In recent months, an escalating trade war between the world’s two largest economies has seen the US and China exchanging tariffs on hundreds of billions of dollars worth of goods.
The two sides have agreed to a 90-day truce as they seek to negotiate a solution, with Washington is keen on a reduction in its massive trade deficit as well as deeper reforms in Beijing to stop the alleged theft of intellectual property.
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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.
Despite the challenges, Brown said Chinese leaders are eager to point to the economic transformation during the past four decades as evidence of being able “to grow an economy without democracy, without a free internet, without free media and without being overly concerned about human rights.
“They will see that as a success and of course we will hear plenty of words today … that the reforms that began by Deng Xiaoping four decades ago are going to continue and deepen – yet really since Xi Jinping became president we have in many ways seen an almost opposite strategy.”
Fraser Howie, a Singapore-based independent analyst, said Xi’s “inclination is one of control, not one of openness.”
“He has brought in a system where he is very much at the centre of the Communist Party, and the Communist Party is becoming ever more central to the economy and the society, so he’s actually backtracking on many of those reforms,” Howie, coauthor of Privatising China: Inside China’s Stockmarkets, told Al Jazeera.
“They are celebrating today 40 years of reform, and clearly Xi wants to try and take Deng’s mantle of being this great reformist leader, but the reality is that under him the reform has largely stopped – the institutional reform, the openness, that direction of travel has very much changed.”
Domestic issues
Howie also said that the trade war with the US could not come at a worse time for China, which is trying to tackle a number of domestic economic problems.
“For the past five to eight years or so, China has been hugely dependent on credit growth to drive the economy,” he said. “There is [an] excessive level of debts across all aspects of the economy and the Chinese leadership, at last, realised that they need to rein this in. So this deleveraging process is draining credit for much of the economy and that’s causing a large part of the slowdown.”
Wu said the trade war with the US could be a chance for China to enact more changes.
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“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 decollectivise 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.
