I’ve been dipping in and out of Ezra Vogel’s Deng Xiaoping and the Transformation of China, which is less a biography and more an authorized history of elite policymaking. The sections on the early reform era are particularly interesting, not least because they do not sound anything like what is going on in China today. In the very first years after the Third Plenum formalized the turn toward a market economy, there was a constant back-and-forth on the right direction for the economy.

Deng was gung-ho for growth, and viewed aggressive growth targets as a way of breaking free of the oppressive Maoist orthodoxy. But he shared power with Chen Yun, who was widely respected for correctly opposing Mao’s excesses in the Great Leap Forward, and who was consistently a voice for caution and realism. Deng of course ultimately won the argument, and Chen Yun today is often viewed, rather unfairly, as a planned economy stick-in-the-mud. But in fact he played a “necessary but annoying” role, as Vogel puts it, in keeping Deng’s ambitions tied to economic reality.

Reading the passages below, I could not help but wonder: who in China’s leadership is now playing Chen Yun’s role? Of course we know little of what is going on behind the scenes, but there are no obvious candidates. And wouldn’t China be better off if the overriding focus on highly politicized growth targets, which have become a form of orthodoxy themselves, was offset with some concern for enormous (if hidden) government deficits, rising strain in the financial system, and other economic imbalances? In short, couldn’t China today do with a bit more of the Chen Yun spirit?

Okay, editorializing over. Here is a history lesson from Vogel:

When Deng became preeminent leader in December 1978, Chen Yun, who had just rejoined the top leadership team, called attention to a potential crisis looming in the economy: visions of growth had gotten out of hand, the budget was out of balance, and commitments for purchasing technology from abroad had exceeded China’s foreign currency reserves, which were needed to pay for them. Among the leaders trying to provide direction for the economy in this new uncharted era, there were countless opinions about how to proceed. But as officials at the top began aggregating the various views, the different views tended to coalesce around two opposite poles. One group centered around the builders, who eagerly sought to introduce new factories and infrastructure projects; the other group, led by Chen Yun, the balancers, cautiously tried to ensure that resources were available for all the national priorities. …

Deng Xiaoping, like Hua Guofeng, was at heart a builder who wanted to see rapid progress. He admired project managers who under adverse circumstances had been able to complete important projects that provided visible signs of progress. Deng, who had little patience with detailed calculations, considered the cautious balancers necessary, but annoying. …

On December 10, 1978, during the meeting of the Northeast group at the Central Party Work Conference, Chen Yun voiced his concerns about the uncontrolled exuberance that had reached the highest level of party leaders. As if giving adult supervision to overly excited teenagers, Chen Yun laid out the problems in the ten-year economic vision. He spoke with authority, suggesting that he already knew he would be appointed to the Politburo. He said, “We should maintain steady progress and not get caught up in a headlong rush. . . . When materials are not available for a project, whether at the local or national level, it should not be launched.”

Before the Third Plenum, Deng Xiaoping had been fully supportive of the project managers, but after December 1978, when Chen Yun warned about the lack of careful planning, Deng threw his weight behind Chen. … Why did Deng shift course from supporting the builders to backing the balancers, led by Chen Yun? Deng recognized the importance of putting the economy on a solid base for the new era, and the summary economic data assembled in December for the past year reflected serious problems. At the time, there was only US$4 billion in foreign currency reserves and most of the foreign currency income from exports was already committed, although contracts had been signed to purchase over US$7 billion of foreign equipment. Even though the imbalances would seem infinitesimal when contrasted with the foreign trade figures a decade later, they loomed large enough to worry cautious officials who were accustomed to smaller amounts and who were frightened by the leverage that such debt might give the capitalist countries.

By March 1979, Chen Yun had collected more data, done more analysis, and was ready to systematically present his proposals for cutting back on the contracts to import foreign plants and for lowering the economic targets for the next several years. Some of his proposals, and even the terminology, were remarkably similar to the retrenchment policies that he had introduced to recover from the Great Leap Forward. Rather than use the term “retrenchment,” the term he used earlier, which would have sounded very negative, Chen Yun used the term “readjustment” (tiaozheng). …

The essence of Chen Yun’s approach to planning was balance: balance income and expenditures, loans and the ability to repay, and foreign currency income and expenditures. He also sought a balance between investment in consumer goods and producer goods, between heavy and light industry, and between industry and agriculture. In 1978, some 57 percent of China’s industrial output was from heavy industry and only 43 percent from light industry. Chen Yun, like many other officials, believed that China’s economy had been out of balance since 1958, with food and consumer goods sacrificed for more heavy industry than the people could bear. In 1980, under Chen Yun’s direction, heavy industry grew only 1.4 percent whereas light industry grew 18.4 percent; and in 1981 heavy industry declined by 4.7 percent whereas light industry grew 14.1 percent.

By the time Chen Yun returned to work in late 1980, the budget deficits had ballooned to become the largest since the Communists took over. The seriousness of the problem made Chen Yun more determined to clamp down and enabled him to gain support from other officials, including Deng. The deficit had grown not only due to the costs of the Vietnam War, but also because of the increase in procurement prices paid to the farmers for grain, the decline in agricultural taxes, and the costs of resettling people who had earlier been sent to the countryside and were now allowed to return to the cities. Moreover, the central government began allowing provinces and local enterprises to keep more of their own funds to stimulate local initiatives, a strategy that had reduced the total amount of taxes collected by the central government. The result was a great stimulus for many provinces, but Chen Yun considered the serious budget deficits alarming and potentially disastrous. …

In November 1980 China’s economic growth rate targets for 1981 were set at a much lower rate, 3.7 percent, and capital construction allocations were reduced from 55 billion yuan to 30 billion yuan. When there were complaints that such restraints would waste valuable time, Chen retorted, “How much time have we wasted since the Opium War? Over a hundred years. Why is it such a big thing to wait three years to move ahead?” What had most delayed China’s advances since 1949, he said, was leftist errors made while rashly pushing ahead. Chen Yun was allowed to take firm control over guiding the drafts for the Sixth Five-Year Plan (1981–1985) and over bringing the budget and deficit under control.