China’s economic reorientation after the third plenum: Conflict surrounding “Chen Yun’s” readjustment program, 1979-80

Although the broad outlines of the conflicting views and interests concerning economic readjustment following the December 1978 Third Plenum are adequately understood in the existing literature, academic accounts and the official narrative seriously misunderstand or misrepresent the élite politics surrounding the readjustment program in 1979-80. The view that Deng Xiaoping and Chen Yun joined forces in an alliance against Hua Guofeng has merit, but not, as commonly claimed, as a rejection of Hua’s failed economic policies—Deng in fact was the most forceful advocate of the pre-plenum policies which Chen found most detrimental. The second widely accepted proposition, that Deng and Chen subsequently fell out along reform vs. readjustment lines, with Chen gaining the upper hand by late 1980, also distorts political reality. When readjustment finally achieved its most forceful manifestation, the actual policies were formulated by Zhao Ziyang, with Deng’s crucial backing.