China marks 40-year economic rise as clouds gather

BEIJING — China celebrates Tuesday the 40th anniversary of its transformative "reform and opening up" policy, which turned the world's most populous country into an economic juggernaut that now faces slowing growth and a stern US challenge.

The brainchild of late paramount leader Deng Xiaoping, the programme was ratified at a Communist Party conclave on December 18, 1978, breaking with the chaotic policies of his predecessor, Chairman Mao Zedong.

The reforms ditched Maoist-style collectivisation that left the nation impoverished and backward, launching a new era which led to double-digit annual growth that pulled millions out of poverty and turned China into the world's second biggest economy.

China now boasts the most dollar billionaires in the world with 620, according to Shanghai-based magazine publisher Hurun Report.

But the economic transformation has not brought changes to the Communist Party-controlled political system, with authorities harshly cracking down on the Tiananmen protests in 1989 and activists complaining of a deterioration of human rights in recent years.

"Reform and opening up let the Communist Party maintain its dictatorship and let it keep its rule from collapsing after the Cold War and survive," Beijing-based political analyst Wu Qiang told AFP.

"I think China now is state capitalism under a one-party dictatorship, or party-run capitalism," he said.

President Xi Jinping -- who has become the country's most powerful leader since Mao and secured this year a potential path to lifelong rule -- will deliver a speech to mark the anniversary at the imposing Great Hall of the People off Beijing's Tiananmen Square.

The commemoration comes as China is locked in a bruising trade war with the United States in which the two sides have exchanged tariffs on hundreds of billions of dollars worth of goods.

The rivals have agreed to a 90-day truce as they seek to negotiate a solution, with the United States seeking a reduction in its massive trade deficit as well as deeper reforms in China to stop the alleged theft of intellectual property.

China is also facing a debt mountain and a slowing economy, which grew by 6.9 percent last year and is expected by the government to slow to around 6.5 percent this year.

Second reform?

Wu said the trade war could be a chance for China to enact more changes.

"If the Communist Party is smart enough, it may transform it into the starting point of a second reform and opening up and change the role of the party and the state," Wu said.

When the party enacted the reforms, China was still suffering from famine and was emerging from the Cultural Revolution, a period of intense social and political upheaval launched by Mao.

This new "revolution" started in the countryside, where authorities began to de-collectivise land and dismantle communes, but it quickly spread to cities.

Wary of an opposing power base in economically powerful Shanghai, Deng chose the extreme south of the country as the guinea pig for his reforms.

Southern cities including Shenzhen, which borders Hong Kong and was still a fishing village, were designated China's first Special Economic Zones that became powerhouses and models for the rest of the country.

Shenzhen has become a global technological hub, with China's internet giant Tencent and telecom titan Huawei choosing the city for their headquarters.

The poverty rate among the rural population dropped to 3.1 percent last year from 97.5 percent 40 years ago.