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Moving communism's economic mountains. Deng Xiaoping and Mikhail Gorbachev are trying to wrest their huge nations from economic ruts. The Chinese so far are responding more quickly than are the Soviets.

By EARL W. FOELL / November 10, 1987



Boston

SEVENTY years into the Soviet communist experiment and nearly 40 years into the Chinese version, how do the two compare? China is still economically behind but accelerating much faster than the USSR. China has demobilized one quarter of its army, more than doubled average farm income and exports grain once again. It has created 2,500 joint enterprises with overseas Chinese and the West, has increased trade with the West, and has sent 170 times as many students as Moscow to train in the outside world.

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In the long view of history, Peking is returning to economic orthodoxy, after a radical experiment in reorganizing society, much more quickly than is Moscow. Deng Xiaoping's reforms are apparently succeeding; Mikhail Gorbachev's are slower out of the starting blocks.

Why?

Now that Deng is phasing himself out as administrator, will his handpicked successors be able to carry through the difficult further stages of shifting to a hybrid free-market system?

Will the Soviet leader be able to push and wheedle a new lineup of bureaucrats and ordinary workers into accepting the personal risks of a supply and demand-driven market system?

The answers to these questions are not simple. No change involving a billion humans (China) and nearly a third of a billion humans (the USSR) is ever simple. Leadership of such vast teams into revolution, counter-revolution, or reform requires wisdom, practicality, flexibility, and good timing.

In broad terms, China was fortunate to have a leader possessed of those qualities at a time when its people were willing to be led in a sharply different direction. The USSR's leader shares some of those qualities, plus a great deal of vigor and charisma. But his people may not be at a similar turning point.

Let's examine the two great Communist reform efforts.

First, China. Deng came to power well prepared. He had already rehearsed his practical reform ideas in the early 1960s. He had been bounced from power twice thereafter for backing such heresies as incentives for farmers.

Deng had seen what happened when Mao Tse-tung's ``great leap forward'' instead leaped backward economically. And he had observed that the real leaps forward in Asia were those being made without slogans by most of the states around the perimeter of China.

In fact, the contrasts between the economies of North and South Korea, China and Taiwan/Hong Kong, Vietnam and Singapore were striking testimony to the success of the disorderly, uneven free-market system in comparison to the monolithic Stalinist system which Mao had adopted in China.

Just as important, a majority of the Chinese people were ready for the risks of economic reform. After nearly a decade of Mao's (and Madame Mao's) chaotic, often brutal, Cultural Revolution, it was hard to find many citizens who were not willing to move in a new direction. They were, moreover, willing to do so even if it entailed some risk of inflation; loss of subsidies for housing, transport, and food; unequal pay; bankruptcy, and even job uncertainty.

There was also a third major reason for the startling initial success of the Deng reforms. China still had a substantial rural farm population, despite the Stalinist/Maoist push into heavy industry. Deng himself was a shrewd peasant from interior Sichuan. He recognized that past prosperity in China had often benefited the coastal industrial strip, bypassed the interior.

So China's reform effort began by freeing up the farm communes. In six years after the 1978 start of the Deng reforms, average farm income had doubled. Word of this success quickly spread to the cities, preparing the way for the more complex, difficult, and risky urban industrial reform stage to follow.

That urban stage is still underway, beginning with light industry and including an experimental mix of joint enterprises, special free-market industrial zones, changes in commercial law, the beginnings of a stock and bond market, and thousands of small private enterprises.

Now turn to the Soviet Union for comparison.

Only one of the three factors involved in Deng's initial success was present to a substantial degree in the USSR: (1) Gorbachev, like Deng, is an able leader determined to bully and woo his countrymen to change course. But (2) Gorbachev is not able to use the success of farm reform and doubled rural income as an incentive for urban Soviet society. And (3) the Soviet people have had no experience like the Cultural Revolution to galvanize them into taking the risks that go with reform of the Stalinist economic system.