Forty-year long march helps to shape a greatly changed China

It was in December 1978 that Deng Xiaoping took the first steps to opening up his country to the outside world.

A People’s Armed Police officer stands before a portrait of Mao Zedong in Beijing.

Forty years ago I saw an adver­tisement in a Sunday newspaper with the heading: “Do you want to go to China?” As I soon discovered, the local Farmers and Graziers ­Association was offering a “farm study tour of China”.

I had never considered that closed communist China was a place I would ever see. I had seen the photos of Gough Whitlam walking on the Great Wall but I was unaware of the historic ­reforms taking place there.

In December 1978, under Deng Xiaoping, the Communist Party’s third plenum took the momentous decision to open China to the rest of the world. The decision and all its far-reaching con­sequences will be celebrated in Beijing next week.

Chinese leader Deng Xiaoping and his wife Zhuo Lin with US president Jimmy Carter and his wife Rosalynn in 1979.

It was driven largely by a need to boost an economy left languishing after Mao Zedong’s Cultural Revolution, and few would have en­visaged that the poor rural country of the late 1970s would ­become the world’s second largest economic powerhouse 40 years later — a country that has gone from having a smaller economy than Australia’s to one that plays such a crucial role in our economic livelihood.

China at the time viewed Australia as a fellow agricultural country that might be able to help with advice on farming techniques.

Our farm study group flew into Hong Kong and caught a train up to the Chinese border down of Lo Wu. We had to leave our Hong Kong guides and carry our bags across a long wooden bridge ­towards a group of Chinese guards with guns. We were told to sit in a waiting room on the other side. We had no idea of our itinerary or even what cities we would be visiting but we were soon taken by train to Guangzhou, then known in the West as Canton. The streets were filled with rickety old trucks and carts, and people on bicycles. Everyone was wearing green and blue Mao suits.

Along the main roads there were revolutionary posters featuring heroic men and women working in factories and mines, fists held high, patriotically urging their fellow workers onward, red scarfs around their necks.

We visited farm after farm, the villagers coming out to see us, ­unable to help themselves from touching the skin and hair of those of us with blond or red hair. Along the way we asked people what they wanted. The overwhelming ­response was one thing: an electric rice cooker.

Forty years on, these images are top of mind as I visit Shanghai as The Australian’s China correspondent. Upmarket shopping centres and Jetsons-style office buildings are bedecked in Christmas lights. At an investor conference by online travel giant Ctrip, which is celebrating its listing on the Nasdaq stock exchange 15 years ago, the conference hall is filled with more than a thousand delegates wanting to hear the company’s plans for the future. Its chief executive, Jane Sun, says she would like to buy a spaceship and take Chinese travellers to the moon. She is only half joking.

The desire of newly well-off Chinese to travel the world is an economic phenomenon. More than 1.3 million Chinese visit Australia each year, a business worth more than $10 billion a year and rising. More than 130 million Chinese made overseas trips last year — with the figures set to surpass the 139 million visits a year to China by foreigners.

Sitting in on the conference, it is clear the Chinese tourist boom is only just beginning.

If I weren’t a journalist I could be forgiven for not realising I am living in a country that is still subject to strict controls by the Communist Party. State-of-the-art electronic techniques are used to constrain the official flow of public information and social media comments. In the school next to my home in Beijing, many children come home wearing bright red Communist Party scarfs around their neck.

In the years since Deng’s historic 1978 decisions that, among other things, allowed Chinese farmers to sell some of their produce, unleashing what would ­become a dynamic private sector, China has become the single ­largest contributor to world economic growth — a role it has played since 2009.

Growth rates of more than 10 per cent a year for many years, slowing more recently to just over 6 per cent, have seen China’s share of the world economy grow from less than 2 per cent in 1978 — when its economy was only 5 per cent the size of America’s — to more than 18 per cent today.

China has been the world’s biggest exporter since 2010 and it is the world’s wealthiest nation in terms of foreign reserves, with holdings of more than $US3 trillion ($4.2 trillion). Its gross domestic product per head is more than 50 times larger than in 1978 — from an estimated $US155 at today’s prices then to more than $US8000 a year today.

While hundreds of millions of Chinese have been lifted out of poverty and have moved from rural areas to shiny high-rise cities, China still insists it is a developing country, pointing to its western provinces where many continue to live in poverty.

Underwriting Australia’s ties with China over the past 40 years has been the Australia-China Council, established by the Fraser government in 1978. Its chairman, senior ANZ executive Warwick Smith, notes the council was ­critical in establishing a host of people-to-people ties between Australia and China that go far ­beyond the early government-to-government relations.

Council members visited Beijing this month for the release of a book on its 40-year history. The book includes pictures of the tour of some of the terracotta warriors to Australian capital cities in 1983 and a 14-month training program undertaken by Chinese students in 1984 and 1985 to study the Australia’s sheep industry.

There are reflections from one of the original council members, author Thomas Keneally, who ­recalls his early visits to China speaking at universities from Xian to Shanghai.

“It’s hard to overstate the ­importance of (the establishment of the Australia-China Council) in the relationship,” Australian ­ambassador to China Jan Adams says at a function at the Australian embassy to launch the report.

“In those early days, when China began its opening up to the rest of the world, our economic ties, which make up so much of our relationship today, were ­extremely small,” she says. “But it was the people-to-people links, fostered by the Australia-China Council in the early days, between journalists, scholars, writers, arts institutions, universities and students, that were central to creating the enduring bonds of friendship and engagement that we enjoy today between our countries.”

Smith notes that Australia’s two-way trade with China has skyrocketed from $580 million in 1978 to more than $155bn.

But in a year when China has seen visits by several leading Australian cultural organisations, ­including Opera Australia, the Australian Ballet and the Queensland Ballet, Smith emphasises the importance of facilitating cultural exchanges as providing opportunities for a “deeper understanding” and a “sustainable” relationship with China.

“Our differences have always been managed when you have a deeper understanding,” he says, ­alluding to recent strains in the Australia-China political relationship that appear to be getting back on track.

Former Australian ambassador to China Geoff Raby describes China’s economic growth over the past 40 years as “extraordinary”. “It is clearly one of the most profound changes in world economic history,” he tells Inquirer. “It has been totally transformative. The increase in people’s wellbeing and living standards and personal freedoms has been quite remarkable.”

Forty years on, the rise of a more confident, nationalistic China determined to stamp its territorial footprint on the South China Sea, expand its economic ties through its Belt and Road concept and to tout a Made in China 2025 concept to develop technologies, is attracting a pushback against rising Chinese influence.

US President Donald Trump bases his trade war against China on what he sees as unfair trading policies and claims part of China’s economic success has been based on stealing American technology. The US is determined to constrain a strengthened China.

Equally important — but less visible to the outside — is the move by President Xi Jinping to suspend economic reform in key areas of the financial sector and to bolster the role of the state-owned sector in China’s economy.

Despite the bright lights of Shanghai, policies will limit growth of the private sector — which is already bearing the brunt of the trade war and the slowing of the economy — which means the decade ahead will not see the soaring productivity of the first 30-plus years of economic reform.

Raby says Xi has stepped back from many areas of structural ­reform in China as he has moved to reinforce control of the Communist Party.

“He has made a conscious decision to slow down on reform of the economy to maintain the control of the Communist Party,” he says.

“We will continue to see a China which is richer, stronger and more prosperous — unless there is a major shock. The biggest risk to the economy comes from the political side — if there is some political disruption.”