As a child he rescued books from the fires of the Cultural Revolution - but Li De Wei has since made education central to Chinese policy, writes Fintan O'Toole
By the time Li De Wei was ready to go to secondary school, there was no secondary school to go to. Now president of Guangxi University of Technology, and one of the leading intellectuals in the Chinese Communist Party, he grew up in the big city of Changsha, capital of the great rice-producing province of Hunan. His family had been in the clothing business and made money by producing a popular winter coat, but lost its status in the revolution. It did not lose its love of education and, as a child, Li was an enthusiastic reader. But after a good primary education, he emerged into the chaos of the Cultural Revolution, when teachers were targeted for abuse, schools and universities were shut down while their students joined the Red Guards, and learning was dismissed as a form of enslavement to the corrupt past.
"My secondary education," he remembers, "was self-education."
Sent to work as a labourer, he remained nonetheless obsessed with books. He rifled the remaining second-hand book stalls for works of literature, history, economics, philosophy, physics and mathematics. He quietly rescued books from the bonfires that had been prepared for them by zealous revolutionaries. He stowed away on trains when he didn't have the money for the fare, taking long journeys to towns where, he had heard, he could find the second or third volume of a work he had started to read. He learned enough to be able, when the Cultural Revolution ended and higher education started up again, to pass the entrance exams for Nanjing University. His self-education was haphazard but broad, and it would make him what he is now: an economist with an expansive sense of history and a vision broad enough to make sense of some of China's deepest complexities.
Yet, if Li De Wei's early struggle for an education typifies the difficult and dangerous experience of intellectuals, his subsequent career illustrates the unique opportunities that China can afford to those of its thinkers who are willing and able to remain within the ruling Communist Party. Dr Li is the kind of figure who has few obvious parallels in the West: a passionate scholar with an original mind who is also a career administrator and politician, able both to influence government policy and to implement it. He has been a senior figure in the State Planning Commission, the architect of local economic experiments that have tested the reform process, and deputy mayor of the large city of Liuzhou, in the large southern region of Guangxi. And his ideas, once bordering on the heretical, are being increasingly accepted as Communist Party orthodoxy.
Those ideas have been shaped in large part by a decision that might have seemed parochial, even reactionary. He was friendly with a Belgian student at Nanjing in the late 1970s and was offered the chance to continue his studies in Europe. But he decided not to do so. His roots were in Hunan, the cockpit of Chinese communism and the birthplace of Mao Zedong, Liu Shaoqi, Peng Dehuai and other early Communist Party leaders.
"Being from Hunan, where Mao's example had a special significance for local people, my dream was to contribute as much as I can to China. Because I had a lot of self-taught knowledge of Chinese economics, politics and history, I felt I could form a theory of Chinese development. I made the decision to stay in China."
From very early on, however, his ideas were at odds with the Party orthodoxies of the time. In 1980, while still at Nanjing, he wrote an article saying that the Chinese economy should be run with a variety of forms of ownership rather than through a single system of state ownership, and he was criticised for being "anti-Marxist". Such a charge might have had dire consequences just a few years earlier, but in the new era of economic reform under Deng Xiaoping, there was a broad realisation that, within bounds, economic policy needed to be tested in debate.
THE FLUIDITY OF the times, and the awareness that the market economy was a system whose principles were not well understood in China, made it possible to develop ideas with relative freedom. When he went to Beijing to do postgraduate research at the Chinese Academy of Social Sciences (Cass), the atmosphere was one of openness. "Cass had quite a free environment for research. The lecturers knew they didn't really understand the leading edge of international knowledge. They couldn't teach us.
"However, they were very intelligent. They gave us freedom to learn the way we wanted. We had the chance to look for textbooks or any other source to teach ourselves. I had a very clear aim: to push forward Chinese economic reform." He formed a research group that quickly began to liaise with the state committee for reform and the Party's agricultural policy research centre.
"These activities provided a chance to learn but also to participate directly in policy-making for economic reform. From that, I formed quite a clear view of which way China would go. I realised the trend was that China would be integrated into the international economy."
Dr Li moved into the state planning commission, and began to influence policy. He worked out bidding systems for the awarding of state contracts, and argued that state enterprises should move away from government ownership towards new forms of public ownership, partly modelled on European systems of profit sharing and employee participation. But he also worked on his own theory of Chinese development and, as it emerged in 1987, it was startlingly at odds, not just with the old Maoist orthodoxy but with the general thrust of the new reform policies as well. For Li's central contention was stark: China could not industrialise and all attempts to do so were doomed to fail.
Li De Wei believes that one of China's perennial problems has been that its intellectuals and economists have studied abroad, come back with a contempt for Chinese underdevelopment and tried to apply western models of modernisation. Their efforts consistently failed, he argues, because China has a huge population and countries with huge populations are different. The argument is not just historical, but has vast implications for China's current development. If he is right, that development has to be driven by policies that do not simply seek to do in the 21st century what the Europeans and Americans did in the 18th and 19th centuries: move from an economy based on agriculture to an economy based on industry.
Li's so-called Big Nation Economic Theory uses macro and micro-economic arguments and notions derived from number theory, but it boils down to a simple enough question: surplus labour. Classical industrialisation involves a profound shift of the workforce from labour-intensive farming to capital-intensive industry. Because industry, in its initial phases at least, cannot employ all the workers moving from the countryside, there is an acute problem of surplus labour. This problem, Li argues, is fundamentally different for a huge country like China than it was for a country like England, where the industrial revolution started.
"In England," he argues, "during the industrial revolution, their surplus labour could move to colonial countries such as Australia, New Zealand or America. Because England was the most advanced economy, they could benefit from international trade.
"Their colonies gave them access to raw materials and to new markets. So England could finish the transformation successfully. But even with all of these advantages, there was still surplus labour and it still led to serious social issues. Just read Oliver Twist. Move that problem to China, and it's not just a social issue, it's social breakdown. The surplus labourers wouldn't be millions, they would be hundreds of millions, and if they don't have food and shelter, they will cause revolution. In fact, in Chinese history, this has happened many times, and each time it has brought Chinese industrialisation back to where it started. Which means it brought the capital-intensive industry which can't contain enough of the labour force back to the small-scale agricultural economy which can contain the labour force."
CHINA'S STRUGGLES TO maintain internal cohesion meant that it couldn't engage in the expansionist wars that European rulers used to carve out colonies and use up some of their surplus workers. Its geography meant that there were few places for its unwanted workers to emigrate to (the Chinese did emigrate to the United States in the 19th century, but the flow was stopped by hysteria about the Yellow Peril). So its attempts to modernise by becoming an industrial nation always came up against the inability to absorb those who were to move out of labour-intensive farming. Progressive reformers tried it in the 19th and early 20th centuries and they failed. And, argues Li, the Communist Party's efforts to achieve a Soviet-style rapid industrialisation were equally doomed to fail.
Mao, he argues, started well by focusing on the peasant masses and giving them the land that was taken from the old landlords. "Actually, this provided the foundation for the development of a market economy and is really equivalent to what Deng was doing in the 1980s, so Mao started with a correct theory. But later on, he started collectivisation and the Cultural Revolution, pushing for industrialisation, and that went away from Chinese reality." Deng, he says, restored the basis for a market economy by giving farmers reasonably secure tenure of their land, providing China with a stable food supply for the immediate future.
But China still faced the great problem of how to modernise without generating massive surplus labour that would in turn create social chaos and set the whole process back to square one. And even if there were a way to square this circle, there was now another factor that made Chinese industrialisation unsustainable: the environmental context. China's fragile ecology couldn't handle the damage that traditional heavy industries would do and the world was running out of the resources to feed those industries.
Back in 1987, when he elaborated this theory, Li's argument was also an implicit critique of the official policy of allowing foreign companies to exploit China's abundant resources of cheap labour. "The terms of trade were very unequal between the labour-intensive goods that China exported and the capital-intensive goods it imported. China remained at a grave disadvantage in trade: the more trade happened, the more backward China would be. If that trend continued, there would be no way for China to catch up to world levels, and in fact the gap would get bigger and bigger."
Li's solution to these problems was that China should stop trying to catch up with the West's history of industrialisation and go straight from agriculture to a high-tech and service economy. "I argued that if we adopt this approach, we start to get first-class human resources. We start at the same level that the whole world started off in software and IT industries, in pharmaceuticals and biotech, in new materials and new energy sources. If you want to accumulate capital, you will accumulate more from those than from labour-intensive industry, moving closer to the international level all the time.
"In the 1980s, when I wrote this, Tsinghua University [in Beijing] was at a world-class level for software design. At that time, there was no Bill Gates in the world. If China had put more effort into high-tech industry, Bill Gates would be Chinese. It was a pity nobody listened to me."
IT IS, OF course, open to question whether China, still emerging from a long series of historical traumas, would have had the capacity to make this leap in the late 1980s, and Li's arguments did not appeal to a leadership steeped in the notion of industrialisation as the holy grail of modernity.
But he continued to argue that instead of spending money on developing heavy industry, the central government should put its resources into education, as the key to transforming the children of peasants into skilled high-tech workers.
"This has been achieved in some other countries: Japan after the war, Korea and Ireland. They're all countries who developed education first. Their farmers used education to become able to work in new industries. Thus the farmers' rebellion didn't happen. If we calculate the cost of training those people against the cost of investing in traditional industry like iron and steel and automobiles, the cost of training is hardly anything."
By the late 1990s, when he decided to get stuck in on the ground level in Guangxi and to turn his theories into practice, Dr Li's arguments were gaining ground, and they have now been incorporated into central government policy. Making them work will demand a huge investment in education, an area long neglected by the Communist state. If it happens, the boy who rescued books from the fire may have helped to spark a much more productive blaze of ideas.