A Hungarian model for China? Sino-Hungarian relations in the era of economic reforms, 1979–89

Abstract

In the wake of the introduction of the Chinese reform and opening up policy in 1978, the Beijing leadership paid special attention to the Hungarian experience with its reform of the economic management system. This article argues that although it is hard to identify single measures within the complex system of Chinese economic reforms that can be labelled as Hungarian in their origins, reference to a reform community proved to be an effective tool for Beijing’s leaders to emerge from isolation in the socialist bloc, rally international support, and strengthen domestic legitimacy for their reform agendas throughout the 1980s.

Keywords:

• China
• Hungary
• Soviet bloc
• Sino-Soviet relations
• Sino-Hungarian relations
• reform

Acknowledgement

The author would like to thank OTKA (K 78484) and the Needham Research Institute Jing Brand Fellowship for their support of research into relations between the Soviet Bloc and China.

Notes

¹ See e.g. Peter Van Ness, ed., Market Reforms in Socialist Societies: Comparing China and Hungary (Boulder: Lynne Rienner Publishers, 1989); Keith Crane and K. C. Yeh, Economic Reform and the Military in Poland, Hungary and China (Santa Monica: RAND, 1990); Andrew G. Walder, ed., The Waning of the Communist State: Economic Origins of Political Decline in China and Hungary (Berkeley: University of California Press, 1995); Yanqi Tong, Transitions from State Socialism: Economic and Political Change in Hungary and China (Lanham: Rowman and Littlefield, 1997); Mária Csanádi, Self-Consuming Evolutions: A Model on the Structure, Self-Reproduction, Self-Destruction and Transformation of Party-State Systems Tested in Romania, Hungary and China (Budapest, Akadémiai Kiadó, 2006).

² Nicholas R. Lardy, Foreign Trade and Economic Reform in China, 1978–1990 (Cambridge: Cambridge University Press, 1992), 3; Peter Van Ness, ed. Market Reforms in Socialist Societies: Comparing China and Hungary (Boulder: Lynne Rienner Publishers, 1989).

³ Su Shaozhi, ‘Xiongyali jingji tizhi gaige zhong de ruogan lilun wenti’ [Some theoretical problems of the system of economic reform in Hungary], Jingji wenti tansuo [Inquiry into economic issues] 2 (1980): 1–9.

⁴ Introductory visits by the new Chinese ambassador. Budapest, 12 April 1979. Hungarian National Archives (Magyar Nemzeti Levéltár Országos Levéltára, hereafter: HNA) XIX-J-1-j Kína 78–1 002744/3/1979; Budapest, 17 April 1979. HNA XIX-J-1-j Kína 78–1 002744/4/1979.

⁵ Cypher telegrams from the Hungarian Embassy in Beijing to the Hungarian MFA: Chinese enquiries about the Hungarian system of economic management. Beijing, 30 August 1979 – 3 December 1979. HNA XIX-J-1-j Kína 78–5 004792/1–6/1979.

⁶ Report of Árpádné Páll, deputy head of MTI International Department: Report on visit of the New China [News Agency] delegation. Budapest, 15 August 1979. HNA XIX-J-1-j Kína 78–8 004830/1979.

⁷ See: Ji Jing, ‘Xiongyali jingji guanli tizhi de gaige’ [Reform of the Hungarian economic management system], Jingji guanli [Economic Management Journal] 6 (1979): 52–6.

⁸ Du Lihui and Wei Yunlang, ‘Xiongyali de jiage zhidu he jiage diaozheng’ [Hungary’s reform of the price system and price adjustment], Jingji guanli [Economic Management Journal] 11 (1979): 59, 60–1.

⁹ MFA, 4th Territorial Department, László Bulyovszky’s report: Chinese enquiry about the Hungarian system of economic management. Budapest, 12 November 1979. HNA XIX-J-1-j Kína 78–5 004792/3/1979.

¹⁰ HSWP CC Resolution, 6 March 1979. HNA M-KS 288. f. 5/767/1979.

¹¹ As the Hungarians never heard of Huang, they suspected he was from another ‘organisation.’ Memoirs of Barna Tálas. Manuscript. Courtesy of Barna Tálas.

¹² Ibid.

¹³ Ambassador Róbert Ribánszki’s cable: Official Chinese enquiry about our experiences of economic management. Beijing, 22 October 1979. HNA XIX-J-1-j Kína 78–5 004792/1/1979.

¹⁴ Yu Guangyuan, ‘Suggestions on China’s Economic Restructuring,’ in Chinese Economists on Economic Reform – Collected Works of Yu Guangyuan. ed. China Development Research Foundation (London: Routledge, 2014), 30.

¹⁵ Beijing Review, 6 April 1979, 3–4, quoted by Jonathan D. Pollack: ‘The Opening to America,’ in The Cambridge History of China (General Editors: Denis Twitchett and John K. Fairbank). vol. 15, The People’s Republic, part 2, ‘Revolutions within the Chinese Revolution, 1966–1982,’ ed. by Roderick MacFarquhar and John K. Fairbank (Cambridge: Cambridge University Press, 1991), 402–72.

¹⁶ On the process of Sino-Soviet normalisation see: Péter Vámos, ‘“Only a Handshake but no Embrace”: Sino-Soviet Normalisation in the 1980s,’ in China Learns from the Soviet Union, 1949 – Present, ed. Thomas P. Bernstein and Hua-yu Li (Lanham: Lexington Books, 2010), 79–104.

¹⁷ The phrase ‘fraternal parties’ was used for the ruling parties in Bulgaria, Czechoslovakia, the GDR, Hungary, Poland (and Romania with reservations) in Europe, plus Mongolia, Vietnam, and Cuba. These parties were part of the close coordination mechanism within the Soviet bloc.

¹⁸ Yu Guangyuan, et al., Xiongyali jingji tizhi kaocha baogao [Survey report on the Hungarian economic system] (Beijing: Zhongguo shehui kexue chubanshe, 1981), 215.

¹⁹ Yu et al., Xiongyali jingji tizhi kaocha baogao. The Hungarians obtained a copy of the book from the Soviet embassy in Beijing. Hungarian ambassador’s cable. Beijing, 24 June 1982. HNA XIX-J-1-j-Kína-504 004530/1982.

²⁰ See, e.g.: Su Shaozhi, ‘Shilun Xiongyali jingji tizhi gaige’ [On Hungarian economic reforms], Shijie jingji wenhui [World economic papers) 1 (1983): 13–24.

²¹ Hungarian MFA IV. Territorial Department, China Desk report (reporter: György Újlaki): The introduction and evaluation of the report by the group of Chinese economists who visited Hungary in 1979. Budapest, 6 April 1982. HNA XIX-J-1-j-Kína-51 001232/1/1982.

²² The Hungarian ambassador’s cable to the Hungarian MFA. Beijing, 23 August 1985. HNA XIX-J-1-j-Kína-50 004238/1985.

²³ Nina Halpern, ‘Learning from Abroad: Chinese Views of the East European Economic Experience, January 1977–June 1981,’ Modern China 11, no. 1 (1985): 77–109.

²⁴ Ibid., 96–8.

²⁵ Deng Xiaoping's Speech at the CPC National Conference, Beijing, 18–23 September 1985. Peking Review, 39/1985, 30 September 1985, 15.

²⁶ Peking Review, 39/1985, 30 September 1985, 19.

²⁷ Yu Guangyuan, ‘Suggestions on China’s Economic Restructuring,’ 26.

²⁸ Tribute to President Tito. Peking Review 1980/20, 19 May 1980, 5.

²⁹ Ibid., 36.

³⁰ ‘Hu Yaobang’s Speech – At the Second National Congress of the Scientific and Technical Association,’ Peking Review, 1980/15, 14 April 1980, 15.

³¹ David Shambaugh, ‘Introduction: The Evolving and Eclectic Modern Chinese State,’ in The Modern Chinese State, ed. David Shambaugh (Cambridge: Cambridge University Press, 2000), 1–14.

³² S. Messmann: ‘Economic Legislation in China,’ in Trends of Economic Development in East Asia, ed. Wolfgang Klenner (Berlin: Springer, 1989), 435.

³³ Peking Review 1980/20, 19 May 1980, 4.

³⁴ Ibid.

³⁵ Peking Review 1980/20, 19 May 1980, 5.

³⁶ Ambassador Mátyás Szűrös’s cable. Moscow, 19 December 1979. HNA XIX-J-1-j-Kína-5–004792/10–1979.

³⁷ Gilbert Rozman, The Chinese Debate about Soviet Socialism, 1978–1985 (Princeton University Press, 1987), 60.

³⁸ Yu Guangyuan, ‘Suggestions on China’s Economic Restructuring,’ 33–4.

³⁹ Cypher telegram 106 by ‘Jász’. Beijing, 13 April 1988. Állambiztonsági Szolgálatok Történeti Levéltára (Historical Archives of the Hungarian State Security, hereafter: HAHSS) 1. 11. 4. S – II/2/1988: 35. About the Chinese study of reforms introduced by socialist countries. 28 April 1988. HAHSS 1. 11. 4. S – II/2/1988: 71–69 (Translation from Russian. For the Russian original see: Spravka: Ob izuchenii Kitaem reform, sovershaemykh v socialistyicheskykh stranakh. HAHSS 1. 11. 4. S – II/2/1988: 68–66.

⁴⁰ Alyson J. K. Bailes, ‘China and Eastern Europe: A Judgment on the “Socialist Community”,’ The Pacific Review 3, no. 3 (1990): 228.

⁴¹ Ambassador László Iván’s report (reporter: Sándor Kusai): The Chinese public media on socialist countries (September 1986 – February 1987). Beijing, 20 February 1987. HNA XIX-J-1-k-Kína-8–3067-1987.

⁴² Su Shaozhi, ‘Xiongyali jingji tizhi gaige zhong de ruogan lilun wenti’ [Some theoretical problems of the Hungarian reform of economic management] Jingji wenti tansuo [Inquiry into economic problems] 2 (1980): 1–9.

⁴³ Su Shaozhi, ‘A Chinese View on the Reform of the Economic Mechanism in Hungary: A Comment,’ in Van Ness, Market Reforms in Socialist Societies, 208.

⁴⁴ For a detailed analysis of Chinese writings on the Soviet Union from first years of the reform era see: Rozman, The Chinese Debate.

⁴⁵ Ambassador Róbert Ribánszki’s cable. Beijing, 17 February 1981. HNA XIX-J-1-j-Kína-22 001658/1981.

⁴⁶ The phrase, derived from the Russian word for China (‘Kitai’), refers to, strictly speaking, a series of meetings on China held interchangeably in the different capitals of the Soviet bloc between 1967 and 1985. Participants were representatives from the party central committee international departments of ‘fraternal’ parties. But broadly speaking, the phrase also covers the whole coordination process of China policies of the Soviet bloc during the second half of the cold war, including economic and trade relations, at ‘economic Interkits’, cultural contacts, and China-related research at the meetings of sinologists. See: James G. Hershberg et al., The Interkit Story. A Window into the Final Decades of the Sino-Soviet Relationship (Washington, DC: Woodrow Wilson International Centre for Scholars, Cold War International History Project, 2011). Working Paper No. 63. http://www.wilsoncenter.org/publication/the-interkit-story (accessed November 29, 2017).

⁴⁷ Report of Tamás G. Gál, Budapest, 24 June 1982. HNA XIX-J-1-j-Kína-I-19 002810/1982.

⁴⁸ 15 December 1986. (No title) Secret telegram from ‘Jász’ (Agent’s codename in Beijing): On the relations between China and the socialist countries in 1986. Historical Archives of Hungarian State Security (hereafter, HAHSS) 1. 11. 4. S-II/2/86/4.

⁴⁹ Ambassador László Iván’s cable, Beijing, 30 March 1983. HNA XIX-J-1-j-Kína-145 002379/1983.

⁵⁰ Head of Department Ferenc Szabó’s note: Soviet diplomat on Sino-Soviet consultations. Budapest, 30 May 1983. HNA XIX-J-1-j-Kína-003622/1983.

⁵¹ Report of the delegation of Hungarian social scientists to China. Budapest, 2 July 1982. HNA XIX-J-1-j-Kína-51–002291/6/1982.

⁵² Ambassador Mátyás Szűrös’s cable, Moscow, 7 July 1982. HNA XIX-J-1-j-Kína-103 004774/1982.

⁵³ Ambassador Mátyás Szűrös’s cable. Moscow, 25 May 1982. HNA XIX-J-1-j-Kína-103 0024/7/1982.

⁵⁴ Resolution of the HSWP CC, Budapest, 26 October 1982. HNA M-KS 288. f. 5/865/1982.

⁵⁵ Head of Department Ferenc Szabó’s report on his meeting with councillor Kokeiev of the Soviet embassy in Budapest: Soviet diplomat’s briefing on evaluations related to China. Budapest, 31 January 1981. HNA XIX-J-1-j-Kína-57 001088/1981.

⁵⁶ Ambassador László Iván’s cable. Beijing, 24 June 1983. HNA XIX-J-1-j-Kína-135 002652/6/1983.

⁵⁷ Head of HSWP CC International Department Géza Kótai’s submission of the Protocol of the China-Consultation of representatives of CC International Departments of the Ten Fraternal Parties Held on 6–7 December 1983 in Prague. Budapest, 27 December 1983. HNA M-KS 288 f. 32. cs. 110/1983 ő.e. 384–389.

⁵⁸ Head of HSWP CC International Department Géza Kótai’s report on the Consultations of the CC International Departments of the Fraternal Parties of Ten Socialist Countries. Budapest, 14 December 1983. HNA M-KS 288 f. 32. cs. 110/1983 ő.e. 631–638.

⁵⁹ Ministry of the Interior, III/II. Department: Deputy Head of Department Police Major General Dr. Miklós Rédei’s report: Information on China. Budapest, 30 September 1985. HAHSS 1. 11. 4. S-II/2/85.

^{60 ’}Li Peng zai yanqing Xiongyali buzhang huiyi fuzhuxi Maeryayi shi shuo: ZhongXiong liangguo jianshe shehuizhuyi zongmubiao shi yizhide’ [Li Peng says at reception for Vice-Chairman of Hungarian Council of Ministers Marjai: China and Hungary share the overall goal of building socialism], Renmin Ribao, 21 August 1984.

⁶¹ Zhao Ziyang huijian Maeryayi shi xiwang tebie zhuyi fazhan ZhongXiong jingji jishu hezuo’ [Zhao Ziyang meets Marjai and hopes to pay special attention to developing Sino-Hungarian economic and technological cooperation], Renmin Ribao, 25 August 1984.

⁶² János Kornai and Zsuzsa Dániel, ‘The Chinese Economic Reform – As seen by Hungarian Economists (Marginal Notes to our Travel Diary),’ Acta Oeconomica 36, no. 3/4 (1986): 289–305.

⁶³ Head of Department Bálint Gál’s report: ‘Consultation in Moscow on China, Indochina, and Korea,’ Budapest, December 1984. HNA XIX-J-1-j-SZU-144–006143–1984 (135. d.).

⁶⁴ ‘The Present State of Sino-Hungarian Relations’, Budapest, August 1985. HNA XIX-J-1-j-Kína-10 002023/9.

⁶⁵ ‘Chinese Evaluation of the HSWP General Secretary’s Visit,’ HAHSS, 1.11.4, S-II/2/87, 229.

⁶⁶ ‘Meeting with the Chinese Embassy’s Leading Diplomats,’ 30 October 1987, HAHSS, 1.11.4, S-II/2/87, 245.

⁶⁷ Cang Lide, ‘Deng Xiaoping huijian Kadaer shi shuo: yao tixian shehuizhuyi youyuexing jiu yao gaige’ [Deng Xiaoping meets Kádár and says: to reflect the superiority of socialism, it is necessary to reform], Renmin Ribao, 14 October 1987. Ailiyashi Beila (Éliás, Béla), ‘Zhongguo zai zhengque daolu shang qianjin’ [China is on the right path], Renmin Ribao, 29 October 1987.

⁶⁸ Chinese views on Hungarian Economic Reforms and Sino-Hungarian Trade Relations. N.D. (late 1987) HAHSS 1. 11. 4. S-II/2/87, 32–42.

⁶⁹ Nicholas R. Lardy, Foreign Trade and Economic Reform in China, 1978–1990 (Cambridge: Cambridge University Press, 1992), 12.

⁷⁰ Hungarian MFA 4th Territorial Department: The State of Hungarian-Chinese exchange of goods. Budapest, 28 October 1982. HNA XIX-J-1-j Kína 78–57-006148/1982.

⁷¹ Hungarian ambassador in Berlin Szalai’s cypher telegram: On the transformation of Chinese economy. Berlin, 7 January 1980. HNA XIX-J-1-j Kína 78–50 00244/1981.

⁷² Ambassador Róbert Ribánszki’s cable: China’s economic problems and the question of Hungarian-Chinese trade relations. Beijing, 9 March 1981. HNA XIX-J-1-j Kína 78–50 001931/1/1981.

⁷³ Ambassador Róbert Ribánszki’s report (reporter: Dr. Zsuzsa Mészáros): A brief review of Chinese publications on Hungarian agriculture. Beijing, 22 March 1980. HNA XIX-J-1-j Kína 78–55 002712/1980.

⁷⁴ Ambassador Róbert Ribánszki’s report (reporter: Dr. Zsuzsa Mészáros): On Chinese agriculture. In appendix: Hungarian agricultural machinery and equipment in China. Beijing, 13 November 1980. HNA XIX-J-1-j Kína 78–55 006671/1980.

⁷⁵ ‘Chinese and Japanese Diplomats on Foreign Political Issues,’ 18 July 1988, HAHSS 1. 11. 4. S-II/2/88, 27–8.

⁷⁶ ibid.

⁷⁷ Mária Csanádi, Self-Consuming Evolutions.

⁷⁸ Ambassador Iván Németh (reporters: Sándor Mészáros and Sándor Kusai), ‘The Evaluation of Hungarian Political Processes in China,’ 21 February 1989, HNA XIX-J-1-j-Kína-1,2–0073/4–1989.

⁷⁹ Su Shaozhi, ‘A Chinese View on the Reform of the Economic Mechanism in Hungary: A Comment,’ in Peter Van Ness, Market Reforms, 210.