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little to transform an economy without a parallel shift in class

relations, private property, and all the other institutional arrange-

ments that typically ground a thriving capitalist economy. The

evolution along this path was both 

fitful and frequently marked by

tensions and crises, in which impulses and even threats from out-

side certainly played their part. Whether it was all a matter of

conscious though adaptive planning (‘groping the stones while

crossing the river’ as Deng called it) or the working out, behind the

backs of the party politicians, of an inexorable logic deriving from

the initial premises of Deng’s market reforms, will doubtless long

be debated.

2

What can be said with precision, is that China, by not taking the

‘shock therapy’ path of instant privatization later foisted on Russia

and central Europe by the IMF, the World Bank, and the ‘Wash-

ington Consensus’ in the 1990s, managed to avert the economic

disasters that beset those countries. By taking its own peculiar path

towards ‘socialism with Chinese characteristics’ or, as some now

prefer to call it, ‘privatization with Chinese characteristics’, it

managed to construct a form of state-manipulated market econ-

omy that delivered spectacular economic growth (averaging close

to 10 per cent a year) and rising standards of living for a signi

ficant

proportion of the population for more than twenty years.

3

 But the

reforms also led to environmental degradation, social inequality,

and eventually something that looks uncomfortably like the

reconstitution of capitalist class power.

It is hard to make sense of the details of this transformation

without a rough map of its general path. The politics are di

fficult

to fathom, masked as they are by the mysteries of power struggles

within a Communist Party determined to maintain its singular and

unique hold on power. Key decisions rati

fied at party congresses

set the stage for each step on the reform trail. It is unlikely, how-

ever, that the party would have easily countenanced the active

reconstitution of capitalist class power in its midst. It almost cer-

tainly embraced economic reforms in order to amass wealth and

upgrade its technological capacities so as to be better able to

manage internal dissent, to better defend itself against external

aggression, and to project its power outwards onto its immediate

geopolitical sphere of interest in a rapidly developing East and

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