 |
 |
|
A General Overview
After its defeat of the Nationalists in 1949, the PRC faced the
immediate problem of rebuilding an economy that had been ravaged
by civil war and Japanese aggression. The CCP government chose to
'build socialism' in their country, and functioned as the guiding
force by formulating central decisions on economic and social policy.
Until 1976, three key elements were central to the PRC's economic
policy, these were: the collectivisation of land; centralised control
over the accumulation and reinvestment of capital, and state ownership
of major industries and banks as well as smaller-scale enterprises;
and self reliance', entailing strict limitations on foreign capital
and external economic factors.
Land reform was the first step in the collectivisation of rural
areas. However, the redistribution of land away from the landlords
and rich peasants to smaller private holdings was not as successful
as the CCP initially hoped. Private farms were not a part of Socialist
policy, and new divisions, exploitation and uneven land ownership
showed signs of re-emerging.
During the 1950s, therefore, collectives were established that
enabled the CCP to control the means of production even further,
and were given quotas to supply the state with a portion of their
output at pre-determined prices and also acted as pools of labour
that could construct irrigation networks, roads and railway tracks.
Collectives also enabled the generation of a gross operating surplus
that paid for education and health services.
However, the CCP felt that industrialisation was still too slow
and in a bid to quicken its pace, collectives were further organised
into 'people's communes' under the guise of the 'great leap forward'
in 1958. Peasants were directed to build roads, dams and other projects
relating to improving China's infrastructure. Millions of 'backyard
furnaces' appeared, producing mainly low quality pig iron and steel
of little use for anything. Cotton was also planted throughout China
- at the expense of staple crops - but had little success because
of wide climatic variations. This futility came at the expense of
agriculture, and resulted in widespread famines and illness.
As for the industrial sector, large-scale industrial enterprises
were allowed to operate independently from the state for a short
period of time after liberation. But from the early 1950s on, the
nationalisation of industries commenced. The PRC launched its first
Five Year Plan in 1953, and placed the industrial sector under direct
state control. Profits from industry were diverted to areas deemed
as key industries in the economy, such as iron, steel and textiles.
The Cultural Revolution
The Cultural Revolution saw rapid industrial growth mainly because
unlike the rural sector after the Great Leap Forward, the urban
sector still concentrated upon heavy industries. The Cultural Revolution
did have an adverse impact on the PRC's foreign trade however, as
trade was attacked as humiliating to China and as worshipping things
foreign. Throughout the period of the Cultural Revolution, the PRC
was in effect cut off from the rest of the world. However, it still
conducted trade relations with other countries it did not recognise,
but only on a limited scale and with very little growth.
Mao Zedong's Death
The death of Mao Zedong in 1976 was the harbinger of great changes
in China's domestic and foreign policies. After his death, a coup
de'tat overthrowing the Gang of Four soon followed and led to the
installation of Hua Guofeng as new Chairman of the CCP. For two
years after Mao's death, vicious political infighting concerning
the direction of China's policies occurred within the CCP. One group
supported the continuation of Mao's philosophies while another group
- led by Deng Xiaoping - favoured more-liberal economic reforms.
This group of pragmatists finally gained the ascendancy at the Third
Plenum of the Eleventh Central Committee held in December 1978.
It was after this date that Deng Xiaoping launched China on a policy
of opening up to the outside world, otherwise known as 'The Open
Door Policy'.
Mao's death heralded immense changes in the PRC's economic and
social policies. During Mao Zedong's rule, the CCP paid close attention
to rural collectivisation, central planning, state control and ownership
of industry, and Chinese self-sufficiency. The rise to power of
Deng Xiaoping heralded a reversal in the emphasis on previous Marxist
policies to policies focusing upon more-rapid economic growth, the
role of market forces, foreign trade and investment from the West.
|
|
|
