There is no doubt that the fall of the Berlin Wall in 1989 and the collapse of the Soviet Union in 1991 were the two most crucial global events in the second half of the 20th century. However, it is not clear how far-reaching these events were for social, economic and political changes that have occurred in places other than Europe and Russia. This article will attempt to analyze the impact of these events on domestic changes in China and in some other East Asian countries.

A PLANNED ECONOMY VS. A MARKET ECONOMY: THE END OF THE DEBATE FOR CHINA

The fall of the Berlin Wall and the breakup of the Soviet Union were rooted in an unsustainable system. However, the process that led to their collapse did not start until the problem of sustainability began to be explosive in the mid-1980s.

China started its strategy of reform and openness in the late 1970s – many years before the sweeping events in Berlin and the Soviet Union. Reform in China was basically driven by domestic factors and without much international experience to go on. There were heated debates over the reform strategy and target economic patterns in the 1980s and these even grew into a political struggle. Although it was obvious that the planned (command) economy was not sustainable and that the market should be introduced to coordinate some economic activities, the Chinese ruling elite and society were divided regarding the question whether the target economic system should be a planned economy with the market playing a complementary role or whether it should be a market economy with the complementary role of planning.

The fall of the Berlin Wall and the breakup of the Soviet Union put an end to these debates in China. The question of viability, changeability and sustainability of the planned economy that had remained open in the 1980s disappeared because of its collapse, and all arguments for maintaining a planned economy in China lost their credibility overnight. So it is not accidental that in 1992-1993 the planned economy was abandoned by the Chinese Communist Party and the market economy was introduced in the Party’s program and in the Chinese Constitution. The fundamental shift from a planned economy to a market economy was extraordinary because the ideology of the early 1990s, as a consequence of the tragic events in Beijing in 1989, was particularly hostile to the market economy, which was viewed as a Western capitalist economic system.

It is not surprising that the fall of the Berlin Wall and the collapse of the Soviet Union had such a far-reaching impact on economic reform in China: the Soviet Union had been a model for China in terms of systemic development, even though international relations between China and the Soviet Union practically broke off in the 1960s. The command economy that dominated in China between 1949 and 1978 was actually a copy of the Soviet command economy. The uncertainty over Mikhail Gorbachev’s reforms in Russia also affected Chinese reform in the 1980s. Thus, nothing could be more sweeping in Chinese mentality than the demise of its tutor, the Soviet Union.

Following the denunciation of the planned economy and the introduction of a market economy, China quickly abandoned the dual-track pricing system. In the mid 1990s, most commodity and service prices were determined solely by the market. Privatization started to spread, first from collectively-owned enterprises, then to small and medium-sized state-owned enterprises subordinate to counties and prefectures, and finally to large state-owned enterprises subordinate to higher levels. The ownership structure of the Chinese economy has changed fundamentally since the 1990s. Measured by output, the share of private sector GDP increased from 0.9 percent in 1978, to 24.2 percent in 1996 and to 65 percent in 2006. China cautiously opened itself to the outside world in the 1980s. In the 1990s, China began to integrate itself into the world economy and by the late 1990s it had completed negotiations with major economic powers on joining the World Trade Organization (WTO). After ascending to the WTO in 2002, China has integrated into the world economy much faster than any other country and has reaped many more benefits than most people could have imagined.

The introduction of a market economy in China was a milestone not only for its economic, but also political development. China had to look for its own path of development because the market economy ran counter to the Stalinist ideology and Stalinism was no longer a line to follow. Meanwhile, developed countries like the U.S., Great Britain and other Western European states were ideologically alien to China. It could not accept them as a model to follow, although China closely studied their experience and has assimilated certain merits of the Western economic system.

Today there is much discussion about the so-called Chinese development model. Some believe there is such a model, while others think it does not exist. One thing is clear: China’s path of development has increasingly acquired many specific features, which – to some extent – are a by-product of the collapse of the Berlin Wall and the Soviet Union.

THE END OF RADICALISM IN CHINESE POLITICAL REFORM

Whereas the impact of the fall of the Berlin Wall and the breakup of the Soviet Union on China’s economic development was absolutely clear, the outcome for its political development was quite obscure.

The debates about lessons from the Berlin and Moscow events for political reform in China involved two opposing sides. One side believed that the Soviet Union’s political system would not have collapsed had it not been for Gorbachev’s reforms. The other side thought that it collapsed just because Gorbachev’s reforms came too late and were handled badly. The voice of the former group was loud and dominating in the early 1990s, reinforced by the 1989 political turmoil in Beijing. However, the arguments of the latter group were also strong, although of a lower profile, particularly because China had already started to explore different forms of political reform in the late 1970s.

Political lessons common to the Soviet Union before 1992 and China before 1978 seem to be that, first, the two countries had no institutions for the succession of power and, second, power was totally concentrated in the hands of a single leader. In the early 1980s, Deng Xiaoping, the architect of the reform and opening-up policy in China, launched a program to institutionalize the transfer of power. He initiated mandatory retirement for those revolution veterans who had been in power for decades since the establishment of the People’s Republic of China in 1949. Young leaders began to emerge as candidates for high posts with the prospect of holding power in limited terms and handing it over to younger generations. The consequences of the Mao cult of personality in China were as tragic and painful as that of Stalin in the Soviet Union. One lesson from it was that Deng Xiaoping and his colleagues put great effort into building an institution of collective leadership. Power was to be shared by a team of leaders so that the influence of any single leader, whether good or bad, would be checked.

The hasty transfer of power from the dying Leonid Brezhnev to the dying Yury Andropov, then to the dying Konstantin Chernenko, then to a relatively young Mikhail Gorbachev who did not have much experience, reinforced China’s own bad succession experience under Mao. An institution that would ensure the succession of power thus became a top priority issue in China’s political reform agenda.

Since the late 1990s the world has been witnessing the achievements of the political reform effort in China. In 1997, a few Politburo Standing Committee members aged 70 retired and in 2002 most of the Politburo members in their 70s retired. The high posts were peacefully transferred to leaders of the younger generation. In 2007, two Politburo members who were over 70 retired, and four new members who were in their 50s and 60s joined the Committee. It is quite likely that by 2012 seven out of the nine incumbent Politburo members will retire. Thus the previously very uncertain issue of the succession of power in the Communist political system has become quite predictable in China.

Another important lesson was drawn from the fact that perestroika and glasnost were directed solely by Gorbachev, which meant that the success and failure of the reform depended on a single person. That was a frightening scenario for the Chinese. The fact that the entire Communist Party was apathetic when Gorbachev announced the dissolution of the Soviet Union and when Boris Yeltsin dissolved the Communist Party was especially shocking for the Chinese leaders who interpreted these events as that the Communist Party played no role in the political processes. They realized that there was an urgent need to dilute the concentration of power by a single leader and increase the participation of ordinary party members in decision-making. This became a primary issue for China, and since the 1990s there has been much more talk about intra-party democracy. Unfortunately, no concrete institution has been established so far to ensure this. This shows that the lessons of the collapse of the Soviet Union have not been fully drawn yet.

Another obscure political issue is how open the ruling party should be towards the state and society. In the 1980s, the main perception among the leadership was that the party was too much intertwined with the state; that it had become a substitute for the state and had degenerated into bureaucracy. Thus there was a need to separate the party from the state so that it politically led the state while the latter focused on administration and implementation. Radical efforts were taken to separate the party structure from the state structure in the 1980s. But the 1989 events in Beijing, together with the fall of the Berlin Wall and the dissolution of the Soviet Union, alarmed the Chinese leadership. One frequently referred perception by the Chinese about the collapse of the Soviet Union is that Gorbachev handed over too much power too quickly from the party to the state, which fundamentally and irreversibly weakened the party. With such a lesson in the minds of the Chinese, the once heated public discussion over separating the party from the state ended in the 1990s and the 2000s. The effort of separating the party from the state stopped. Moreover, it seems that since the 1990s there has been a tendency to strengthen the party’s supervising role over the state.

However, not all political reform measures taken by Gorbachev were perceived as mistakes in China. The Chinese leadership realized that some extent of openness in the party structure was needed. Bureaucratism in the Chinese Communist Party was as strong as it was in the Soviet Union. Thus the need for reform was equally urgent. Nevertheless, what exactly should be done is far from clear.

DEMOCRATIZATION IN SOUTH KOREA AND TAIWAN

The impact of the fall of the Berlin Wall and the collapse of the Soviet Union on domestic economic and political development was felt not only in China, but in other East Asian states, as well, such as South Korea and Taiwan. In these countries, the events in the Soviet Union and Eastern Europe mainly affected their political development. It was not accidental that democratization in South Korea and Taiwan started in the late 1980s and was practically completed in the 1990s. However, the way in which the events in the Soviet Union and Eastern Europe influenced the political development of South Korea and Taiwan differed from that of mainland China. In China, it was the ruling elite that drew serious lessons from the failure of its former comrades. In South Korea and Taiwan, it was the United States which, no longer tied up by pressure from the Soviet Union, encouraged or even imposed democratization on South Korea, Taiwan and its allies in East Asia.

During the Cold War, the United States would make alliances with any country or region that was against the Soviet Union, no matter how authoritarian a particular regime was. The U.S. would not intervene in the domestic affairs of its allies if the intervention would upset the rulers and thus drive its ally into the Soviet bloc. That was also the case with the Soviet Union. The Soviets did not mind becoming allies with those capitalist or feudalist states that were against the U.S. bloc, although ideologically capitalism and feudalism were condemned by the Soviet Union.

Once the pressure of the Cold War was alleviated, the U.S. had the opportunity to promote democracy in allied countries. In 1988, the military regime in South Korea held the first free presidential election since General Park Chung-Hee took power in a coup d’etat in 1961. In Taiwan, long-time dictator Chiang Ching-Kuo allowed an opposition party – the Democratic Progressive Party – in 1998. Restrictions over freedom of speech were lifted both in South Korea and Taiwan in the late 1980s. There was a change in the ruling party in South Korea in 1998 and Taiwan in 2000 as a result of free elections which marked a new stage of democratization in these countries. Naturally, there were other factors that promoted democratization processes in East Asia, primarily the push from the U.S. But this push would have been impossible without the fall of the Berlin Wall and the collapse of the Soviet Union.

A NEW POSSIBILITY

The fact that the Berlin Wall fell and the Soviet Union dissolved peacefully had and will continue to have a huge impact on politics in East Asia. Before these two events, few people could imagine that a regime change, dissolution of a state or reunification of a nation could be accomplished peacefully. All of prior history showed that regime change and the dissolution or mergence of states inevitably involved mass violence, bloodshed and killing. The peaceful collapse of the Berlin Wall and the Soviet Union wrote a promising new page in world history, especially for China and Korea, which face the pending problem of reunification.

Several wars in the Middle East and Central Asia show that it is much easier for violence to prevail than peace when different states face disputes. Therefore, the peaceful fall of the Berlin Wall and the Soviet Union set a genuinely precious example. It was fortunate that the Czech Republic and Slovakia had a peaceful divorce in the 1990s, following the peaceful reunification of Germany and the peaceful dissolution of the Soviet Union. But it was tragic that the former Yugoslavia did not follow this example. The breakup of Yugoslavia involved hundreds of thousands of deaths, as did the divorce between Pakistan and India in the 1940s when millions of people died.

It is not yet clear if the great legacy of the peaceful processes of the events in Berlin in 1989 and in the Soviet Union in 1991 has been fully taken in by China and South Korea. The Chinese Communist Party and its former enemy Kuo Ming Tang (the Nationalist Party) in Taiwan reached a high level of reconciliation in 2005 after decades of antagonism. This reconciliation greatly eased the tension across the Taiwan Strait. Also, North and South Korea began to engage with each other in the late 1990s. Although the reconciliation between the two Koreas is not comparable with that between mainland China and Taiwan, tensions on the Korean Peninsula have decreased greatly because of this engagement. The increasing possibility for peace in these two countries could partly be a result of their people learning the lessons of the peaceful fall of the Berlin Wall in 1989 and of the peaceful breakup the Soviet Union in 1991.

EASE OF TENSIONS IN EAST ASIA

The end of the Cold War, together with the ensuing domestic changes in East Asian countries, greatly improved international security in the region.

The early 1990s witnessed a third – since 1949 – wave of China establishing or restoring official ties with many countries, particularly with its Asian neighbors – South Korea, Vietnam, Singapore and Indonesia. China also established official relations with Saudi Arabia, Israel, South Africa and Namibia during this period. This new trend in foreign relations with various countries helped China improve international security. Without profound political changes in Berlin and Moscow in 1989-1991, establishing or restoring ties could not have been possible. For example, Vietnam had to end its aggression in Southeast Asia because of the collapse of its ally, the Soviet Union, which paved the way for the restoration of official ties between Vietnam and China. Similarly, due to the fall of the Soviet Union, North Korea – a member state in the Soviet bloc – lost its chance to invade South Korea, a member state in the U.S. bloc. The tension on the Korean Peninsula eased greatly, making it possible for China and South Korea to develop foreign relations.

Even relations between China and India have improved since the late 1980s when Gorbachev and the Chinese leadership began to seek normalization of their relations. Backed up by the Soviet Union, India had been antagonistic towards China for decades. After the Soviet Union pulled back its support for this tension, India and China began to engage with each other.

Yet a more far-reaching impact on international relations seems to be that the approach of dividing the world along ideological lines – communism, nationalism, liberalism, etc. – no longer prevails. The most powerful driving force in shaping international relations is now the promotion of economic interests through trade with different nations. This new approach has helped many East Asian states put aside their ideological differences and develop economic cooperation. If there is still tension caused by ideological reasons, its magnitude is not comparable with that which existed before.

Thus from a Chinese point of view, the fall of the Berlin Wall and the Soviet Union greatly improved international security. Whether the world is safer is another question. Newly emerging extremism might disrupt peace in the world. However, a world without the frenzied Cold War is surely a much safer place than a world with it.