China in the 20th century has been going through enormous changes. From
colonialism and imperialism to republicanism, from communism to capitalism, and from
underdevelopment to a country maintaining over 10% economic growth for over ten
years. In this research paper, I will focus on the transition of China from a Communist
command economy to a type of market economy as well as the economic fluctuations
throughout this period.
In 1949 Oct 1, the People’s Republic of China was established. Before 1949,
there was a period of civil war soon after the world war two. The confrontation was
between the Nationalist Komintang led by Chiang Kai Shek and peasant-based
Communist party led by Mao-Zedong, ended with Chiang’s defeat. Mao became the
leader of China, and he believed that Marxism was the best way to solve China’s social
and economic problems. He wanted to stop the landlords from exploiting the farmers.
Under the rule of the Communist party, the people owned all the economic areas of
China, and these would be controlled by the Communist government. All of the people
would work for the common goal of the country. As a result, Chinese socialism was born.
The pre-communist history of modern China has been essentially one of
weakness, humiliation and failure. This is the atmosphere in which the Communist Party
developed its leadership and early growth. This resulted in strong determination by
chairman Mao to eliminate foreign influence within China, to modernize the country and
envision a strong economy under Communist control. Therefore, a series of radical
reforms were introduced and the social organize was transformed under Communist
Economic growth during the first ten years of Mao’s regime was significant.
However, the Great Leap Forward (1958-61) introduced catastrophic changes resulted in
a famine in which some 30 million people may have died. The Cultural Revolution from
1966-76 led to further disruptions and the standard of life worsened. (all these will be talk
in details later) After the death of Mao Zedong in 1976, Deng Xiaoping came into power
in 1978. He was in favor of capitalist-style reforms and he also changed China
fundamentally by introducing dramatic changes in economy to cope with the growing
influence of global capitalism.
The period of Mao
Before the People’s Republic of China was established, China remained
predominantly rural and agricultural, with close to 90 percent of the population living in
the countryside and about 65 percent of the national income generated in the agricultural
sector. (Liu and Yeh 1965, 66, 212) At that time, very few people could read, inflation
was so high that prices sometimes rose daily, and the tenants were greatly exploited by
landlords (Kristof and Wudunn,61).
The period of 1949 to 1952 was largely the reconstruction and rehabilitation
period. Land reform began promptly after the founding of People’s Republic. The
Communist halted inflation, restoring confidence in its new paper currency, divided up
the land, tried to end up opium addiction and prostitution, banned child marriages, and
encouraged the peasants to go to school and breathed new hopes into the people. It was
the first time a moderate degree of equality ever existed for most of the Chinese people
(62). Most people were delighted by the communist, reconstruction works were
completed by 1952. During this rehabilitation period, output in both industry and
agriculture rose rapidly from the sharply depressed 1949 levels, and hadd been restored to
previous peak levels (Lippit 133).
The period of recovery and rehabilitation was followed by the First Five Year
plan, 1953-1957, during which output continued to rise strongly (110). During...