From economic shipwreck to global economic player: few people in the mid-1960s could have predicted that this would be China’s trajectory over the subsequent six decades. It was also one of the most important developments in international relations in the late twentieth century.

The usual story of how this occurred goes something like the following. After Mao Zedong’s death in 1976, the ousting of the Gang of Four, and Deng Xiaoping’s rise to power, China’s Communist leaders decided upon a radical shift in the country’s economic direction. Recognizing Maoism’s economic failures, the argument goes, Deng progressively started introducing elements of capitalism into China and steadily opened the country to a world economy in which trade liberalization was gathering apace. From that point on, increasing scope was given to markets to work their magic—provided that everyone understood that the CCP’s monopoly of power was never questioned: ergo, the 1989 Tiananmen Square massacre.

Like many popular narratives about the changes that occurred in China between the late-1960s and mid-1980s, this tale contains some truth. In The Great Transformation: China’s Road from Revolution to Reform, however, the historians Odd Arne Westad and Chen Jian present a more nuanced and more compelling story, one relevant to the vexed issue of how America should deal with today’s China.

Nothing is Inevitable

According to Westad and Chen, China’s economic transformation was a far more complicated process during the period they cover than many historians or commentators realize. Many of its roots, they argue, precede the post-Mao era. Westad and Chen also stress the role of non-economic forces in shaping events and the part played by specific institutional players. At different points, they show that China could have wandered down other economic paths and become a different society from what it is today.

The lens through which Westad and Chen present their analysis comes from the book from which they also draw their title. In his 1944 book The Great Transformation: The Political and Economic Origins of Our Time, the economic sociologist Karl Polanyi argued that there was nothing inevitable about capitalism’s emergence in Europe. Instead, Polanyi maintained that multiple social, cultural, and political forces were at work, and, at various points, European economies could have developed in other directions.

This is the paradigm through which Westad and Chen structure their account of how “politics and society combined with markets and capital to produce China’s great transformation, the journey from Maoist socialism in the 1960s to incipient capitalism in the 1980s.” They do not dispute that economic policy choices, once made, have predictable effects. Even so, Westad and Chen maintain that the startling developments experienced by China during this period reflected “radical political change at the top” but also the choices of many “people from all walks of life” to break “free from the assumptions that had governed their lives before and during Mao’s Cultural Revolution.”

Mao himself looms as a central figure throughout this story. Whether as a radical intent upon remaking China along the lines of his personal interpretation of Marx or as someone increasingly convinced that the Soviet Union was China’s main foreign adversary, Mao’s shadow is of such consequence that even someone as independent-minded as Deng could not entirely escape its influence long after Mao’s death.

Yet for all Mao’s sway upon China, Westad and Chen emphasize the enormous fluidity marking Chinese society in the 1960s and 1970s. Some of this reflected the response of CCP elites to changes in Mao’s priorities, but also Mao’s own need to react to changes in international relations as well as his efforts to manage the competition between the CCP’s two factions.

One faction was a highly ideologically driven “Left.” Empowered by the Cultural Revolution, it sought to create a truly socialist society purged of any trace of pre-Mao China. The other faction—a more pragmatic “Right”—was appalled by China’s economic backwardness and intent upon dragging the country out of the chaos into which the Red Guards had plunged it.

This division should not be oversimplified. Some high-ranking CCP officials straddled both camps. Mao’s sympathies were heavily with the Left, but he was never its creature. Mao always kept enough figures from the Right around to counterbalance the radicals.

This helped to keep Deng (purged twice by Mao) alive during the Cultural Revolution. Yet Deng was careful during his own rise to power to make some nods in the Left’s direction. Many CCP members, he recognized, genuinely embraced Mao’s radicalism and they could not be entirely ignored. Throwing the Left occasional bones also enabled Deng to ensure that he stayed in control. Even as he advanced an economic agenda quite different from the Left’s, Deng found it useful to keep the Right guessing.

Top-Down, Bottom-Up

Much of Westad and Chen’s analysis focuses on the rise and fall of different players within the CCP. The prospect of being purged or forced to endure self-criticism exercises became part of life for senior CCP officials as they fought out an internal party battle over China’s future.

Nevertheless, some figures were able to navigate upheaval and maintain some continuity. Mao’s close ally, Zhou Enlai, emerges as one example; he was able to modulate the flux as Mao grew older, more anxious, and paranoid.

Another steadying force was the People’s Liberation Army (PLA). Westad and Chen present it as putting limits on how far the Left—and even Mao himself—could go as they tried to destroy the past and their party rivals to build the socialist paradise. Deng was, the authors state, “without doubt hated by the Left.” One factor in Deng’s survival, however, was his closeness to senior PLA generals and their admiration of his contributions to the war against Japan and the subsequent civil war. This gave him some protection against Left hardliners like Mao’s fourth and final wife, Jiang Qing.

But the PLA had its own reasons to support the nation’s economic modernization. Economic growth, the generals understood, was the sine qua non for military power. The PLA subsequently grasped that China’s economic weakness put it at a decisive disadvantage vis-à-vis the Soviet Union and the United States.

Westad and Chen emphasize this geopolitical problem in their explanation of China’s rise to economic power. Beginning in the late 1950s, Mao became increasingly convinced that the Soviet Union—not America—was China’s primary threat. That complemented the realization “shared by many Chinese leaders of vastly different political orientations, that [Soviet-style] strict economic planning had not delivered enough growth for China back in the 1950s.” The same leaders also comprehended that Western countries were economically light-years ahead of Communist countries.

America and its allies (especially Japan) thus became of greater interest to some CCP officials: so much so that President Richard Nixon was pushing on an open door when he went to China in 1972. Geopolitical concerns thus created opportunities for figures like Deng to ponder alternatives to the economic mess bequeathed by central planning and the Cultural Revolution.

But there was another dynamic driving the change. Westad and Chen show that there were sporadic outbursts of unauthorized private economic activity from below in the late 1960s and 1970s. This often resulted from sheer necessity. Peasants were less worried about being denounced as “Rightists” when they were starving.

On other occasions, lower-level officials and technicians (some of whom traveled to America, Europe, and Japan in the 1970s) became disillusioned by the effects of a state-run economy. They also discovered, sometimes by accident, that incentives and the prospect of acquiring wealth produced tangible economic growth. In other words, China was not a nation lacking any experience whatsoever with private enterprise when policy changes began being introduced in the early 1980s. Westad and Chen even maintain that this “revolution from below did more to change China than any orders issued by the CCP.”

Culture, Constancy, and Change

Overshadowing the growth of conditions that created possibilities for market-orientated reforms was one principle to which all CCP leaders adhered: the CCP would neither share nor give up power. As Westad and Chen point out, Deng and others inclined to economic liberalization were quick to suppress any suggestion inside or outside the party that political pluralism—let alone democracy—was possible. While other forms of freedom achieved some expression alongside China’s limited embrace of economic liberty, there were strict constraints on what the CCP would tolerate. Indeed, since 2012, Xi Jinping has been cracking down on even those very partial freedoms.

Behind this, however, there was more than the typical Communist attitude towards power. Westad and Chen emphasize that a “preoccupation with the state and its functions … has been a hallmark of Chinese history for a very long time.” That state-centric outlook is what links imperial dynasties of the past and the CCP regime of the present. As David P. Goldman has written for Law & Liberty, understanding this political culture is central for appreciating how China differs from countries like America.

But that same culture need not mean that the economic changes that took off in the early 1980s will remain a one-off event. Westad and Chen observe, for instance, that China’s gradual and often muddled embrace of change during this period is not unprecedented. There have been occasions in the past, they note, when China experienced “eras of intense and unexpected change, very often brought on by the realization that even well-known truths would have to be looked at again or the integrity and capacity of the state would be threatened.”

Since late 2012, Xi Jinping has taken China in directions different from those of Deng. But China’s history of unanticipated disruptions provides some hope that many of the problems that plague Xi’s economic policies, so thoroughly documented by scholars like Zongyuan Zoe Liu, may eventually generate a willingness within the CCP’s senior ranks to contemplate other options. In the 1960s and 1970s, China was a byword for economic disaster. It was also more politically repressed compared to today. Yet substantial change eventually occurred.

One can, for instance, envisage Beijing starting to worry about Russia’s stability or India’s geopolitical ambitions, or deciding that China needs more investment from and trade with the world’s biggest economy: i.e., the United States. That could lead the Chinese leadership to conclude that Beijing must reset its relationship with Washington. If enough of the CCP elite decide that this is indispensable for the Chinese state’s security, prestige, and development, such a reconsideration might well bubble to the surface, even under Xi. When we add to this the fact that millions of Chinese—especially CCP members—are now accustomed to material prosperity, that creates a restraint and pressure upon CCP leaders that did not exist under Mao or the early years of Deng’s dominance.

Westad and Chen have no illusions about how much China has departed from the policies that unevenly prevailed between 1980 and 2012. Nor do they suggest that Xi will inevitably come undone under the weight of his policy contradictions. If an authoritarian regime can derive legitimacy from the dominant political culture and is willing to use all the means at its disposal to stay in power, it generally will.

That said, the transformation that reshaped China from the mid-1970s until the early 1980s underscores that we should not presume that the trajectory that Xi has set for his country is somehow immovable. The real question for America is whether its political leaders will have the vision to recognize if and when change occurs, let alone possess the imagination to respond appropriately.