An insight into China's Communist and Non-communist history.
By: Aditeya Das
Source: Getty Images
Communism is one of the most-speculated political and economic ideologies in the world. The work of Karl Marx started the idea of how everything should remain in equity. A doctor should have the same societal values as a farmer. A teacher should have the same societal value as a politician. Concepts such as previously mentioned along with several others have created the communist utopia which we know today. One of the most prominent cases of communism is in China. The former authoritarian communist state under Chairman Mao blossomed into one of the world’s biggest economies through the careful economic liberalization by Deng Xiaoping and nurturing by President Xi Jinping. But what was the real cause of these economical advancements?
To answer this question you need to look at the case of the problems that were faced by the communist party before Deng Xiaoping, and the advancements made after he arrived.
In the late 1950s and early 1960s, China went through what was called ‘The Great Leap Forward’. The Great Leap Forward was when Chairman Mao decided to solve China’s agricultural and industrial problems. He wanted to make China’s industrialization much more labor-intensive, as to be the true epitome of communist values. Due to China’s vast population, the government decided that it would be a much faster way to industrialize and provide jobs compared to using capital and to show the true power of Chinese communism
Due to its massive population and size, China was unable to organize itself effectively. Because of a shift from the focus on agriculture to a focus on industrialization, the agriculture market of China plunged. Paired with natural disasters and the removal of aid from the Soviet Union, the move from agriculture to steel put the country into one of the worst famines in human history ever recorded with an estimated 20 million people dying due to starvation between 1958-62 leaving economic turmoil in China for 18 years.
During these 18 years, there was also the cultural revolution. A UWC student stated that “In 1966, Mao Zedong fueled the Cultural Revolution in an attempt to solidify his legacy and the creation of the Maoist economic policy. As part of this, the government systematically purged intellectuals and entrepreneurs, once again virtually disabling the economy”.
After Chairman Mao died in 1976, the Chinese Communist Party Politburo became very dissatisfied with Maoist economic policy, and thus facilitated Deng Xiaoping’s rise in power. In the 1980s, Deng Xiao Ping had only one goal, and that was to build up the Chinese economy. First, he decentralized the Chinese domestic economy. This means that farmers and business owners were left to control their own profits and level of production. The second act he did was facilitate the creation of massive Special Economic Zones (sez). These SEZs allowed local governments to offer tax incentives to foreign investors to develop infrastructure without approval from the Central Government. This led to China’s economy skyrocketing as the consumer goods industry exploded. This is a clear move to a capitalistic economy as the removal of huge government restrictions on businesses and a consumer-driven industry are big parts of what makes a free market economy.
Source: Financial Times
China’s interest in the capitalistic system was further maintained by Xi Jinping as he propagated the case of the One Belt One Road (OBOR) Initiative. To put it simply, the One Belt One Road initiative is a reimagination of the historical Silk Road, that connected China with Europe and many parts of Asia for trade in silk and spices. Leveraging on the same idea, President Xi is trying to rebuild the same connections between China, Africa, Asia, and Europe by sea and overland. He is doing this through massive development projects in other countries, such as its US$ 1.2 billion investment in Sri Lanka’s Hambantota port. The port is an important trade route and an estimated 36000 ships pass through it. Investing in Hambantota port not only gives China a good return to its capital investment but also helps it secure vital port infrastructure in a busy trade route. This is a very capitalistic idea as China is using the means of trade and investment to open up and grow its economy.
This quite clearly shows a massive shift from one end of the paradigm to the other. This shows how China uses mixed approaches of communism and capitalism to advance its economy. The careful design of the economy by both Deng Xiaoping and Xi Jinping through their capitalist mindsets made Mao Zedong’s attempts at a communist paradise look like a boon in disguise. However, it is still early to declare China to be a success with its blend of communism-capitalist mindset. No one knows what is going to happen to the Chinese OBOR initiative. Will President Xi decide to keep the status quo of running the country or move back into the old ways of doing things? The only way to answer this question is by looking at the future and seeing what they do to make their already massive economy even larger.
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