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