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Two years after the death of Mao Zedong in 1976, it became apparent

to many of China's leaders that economic reform was necessary. During his

tenure as China's premier, Mao had encouraged social movements such as the

Great Leap Forward and the Cultural Revolution which had had as their bases

ideologies such as serving the people and maintaining the class struggle.

By 1978 "Chinese leaders were searching for a solution to serious economic

problems produced by Hua Guofeng, the man who had succeeded Mao Zedong as

CCP leader after Mao's death" (Shirk 35). Hua had demonstrated a desire to

continue the ideologically based movements of Mao. Unfortunately, these

movements had left China in a state where "agriculture was stagnant,

industrial production was low, and the people's living standards had not

increased in twenty years" (Nathan 200). This last area was particularly

troubling. While "the gross output value of industry and agriculture

increased by 810 percent and national income grew by 420 percent [between

1952 and 1980] ... average individual income increased by only 100 percent"

(Ma Hong quoted in Shirk 28). However, attempts at economic reform in

China were introduced not only due to some kind of generosity on the part

of the Chinese Communist Party to increase the populace's living standards.

It had become clear to members of the CCP that economic reform would

fulfill a political purpose as well since the party felt, properly it would

seem, that it had suffered a loss of support. As Susan L. Shirk describes

the situation in The Political Logic of Economic Reform in China,

restoring the CCP's prestige required improving

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