nations also denounced it. In Jan., 2014, Taiwan and China held their highest level talks since the Communists came to power, and in Nov., 2015, the presidents of the two countries met, but the election of an opposition Taiwanese politician as president in 2016 led to new tensions. There were ongoing tensions in the South China Sea with the Philippines and Vietnam in 2014, and confrontations between Chinese and Vietnamese vessels over Chinese oil drilling the sea led to anti-Chinese riots in Vietnam. China also used dredging to convert reefs in the sea into islets with military outposts, a process that continued in subsequent years. The work led to criticism from, and further tensions with, a number of SE Asian nations, and in 2016 the Hague Tribunal ruled, in a case brought by the Philippines, that China's claims to the South China Sea were not justified.

Slower economic growth in China had more pronounced effects in China and on the world in 2015; by late 2015 China's service industries had become the most important sector of the economy, replacing manufacturing. Suppliers of commodities to Chinese industries found their economies affected, and the Chinese stock market dropped sharply in the second half of the year and again in early 2016 despite several government measures intended to support it, leading to spillover effects in world stock prices. China's official economic growth rate was slower again in 2016, increased slightly in 2017, and slowed again in 2018; at least some of the easing in the rate was an attempt to reduce what the government saw as economic growth that was over the long term unsustainably high.

In Oct., 2016, Xi was named China's core leader in a mark of his power and stature within the Communist party and China. When the party voted to incorporate “Xi Jinping Thought” into its constitution a year later, it gave him the highest stature and greatest power of any Chinese leader since Mao. Xi, while continuing to support private enterprise, has overseen changes to China's economy that have made things more difficult for private firms, and has been a strong supporter of large state businesses even as the government has sought to reduce employment in a number of industries dominated by state companies.

Mid-2017 saw tensions rise with India after Bhutan accused China of constructing a road on disputed territory despite a 2012 agreement not to do so; Bhutan sought Indian help, leading to a three-month standoff between Indian and Chinese troops. Also in mid-2017, the United States placed sanctions on Chinese companies and individuals that it accused of helping North Korea with international trade; China protested the sanctions. Xi's reelection as president in Mar., 2018, was marked by the removal of the two-term limit on the presidency and the establishment of more direct party control over the media; Premier Li also was reelected.

In 2018 there were increased tensions with the United States over trade, as the Trump administration imposed tariffs on Chinese goods and on steel and aluminum in an attempt to win trade concessions from the Chinese, who responded by imposing tariffs on U.S. goods. Additional tariffs and other measures were imposed by both countries in subsequent months, and though at times tensions moderated, at others they escalated. Trade talks, which continued into 2020, have not resolved the situation, although an interim agreement signed in Jan., 2020, eased some U.S. tariffs and called for increased Chinese purchases of U.S. goods and services. The trade war contributed to the further slowing of economic growth in 2019.

In the first months of 2020, COVID-19, which is caused by a coronavirus that apparently jumped from an animal to humans in the vicinity of Wuhan, Hubei, sometime in late 2019, rapidly spread through Hubei prov. and into other parts of China. The disease, which was not publicly acknowledged as a serious threat by China until late January, resulted in travel restrictions and the imposition of quarantine measures in many locations, with the strictest and most widespread restrictions imposed on Hubei prov. The measures, however, were imposed too late to halt the spread of COVID-19 abroad, and despite them reported cases in China were nearly 84,000 (Chinese researchers later said that cases may actually have exceeded 500,000) and deaths exceeded 4,600. The quarantines had a significant impact on the Chinese economy, which was in large part shut down until late March and experienced a contraction, and then the spread of the disease abroad reduced foreign demand for many Chinese exports. By mid-2020, however, when the disease was well-controlled, often through recurring use of local lockdowns and quarantines, the economy had made significant gains.

In June, China adopted a so-called national security law for Hong Kong; it criminalized secessionist, subversive, and terrorist activities and gave Chinese security officials the right to act independently of the Hong Kong legal system in order to antigovernment demonstrations and criticism. The new law was denounced as the effective end of Hong Kong's fundamental freedoms and the “One Country, Two Systems” policy. That same month also saw the worst outbreak of border violence between Chinese and Indian troops in decades. Although the situation soon eased and troops were pulled back from the border, there were sporadic border tensions subsequently. In mid-2020 some of the worst flooding in more than 20 years occurred in S and central China, with the most significant damage occurring in agricultural areas. U.S. relations continued to be difficult during 2020, aggravated by U.S. President Trump's accusations that China had lied about the COVID-19 outbreak, by U.S. opposition to developments in Hong Kong, and by warmer U.S. relations with, and arms sales to, Taiwan.

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