In 1980, with fanfare and high hopes, Deng Xiaoping launched his ‘decade of reform and opening’ and foreign media, businessmen and politicians saw only blue skies. But Deng was unqualified to manage the transition to capitalism – as our media hopefully labeled it – and he resigned before decade’s end. Says Dongpin Han, a student at the time,

Official corruption had disrupted China’s economy. The government, facing bankruptcy, had printed more money in 1984 than in the previous thirty-five years combined. Prices of commodities, previously State-controlled and stable, exploded. Meat rose five hundred percent. My parents had saved two thousand yuan. They’d bought their first house for four hundred yuan then, overnight, their savings lost 90 percent of their value. My mother rushed to the store and bought two hundred feet of plain cloth. Her neighbor bought four hundred pounds of salt and another bought forty TV sets. They believed that war-era inflation had returned and their money would become worthless. People started publicly denouncing corrupt officials and their children’s promotion to high office. Beijing’s Consumer Price Index had jumped 30% in 1988 and salaried workers panicked when they could no longer afford staples. State-owned enterprises were pressured to cut costs. Mao’s iron rice bowl–job security and social benefits ranging from medical care to subsidized housing–were suddenly at risk”. 

Adds Orville Schell, "Deng’s Southern tour rammed Chinese society into reverse gear, stampeding the country into a form of unregulated capitalism that made the US and Europe seem almost socialist by comparison." Yale historian Jerome Meisnercommented, “though the economic gains were spectacular; the social results were calamitous”. Crime was rampant and, after doubling under Mao, life expectancy was falling. Deng’s efforts at market and price reform caused massive inflation.

 

Harvard’s Elizabeth Perry:

The Cultural Revolution left a significant mark on popular protests in post-Mao China. Repertoires of collective political action popularized during the Cultural Revolution—such as singing revolutionary songs, marches, rallies, and hunger strikes—had a great impact on the 1989 protest movement. The haunting specter of the Cultural Revolution also had a crucial impact on the Deng regime’s interpretation of—and thereby reaction to—the movement..

The bleak reality of growing socioeconomic disparity, environmental degradation, massive layoffs of workers in state-owned enterprises, evisceration of social protections, rampant official corruption, illicit appropriation of public property, and exploitation of rural migrant labor has led to the unraveling of the broad but fragile consensus regarding the direction and rationality of post-Mao reforms that dominated Chinese intellectual discussions of the 1980s.

Amid soaring inflation, widespread corruption and elite privilege, graduates had found themselves in the worst employment market since the War. Only those with political connections got hired, and then earned less than high school matriculants. Government subsidies and professors’ incomes were slashed and parents, students and faculty demanded⁠ ‘more money for education and higher pay for scholars’. Famed scholar Ding Shisun told an interviewer, “People ask me whether as Beijing University president I fear student protests? I tell them what I fear most is not having enough money,” and students in Tiananmen Square satirically offered to shine congressmens' shoes.

Deng’s withdrawal of Mao’s tuition subsidies crushed the dreams of millions, while his decision to maintain them for African students touched off race riots in Nanjing, where students rampaged through the Africans’ quarters. Beijing students carried banners ("No Offend Chinese Women,” "Kill the foreigners!”), screamed insults at Deng, and marched on Party leaders’ living quarters at Zhongnanhai.  

Workers echoed students’complaints. One explained that everyone in her industry had much less opportunity to participate within the system than in the 1970s, when meetings were called for every problem and people could raise opinions that today would result in their dismissal. By the Fall, State-owned companies had dumped millions of workers into an unprepared labor market, where inflation consumed their six months severance pay in six weeks.

Demands

When the deposed Hu Yaobang died suddenly in mid-April, demonstrators released their demands:

1. Reassess Hu Yaobang's merits and demerits;

2. Allow the people to run newspapers;

3. Increase educational funding and raise the pay of intellectuals;

4. Reevaluate the 1986 student movement and the opposition to bourgeois liberalization;

5. Make public the truth of the April 20, 1989, incident (when police allegedly beat student demonstrators);

6. Oppose corruption, oppose bureaucratism and severely punish official profiteering;

7. Report truthfully all the events from the death of Hu Yaobang to the student demonstrations in Tiananmen Square.

Ten days later, students and workers began massive demonstrations in Beijing and Shanghai, denouncing Deng, “It doesn’t matter if the cat is black or white, so long as the cat resigns”.

Part 2, What About the Workers? will be released soon.