Ever since Mikhail Gorbachev became general secretary 25 years ago last week, the world has compared China’s successful economic reforms, which were first set into motion in late 1978 under the leadership of Deng Xiaoping, with the Soviet Union’s and then Russia’s largely unsuccessful attempts to overhaul its economy. The conventional version is that Moscow somehow took the wrong path toward reform and things would have been a lot better had Russia copied the Chinese model. But this is an oversimplified analysis. The two countries are far too different for Russia to have copied China’s reform program in a cookie-cutter fashion.
First, consider the domestic situations in each country. China was embroiled in chaos after the Great Cultural Revolution, which lasted from 1966 to 1976. By 1978, the overwhelming majority of Chinese officials and citizens understood the need to institute fundamental reforms. The situation was quite different in the Soviet Union in 1985. Most Soviets viewed the country in 1985 as a superpower with a relatively functioning economy, social stability and order — particularly when compared with the stagnation years under Leonid Brezhnev and in comparison with the widespread poverty and hunger in China before Deng started economic reforms.
Second, the state apparatus in both countries differed considerably. The authority, power and unity of the Chinese leadership had been severely set back by the Cultural Revolution that the more conservative members could not put up any organized resistance to those who called for fundamental reforms. It was clear to all that something drastic had to be done to revive the country. By contrast, Gorbachev’s reforms was heavily resisted by the Politburo’s conservative members and among the military top brass.
Third, two very different individuals headed the reform movements in both countries. China’s reforms were led by the highly experienced, former revolutionary figure Deng. He enjoyed enormous authority and had the liberty to take bold steps toward reform. In the Soviet Union, the burden of reform fell on the shoulders of a less experienced, provincial party functionary who was only capable of experimenting within a very limited political and economic framework that was defined by the old guard. In the end, Deng was able to institute deep and far-reaching reforms, while Gorbachev had to settle for only insignificant economic reforms that were frequently pointless or even detrimental. It is notable that in one of the few cases in which Gorbachev was able to institute a radical economic reform — the introduction of private business cooperatives in 1988, the first time since Lenin that Soviets were given the right to own private businesses — he was forced to retract it a year later.
The fourth factor was the social and economic conditions that prevailed in both countries. China remained an agrarian country. Eighty percent of the people were peasants who hungered for the right to work their own land, and Deng gave them this right. As a result, the situation in the villages quickly improved, and even inveterate skeptics were forced to admit that the reforms were successful. From agriculture, Deng set out to reform to the industrial and other sectors of the economy as well. Gorbachev was faced with a completely different situation. Unlike in China, the military-industrial complex was the backbone of the Soviet economy. To stimulate and diversify the economy, it was necessary to make drastic cuts and reforms to the military-industrial manufacturing sector, which permeated virtually all sectors — from producing intercontinental missiles to manufacturing women’s shoes. But this was fiercely opposed by the top military brass for obvious reasons, and they had an ideological and military basis for resisting such reforms — that the United States and NATO were a direct threat to the country’s national security.
Further, Gorbachev’s attempted agricultural reforms were stifled by 50 years of backwardness in the country’s collective farms, fierce opposition from Communist Party apparatchiks to any type of change and — very much in contrast to what happened in China — the lack of desire among Soviet farmers to work harder even under more liberal economic conditions to improve their well-being. On the whole, it was far more difficult to reorganize the more military-based, industrialized Soviet economy than it was China’s more agricultural-based, primitive economy.
Fifth, the foreign policies of the two countries differed significantly. China had close military and political ties with the West based on a common opposition to what was perceived as the Kremlin’s expansionist foreign policy. As a result, the United States and its allies enthusiastically participated in Chinese reforms both on a governmental and private-sector basis. Chinese nationals living overseas also played a key role in the process. The Soviet Union could not even dream of receiving such assistance from abroad. Gorbachev’s first priority was curbing the arms race that had been bleeding the country dry. And that goal could only have been achieved had the conservative elements within the Politburo been willing to downsize and restructure the massive military-industrial complex. After his first two years in office, Gorbachev realized that his economic reform plans had reached a dead end. In 1987, in an attempt to jump-start the process and overcome the conservative resistance, Gorbachev focused on political reforms, hoping to rally the people behind his reforms. But this backfired on him. Democratization and pluralism eroded the very foundation of the Soviet regime and weakened the glue that had been holding the Soviet republics and Russian society together. As a result, the Soviet Union was crippled by an intense struggle between liberals and conservatives within the Politburo, between Moscow and the provinces and among nationalities in the republics. This type of “shock democratization” has almost always led to chaos in totalitarian regimes.
Thus, the Soviet Union was caught in a vicious circle of political and economic instability. Gorbachev’s political reforms led to a debilitating political conflict between liberals and conservatives within the Kremlin, which made it impossible to institute economic reforms. Both of these factors this took the Soviet Union down a slippery slope toward a severe political and economic crisis. Unlike China in 1978, the Kremlin in the mid- and late 1980s could not develop a unified strategy for economic reform — much less to put such a strategy into practice. Ensnared in a deep political deadlock amid deteriorating economic conditions, the Communist regime collapsed in 1991. Russia has been struggling to implement its economic reforms ever since, while China is celebrating nearly 32 years of economic success.