Chen Yun (simplified Chinese: 陈云; traditional Chinese: 陳雲; pinyin: Chén Yún, pronounced [ʈʂʰə̌n y̌n]; 13 June 1905 – 10 April 1995) was one of the most influential leaders of the People's Republic of China during the 1980s and 1990s. He was also known as Liao Chenyun as he took his uncle's (Liao Wenguang) family name when he was adopted by him after his parents died. He was one of the major political leaders of China both during and after the Chinese Civil War along with Mao Zedong, Liu Shaoqi, Zhou Enlai, Zhu De and Ren Bishi and was later considered to be one of the Eight Elders of the Communist Party of China. In the 1980s and 1990s, Chen Yun was regarded as the second most powerful person in China after Deng Xiaoping.
A native of Qingpu, Jiangsu (now part of Shanghai), Chen was one of the few Communist Party organizers from an urban working-class background; he worked underground as a union organizer in the late 1920s, participated in the Long March, and served on the Central Committee from 1931 to 1987. He was active throughout his career in the field of economics, despite receiving no formal education after elementary school.
As a typesetter for the famous Commercial Press of Shanghai, Chen played a prominent role as a younger organizer in the labor movement during the early and mid-1920s, joining the CPC in 1924. Following the May Thirtieth Movement of 1925, Chen was an important organizer under Zhou Enlai and Liu Shaoqi. After Chiang Kai-shek turned against the CPC in 1927, Chen fled to his hometown, but soon returned to Shanghai and secretly continued his work as a labor unionist.
He served on the Central Committee in the Third Plenary Session of Sixth Central Committee of CPC in 1930 and became a member of the Politburo in 1934. In 1933 he evacuated to Ruijin, in Jiangxi province, the headquarters of the CPC's main "soviet" area. He was in overall charge of the Party's "white areas" work, that is, underground activities in places not under Party control. On the Long March he was one of the four Standing Committee members of the Political Bureau who attended the January 1935 Zunyi Conference. He left the Long March sometime in the spring of 1935, returning to Shanghai, and in September 1935 he went to Moscow, serving as one of the CPC's representatives to the Comintern. In 1937 Chen returned to China as an adviser to the Xinjiang leader Sheng Shicai. Chen later joined Mao in Yan'an, probably before the end of 1937. In November 1937 he became director of the Party's Organization Department, serving in that capacity until 1944, and by the early 1940s was in the inner circle of Mao's advisers. His writings on organization, ideology, and cadre training were included in the important study materials for the Yan'an Rectification Movement of 1942, a campaign of political persecutions which consolidated Mao's power within the Party.
Chen's economic career began in 1942, when he was replaced by Ren Bishi as head of the CPC Organization Department. In his new position, Chen was assigned responsibility for the financial management of Northwest China. Two years later, he was identified as responsible for finance in the Shaan-Gan-Ning Border Region as well. He added Northeast China to his portfolio in 1946 (under the overall leadership of General Lin Biao and Political Commissar Peng Zhen.
In May 1949, Chen Yun was named head of the new national Central Finance and Economic Commission. In early 1952, Zhou Enlai led a team to draft the first Five-Year Plan which included Chen, Bo Yibo, Li Fuchun and General Nie Rongzhen. Zhou, Chen and Li presented the draft to Soviet experts in Moscow, who rejected it. In early 1953, Gao Gang and the State Planning Commission began work on what would eventually become the final version. After Gao's fall, Chen, Bo Yibo, Li Fuchuan and (later) Li Xiannian would manage the Chinese economy for the next 30+ years.
Throughout the 1950s, Chen was the official who did the most to moderate Mao's radical economic reforms. Looking back, Chen would later believe that it was the Chairman's errors that most kept China from achieving its Five-Year Plans. In 1956, when the 8th National Congress of Communist Party of China was held, Chen was elected a Vice-chairman of the Central Committee. Around that time, both Mao and Chen had come to believe that the economic system, modeled on that of the Soviet Union, was overly centralized, but had different ideas about what to do about it. Chen's proposal was to make wider use of the market, allowing for the operation of supply and demand rather than simple government fiat in determining the allocation of resources. He argued that decisions concerning prices and production should be made by individual firms, in conformity with business logic. At the same time he favored giving the central government ministries stronger control over these firms, to assure that their decisions did not transgress the boundaries of the plan.
Mao's idea, rather, was to devolve powers to provincial and local authorities, in practice Party committees rather than state technocrats, and to use mass mobilization rather than either a detailed central plan or the market to promote economic growth. Mao's program prevailed, and these policies converged with the rest of the ultimately disastrous Great Leap Forward. By early 1959 the economy was already showing signs of strain. In January of that year Chen Yun published an article calling for increased Soviet aid, perhaps a signal to Moscow that the wild men were no longer in control of the economy. In March he published a subdued but general critique of the Leap, especially its reliance on the mass movement. Economic growth, he asserted, is not simply a matter of speed. It requires attention to safe working conditions and quality engineering. It depends on technical skill, not just political awareness.
Attempts to lead China's economic recovery
This was Chen's last public statement during Mao's lifetime. In the summer of 1959 the Party convened a meeting at the resort town of Lushan to review the policies of the Leap. The Minister of Defense, Marshal Peng Dehuai, attacked the radicalism of the Leap, and Mao took this, or affected to take it, as an attack on himself and his authority. Mao responded with a vicious personal attack on Peng. Peng lost his military positions and the Party undertook a general purge of right opportunism. Further reform of the Leap policies was now out of the question. China continued on its set course for another year or more, and by the end of 1960 had fallen deep into famine.
Chen Yun was certainly in sympathy with Peng Dehuai's criticism of the Leap, but he was not included among the right opportunists. Chen joined forces with Zhou Enlai and Deng Xiaoping to manage the economy in the post-Great Leap Forward period, which required deft handling of Chairman Mao's sensitivity to criticism.
Although Chen nominally retained his positions as Party vice chairman and member of the Politburo, he was no longer in practice part of the core Party leadership. He did, however, continue to express his opinions behind the scenes. In 1961 he conducted investigations of the rural areas around Shanghai. According to a Cultural Revolution attack on him by the radical group within the finance system, he reported the peasants as saying: "In the days of Chiang Kai-shek we had rice to eat. In the glorious era of Chairman Mao, we have only gruel." According to his obituary, Chen was one of the main designers of the economic policies of the 1961-1962 "capitalist road" era, when China's economic policy stressed material incentives and sought to encourage economic growth in preference to pursuing ideological goals. This approach is often referred to as Chen's "bird-cage" theory of post-Great Leap economic recovery, where the bird represents the free market and the cage represents a central plan. Chen proposed that a balance should be found between "setting the bird free" and choking the bird with a central plan that was too restrictive; this theory would later become a focal point of criticism against Chen during the Cultural Revolution. His only public appearance during this time was a photograph of him published on the front page of the People's Daily and other major newspapers on May 1, 1962, showing a somewhat emaciated Chen shaking hands with Chairman Mao, while Liu Shaoqi, Zhou Enlai, Zhu De, and Deng Xiaoping (the entire inner core of leadership of that time, with the exception of Lin Biao) look on. There was no caption or any other explanation.
During the Cultural Revolution, Chen Yun was denounced in Red Guard publications but not in the official press. He was re-elected to the Central Committee in the Ninth Party Congress in April 1969 but not to the Politburo. He no longer held any functional positions. Later that year he was "evacuated" from Beijing, as were many other inactive or disgraced first-generation leaders, as part of a supposed plan preparing against the eventuality of an invasion by the Soviet Union with whom China had a serious split. Chen was put to work in a factory in Nanchang in Jiangxi province, where he stayed for three years. In January 1975, he was elected to the Standing Committee of China's legislature, the National People's Congress.
Criticism of Maoism after Mao
Following the death of Mao in September 1976 and the coup d'état against the radical Gang of Four a month later, Chen became increasingly active in the country's political life. He and General Wang Zhen petitioned Party chairman Hua Guofeng to rehabilitate Deng Xiaoping at the March 1977 CPC CC Work Conference, but were turned down. After Deng was rehabilitated later that year, Chen led the attack on the Maoist era at the November–December 1978 CPC CC Work Conference, raising the sensitive "six issues": the purges of Bo Yibo, Tao Zhu, Wang Heshou and Peng Dehuai; the 1976 Tiananmen Incident; and, Kang Sheng's errors. Chen raised the six issues in order to undermine Hua and his leftist supporters. Chen's intervention tipped the balance in favor of movement toward an open repudiation of the Cultural Revolution and Deng Xiaoping's promotion, in December 1978, to de facto head of the regime. Chen laid the basis for Deng's "reform and opening" program.
In July 1979, Chen Yun was named head (and Li Xiannian deputy head) of the new national Economic and Financial Commission staffed with his own allies and conservative economic planners. In April and July of that year he made further provocative statements in internal Party meetings, although their authenticity was denied (in an equivocal manner) by official spokesmen. In these Chen deplored China's lack of economic progress and the people's loss of confidence in the Party. In April he criticized the luxurious life of Party leaders (including himself), and said if he had known in the period before Liberation what the past ten-some years would be like (that is, the Cultural Revolution period), he would have defected to Chiang Kai-shek. He deplored Mao's dictatorial ways and implied, although not very strongly, that the Party should take a milder line against dissidents. If "Lin Biao and the Gang of Four; that is, the radical leftists" had been able to assure the people food and clothing, he said, they would not have been so easy to overthrow.
In July Chen developed these themes in the course of another rambling exposition (which also included some sarcastic observations on the late Chairman's taste in literature). Chen said: "We say the old dynasties and the KMT 'ruled' the country, but talk instead of the 'leadership' of the Communist Party. But the Party is in fact a ruling party, and if it wishes to keep its position it must also keep the support of the people. It should not float above the masses but should live among them as their servants. Both the welfare of the people and the Party's ruling position require that the Party shrink the distance between itself and the people." The old dynasties, Chen said, knew the value of a "policy of yielding", of retreating from untenable positions. The Party has to be able to step back from its past practices: in economy, culture, education, science, and ideology. Without compromising the basic principle of socialism, Chen believed that the Party must accommodate, for the time being, co-existence with aspects of capitalism. But all of this, Chen added, must be done carefully: otherwise China would be in danger of abandoning socialism and restoring capitalism. These pronouncements presaged the major reorientation of Chinese communism in the reform movement.
Role in promoting China's economic reform
Though Deng Xiaoping is credited as the architect of modern China's economic reforms, Chen Yun contributed much to the strategy adopted by Deng, and Chen was more directly involved in the details of its planning and construction. A key feature of the reform was to use the market to allocate resources, within the scope of an overall plan. The reforms of the early 1980s were, in effect, the implementation, finally, of the program Chen had outlined in the mid-1950s. Chen called this the "birdcage economy". According to Chen, "the cage is the plan, and it may be large or small. But within the cage the bird [the economy] is free to fly as he wishes."
In 1981 a rival "Financial and Economic Leading Group" was established under Zhao Ziyang and staffed by a more balanced mix of economic planners. In 1982 Chen Yun, who was 77 years old, resigned from the Politburo and Central Committee and from his active administration positions. He served as Chairman of the new Central Advisory Commission, a temporary institution set up to provide a place for the surviving leadership of the founding generation, to give them a graceful way to step aside in favor of younger minds while also remaining at least marginally involved in public affairs.
During the 1980s Chen did in fact remain very much involved in policy discussions. He was increasingly disenchanted with the direction the reforms were taking. In 1982 he was among those grumbling about "spiritual pollution" (an "Anti-Spiritual Pollution Campaign" was organised in late 1983), as the sense of freedom spread from economics into China's social cultural, and threatened China's political status quo. Chen's philosophical rupture with Deng Xiaoping became permanent around 1984, when the CCP began to apply the kind of market reforms that had been so successful in agriculture to urban areas and the industrial sector.
Late opponent of reform
Chen was not, in principle, opposed to the scope of Deng's reforms: China's economic policy had effectively frozen consumer prices for decades, to the point that prices in China no longer had much relationship to the relative value of resources, goods, or services. Chen did object to the way in which the urban reforms were carried out. The immediate consequence of Deng's price reform was a sudden and massive inflation, unprecedented in the experience of the younger generation and particularly frightening to older folks who could still remember the rampant inflation in the last years of the Nationalist regime. The increasing circulation of money in the economy, together with a hybrid system in which those in official position or with official connections were particularly well-placed to take advantage of the new opportunities to make a profit, encouraged official corruption. The government's first response to inflation was to issue bonuses to workers in state-owned enterprises, to help make up for the price increases. Chen Yun argued that, if there were to be such bonuses, they should be gauged to increased productivity. In practice these bonuses were universal throughout the state sector, and had the same economic effect as if the government had simply printed more money. Because Chinese farmers were not eligible for bonuses (since they were not technically state employees), China's agricultural sector, which had prospered in the first stage of the reform, was especially damaged by inflation.
Chen's theory had been that the market should supplement the plan. In the context of radical Maoism this made him seem like a social democratic proponent of market socialism. It turned out, however, that Chen meant exactly what he had said. He was much less enthusiastic about the market than Deng Xiaoping and Deng's younger colleagues. Although in his "secret" pronouncements of 1979 Chen had shown an unusual personal disdain for Mao, he also indicated he shared the late Chairman's worries that China would abandon socialism and revert to capitalism.
During the 1980s Chen emerged as the main figure among the more hard-line opponents of reform. He supported the vicious campaign in the early 1980s against the "three kinds of people", a general purge of all those who had been identified with radical factions during the Cultural Revolution. He made common cause with conservatives among other Party elders. During the reform era Chen refused to meet with foreigners. Chen never visited the new Special Economic Zones. In a memorial tribute to Li Xiannian, an old colleague from the economic system (and, like Chen, one of the few real proletarians among the first generation of Party leaders), Chen stated that he was not necessarily opposed to everything about the Special Economic Zones. While Chen became the moral leader of the conservative opposition to Deng Xiaoping, he did not challenge Deng's personal primacy as head of regime.
Although Zhao Ziyang's promotion of political and economic reform made Zhao one of Chen's main political rivals, Chen was one of the Party elders active in the 1980s who Zhao respected most. In Zhao's autobiography, Chen was one of the few elders who Zhao referred to regularly as a "comrade". Before implementing new policies, Zhao made a habit of visiting Chen, in order to solicit Chen's advice and attempt to gain Chen's approval. In the event that Zhao failed to gain Chen's approval, Zhao would then normally attempt to fall back on the favor of Deng Xiaoping in order to promote reforms.
In 1989 Chen was among the Party elders responsible for making the key decisions concerning the student-led Tiananmen Square protests. There is no evidence that Chen indulged in diatribes against the students or actively advocated their violent repression. While Chen was opposed to the violent suppression of the students, he did give his support to the military once the action had begun. Chen agreed that Zhao Ziyang should be replaced as the formal head of the Party, and he endorsed Li Xiannian's nomination of Jiang Zemin as the new Party General Secretary.
Chen Yun was known for his conservatism, especially in his last years, but the general Chinese population held mixed feelings about him. He was admired, despite his political stands, because he was not considered corrupt. Chen's political perspective is generally viewed as liberal until about 1980, but conservative after about 1984. Although it could be argued that his opposition to radicalism, be it Maoism or neoliberalism, represented a consistent conservative position similar to other paleo-left politicians like the British politician Peter Shore or the French politician Jean-Pierre Chevènement.
Chen's criticism of Deng's economic reforms was influential within the Communist Party, and was reflected in the policies of China's leaders after Deng. Chen's theories supported the efforts of Jiang Zemin and Hu Jintao to use state power to provide boundaries for the operation of the market, and to mediate the damage that capitalism can do to those who find it difficult to benefit from the free market. Chen's notion of the CCP as a "ruling party" is central to the redefinition of the role of the Party in Jiang Zemin's Three Represents. In 2005, on the occasion of the hundredth anniversary of Chen's birth, the Party press published, over the course of several weeks, the proceedings of a symposium discussing Chen's contributions to CCP history, theory and practice.
Although Chen was out of favor with the Mao regime and ultimately opposed to Deng's line, Chen was not a victim of public humiliation or abuse. One reason for Chen's ability to escape political persecution, especially in Mao's time, was his lack of will or ability to challenge the top leadership (one of Deng's merits was that he did not subject his defeated critics to public abuse). Whatever the wisdom of his substantive positions, Chen consistently appeared to act on principle rather than for personal advantage: perhaps another reason he could keep his influence even while excluded from the inner circles of decision-making. Chen showed little of the ambition, opportunism, or freedom of scruple that is often observed in those who rise to the top in politics, whether in China or abroad.
His son, Chen Yuan, served as the Governor of the China Development Bank, and later became a Vice-Chairman of the Chinese People's Political Consultative Conference.