Economics, not dogma as China Communists reach 80

By Paul Eckert

YAN'AN, China (Reuters): The red hammer-and-sickle flag still flutters over Mao Zedong's famed mountain redoubt of Yan'an, but it is construction cranes and huge billboards advertising mobile phone services which dominate the landscape.

As China's Communist Party marks its 80th anniversary on July 1 -- triumphantly, yet selectively, with a focus on wartime glory and economic successes of the past 20 years -- it is hard to tell what is actually communist about what is being celebrated.

This is true even in Yan'an, the cradle of the Chinese Communist revolution, a poor but proud plateau town that was the Communist base from 1937 to 1947 and where conservative opposition slowed the launch of 1980s economic reforms.

To be sure, more than a million Chinese visit this compact, mountain-rimmed city of 140,000 people each year to tour Mao's spartan cave and look at the writing desk where he composed about three-quarters of the essays in his Little Red Book.

And locals speak proudly of the "Yan'an spirit" -- the true grit that enabled Mao and his followers to bounce back from near annihilation in 1935 to take over China in 1949.

"I sum up the Yan'an spirit in two words: 'Bitter struggle'," said Zhang Jianru, the official in charge of propaganda for the city government and its party chapter.

But the slogans the visitor is more likely to hear are "economic construction" and "develop the west" -- China's new scheme to overcome poverty in its backward hinterland.

Yan'an's remoteness drew the Communists after their bold "Long March" across China in 1934-1935 to escape the extermination campaigns of the Nationalist government of Chiang Kai-shek.

The region's dire economic conditions, among the worst in China, made it fertile ground for Mao's revolution.

Less than a decade ago, it still took two full days to drive the 300 kilometer (185 miles) to Yan'an from Xi'an, the Shaanxi provincial capital famed for its terracotta warriors.

And local officials recount that in 1973, Premier Zhou Enlai revisited Yan'an for the first time since 1949 and broke down in tears to find old cadres mired in poverty. His visit resulted in a program of state subsidies for old revolutionary bases.

Now, the drive from Xi'an takes six hours and Yan'an has four flights a week to Beijing on sleek Firchild-Dornier passenger jets. The old airstrip on Yan'an's outskirts is now surrounded by offices and apartments and has been repainted as a main street.

Yan'an, while sleepy by big city standards, is undergoing a construction boom funded by a mixture of central government and local money. It has trendy Taiwan-style teahouses and cafes, night clubs with hostesses and dozens of small Internet cafes.

"Our young people can connect with the outside world for only about three yuan ($0.36) an hour," said Zhang.

"The Reds are very practical people," wrote American journalist Edgar Snow, who visited Mao and his troops in Yan'an and immortalized them in the 1937 book Red Star Over China.

Snow was referring to Mao's skill at tinkering with the pace of land reform and playing down Marxist dogma to fit local conditions and create space for the radical vision he would later impose at tremendous cost.

But the pragmatism of today's Communist leaders -- inspired by Mao's successor, the late economic reform architect Deng Xiaoping -- extends to every aspect of economic policy, even as they take an uncompromising line against political liberalization.

Seated before portraits of Marx, Engels, Lenin, Stalin, Mao and Deng, Cao Chunying described his trajectory from a youth sent to the countryside near Yan'an during the Cultural Revolution to his current posts as a local party leader and head of a 30 million yuan private construction firm with 600 workers.

"Economic construction is what we have to stress and it is the primary duty of party members," said Cao, when asked if Mao would not frown on the quasi-capitalist society China has become.

A promotional brochure produced by the city government shows that, increasingly, the business of Yan'an is business.

"We warmly welcome friends with lofty ideas from all walks of life, as in finance, industry, science and technology, etc. to come to this piece of hot land to invest, establish the industries and exploit here, thus to promote the city to become more prosperous in the new century," it said in English.

Communist Party chief Jiang Zemin, keen to join the pantheon of party thinkers after he retires in 2003, has put forth a theory designed to keep the nominally workers and peasants party relevant in the era of multinational firms and entrepreneurs.

Jiang's "Three Represents" theory, required party reading since it was unveiled last year, holds that the Communist Party represents the interests of advanced productive forces, advanced culture and a wide sector of the population.

Ask party members in Yan'an to identify their most pressing future concerns, however, and talk turns to the economy.

"My strongest hope is that the next party leader can build up the economy to make our country an economic superpower," said retired city cadre Shi Rui.

But Shi, 72, whose son has followed his footsteps into Yan'an party work, also said he was worried about corruption and about the huge gap between rich city dwellers and poor peasants -- some of the very factors that sparked Mao's rural revolution.

"Our agriculture was very backward, but after three generations of party leaders, farmers have food to eat and clothes to wear. However, this is not enough. It is far from enough," Shi said.