The 1978 Third Plenary Session of the Eleventh Central Committee of the Chinese Communist Party (The Third Plenum) stood as a pivotal moment in post-1978 China, marking the onset of the Reform Era. This meeting laid the groundwork for economic and social reforms that propelled China’s subsequent success. It also signified Deng Xiaoping’s ascent as China's paramount leader, despite Hua Guofeng’s Chairmanship, with a focus on reform. A key agenda was the reconstruction of the national economy and the blueprint for future reforms.
Following this Session, the Beijing Review published a communique detailing the Chinese government’s strategy to revitalize Chinese society economically and politically. The party emphasized agriculture as the economy’s cornerstone, resolving to prioritize its advancement. Moreover, the session set a goal to significantly improve living standards, contingent on economic growth. The announcement revealed how the Chinese government planned to restore Chinese society economically and politically.
The policies introduced during the meeting signaled a departure from a centrally planned economy to a market-oriented one. Notably, the session reformed communes, ensuring state laws protected the ownership and decision-making rights of people’s communes, production brigades, and production teams. The introduction of merit-based payments within communes aimed to incentivize productivity, while the recognition of private land use for commune members addressed past failures and supported individual initiatives. These reforms ignited a transformation in China’s economy, laying the groundwork for agricultural and industrial success to benefit peasants and urban workers. The meeting carried out this shift through the reform of communes and the communique stated that “The right of ownership by the people's communes, production brigades and production teams and their power of decision must be protected effectively by the laws of the state; it is not permitted to commandeer the manpower, funds, products and material of any production team”. This change meant that state law protected people's communes' ownership rights and decision-making power. In addition, the change dictated that the state be allowed to commandeer the manpower, funds, products, and materials of any production team. This new organization was a step away from the initial communes enacted by Mao, which centralized the power and organization of communes within the state.
The next reform to the commune focused on the utilization of incentives for high-performing workers: “The people's commune must conscientiously…work out payment in accordance with the amount and quality of work done, and overcome egalitarianism” In divergence with Maoist principles, the meeting reformed the economic organization of communes by employing the use of meritocracy based payments. This seemingly pragmatic change allowed for rapid development of the economy as workers would be more motivated to work harder, increasing productivity and efficiency. In addition, “small plots of land for private use by commune members…must not be interfered with”. During the Great Leap Forward and the Cultural Revolution, one of the reasons for famine and failure lay in the fact that farmers could not independently work their land, whether it was for extra money or to feed themselves and their families. Yet this shift coming from the Third Plenum finally acknowledged that small plots of land for private use by commune members, their domestic side-occupations, and village fairs were necessary parts of the socialist economy and were not to be interfered with.
A spark of market economy sentiment was born in socialist China. According to the Party, after the success in agriculture, the “benefits [of such success] will in general be passed on to the peasants” and “after the purchase price of farm produce is raised, the urban workers must be guaranteed against a fall in their living standard.” These agricultural reforms focused on economic development, the well-being of the workers in the communes, and how success within agriculture would genuinely benefit the workers. The communes, after the adoption of new approaches, began to come up with a solution for how to fix the economic state of China. The communes simply contracted plots of land to farm to individual households, called farm households. The farm households were allowed to manage these lands under a contract. The contract required them to give a certain amount of their harvest to the communes. This policy essentially brought back the traditional farm household economy. With this policy, the role of communes changed significantly. The communes became more like landlords, owning the land but leaving the management of the land to individual households.
The Third Plenum presented a paradigm shift in economic development. Meritocracy ensured the success of agriculture, and the rights of commune workers were interchangeable with the success of the communes themselves.
The reform of agriculture and industry represented the first shift towards a market-oriented economy. On this basis, China began its rapid development in the next decades to obtain global success. The Session ignited a flame of market economy transformation that burned the failed centrally planned past and created a new and fresh plot of land for success. In accordance with the beginning of the reform era, Deng Xiaoping emerged as the preeminent leader as Hua Guofeng’s influence waned. Ultimately, the Third Plenum represented a watershed in economic and social development, setting a new tone for the Reform Era—a period marked by improved living standards and economic progress.
The Third Plenum’s economic reforms quickly impacted the Chinese economy, as farmers began to greatly increase their output—a clear response to their new privileges under the market-oriented economy. Over the course of six years, food shortages, which had engendered China’s population for centuries, subsided as farm incomes doubled under the new economic model.
The beginning of the Reform Era removed the economic and social rubble left by the unsuccessful Maoist rule. The reforms expanded modern China’s agricultural and industrial landscapes, bringing new factories producing consumer goods and building materials. Progress was confirmed in The State Statistical Bureau's "Communique on Fulfillment of China's 1978 National Economic Plan," which provided insights into the advancements achieved in the industrial and agricultural sectors from 1977 to 1978. The statistical analysis in the Communique on Fulfillment shed light on the effectiveness of the economic and social reforms implemented in 1978, as well as their impact on the Chinese economy. According to the statistics, the economic and social reforms were extremely successful as the “total industrial and agricultural output value reached 569,000 million yuan,”50 which was 12.3 percent more than in 1977. The percent increase reveals that the reforms fomented a large amount of progress considering the small time frame. In terms of industry, “The 1978 total industrial output value was 423,100 million yuan, 1.6 percent above the plan and 13.5 percent over 1977.” These increases reveal that economic reforms go above China’s plan for development during the Third Plenum. Figure 1 reveals the massive increases in production outputs of products like freight wagons, with a 165% increase, and locomotives, with a 77.8% increase. These developments played a crucial role in driving economic growth, as the use of freight wagons and locomotives facilitated the increased transportation of goods and people, leading to a rise in exports and improved circulation of goods and people across the country.
The significant increase in the production of transportation devices allowed for the introduction of a new and more efficient supply chain system. Furthermore, the consumer market saw substantial growth as the production of bicycles increased by 14.9 percent and wristwatches by 22.4 percent. This expansion of consumer goods and improved transportation contributed to developing a domestic market for nonessential products in China. Within agricultural output, the year 1978 saw drought and other natural calamities. Nevertheless, “a rich harvest was reaped as a result of the peasants' staunch struggle and energetic support from all quarters.” The increased living standards and meritocracy improvements from the economic reform likely contributed to the peasants' willingness to work. The Agricultural output in 1978 totaled “145,900 million yuan,” which was “2.7 percent above the plan and 8.9 percent higher than the previous year [1977]”. Among the 12 major farm products, “the output of jute and ambary hemp, sugar cane, and tea met or outstripped their quotas.” The output of jute and ambary hemp, as per Figure. 2, increased a whopping 30 percent. Grain production in 1978 saw a substantial increase, which had “rarely been seen since the founding of New China.” The agricultural reforms ensured state farms' success, as “[p]roduction on state farms rose markedly following measures taken to straighten things out.''53 The measures taken to straighten things out refer to the specific change to a meritocracy-based payment system within communes. Also, due to the shift of the state's role in communes, “Management [of the farms] showed improvement.”
The reforms made during the third plenum revealed a clear link with the subsequent success in the latter half of 1978. Prosperity in agricultural output during 1978 can also be accredited to developments in science and technology, as “China saw a comparatively big increase in the deployment of farm machinery.” Compared to 1977, the number of large and medium-sized tractors increased, reaching 557,000. Additionally, the count of hand tractors rose to 1.37 million, and the horsepower of power-driven drainage and irrigation machines for rural use increased to 65.58 million. With new technologies, Chinese farms adopted improved and more effective farming methods that yielded more crops. The revival of the intellectual class and the implementation of economic reforms during 1978 highlighted the intersection of these two pragmatic changes, creating progress. None of the successes reached in industrial and agricultural output could have been possible without the rebirth of science and technology as an imperative function of society. During the Mao era, production in China was highly inefficient due to the lack of proper organization within factories and farms, the pervasive sense of class struggle, which limited progress, and the egalitarian standards for all the workers as non unique cogs in the Chinese communist party clock.
The pragmatic reforms introduced by Deng Xiaoping during the Third Plenum in 1978 changed the way China worked regarding social dynamics (the population) and economics (the function of production) and, in doing so, fomented the success that Mao’s China lacked.
Cover Image From: http://www.bjreview.com.cn/special/2013-10/23/content_573998.htm
Works Referenced
Balassa, Bela. "China's Economic Reforms in a Comparative Perspective." Journal of Comparative Economics 11 (1987): 410-26. Digital file.
Beijing Review. "Communique of the Third Plenary Session of the 11th Central Committee of the Communist Party of China." December 29, 1978. Accessed May 10, 2024. https://www.bjreview.com/Special_Reports/2018/40th_Anniversary_of_Reform_and_Op ening_up/Timeline/201806/t20180626_800133641.html.
Bridgham, Philip. "Mao's 'Cultural Revolution': Origin and Development." The China Quarterly, no. 29 (1967): 1–35. http://www.jstor.org/stable/651587.
Bureau, State Statistical. "1978 Output and 1977 Output Comparison." Chart. 1979.
Chang, Parris H. "Regional Military Power: The Aftermath of the Cultural Revolution." Asian Survey 12, no. 12 (1972): 999–1013. https://doi.org/10.2307/2643020.
China's Economic Future : Challenges to U.S. Policy. Abingdon, Oxon: Routledge, 2015.
Digital file.
China's Economic Rise: History, Trends, Challenges, and Implications for the United States, Rep. (June 25, 2019). Congressional Research Service.
Goldman, Merle. "The Aftermath of China's Cultural Revolution." Current History 61, no. 361 (1971): 165–82. http://www.jstor.org/stable/45312540.
Goldman, Merle. Sowing the Seeds of Democracy in China : Political Reform in the Deng Xiaoping Era. Cambridge, Mass.: Harvard University Press, 1994.
Haque, Md Moinul, Habibur Rahman Pramanik, Jiban Krishna Biswas, K. M. Iftekharuddaula, and Mirza Hasanuzzaman. "Comparative Performance of Hybrid and Elite Inbred Rice Varieties with Respect to Their Source-Sink Relationship." The Scientific World Journal 2015 (2015): 1-11. https://doi.org/10.1155/2015/326802.
Hutchings, Graham. Modern China : a Guide to a Century of Change. Cambridge, Mass.: Harvard University Press, 2001.
MacFarquhar, Roderick, and Michael Schoenhals. Mao's Last Revolution. Cambridge, Mass.: Belknap Press of Harvard University Press, 2008.
Mitter, Rana. A Bitter Revolution : China's Struggle with the Modern World. Oxford: Oxford University Press, 2005.
Mühlhahn, Klaus. Making China Modern : from the Great Qing to Xi Jinping. Cambridge, MA: Belknap Press of Harvard University Press, 2019.
National Bureau of Statistics of China (2010). China Statistical Yearbook. https://www.stats.gov.cn/sj/ndsj/2010/indexee.htm
Naughton, Barry. The Chinese Economy : Transitions and Growth. Cambridge, Mass.: MIT Press, 2007. Digital file.
Review, Beijing. "TV Universities Gain Popularity." Beijing Review (Beijing, China), May 14, 1984, Events & Trends, 11-12. PDF.
Rodziński, Witold. The People's Republic of China : a Concise Political History. New York: Free Press, 1988.
Schell, Orville, and David L. Shambaugh, eds. The China Reader : the Reform Era. Nachdr. ed. New York: Vintage Books, 2010.
Schoppa, R. Keith. The Columbia Guide to Modern Chinese History. N.p.: Columbia University Press, 2000.
Statistical Bureau, State. "Communique on Fulfillment of China's 1978 National Economic Plan." Beijing Review (Beijing, China), July 6, 1979, 37-41. PDF.
Vogel, Ezra F. Deng Xiaoping and the Transformation of China. Cambridge, Mass.: Belknap Press of Harvard University Press, 2011. Digital file.
Xiaoping, Deng. "Speech At the Opening Ceremony of the National Conference On Science." Speech presented at National Conference On Science, Beijing, China, March 18, 1978. Marxist.org. https://www.marxists.org/reference/archive/deng-xiaoping/1978/30.htm.
Xiaoping, Deng. "Speech At the National Conference On Education." Speech presented at National Conference of Science, Beijing, China, April 22, 1978. Marxist.org. Last modified April 22, 1978. Accessed May 7, 2024.
Yang, Benjamin. "The Making of a Pragmatic Communist: The Early Life of Deng Xiaoping, 1904-49." The China Quarterly, no. 135 (1993): 444-56. JSTOR.
Yi, Fang. "On the Situation in China's Science .and Education." Beijing Review (Beijing, China), January 13, 1978, 15-19. PDF.