Chapter 3 continues to describes the power relations and the hierarchy of Deng’s regime, focusing on his relationship with two potential heirs. It also discusses the precarious position of General Secretary Zhao Ziyang, the possible successor, on the eve of the student protest.

After Mao’s passing in September 1976, the coalition that Mao had put in place at the end of his life, which was composed Cultural Revolution radicals with little revolutionary experience, even more junior officials like Wu De and mass representatives, the tainted Fourth Front Army (FFA) group, and a handful of trusted First Front Army veterans like Ye Jianying and Wang Dongxing, took over the People’s Republic of China. An uneasy truce persisted for a very short time before the Gang of Four had alarmed Hua Guofeng by challenging his role as the anointed successor, which compelled him to seek more drastic solutions (Zhang 2008b: 263). In this decisive moment, the FFA swung behind Hua, thus sealing the Gang of Four’s fate, but Hua also became very dependent on FFA veterans. His dependence on military veterans with vastly more experience and greater networks ultimately also brought about his downfall. Within two years of Mao’s death, none of the potential successors Mao had put into place just prior to his death survived as powerful figures in the party. The Gang of Four had ended in jail, while Hua was sidelined at the third plenum in 1978. Even FFA veteran Li Desheng, who had served as vice chairman of the party for a short while, ended his career in the 1980s as the head of the National Defense University (Zhu 2007: 425). Except for key members of the FFA group, the vast majority of Mao’s coalition of the weak had ended in jail or in retirement by the early 1980s. His legacy of continuous revolution also was completely expunged from the party ideology in favor of a single-minded focus on economic development.

December 1978 was a political, economic and social turning point for China. As the balance of power within the top leadership shifted, a search for new policies began that deepened into what came to be called “reform and opening” and culminated decades later in a multistranded transition to a market-based economy. This new policy orientation was accompanied by a shift in development strategy that permitted China to take advantage of its factor endowments and structural conditions and dramatically accelerate economic growth. Thus 1978 marks not only the beginning of “reform,” but also the start of the Chinese “economic miracle,” a remarkable thirty-two-year period, through 2010, during which GDP grew at an annual rate of 10 percent. Chinese economic structure and Chinese society were utterly transformed. An extraordinary distance separates the vibrant upper-middle-income, predominantly market-based, economy that is China today from the troubled, isolated low-income country that was China at the end of the Cultural Revolution. This chapter builds its narrative around the systemic and structural changes that transformed China, especially in the thirty years between 1978 and 2008.

This chapter examines the rise of China across the 1989 divide, as a year in both Chinese and global history. It focuses on the Chinese Communist Party (CCP) leadership's response to the domestic and international crises of 1989–1992. Using previously unstudied internal Chinese materials, it argues that this period - often overlooked in scholarship of contemporary China -witnessed significant and enduring changes in how the CCP intended to guide China's rise: bifurcating economic liberalization and political liberalization, building up the institution of the leadership "core," strengthening the party, opposing "peaceful evolution," and rewriting the history of the preceding decade to emphasize a battle between "bourgeois liberalization" and Deng Xiaoping's authoritarian Four Cardinal Principles. This chapter shows how the CCP came to see itself as a socialist survivor, uniquely able to exploit the benefits of openness to global capitalism while resisting the perceived dangers. The chapter concludes with a reflection on how these crucial shifts in the period 1989–1992 have profoundly shaped the Chinese system and international images of China to the present day.

This chapter examines Deng Xiaoping’s rise to power and his efforts to build a structure that would prevent the return of Maoism. That structure included rejuvenation, the building of leadership groups at different levels, and the introduction of balances. This chapter also discusses the forces that undermined party unity, leading first to the purge of Hu Yaobang and then the Tiananmen events, followed by the ouster of Zhao Ziyang. The military proved to be an important part of Deng Xiaoping’s structure of power. In many ways, Deng tried to introduce institutionalization to correct the concentration of power under Mao Zedong, but Deng’s own dominance of political power contradicted and undermined these efforts to introduce institutionalization.

Chapter 7 focuses on the economic and political reforms of General Secretary Zhao Ziyang (1919–2005) and his predecessor Hu Yaobang (1915–1989). The reforms are placed within the context of both the controversial “reform and opening” policies of paramount leader Deng Xiaoping (1904–1997), and also the larger context of intra-Party ideological debates dating back to founding of the nation. Zhao’s early career as Party secretary in his native county before 1949 is contrasted with his later posting to Guangdong as part of an initiative to break local resistance to land reform in the 1950s. The disastrous Great Leap Forward is presented as a formative experience for Zhao, leading him to side with Mao’s critics, a decision which would in turn lead to his fall from power in 1967. His eventual rehabilitation by Zhou Enlai in 1971 is described as having led Zhao to support political and economic reform beginning with the Li Yizhe controversary of 1974 and culminating in his work in the late 1970s as Party secretary in Sichuan, where he was responsible for implementing Deng Xiaoping’s reforms in the agricultural sector. The chapter concludes with a discussion of Zhao’s rapid promotion to premier by 1980, and his pragmatic approach to political reform and liberalization, which would lead to his eventual downfall for a second time on the eve of the Tiananmen massacre in 1989, and contested legacy in the PRC today.

If the elders who forced Hu Yaobang from office had retired from politics, Hu and Zhao Ziyang would have had time and space to deepen economic and political reforms, a scenario that would have reduced the chances of protests and violence in 1989. The two-child policy proposed by demographer Liang Zhongtang would have been less harsh than the one-child policy, but a cultural shift in sexual norms would have been necessary to prevent the traumas experienced by Chai Ling, Lu Decheng, and Wang Qiuping.

Hu Yaobang's death sparked student protests in Beijing, which escalated when protesters felt ignored by officials after Hu's memorial service on April 22, 1989. General Secretary Zhao Ziyang and Premier Li Peng disagreed about how to handle the protests before Zhao left for North Korea on April 23. In Zhao's absence, Li and other officials presented their views to Deng Xiaoping, who labeled the protests "turmoil," sparking a march of approximately 100,000 people disputing this characterization.

There were many turning points and key moments in spring 1989 that could have pushed events in new directions and led to different outcomes. They included inviting students to attend Hu Yaobang's memorial service, Zhao Ziyang not traveling to North Korea, protesters escalating their civil disobedience through self-immolation, and convening a special session of the National People's Congress (NPC) to rescind martial law. These were all genuine possibilities, but they were made less possible by the realities of old-man politics.

Political opening, romantic freedoms, economic reforms, and such moderate political leaders as Hu Yaobang and Zhao Ziyang sparked happiness for many people in China during the 1980s, but their high hopes created heightened expectations that would be dashed by the end of the decade.

Zhao Ziyang and Li Peng clashed on how to handle the student protests, with Zhao arguing for a more open press and for democratic and legal solutions. Students declared a hunger strike shortly before Soviet leader Mikhail Gorbachev's visit to Beijing. Millions of Beijing residents hit the streets to support the hunger strikers. Deng Xiaoping decided to impose martial law. When Zhao Ziyang refused to implement martial law, Deng decided to replace Zhao as general secretary with Shanghai Party secretary Jiang Zemin.