The whole of the Chinese state has been mobilised in the single-minded pursuit of "baoba", preserving 8 per cent growth in gross domestic product.

The campaign has been more successful than expected. Beijing is already shifting back a gear to deal with the inevitable distortions and excesses.

Thirty years after China set out on the road to reform, the Communist Party still insists on trying to command the economy in pursuit of GDP targets, production quotas and nature-conquering infrastructure.

The same command economy techniques are deployed to deal with the myriad problems that result.

The architect of China's 1980s economic reforms, Zhao Ziyang, shows in his memoirs that it did not have to be this way. His book from the grave, Prisoner Of The State, due to be published this week by Simon & Schuster, is the most instructive that I have read on how China does and does not work.

Zhao's patron, Deng Xiaoping, was unique among China's top leaders in being both politically conservative and economically pragmatic.

The Deng-Zhao reforms were about getting out of the way of peasants and small entrepreneurs who wanted to produce and sell according to their comparative advantages. Both groups received a positive income shock in the 1980s that was without precedent and that has never been repeated.

China was only beginning to deal with the remainder of the economy, the heavy and "strategic" industries monopolised by state-owned enterprises, when conservatives began to gain the upper hand during an outbreak of inflation in 1988.

Zhao proposed using market mechanisms - raising interest rates - to stop a run on bank deposits. The conservative ideologues, led by Li Peng, overruled him and adopted credit quotas.

As a result, Zhao says, "there was insufficient liquidity and no funds for procuring agricultural products or upgrading technology for factories. Production stagnated."

The similarities between monetary policy in 1988 and 2008 are surprising. Deng's pragmatic side led him to doggedly protect Zhao and his economic reforms through the inflation outbreak of 1988.

But the student and worker demonstrations of May and June 1989 forced Deng to choose between his reformist side and his instinct to protect the Communist Party's monopoly on power. He did not hesitate to choose the latter.

Deng gave his blessing to the party's elders, who immediately purged the most talented, liberal and market-oriented thinkers. Zhao was the best of them, but there were hundreds of others.

From that moment Chinese leaders have been chosen first for their political reliability and second for their ability.

Those apparatchiks, however intelligent, lack the political courage of Deng and Zhao to take on vested interests and pursue reform. Spending a lifetime obsessing about security and climbing through the treacherous black box of the Communist Party can leave little room for exploring new ideas or experiencing the workings of the Chinese economy on the ground.

Since 1989, and despite Deng's seminal "southern tour", which reignited the animal spirits of the Chinese economy in 1992, the party went from deliberately strengthening the market sector and weakening the state sector to strengthening both at the same time.

The State Planning Commission - now the National Development and Reform Commission - regained some of its former glory after 1989, and is still creating trouble.

Zhao says his starting point had been a conviction about the importance of higher efficiency and people seeing practical gains.

"After I came to Beijing my guiding principle on economic policy was not the single-minded pursuit of production figures, nor the pace of economic development, but rather finding a way for the Chinese people to receive concrete returns on their labour."

Ironically, it was China's most liberal leader, Hu Yaobang, whom Zhao had to first do battle with to wean China off its addiction to blind pursuit of growth.

"Wherever he went, he called for 'quadrupling ahead of schedule'," Zhao says.

"As a result, local officials acted according to Yaobang's directive, demanding funds, permission for projects and more energy, as well as raw materials and supplies from the Planning Commission and the State Council."

Zhao's victory over Hu Yaobang's quota economics was not permanent. Beijing is barely six months into its latest campaign - for 8 per cent growth - and it is already concerned

that is has overshot the mark

and stands ready to pull its command economy levers back the other way.

A week ago a senior academic told me that steel companies had wanted to cut back loss-making production but had been stopped by local governments, who had been concerned that their local GDP figures would "look very ugly".

On Saturday Baosteel's boss, Xu Lejiang, told reporters that China's steel industry might post a loss this year as overproduction persists.

With news like this, Beijing, it seems, has quietly pulled on its central planning levers and caused new loans from state-owned banks to slow sharply, electricity production to fall further in the first 10 days of this month and officials to tell banks to stop lending to steel producers that are "still expanding production capacity without considering actual market demand".

The latter notice, reported without sources on Thursday, also told mills to cut back on iron ore imports.

China will no doubt reach its 8 per cent GDP target. But for China and the world, not least its resource suppliers, it is going to be a wild ride. The gun shots from Tiananmen Square are still reverberating 20 years on.