Chinese History for White People--The PRC

At this point, we've reached the end of history. I'm no longer speaking of the past, but giving my impressions of the present. The significance or consequence of any event or policy since then has yet to be clarified by hindsight, and any commentary I provide is more speculation than a retrospective. There's much to be said about the explosive growth of modern China, the challenges it faces and the dysfunctions it has inherited- but that could fill a book (a blog?) on its own. Nonetheless, this history feels incomplete unless I say something about how the PRC is different from the CCP.

Deng Xiaoping was paramount leader, but his rule was never absolute¹. China was governed by the “Eight Elders”—of which Deng was the most important, and the meetings were often held in his home. But it included hard leftists who opposed his major economic reforms. The change was gradual—each concession painstakingly negotiated from the Communists—and because of that there remains curious artifacts of Communist law on the books. And the mid-government cartel culture is alive and well to this day. But make no mistake—China is more free-market unregulated capitalist than America, as oligarchic tycoons spring up with more money and power than the government tasked with controlling them.

So what was Deng's actual plan? The first step was allowing foreign imports—and Hong Kong was the first and easiest concession for Deng to get through since England had agreed² to repatriate it to China in 1997. Shenzhen was just an irrelevant fishing village before it became the primary importer for Hong Kong merchandise, and the first wave of Chinese New Rich came from buying up these imports and retailing them throughout the mainland. The second step was sweatshops—using China's abundant population for comparative advantage in the global market. When Deng took power, China's economy was still almost entirely agricultural, and these government funded and operated sweatshops were considered dream jobs to subsistence farmers. People spent their savings bribing their way into these jobs—which offered more stability than farming and paid 7x the income of farming even in a bountiful harvest. The third step is collective bargaining—limiting how cheaply Chinese goods could be exported—otherwise know as the trade war.

The result was ~30% GDP growth³ per year. Which leads to some problems of its own. Even Chinese treasury bonds became a bubble for a while, since they promised to adjust for inflation but the growth was unpredictable, which led to speculation on their value as a security. The stock market similarly was a chaotic investment⁴, with overnight millionaires going bankrupt by the end of the month. The most reliable asset became real estate, since no matter what happened at least you still had a house at the end of the day. Since this was the primary wealth management tool for most of the population, a lot of Chinese economic incentives and laws are designed to prop up the housing market to a much greater extent than you see in the west. Such as the unique system of buying “futures” in real estate, where you take out mortgages to purchase a house that doesn’t exist yet.

The Tiananmen Square protests in 1989 were a bit blow to Deng’s economic reforms. Over 100,000 students gathered for several weeks to demand westernized democracy. Deng's faction was already pushing for democratic reform, but when Zhao Ziyang, head of state at the time, promised gradual implementation of the student's’ demands, he lost his office the very next month for being “soft” on protests. And two weeks later, the military was given the order to clear the protests by force. Civilian death rolls range from 300 to 2700 (depending on who you believe)⁵. The West calls it the Tiananmen Square Massacre. However, the majority of the protests—which not unlike American protests occasionally included riots and arson—did not even take place in Beijing, and the majority of the violence did not occur in Tiananmen Square itself. Since then China invested more heavily in training its military in riot suppression tactics⁶, and nobody within the Chinese government ever dared advocate free speech again. Whatever plans Deng had for democracy were permanently abandoned.

Deng, at the age of 88, began aggressively pushing his market reforms again in 1992, which coincided not just with the fall of the Soviet Union and the surplus that brought America, but also the American neoliberal political movement of free trade. There could not have been a better opportunity for China, and the enormous relocation of global industry brought Deng's plan to unimaginable heights of success. He died in 1997, having in one lifetime seen the end of Qing Dynasty, the Warlord Era, the Chinese Civil War, WW2, the Korean War, the Great Chinese Famine, the Cultural Revolution, and then, in the last 17 years of life, the relative peace and prosperity of his Economic Miracle.

Remember, this has all been only an introduction to Chinese history—something to familiarize yourself with any more detail you might encounter in the wild. As for everything since, that's political commentary—not history. I won’t soapbox about my own takes here—for that, you’ll have to join the Discord.

Back to CCP

1. And it probably could have been; it’s quite clear from the Constitution he designed that he took a principled stance against autocratic power.

2. Having just come off a victory in the Falklands, Britain actually tried to renege on the deal and hold onto Hong Kong until 2099. China made it clear they were willing to go to war over this, and while my money would be on the Royal Navy anyways, China would ensure it would be a costly victory, so Britain backed down and turned over Hong Kong as promised.

3. Despite this, as of 2023, China’s GDP per capita is still slightly below that of Costa Rica, and given the extreme wealth gap for nearly everyone who isn’t in Beijing, Shanghai, or Shzenzhen, it’s actualy much worse than Costa Rica for over a billion people.

4. Where there’s a lot of corruption and unregulated ponzi schemes and rampant securities fraud for a very long time (even to this day??). A lot of CCP members will tactically preferentially buy from certain companies to artificially boost up stock prices and then rug-pull them.

5. For older generations who survived the Famines or the Red Guard, this number is microscopic and the event forgettable. Meanwhile, younger generations speculate online why the number “89” would be censored, and conclude it must be some extremely obscure penis reference.

6. The Chinese military is actually so shockingly unprepared for fighting a real war that I’ve often wondered why they exist at all and speculate that itm ust be primarily for domestic suppression. The Chinese veterans I’ve talked to explain they’ve never actually trained with a real gun, and it’s routine to get out of physical training with bribes.