Inner Mongolia is only an hour's flight from Peking, but it seems like another world. From the airplane one can see snaking through the rugged, blue-green mountains, the fabled Great Wall, for centuries the barrier separating China from the nomadic tribes to the north. On the other side of the mountains, just past the provincial capital of Huhehot, is the start of the Gobi Desert. Its jagged brown hills and endless flat prairie stretch into the horizon. Only near occasional clumps of trees, patches of green grazing land, and isolated lakes does one see signs of human habitation.

But this vast, rugged territory -- its eastern border abuts Manchuria, while in the west if reaches all the way to the remote province of Gansu -- is of immense strategic and economic importance to China. Its strategic value is the result of its long northern border with the People's Republic of Mongolia, also known as Outer Mongolia, whose government has for many years been a faithful client of the Soviet Union and which hosts three Russian divisions. Economically, Inner Mongolia is both a growing industrial center and, more significantly, produces much of the meat and milk needed to feed the population of north China.

For these reasons, the region's troubled and violent history during the Cultural Revolution of the late 1960s and the current efforts by the Chinese government to improve the situations are of vital importance not only to Inner Mongolia, but also to the entire People's Republic of China.

Of all China's provinces and autonomous regions, Inner Mongolia was one of those most severely affected by the chaos and turmoil of the Cultural Revolution. According to Canadian anthropologist Gervais Lavois, a leading Western specialist on the area at least 60,000 people were killed, injured, or imprisoned here during that time, and the social and political fabric of the regions was torn apart.

The disruption was particularly damaging to the relationship between the indigenous Mongols, who number about 2 million, and the ethnic Han majority, now about 18 million.

"In the Cultural Revolution," Mr. Lavois said in an interview in this frontier town, where he was doing research as part of a six-month study of Inner Mongolia, "there was a very strong movement against the Mongolian people. The radicals accused the Mongols of wanting to secede from China, and used an anti-ethnic movement as a lever to obtain bureaucratic power."

"Relations between Hans and Mongols were not good at that time," added Bu Ti Ke Chi, the ethnic Mongol vice-director of the Da bu Chi Commune in the grasslands north of Xilinhot. "Mongolian customs were seriously damaged. Mongolian children were forced to give up their language and learn Chinese. Our way of life was looked down on."

The economic policies of the Cultural Revolution only made the situation worse. In an effort to take away the Mongols' distinct identity, ultraleftist officials ordered the seminomadic herdsmen to give up raising animals and become farmers. The Mongols bitterly resented this intrusion into their traditional way of life. The result was that their efforts to grow grain under coercion were largely unsuccessful, while at the same time their age-old means of making a living was seriously disrupted.

Following the fall of the "gang of four" in 1976, the central government in Peking began to turn its attention to improving the situation in strategic border areas like Inner Mongolia and Tibet. Eager to enlist the support of national minorities for its modernization program and aware that minority disaffection in these regions could have dangerous consequences, Peking discarded the destructive policies of the Cultural Revolution.

In their place came a series of measures designed to give the mongols a large degree of cultural, political, and economic autonomy.

"Under the new policies toward national minorities," Bu Ti Ke Chi said, "written and spoken Mongolian is respected again. We now have the right to use Mongolian to teach our children in school."

In addition, traditional Mongolian cultural and social customs are gradually being revived. During a stay with a group of Mongol herdsmen in their felt-covered yurt in the grasslands, this reporter observed an impromptu session of songs and dances, all of which were Mongolian, with no traces of Han influence.

The Mongols are now allowed to follow their own customs in arranging marriages, and, in an effort to increase their numbers, have been exempted from China's strict marriage laws and birth-control campaigns.

When a young man and woman wish to wed, said an elderly herdsman sipping traditional Mongolian tea laced with butter and roasted grain, an elaborated and old-fashioned ceremony is now staged. The highlight comes when the bride and groom are given four sets of clothes -- one for each season -- and the two families then stage a horse race across the open steppes to celebrate.

Mongolian religion has also been given a new lease on life. In the old, predominantly Mongol part of Huhehot, government funds have been used to repari a 300-year-old mosque and support renewed religious activity. On a hill overlooking Xilinhot, an ancient Buddhist temple, destroyed by Red Guards during the Cultural Revolution, is being restored.

At the province's leading educational institution, Inner Mongolia University in Huhehot, plans have been drawn up to increase the number of Mongolian students and expand the number of classes dealing with Mongolian studies.

"Besides general educational goals," a university official said, "we have a special emphasis on promoting Mongolian culture." Consequently, courses on Mongolian history have been revived, along with a special center for research on the Mongolian language. At the moment, 25 percent of the students are Mongols. But the university plans to raise the total soon to 30 percent, and, eventually, to an even higher figure.

As part of the transformation of the province's political structure, the number of Mongol cadres or officials has increased substantially. At the county level, according to anthropologist Lavois, there is a 50-50 split as production brigades and teams, must cadres are Mongols, except in Handominated areas.

The Da Bu Chi Commune, for example has 13 cadres for its 1,700 people. All of them are ethnic Mongols. "The result is that our own nationality makes its own decisions," a commune member said.

Expanding local autonomy and boosting the number of Mongol cadres is crucial to the progress of the modernization program in the region, Mr. Lavois noted. "The government must have skilled people in remote areas. Although the population in Inner Mongolia has doubled in the past 20 years, many hans don't want to work in the grasslands as nomadic animal raisers. Others, sent here during the Cultural Revolution, want to return to their native provinces."

Indeed, the distaste of the Hans for Mongolian food, sanitary habits, and life styles is still intense, despite the many years Hans have lived in the region and despite the government's new pro-Mongol bias. The Mongol diet, which runs to dried cheese, clarified butter, dried mutton, and, on special occasions, fried camel humps has few devotees among the rice-eating Hans. Moreover, life on the range is repellent to most Hans, who prefer a more sedentary existence raising crops of working in urban areas.

The recent policy enunciated by Peking, according to Mr. Lavois, is designated to deal with this problem by replacing the existing Han intelligentsia with a new cadre of Mongol officials.

In addition, he noted, the provincial government, because of its role in the Cultural Revolution, hasn't commanded popular respect for 15 years. "so the authorities are using the policy of decentralization to give a lot of power to the local level in the hope of getting some form of government administration going again."

The expansion of local autonomy is most clearly visible in the economic sphere. The compulsory grain-growing of the Cultural Revolution has been abandoned. The mongols have returned to their traditional occupation -- raising animals.

At the Da Bu Chi Commune, four of the five production teams are engaged in animal husbandry. The fifth grows fodder for the herds of camel, sheep, horses, cattle, and goats which the mongol cowboys, dressed in loose-fitting the blue jackets, lead across the steppes.

Since the fall of the "gang of four" the members of this commune, like Mongols elsewhere in the province, have been permitted to raise their own animals. Commune leaders said 6,000 of their 50,000 animals are privately owned , with the herdsmen able to sell as many animals as they wish to the state or other individuals or keep them for their own use.

As a general rule, other sources said, each family can own five head per person. A family of eight, for instance, could own to 40 valuable head of cattle, horses, or camels.

These moves have helped to raise the living standards of the Mongol population, increase production of badly needed milk and meat, and, simultaneously, restore the prestige of the central government in the eyes of the herdsmen.

But the dramatic transformation now under way in Inner Mongolia has brought with it a host of difficulties, some of which threaten the modernization process before it has really begun.

For example, the lack of a developed infrastructure has slowed the government's plan to increase the number of grazing animals. With traditional patterns of grazing still suffering from the disruptive effects of the Cultural Revolution, supplying animals with food and water has not been easy. Indeed, the provincial press is full of reports of animals starving or dying of thirst, sometimes in large numbers. Irrigation networks are badly needed to solve this problem. But given the time, effort, and expense involved, they are not likely to be built quickly. In the meantime, the difficulties persist.

Another major problem is the danger that policies favorable to the largely rural Mongol minority might provoke a backlash of resentment on the part of the predominantly Han urban population. Recent increases in the price paid by the state for animals, for instance, have boosted the income of the herders. But in cities they have led to dramatic increases in the price of meat, milk, and other animal products, a development which has left the urban population unhappy.

More generally, given the animosity that poisoned Han-Mongol relations during the Cultural Revolution, it remains to be seen how the Hans will react to the government's deliberate promotion of mongol interests over their own.

Beyond this looms the danger to security posed by the pro-Soviet government of Outer Mongolia just across the border is infrequent, limited primarily to a few adventurous traders. But in its propaganda, the regime in Ulan Bator makes frequent appeals to Mongol nationalism, urging the people of the region to oppose Chinese rule. The lingering bitterness of the past 15 years has made some Mongols susceptible to such appeals, and part of the current program of liberalization and local autonomy is designed to ensure that the provinces's minority population remains politically loyal to Peking.

For the government's new approach to Inner Mongolia to work these difficulties must be surmounted. If they are, the province may be able to overcome the racial tension left over from the Cultural Revolution and reach its full economic potential. If these questions are not resolved, however, the outlook could be more political problems and economic stagnation in one of China's most strategic border areas.

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