China

People’s Republic of China

The Chinese Economy Under Communism

The Cultural Revolution and the Decline of Communism

Biggest question in 1949:

Can CCP create an effective and strong government to unite China?

Can CCP succeed where Qing and GMD failed?

Land reform – was the CCP always just using this a cynical trick?

Land reform instituted across China – break the power of landlords

Use of violence to cement loyalty to CCP – 1 million die

Accommodation to urban capitalists

Attack criminals, imperialists and GMD

Use of CCP as instrument of power

Central committee

Politiburo

Standing Committee

Mao Zedong. Zhou Enlai, Zhu De, Chen Yun, Liu Shaoqi

PLA as major power base – Chair of Military Commission is a major Party figure

Party commands the gun; the gun never commands the Party

Problems of ideology and professionalism (pages 561-562)

Communist government as the first modern state in China

Party discipline allows for effective rule throughout the nation

China and the Korean War

Events

China lacks credibility for threats

Mass mobilization turns into xenophobia

Chinese communism becomes nativist and very intolerant

Stalin and Mao

The Economic Question in China

The Chinese Economy, 1912-1949

What is economic growth?

Industrialization in China, 1912-49 focused in three areas:

1) Treaty port (enclave) industrialization under the control of foreign firms with significant Chinese follower firms, that were able to leverage relationships with foreign firms into acquisition of the skills for modern industry. Focus on light industry and consumer goods.

2) Manchurian industrialization under Japanese control, focused on heavy industry and integrated into the Greater East Asia Co-Prosperity Sphere

3) GMD state-run enterprises set up inland to support the war effort

Growth of 8-9% for more than 2 decades = Modern industries equal to 2% of GDP and .4% employment; a start and an indication of what might happen

After 1945 the GMD took over most of this industry, especially the heavy industry

Origins of the command economy under the CCP

Soviet Union as model: economic life is to be organized, owned and directed by the state

Political need to destroy economic/political power of landed and capitalist class

Economic need to promote rapid economic growth

Stages of land “reform”

“Directed at landlords – results in redistribution to peasants and considerable violence against landlords (maybe 1 million killed)

Why was a system of “capitalist” peasants unacceptable to the CCP, both politically and economically?

The basic problem of rapid economic growth in an agricultural society

“Savings” for investment in industrialization must come from agriculture

Taxes are uncertain

Control production and prices

Government buys all produce at artificially low prices; sells to urban residents at a profit (but still low prices) and uses the surplus to invest in industry

Move to control agriculture in collective farms to meet these needs

Private plots yield much higher proportion of output – crisis for CCP

First Five-Year Plan

Production targets – command production levels

Investment plus increase output (543 and 546)

Focus on heavy industry; not labor-intensive industrialization

Resembles Japanese industrialization in Manchuria; ignores development in 1912-36 and in Taiwan/Hong Kong in 50s and 60s

Input-output planning

Nomenklatura system

How to deal with intellectuals? This question converged with political crisis in CCP: potential liberalization in economic policy to grow faster threatened Party and command economy structure.

100 Flowers and pluralism initially supported by major figures in CCP, including Mao and Zhou

Can CCP manage and incorporate divergent forces in the nation?

Khrushchev’s attack on Stalin feeds questions about Mao

Hardliners such a Liu Shaoqi resisted Mao’s liberalizing tendencies

100 Flowers exposes the deep weaknesses in the new communist system

Fear for effects of open criticism give hardliners upper hand; Mao moves (is moved) to revoke pluralism

100 Flowers episode merges with emerging failure of cooperative effort in countryside; decline in production in country in 1957 threatens development and growth in industry

Planning system is threatened by mismanagement, markets lead to non-planned actions by peasants and cadres, poor information flows

Great Leap Forward

Mao swings from the pluralism of 100 Flowers to romantic revolutionary fervor and mobilization as solution: reduces role of technical managers and planners and shifts role to CCP

Use mass mobilization techniques to increase production expand collective into “people’s communes” and eliminate private property

Party cadres become those responsible for economic output: report fanciful numbers to prove their ideological fervor

Based on false data, increase in procurement of grain; Chinese leaders have little reliable information about economic conditions in the countryside – just like Qing

Leaders also shift agricultural workers into local “industrial” production – less labor for grain

Famine 1959-62 kills 25 million

Mao retreats from some responsibilities but retains enormous latent influence and continues to be very hostile to bureaucrats and experts as policymakers and retained a fanatical commitment to a vision of revolutionary economies based on mass effort and unconnected to incentives and planning

Rebuilding the economy from 1961-1965 leads to a larger role for experts and incentives – Chen Yun with Deng Xiaoping in support

The events of Great Leap coincide with crisis and growing conflict with the Soviets

Chinese increasing adopt isolation and xenophobia in international dealings

Deep internal conflicts within the CCP

The Cultural Revolution

Mao sees the direction of party, bureaucracy, and economy as betraying the revolution

Lin Biao, minister of defense and head of PLA, uses PLA to rebuild Mao’s political power in China

Politicize PLA

CCP linked into PLA

Links politically to Jiang Qing and cultural critique

Radical egalitarianism – eliminate ranks in PLA

“Conservatives” in CCP resist radical politics – Liu, Deng, etc.

Widespread and deep social/political antagonisms directed at the privileges of the CCP feed CR from the bottom; xenophobia at those with western attachments; anger at regimented society

Red Guards

Purges of top CCP officials

Second stage of CR involves near complete breakdown of order

Conflict between Red Guard factions

Conflict between Red Guard and PLA

Late 67-mid 68 needed to restore order – PLA and security police

Rise and fall of Lin Biao

Enormous increase in power of PLA

Fighting with Soviet Union in 1969

Lin Biao named as Mao’s successor in 1969

1969-1971 shifting policies toward US

Reaction against extremism in CR

Lin overreaches – plans assassination of Mao

September 1971 dies in plane crash