Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.
Speaker 3: I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 2: Tracy now that I'm like a middle aged old man,
Speaker 2: I don't know. I've been getting really into reading history lately.
Speaker 3: Is it Roman history? No?
Speaker 2: No, it's actually worse than Roman history. I've been reading
Speaker 2: a lot of twentieth century history. And the problem, well,
Speaker 2: one problem is a bit of a diversion. But one
Speaker 2: problem with reading twentieth century history is that I'm eventually
Speaker 2: going to have to get around to really learning what
Speaker 2: World War two is all about, and then I'm going
Speaker 2: to be a fifty year old man.
Speaker 3: Reading You have to fulfill your destiny.
Speaker 4: I know.
Speaker 2: So I'm going to be a fifty year old man
Speaker 2: in a few years reading World War two books and
Speaker 2: watching World War or two documentaries. So, but yes, I've
Speaker 2: been reading a lot of twentieth century history lately.
Speaker 3: You know how you know that you are really old,
Speaker 3: It's when you start reading twentieth century history books and
Speaker 3: realize that you were like there and sort of participating
Speaker 3: in that time period.
Speaker 2: Well, it's so funny that you mentioned this because this
Speaker 2: is increasingly dawning on me when I read history. And again,
Speaker 2: slight sidetrack, but I've mentioned before a couple of times.
Speaker 2: I lived in Malaysia for a year in nineteen eighty
Speaker 2: nine and nineteen ninety and I discovered in reading history
Speaker 2: recently that I don't know if they call it the
Speaker 2: Malaysian Civil War, but the Ultimate Peace Agreement between the
Speaker 2: Malaysian government and the Communist Party of Malaysia was signed
Speaker 2: in nineteen eighty nine that ended that conflict, And so
Speaker 2: I was there. I had no idea, but reading his.
Speaker 3: Grade school Joe was living through history.
Speaker 2: I was, and it sort of reminds I think this
Speaker 2: is an important thing that I've realized reading more history,
Speaker 2: is that the modern world as we know it is
Speaker 2: so young. It's basically like the length of a person's life,
Speaker 2: depending on where you want to start it. Like we're
Speaker 2: just getting started here.
Speaker 3: So the history we're going to be talking about specifically
Speaker 3: is China. And I was thinking about this because the
Speaker 3: first time I went to China was in nineteen ninety four,
Speaker 3: and it was completely different to how it is now,
Speaker 3: Like there were still rickshaws on the street, Friendship stores existed.
Speaker 3: Friendship stores still existed in the early two thousands when
Speaker 3: I was there, and I don't know, do you know
Speaker 3: what a friendship store is?
Speaker 2: I can guess.
Speaker 3: So it's like where foreigners were basically allowed to go
Speaker 3: and like purchase specific goods. They had a lot of
Speaker 3: like tourist tat and stuff like that. But if you
Speaker 3: went to a friendship store in Beijing in the early
Speaker 3: two thousands, it was basically like going to the East Bloc.
Speaker 3: It was like a full employment program where you would
Speaker 3: find a salesperson on the floor and you would say,
Speaker 3: I want this item, and then they would give you
Speaker 3: a little like token or receipt and then you would
Speaker 3: take that to the cashier and pay, and then someone
Speaker 3: else would bring the item to you. So yeah, that
Speaker 3: was in the two thousands, And now when I think
Speaker 3: about Beijing, like it has changed completely, Like stuff that
Speaker 3: used to be one story neighborhoods full of bars like
Speaker 3: san Ley Turn is now like luxury shopping centers totally.
Speaker 2: So this is the other thing too, which is that
Speaker 2: you know, we talk a lot about China right now
Speaker 2: for obvious reasons, but I kind of feel that like,
Speaker 2: if we're going to talk about today. There probably is
Speaker 2: some justification for like how we got here, and I
Speaker 2: have to admit, you know, my understanding is really very
Speaker 2: rudimentary and limited. Like in my mind, it's basically like
Speaker 2: Maud died Doung Hopeng liberalized the economy, that was the
Speaker 2: economy plugged into global.
Speaker 3: Idiot sunflower seeds happened.
Speaker 2: Yeah, and then they allowed a business and then they
Speaker 2: entered the wto in here. And I would say, I
Speaker 2: know basically four facts about the history of China, and
Speaker 2: those you know, nineteen seventy eight wto now, so maybe
Speaker 2: that's just three. And so I actually think it's important
Speaker 2: to sort of deepen our understanding of how we got
Speaker 2: to the China that we are so deeply connected to today.
Speaker 3: I am in favor of you using the podcast as
Speaker 3: an excuse to read a bunch of history books.
Speaker 2: It's great, it's other.
Speaker 3: Manifest your middle aged self. That's fine, we should do it.
Speaker 2: Well, it's better because if I have to read books,
Speaker 2: that means I'm not just scrolling Twitter all the time.
Speaker 2: So if I have to prepare for episodes anyway, we're
Speaker 2: going to be speaking with one of the co authors
Speaker 2: of the new book came out in October The Great Transformation,
Speaker 2: China's road from revolution to reform. And I would say
Speaker 2: it complexifies a bit the very rudimentary story of the
Speaker 2: last I don't know, forty plus years of China. It's
Speaker 2: more than just three specific dates. It complexifies that story.
Speaker 2: It sort of fleshes it out in a big way.
Speaker 2: The co authors are Odd Arned Westdad and Chen John.
Speaker 2: The first time on odd Lots that we'll have a
Speaker 2: guest with the name odd.
Speaker 3: Surely the perfect guest.
Speaker 2: So it's truly the perfect guest. So we're speaking with
Speaker 2: professor of history at Yale, Odd Earned west Dad. Professor Westdad,
Speaker 2: thank you so much for coming on the podcast.
Speaker 4: Thank you for having me on you you almost had
Speaker 4: to write we had It's truly, it's really a shame
Speaker 4: that you haven't had me on before, I mean your
Speaker 4: podcast with me as you first guest.
Speaker 3: We had to wait for Joe to enter his history phase.
Speaker 2: That's right, but you should have. You should have been
Speaker 2: the first guest. So why this book, because I imagine
Speaker 2: if I go on Amazon, there are probably hundreds of
Speaker 2: books that are some version of how China reformed, How
Speaker 2: China went from being this backwards economy to dynamic capitalist economy.
Speaker 2: I know it's been written about in various forms of
Speaker 2: numerous numerous times. Why did you and your co author
Speaker 2: still feel at this point that this was an important
Speaker 2: story or collection of stories to tell.
Speaker 4: I think there are two reasons. The first one is
Speaker 4: quite personal in a way. I mean it almost goes
Speaker 4: back to what you were talking about a minute ago.
Speaker 4: So I first came to China as and I changed
Speaker 4: student back in the late nineteen seventies and Changen. Of course,
Speaker 4: my co Walton lived there during that period, so this
Speaker 4: is away so personal process. Well, we lived through parts
Speaker 4: of the time period that we are talking about in
Speaker 4: this book, and there is no better incentive, as you
Speaker 4: just touched upon, to go back to look at history
Speaker 4: again than trying to understand the period that you lived through.
Speaker 4: So that's the first reason. And the second reason is,
Speaker 4: of course that we think we do it better than
Speaker 4: anyone else. Do it better than anyone else because we
Speaker 4: have more access to sources and more access to information
Speaker 4: about what actually happened during that time period. So as
Speaker 4: you read the book, you can see how, at least
Speaker 4: when we do this as well as we can, we
Speaker 4: are able to get on the inside of many of
Speaker 4: the things that took place during that time period and
Speaker 4: show the complexities, I mean, show how complex that period
Speaker 4: of very early Chinese reform and opening was and in
Speaker 4: many ways how contingent the process was, and how surprising
Speaker 4: it is in more than one sense that we ended
Speaker 4: up where we are today.
Speaker 3: So speaking of access, you mentioned this, I think in
Speaker 3: the very beginning of the book, but you started researching
Speaker 3: this in twenty ten, and you said that the research
Speaker 3: process and the access you had kind of changed over
Speaker 3: the next I guess thirteen or fourteen years or so.
Speaker 3: Give us a little bit more detail, like, as a
Speaker 3: researcher of Chinese history, how have things actually evolved for you?
Speaker 4: That's right. We started thinking about this and started researching
Speaker 4: it in the early twenty teens, and of course back
Speaker 4: then we had much better access to sources, much better
Speaker 4: access to archives, to talk to people, to travel around
Speaker 4: and country, to have informal discussions with people who would
Speaker 4: be in the know than what is the case today.
Speaker 4: So China has really since twenty sixteen seventeen, there were
Speaker 4: closed down in terms of access to historical sources of
Speaker 4: all kinds. So we were lucky. We started this process
Speaker 4: quite early on and had some good years in which
Speaker 4: we actually could collect material. Then we did something really silly.
Speaker 4: We put it aside for other projects, hoping that we
Speaker 4: would get even better access in a few years. That
Speaker 4: happens sometimes that you make the wrong call on these
Speaker 4: kinds of things, and instead, of course, it got much
Speaker 4: was So what we had to do was to go
Speaker 4: back to some of the material that we had gathered
Speaker 4: in that early time period before we switch to other
Speaker 4: projects that we then completed before we returned to this book,
Speaker 4: and then try to feel that in the best we
Speaker 4: could with all the materials we could get now. But
Speaker 4: the level of access, the level of information is very
Speaker 4: different today from what you could get pulled off back then.
Speaker 2: So I want to get into some of the content
Speaker 2: of the book obviously, And like I said in the intro,
Speaker 2: you know, I have this very cartoonish vision of history
Speaker 2: in my head where Mao dies, Don Chopeg becomes the
Speaker 2: new leader of the country after a little bit of
Speaker 2: tension and turmoil, and then China liberalizes.
Speaker 3: So one of the sort of eye.
Speaker 2: Opening or sort of mind expanding moments in the book,
Speaker 2: you talk about the cultural revolution, and how even there,
Speaker 2: you know, we think of that as going I guess
Speaker 2: from nineteen sixty six to sometime in the nineteen seventy.
Speaker 2: You argue that the real intensity of it was two
Speaker 2: years where the sort of the youth of China rose
Speaker 2: up against the old cadres within the Communist Party. But
Speaker 2: even in that time, amid some of this incredible turmoil
Speaker 2: that the Communist Party was going through under mau, some
Speaker 2: of the seeds of I guess capitalism were actually planted
Speaker 2: in that turmoil.
Speaker 4: Yeah, that's right. I mean that I think is one
Speaker 4: of the contributions of this book. I mean, your summarized
Speaker 4: history of what happened. It is not wrong, okay, It's
Speaker 4: just that it was really difficult and, as I said,
Speaker 4: very contingent in terms of the various things that are
Speaker 4: happening to get from warm to the next of those stages.
Speaker 4: And one of the things that we do show in
Speaker 4: the book is how the cultural revolution, which was undertaken,
Speaker 4: of course, in order to solidify Maltadome's leadership and attack
Speaker 4: the old leaders in the Communist Party who he regarded
Speaker 4: as being too backle to take China into his new
Speaker 4: Communist paradise. This cultural revolution had effects that were in
Speaker 4: no way for sea, and part of them was in
Speaker 4: many ways the destruction of all China. I mean, they
Speaker 4: got rid of many of the traditional ways of thinking
Speaker 4: and loyalties, and much of the patriarchal approaches within families.
Speaker 4: All of this because of these political campaigns that they undertook,
Speaker 4: directed almost against any kind of authority except most of
Speaker 4: ohn authority. And in a strange kind of way, when
Speaker 4: you get into the nineteen seventies, Mao's still alive, still
Speaker 4: ruling from Beijing, things start to change in some places
Speaker 4: from the ground up. So this is turning to markets
Speaker 4: almost as a kind of revolutionary acts out of desperation,
Speaker 4: because people along the coast, in the south, in the
Speaker 4: areas that have some experience with capitalism and with markets,
Speaker 4: they are worried that when this campaign ends, things have
Speaker 4: got to get even worse. And some of these people
Speaker 4: have been starving, you know, back during the Great Leap
Speaker 4: forward in the late fifties and early sixties. So they
Speaker 4: start rating, they start building up the opportunities that they
Speaker 4: can take for themselves. In a little way. I mean,
Speaker 4: this is not a predominant act in China in the
Speaker 4: early nineteen seventies, but it did see something that is
Speaker 4: incredibly important for the future, and then comes into full
Speaker 4: flow after the party takes a step back off the
Speaker 4: mal died and opens up for these console reforms happening
Speaker 4: on an until boy Scain.
Speaker 3: I apologize in advance for asking a hypothetical, but do
Speaker 3: you think the economic liberalization of the late nineteen seventies
Speaker 3: early nineteen eighties would have been able to happen or
Speaker 3: would have happened in some form if China hadn't experienced
Speaker 3: the Cultural Revolution and all the I guess emotional trauma
Speaker 3: and political chaos that came with it.
Speaker 4: It wouldn't have happened when it happened, that's for sure.
Speaker 4: That's not even a hypothetical. I mean, I think if
Speaker 4: China had continued basic along the Soviet model of development,
Speaker 4: which is what they took up after the People's REPROBLEBM
Speaker 4: was put in place in the late nineteen forties, Soviet
Speaker 4: style everything right, planning, centralization, the wholer. I don't think
Speaker 4: the kind of reform that we saw in the late
Speaker 4: seventies and nuineteen eighties would have happened because there wouldn't
Speaker 4: have been any fundamental reason to undertake it. I mean,
Speaker 4: China would probably have chugged along in the same kind
Speaker 4: of way as the Soviet Union did until some point
Speaker 4: when that model started breaking down. Now, I'm not saying
Speaker 4: that the Cultural Revolution was a necessary condition for these
Speaker 4: changes in pay place, but the period of Cultural Revolution
Speaker 4: activism did in many ways prepare the ground for the
Speaker 4: timing of this and when it was to happen alst
Speaker 4: be because you know, China at the end of the culture
Speaker 4: ablution was a deserted thing. You know, when I first
Speaker 4: arrived there in nineteen seventy nine, this was a dirt
Speaker 4: poor and terrorized country, you know, a poorer in terms
Speaker 4: of income to capital and most African countries and things
Speaker 4: are getting work not that. So that kind of desperation
Speaker 4: at all levels of Chinese society fitted into these changes.
Speaker 4: Something had to be done, and going back to the
Speaker 4: Soviet model of development as it existed only on when
Speaker 4: you get into the nineteen eighties does not seem as
Speaker 4: a viable composition.
Speaker 2: What does it mean when you talk about history being contingent?
Speaker 2: You use that word a couple of times, and I
Speaker 2: actually don't know if I fully understand what that means.
Speaker 2: But when you're telling these stories or this story and
Speaker 2: you're keeping in mind the contingency and history, can you
Speaker 2: talk a little bit more about this idea.
Speaker 4: So you'll see from the book that we go in
Speaker 4: and out from the sort of micro to the macro
Speaker 4: level of telling history. And if you look at the
Speaker 4: night and the coup against the radicals, the softball gang
Speaker 4: of four within the party took place, which we described
Speaker 4: in some detail almost you know what happens from hour
Speaker 4: to hour.
Speaker 2: That right, This was the moment in which the left
Speaker 2: faction after maud Dies was arrested and allowed for a
Speaker 2: sort of more moderate path to emerge.
Speaker 4: That's right. And it was in effect the military coup,
Speaker 4: and it was undertaken by the military and the security
Speaker 4: forces against the people who himself had put in charge
Speaker 4: of the party, including his widow was most prominent of
Speaker 4: all jiang Qin. Now that night, the following few days,
Speaker 4: things could have ended up very differently. In Shanghai, the
Speaker 4: biggest city in China by far, was still under control
Speaker 4: of the radicals. There were military units that supported the
Speaker 4: radical approach to politics. This could have ended up very
Speaker 4: differently from what it did. And as we described in
Speaker 4: the in the books, some of the protos, some of
Speaker 4: the coup makers themselves in those days that followed the
Speaker 4: coup itself, were completely surprised by how little resistance there
Speaker 4: had been from the left and how chales there had
Speaker 4: been on the streets. So that's what I mean with
Speaker 4: it being contingent. I mean, this is something that obviously
Speaker 4: connects to the larger picture that we see today, going
Speaker 4: back to your sort of three level version of what
Speaker 4: happened right in China, But it didn't seem that obvious
Speaker 4: at the time, and it could have gone in very
Speaker 4: different directions from what we're seeing today.
Speaker 3: How important was the fraying of the relationship between China
Speaker 3: and the Soviet Union in the sort of nineteen sixties
Speaker 3: early nineteen seventies to spurring or catalyzing that opening up,
Speaker 3: Because it does feel like the sudden emergence of the
Speaker 3: Soviet Union as an external enemy. It feels like that
Speaker 3: led China in some respects to open up to the
Speaker 3: US and some other countries.
Speaker 4: This is a sort of trajectory that I think is
Speaker 4: really important to get right because what Mao and his
Speaker 4: group of leaders did in the late nineteen sixties was
Speaker 4: to turn to the United States as an ally pseudo
Speaker 4: ally security ally against the Soviet Union because they were
Speaker 4: so deadly afraid that there would be a war with
Speaker 4: the Soviets, a war that China certainly would have lost,
Speaker 4: given the state that the Italians communists themselves had put
Speaker 4: China into during the Cultural Revolution. So what Mao did
Speaker 4: was to turn to the enemy far away in the
Speaker 4: United States to help backing against an enemy much closer
Speaker 4: to home, the Soviet Union, which that had this falling
Speaker 4: out with mainly for our geological reasons. From Mao's perspective,
Speaker 4: this was always intended to be a strictly security oriented
Speaker 4: pseudo alliance right it was the right state against the
Speaker 4: Soviet Union. Mao, to the end of the States, was
Speaker 4: puzzled that the United States would support the real Communists
Speaker 4: meaning him, against the thing communists meaning the Soviet Union.
Speaker 4: But as long as they were willing to do that,
Speaker 4: he was certainly willing to reap burnefit. But he never
Speaker 4: intended that this would have any effect in terms of
Speaker 4: the increasingly radical communist direction that he was taking for
Speaker 4: China internally domestically. So that's when what happens in nineteen
Speaker 4: seventy six. After Mouse. That becomes so significant because the
Speaker 4: people who then took over, they thought, aha, we have
Speaker 4: this relationship with the United States. They are supporting us
Speaker 4: for their own reasons in the Cold War against the
Speaker 4: Soviet Union. We can now also make use of this
Speaker 4: to suit the charge Chinese reform. Right, if it hadn't
Speaker 4: been for that relationship strictly security orialited that already existed
Speaker 4: between China and the United States, I doubt that that
Speaker 4: would be possible. So it's very important point about the
Speaker 4: longer term US China relationships to think about that origin
Speaker 4: and how this actually got started, very different from the
Speaker 4: way most people think about it, where the security element
Speaker 4: and the reform element that sort of conflated into one.
Speaker 2: It's also just hard in twenty twenty four to imagine
Speaker 2: that various communist states would not be natural allies. And
Speaker 2: of course China after the Vietnam War, China also went
Speaker 2: to war against Vietnam. The fact that they're so concerned
Speaker 2: about the Soviet invasion, it just sort of this fascinating
Speaker 2: dimension that I don't think fits neatly into our heads.
Speaker 4: You know.
Speaker 2: I also read your co author's book. He recently wrote
Speaker 2: a great biography of Joe and Lae, and it occurs
Speaker 2: to me like reading that book and the new book. Obviously,
Speaker 2: I think Mao associated ideologically with the left faction and
Speaker 2: the CCP and the Gang of Four, etc. But he
Speaker 2: always seemed to keep a couple of I don't know
Speaker 2: if the word is liberals, but to some extent liberals
Speaker 2: around So Joe he never got purged, even though it
Speaker 2: didn't seem like Mao particularly liked him. For much of
Speaker 2: his life. Liberals and dun Chopeng got purged multiple times,
Speaker 2: but never lost his membership of the Communist Party and
Speaker 2: always seemed to find his way back even during the
Speaker 2: Mao era. Why was it that, despite his ideological predilections
Speaker 2: towards the left, that in these important roles he couldn't
Speaker 2: bring himself to purge some of these perhaps more reformist
Speaker 2: minded characters.
Speaker 4: Because he needed to have things stop. I mean, Mao
Speaker 4: wasn't just an audiologue, which was the most important aspect
Speaker 4: of him. I think when you look at his historical role,
Speaker 4: he was also the leader of a country, and he
Speaker 4: needed to get certain things to work within the country
Speaker 4: or within the pup and for that, having seen time
Speaker 4: and again that his ideological allies were not particularly good
Speaker 4: at this. They were good at reciting Marx and Lenin,
Speaker 4: but they were not particularly good at running things. He
Speaker 4: needed people like Joe and I. He needed people like
Speaker 4: Dung Show King to get Kingstom. But as chan Jen
Speaker 4: Great Joe in biography shows very clearly, there were limits
Speaker 4: to how far he would go in working with people
Speaker 4: like Joe. Or he was willing to work with them
Speaker 4: as long as they served his purposes, and if there
Speaker 4: was any sense that they actually tried to have a
Speaker 4: direct political influence above or different from his, they would
Speaker 4: get into trouble. So I'm not sure if talken liberals
Speaker 4: here is the right term. I mean liberals in terms
Speaker 4: of their thinking about politics. These people served, as long
Speaker 4: as he was alive, served as gelemen, and they served
Speaker 4: him at his leisure. So if he got a suspicion
Speaker 4: with them, as he did so many other people, that
Speaker 4: they were not serving his radical interests, he would act
Speaker 4: against them.
Speaker 3: You mentioned earlier that your book brings together the macro
Speaker 3: and the micro, and in terms of the micro, it
Speaker 3: reminded me a lot of second hand time which is
Speaker 3: an oral history of the end of the Soviet Union,
Speaker 3: and there are lots of stories in there about individual
Speaker 3: experiences and entrepreneurs who suddenly are starting their businesses in
Speaker 3: the post communist period and things like that. I've been
Speaker 3: trying to get Joe to read this book a lot time.
Speaker 3: It's amazing. But can you talk to us a little
Speaker 3: bit more about the individual stories that you heard from
Speaker 3: this particular period in Chinese history.
Speaker 4: So there are many stories, and both Jan and I
Speaker 4: are the kind of historians who are storytellers. We like
Speaker 4: to tell these stories. We like to focus on individuals
Speaker 4: and their experiences, and that's of course what sets this
Speaker 4: period upon. It's such an incredibly dramatic era. I mean,
Speaker 4: first to count revolution and instants, and then this period
Speaker 4: of almost unbelievable change, which I remember very well myself.
Speaker 4: I mean, from one day to the next, things that
Speaker 4: have been seen as being true forever were no longer true, right,
Speaker 4: And things changed so very quickly, and entrepreneurs who had
Speaker 4: a few weeks earlier had been put in prison for
Speaker 4: their activities held up as heroes of economic development. Right.
Speaker 4: That was China during this time period, and it's wonderfully
Speaker 4: fertile ground for historians who like to tell stories, so
Speaker 4: we tell some of these. Maybe some of the most
Speaker 4: fascinating ones that we came across are the ones of
Speaker 4: these early entrepreneurs, I mean people who get started even
Speaker 4: before the political changes in Beijing have taken place, very
Speaker 4: often coming out of collective enterprises of some sort, people's
Speaker 4: communes or whatever you have, and finding that they were
Speaker 4: were pretty good at doing what they were set to do.
Speaker 4: We have one example in there, which is one little
Speaker 4: tract or repair shop that turned out to be incredibly
Speaker 4: good at repairing tractors in Guangdong Province in the south
Speaker 4: of China, and then started gradually to get payment in
Speaker 4: kind kind of bartering system their services against a little
Speaker 4: bit of steel or a little bit of machinery or
Speaker 4: some silk and that right which they could and trade
Speaker 4: or for a while they could actually smuggle it into
Speaker 4: Hong Kong and trade it there. By the mid nineteen seventies,
Speaker 4: these folks have a Hong Kong Bank account right well
Speaker 4: before anything has happened in Beijing in terms sorry for
Speaker 4: so if these guys had been caught, they would probably
Speaker 4: have been shocked, right for smuggling and currency for when
Speaker 4: the reform really gets started in nineteen seventy eight, they
Speaker 4: have a leg up, right, and they can do things
Speaker 4: that no one else can, and now they're heroes. So
Speaker 4: this is the origins of one of the biggest companies
Speaker 4: in China today. So these are the kinds of stories
Speaker 4: that we'd like to tell. I mean at the political
Speaker 4: level as well. I mean, one of the most fascinating
Speaker 4: people that we came across is who are Wokong? The
Speaker 4: guy who became somewhat unwillingly, most handkicked successful, and who
Speaker 4: was actually quite a decent leader in many ways, not
Speaker 4: very imaginative, not of the kind of dynamism that Don had,
Speaker 4: but still probably someone who was annecessary figure, you know,
Speaker 4: in order to facilitate that station. Yeah, that happened in
Speaker 4: the in the late nineties.
Speaker 2: Yeah, I get the impression to reading about him that
Speaker 2: obviously he was in a difficult position having to uphold
Speaker 2: MoU's legacy, who's pushed aside eventually more or less by
Speaker 2: Don Chopang, but also sort of went gradually and didn't
Speaker 2: put up a huge fight. That probably saved a lot
Speaker 2: of turmol, you know, speaking of somebody these early companies.
Speaker 2: I hadn't realized that the China's number one electrical appliance manufacturer.
Speaker 2: I don't know if I'm pronounce to you right, but mydea,
Speaker 2: it looks like that was actually founded in nineteen sixty eight,
Speaker 2: as you point out in the book. So really, I mean,
Speaker 2: here's this gigantic, publicly traded company and it was founded
Speaker 2: right in the heart of the Cultural Revolution.
Speaker 4: Yeah, those are I mean, those were perhaps some of
Speaker 4: the most surprising examples. I mean they're not many of
Speaker 4: I mean, we should be careful with not exaggerate. Okay,
Speaker 4: this is not an attempt that to rehabilitating the control revolution,
Speaker 4: but it was possible, under extraordinary circumstances and by extraordinary people,
Speaker 4: to few things that probably early on could not be on.
Speaker 4: I mean, they didn't do it big because the Communist
Speaker 4: Party wanted them to do it. They did it because
Speaker 4: the Communist Party lost control and couldn't go on with
Speaker 4: the kind of centralized planning that they had done before.
Speaker 4: Not everywhere and at all times anyway. So media is
Speaker 4: a good example of that, and I'm sure there were hundreds,
Speaker 4: if not thousands, of these startups cultural revolution era startups
Speaker 4: that didn't succeed, or these people were caught and ended
Speaker 4: up in prison camps or whatever. Right, so we shouldn't
Speaker 4: overstate the countryvoid importance of these attempts at entrepreneurships. Many
Speaker 4: of them ended up not going anywhere, but there was
Speaker 4: this opportunity among those that survived to have that fundamental
Speaker 4: advantage over others when then countrywide national reform came about
Speaker 4: in the late nineteen seventies. And that actually connects to
Speaker 4: a point about who are go Phone because at that point,
Speaker 4: normally in Chinese politics, someone who fell from grace the
Speaker 4: way who all Go Phone did would have met with
Speaker 4: quite a terrible fate. Who allowed himself to be replaced
Speaker 4: at the top because he simply taught it was better
Speaker 4: for China that it went in the direction that it
Speaker 4: did peacefully, and then spent the rest of his life
Speaker 4: cultivating grapes in his residence in Beijing. He became one
Speaker 4: of China's foremost experts of native grape varieties, a subject
Speaker 4: of which he published at least two articles. Of course,
Speaker 4: andro pseudonym, So you know, this kind of thing earlier
Speaker 4: on in China would have be don't think given the
Speaker 4: cut throat aspects of Chinese politics.
Speaker 3: I didn't realize that China had native grape varieties, so
Speaker 3: that's interesting, okay, But just on this point, what was
Speaker 3: the downside for individu rules in accepting market liberalization, Because
Speaker 3: nowadays we talk a lot about the social compact in China,
Speaker 3: the idea that okay, maybe people don't have as many
Speaker 3: democratic rights as in other parts of the world, but
Speaker 3: the promise from the CCP is that we're all going
Speaker 3: to get rich. And it feels like in the nineteen
Speaker 3: seventies nineteen eighties there was some loss of a social
Speaker 3: safety net that came about as a result of the
Speaker 3: promise that like, Okay, you're not going to get as
Speaker 3: much welfare social welfare, but you're going to get a
Speaker 3: chance to become really, really wealthy.
Speaker 4: And that was, of course part of this great transformation
Speaker 4: that we're talking about, is what happened when much of
Speaker 4: that social welfirm net disappeared. It was a very brutal process.
Speaker 4: I mean, we have a tendency I think in this
Speaker 4: country and knows what to think about Chinese reform as
Speaker 4: the good reform in terms of results, and Russian reform
Speaker 4: is the bad reform. Right where things went wrong after
Speaker 4: the collapse of the solid Union. But these two are
Speaker 4: in many ways much more similar, we discovered than what
Speaker 4: they generally have been taken to be. The desperation that
Speaker 4: you find among a lot of Chinese when these social
Speaker 4: welfare systems went away, mainly in the late eighties and nineties,
Speaker 4: in the early two thousand was very profound. It was
Speaker 4: a market revolution, but as all market revolutions, it has
Speaker 4: its winners and its users. And what was remarkable about
Speaker 4: the transformation in China was that when one went through
Speaker 4: that first period of relative hardship, then of course the
Speaker 4: general economy started to pick up, giving more people a
Speaker 4: chance to enter into the middle class. But these two
Speaker 4: time periods are not the same. There was a period
Speaker 4: of real hardship to begin with, and then quite a
Speaker 4: bit later this opportunity for many people still not everyone
Speaker 4: still draw up about four hundred to five hundred million
Speaker 4: poor people in China, a lot of people, but for
Speaker 4: many to take that step into division justice. And that's
Speaker 4: in a way the story of Channel's reformed that they
Speaker 4: were able to make that jump, while in Russia, most
Speaker 4: of the efforts that setting up I'm of the economy
Speaker 4: that's actually worked domestically failed.
Speaker 2: So one thing that people say a lot is that
Speaker 2: the Chinese Communist Party for a long time up until
Speaker 2: the day, is obsessed with the fall of the Soviet
Speaker 2: Union and figuring out how to avoid a similar collapse
Speaker 2: at some point, and part of me wonders, like, the
Speaker 2: two countries seem so different and the circumstances seem so
Speaker 2: different that it's like hard for me to like say, like, oh,
Speaker 2: if you do this, then you do get that outcome,
Speaker 2: and like who knows. But there is some school of
Speaker 2: thought that part of the problem with Soviet reforms starting
Speaker 2: under Gorbachov was the sort of political liberalization that maybe
Speaker 2: economic liberalization is okay markets, but you still need that
Speaker 2: strong central party, and that maybe Orbitschov's mistake was doing
Speaker 2: both at once, or maybe doing the political liberalization at all,
Speaker 2: et cetera. You talk also in your conclusion about some
Speaker 2: of the missed opportunities of more political liberalization along with
Speaker 2: the market liberalization that China has seen over the last
Speaker 2: several decades. When you think about the fall of the
Speaker 2: Soviet Union and what contributed to that collapse, how much
Speaker 2: of it is it the market reforms versus the structure
Speaker 2: of the Soviet Union versus the political liberalization. And is
Speaker 2: there an argument to be made that the reason that
Speaker 2: the CCP and the country is as stable as it
Speaker 2: is today is because they didn't also pursue the political liberalization.
Speaker 4: No, not really, I don't think that is the key.
Speaker 4: I think the key reason why the CCP succeeded was
Speaker 4: more that they were willing to experiment, I mean, under
Speaker 4: a situation of political dictatorship. As you pointed out, they
Speaker 4: were willing to experiment in ways that the Soviet leadership
Speaker 4: was And maybe I mean, and this is pure speculation,
Speaker 4: but maybe that goes back to what we talked about
Speaker 4: earlier on that the Soviet Union kept chugging along, you know,
Speaker 4: with some growth a very very long time. There wasn't
Speaker 4: that kind of desperation that you found in China after
Speaker 4: everything that the Communist Party had tried had failed. So
Speaker 4: these people were really running out of the time both to
Speaker 4: transformed China but also to protect the execution right. They
Speaker 4: had to do something, and then they introduced gradual reform
Speaker 4: and all that gradual economic reform without ever thinking that
Speaker 4: they would give up political control. So this is one
Speaker 4: of the things that we show in the book, and
Speaker 4: I think this is the reason why the Chinese communist
Speaker 4: potted today is so obsessed with learning the negative lessons
Speaker 4: from the Soviet Union, is that much of this was
Speaker 4: of course not just about creating a China that was
Speaker 4: rich and strong. It was being able to recreate the
Speaker 4: communist party that was in control of mostics. Right. So
Speaker 4: that story or how that the dictatorship was reinforced at
Speaker 4: the back of reform already in the mid nineteen eighties,
Speaker 4: is a very central part of our book. I mean,
Speaker 4: we do see a period of openness from the late
Speaker 4: seventies to the mid nineteen eighties, when there would have
Speaker 4: been a really possibility that China would have moved in
Speaker 4: a more democratic, but more pluralistic, more open direction than
Speaker 4: what happened what happened later on. But by nineteen eighty
Speaker 4: four of their aboats that period is ended. Done is
Speaker 4: laying down the law, saying the direction that China will
Speaker 4: go in is one of increased deepening, market reform and
Speaker 4: communist party control. There will be no pluralism of any sort,
Speaker 4: there will be no freedom of speech. All of that
Speaker 4: is and this is of course very important in terms
Speaker 4: of understanding China today. I mean, this is what created
Speaker 4: the kind of situation that we see now, even though
Speaker 4: I now, of course, I was in China in the
Speaker 4: spring and one of my businessman friends was joking that maybe,
Speaker 4: you know, reform and opening should be seen as a
Speaker 4: gigantic Yet you know, let in its new economic policy
Speaker 4: back in the nineteen twenties where people were allowed to
Speaker 4: generate wealth for a while, just for the party to
Speaker 4: come back in and confiscate everything. So don't say that
Speaker 4: I'm sharing that view, but given what she and King
Speaker 4: has been up recently, you can spok of longer standing.
Speaker 3: Since we're up firmly in the nineteen eighties. Now, talk
Speaker 3: to us about Coca cola and its presence in the
Speaker 3: Chinese market, because I kind of think this is like
Speaker 3: a nice little microcosm of the changes that happened to
Speaker 3: the Chinese economy around that time.
Speaker 4: So the Coca Cola example is really interesting because it's
Speaker 4: a typical example in a way of how it was
Speaker 4: possible for a moved the national company to come into China,
Speaker 4: to start working in China because of the attractiveness the
Speaker 4: symbolism of the product that it delivered, but also was
Speaker 4: able to work with local people and local businesses within China.
Speaker 4: And what's also fascinating here is the connection between Coca
Speaker 4: Cola and its political significance in terms of the American.
Speaker 3: Because Coco is like a symbol of American capitalism, right.
Speaker 4: Yes, and the Chinese leadership wanted to embrace that symbolism
Speaker 4: without necessarily having to embrace the full package. So they
Speaker 4: were trying to figure out how they could work with
Speaker 4: this particular American company and indeed other American companies as well,
Speaker 4: in order to be seen as helping bringing Coca Cola
Speaker 4: to China, but on conditions that would be acceptable to them.
Speaker 4: And this is the story that is repeated over and
Speaker 4: over again in China when it comes to foreign companies,
Speaker 4: the connections to local partners, how the government oversees this
Speaker 4: in seat of political terms, but also how it can
Speaker 4: turn out to be immensely emotionally successful under those circumstances.
Speaker 2: You joked about your businessman friend in China saying, maybe
Speaker 2: that whole reform period was like Lenin's net period, and
Speaker 2: you had the dominance of the party and then wealth
Speaker 2: was created, and then now the party re emerges in
Speaker 2: strength and Caesar's control of that wealth, so to speak.
Speaker 2: I'm curious your take here in twenty twenty four. Do
Speaker 2: you find that to have been an inevitable arc? I mean,
Speaker 2: I probably doesn't sound like you believe much is inevitable,
Speaker 2: given your focus on contingencies of history. But was this
Speaker 2: something that like due to this specific leaders who emerged
Speaker 2: in China, most prominently Shijinping, but also to some extent
Speaker 2: with the more nationalist edge of hu Jintao, Like, was
Speaker 2: this something that is like it was the result of
Speaker 2: these specific individuals that has bent the curve of history
Speaker 2: so to speak, or do you think there was sort
Speaker 2: of like structural forces and play that brought back the
Speaker 2: sort of like very high level of state control.
Speaker 4: I think it was both. I mean, in the She
Speaker 4: and Pink case, I think he was picked by the
Speaker 4: party as the what the Chinese could call the core
Speaker 4: leader back in the early twenty teens in response to
Speaker 4: what was seen as a bunch of real problems from
Speaker 4: a Chinese Communist Party perspective over liberalization, decentralization, corruption, strength
Speaker 4: of private companies that meddled in a lot of things
Speaker 4: that the Communists didn't want them to meddle In. They
Speaker 4: wanted to get a strong leader win who could deal
Speaker 4: with those issues in a way that his predecessors, youngstermen
Speaker 4: Hu Jintao, had not been able to do it. So
Speaker 4: they wanted a strong leader. It's just that I think
Speaker 4: even for many Communist leaders of that generation, they got
Speaker 4: more than they bargained for. So that's where the personality
Speaker 4: as state comes in. They got a leader who really
Speaker 4: wanted to return digal So issues to the maoist or
Speaker 4: even the sort of pre Mao period in terms of
Speaker 4: the CCP's history, and emphasizes the party's position over what
Speaker 4: even many party leaders back twenty fifteen years ago. Coote
Speaker 4: would be good for China. And it's a classic example,
Speaker 4: right of responding to real world problems not unknown in
Speaker 4: this country, right by going very far in one direction,
Speaker 4: hoping that that would resolve the problem that is there,
Speaker 4: and then getting stuck in a way in WICKI kind
Speaker 4: of leader that you have in this case in Tea
Speaker 4: and pain. So, I think that's the story the way
Speaker 4: we can tell it now. I hope at some point
Speaker 4: to be able to tell that story based on archives
Speaker 4: and primary documents. As an historian, we can't do that yet,
Speaker 4: but I think at some point we will be able
Speaker 4: to do that, and then it will be fascinating to
Speaker 4: test that hypothesis about how this happened.
Speaker 3: So just on the revolution from below point, one of
Speaker 3: the things that you emphasize the book is a lot
Speaker 3: of the stuff that happens in this time period is
Speaker 3: a result of people feeling that they are heading somewhere,
Speaker 3: that there's like a grander Chinese vision that can be achieved,
Speaker 3: and so that motivates people to actually do something. I'm curious,
Speaker 3: just going up to the present day, do you get
Speaker 3: a sense that people feel that that there's like a
Speaker 3: direction that China is heading in that it's clear to
Speaker 3: people like what they are trying to do at a moment.
Speaker 4: Absolutely not. I think it's very very clear that a
Speaker 4: lot of people in China do not understand where the
Speaker 4: country is heading and what the reasons are. And you know,
Speaker 4: you don't spend much time in Beijing before you realize
Speaker 4: that these days, I think it was very different in
Speaker 4: the time period that we are talking about, which was
Speaker 4: generally a time or uplift, at least in economic and
Speaker 4: social terms. And it's right to say, I mean as
Speaker 4: many historians said that there was an element of a
Speaker 4: bargament that at least for some Chinese, not everyone, but
Speaker 4: for some Chinese, very particularly in business, that one accepted
Speaker 4: the dictatorship for what it was and then went on
Speaker 4: getting rich and establishing somebodies great middling fortunes that you
Speaker 4: find so many in China today. And that is good.
Speaker 4: I mean, that was positive. It was much much better
Speaker 4: than the dark past that we described at the beginning
Speaker 4: of the book. It was just that China wasn't able
Speaker 4: to take what in our view is a necessary step
Speaker 4: to improve its political system, its overall attempt at trying
Speaker 4: to become a more open, more pluralistic country in the
Speaker 4: period when the going was good, when there was a
Speaker 4: general sense that China was making advances domestically and internationally. Now,
Speaker 4: I think even if people from within the Chinese Companist
Speaker 4: Party of the Hemping would try to move in a
Speaker 4: direction of increased liberalisation, which I think they will have
Speaker 4: to do at some point because people are just very
Speaker 4: unhappy with the color system that is there at the moment,
Speaker 4: it would be much more difficult because the going is
Speaker 4: not that good and it probably is never going to
Speaker 4: be that good again, and it was a remarkable period
Speaker 4: of economic transformation ten percent per year growth rates. It
Speaker 4: would have been possible to carry out necessarily reform, but
Speaker 4: these people didn't want to do it because they had
Speaker 4: become so preoccupied with holding on power themselves. And I
Speaker 4: think historically that that might turn out to be the
Speaker 4: biggest mistake. That's cover is for us later.
Speaker 2: On, arn Western, Thank you so much, truly the perfect guest.
Speaker 2: Really appreciate you coming.
Speaker 3: On nominative determinism. Truly had to come on this.
Speaker 4: Indeedeed we talked about contingency. This is not contingent. This
Speaker 4: is right. This is the one.
Speaker 2: This is the one scientific fact of history that was
Speaker 2: inevitable regardless of it.
Speaker 4: Was great chatting with you.
Speaker 2: Yeah, thank you so much. Congrats on the book and
Speaker 2: encourage people to check it out. And I appreciate it.
Speaker 2: Thank you, Tracy. I'm totally down in my dottage to
Speaker 2: just turn this into a history podcast where we read
Speaker 2: books and then talk to historians.
Speaker 3: I feel like podcasts becoming history podcast is also an
Speaker 3: Indepololgi right.
Speaker 2: Well, you run out of things to talk about, so
Speaker 2: you gotta start mining the past.
Speaker 3: You know what actually in all your recent reading, you
Speaker 3: might know the answer to this question which I forgot
Speaker 3: to ask arn about. But why was the Soviet Union
Speaker 3: and China in like the nineteen fifties obsessed with steel production?
Speaker 2: Do you know why? I actually don't know the answer.
Speaker 2: My guess would be is just like the most sort
Speaker 2: of objective thing of what you need to modernize in
Speaker 2: a twentieth century economy, you need steel for probably literally
Speaker 2: everything that gets built. It'd been a good question. Another
Speaker 2: thing that I wish I had asked is how paranoid,
Speaker 2: how justified? Was because you asked that great question about
Speaker 2: the importance of the tension between China and the Soviet
Speaker 2: Union in Mao's turning at least to some extent to
Speaker 2: the US, which then expanded greatly over the following decades.
Speaker 2: But I never get the impression that there really was
Speaker 2: any actual prospect of war. Like there's one point in
Speaker 2: the book where like the leaders all scrambled away from
Speaker 2: Beijing because they were fear of a nuclear attack from
Speaker 2: the Soviet Union. But it's not clear that there was
Speaker 2: any real anything happening there.
Speaker 3: I guess hindsight is twenty twenty when it comes to
Speaker 3: a lot of this stuff, including the Cold War, is
Speaker 3: kind of similar. I guess, like nothing happened in the
Speaker 3: end in terms of like a nuclear tech came close
Speaker 3: with Cuba as minds, that is true, but like it
Speaker 3: didn't happen. Yes, But one thing that I got from
Speaker 3: this book is again the importance of an external enemy
Speaker 3: when it comes to radical economic transformation. And I think
Speaker 3: we've seen so many examples of that throughout his at
Speaker 3: this point. So China, China's market liberalization as a result
Speaker 3: of its fear of the Soviet Union is a great one.
Speaker 3: I guess the return of industrial policy in the US
Speaker 3: as a result of its fear of China's economic dominance
Speaker 3: is another one. Japan in the nineteen eighties would be
Speaker 3: a good one too. It feels like in order for
Speaker 3: anything to get done at scale and in an efficient
Speaker 3: time period, you have to have like some sort of
Speaker 3: threat that's hanging over you.
Speaker 2: This is why we need the Paul Krugman, like, we
Speaker 2: need to convince everyone that the threat is the alien. Yes, yes,
Speaker 2: and then you catalyze development without actually and then there's
Speaker 2: no aliens in the end. But yeah, I though there
Speaker 2: was fascinating. I know, it's such a cliche and I
Speaker 2: hate to admit it, but it does seem like understanding
Speaker 2: the modern world, you can learn something by reading the past.
Speaker 3: I resist incredibly surprising.
Speaker 2: I resisted that reality for a long time in my life,
Speaker 2: and now I've succumbed. We have to know how we
Speaker 2: got here.
Speaker 3: Okay, now that you've discovered history, shall we leave it there?
Speaker 2: Let's leave it there.
Speaker 3: This has been another episode of the Audlots podcast. I'm
Speaker 3: Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 2: I'm Joe Wisenthal. You can follow me at the Stalwart.
Speaker 2: Follow our guest Odd arn Westdad. He's OA Westdad, and
Speaker 2: definitely check out his new book, The Great Transformation. Follow
Speaker 2: our producers Carmen Rodriguez at Kerman Arman, Dashel Bennett at Dashbot,
Speaker 2: and Keil Brooks at Keilbrooks. Thank you to our producer
Speaker 2: Moses Ondem. For more Oddlots content, go to Bloomberg dot
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