China's Economy after Fifty Years
| DOI | 10.1177/002070200005500106 |
| Author | Thomas G. Rawski |
| Published date | 01 March 2000 |
| Date | 01 March 2000 |
| Subject Matter | Article |
THOMAS
G.
RAWSKI
China's
economy
after
fifty
years
Retrospect
and
prospect
AS
THE
PEOPLE'S
REPUBLIC
OF
CHINA
CELEBRATED
its
fiftieth
anniver-
sary,
economists
look
back
on
a
remarkable kaleidoscope
of
events
and
policy shifts
that,
despite
episodes
of
vast
suffering
and
waste,
have
brought
enormous
material benefits
to
China's
teeming
masses.
The
economy
inherited
by
Chinas
new
communist
leaders
in
1949
was
overwhelmingly
agrarian,
ravaged
by
twelve years
of
warfare,
and
wracked
by
hyperinflation. Despite the
strains
imposed
by
Chinas
par-
ticipation
in
the
Korean
War,
the
new
government
quickly
resolved
dif-
ficult
short-term
economic
obstacles
and
embarked
upon
a
long-term
process
of
socialization
and
development.
China's
experience
of
socialist
planning,
which
roughly
coincides
with
the
period
from
1949
until
the
death
of
Mao
Zedong
in
1976, left
a
mixed
economic
legacy.
As
in
other
socialist
regimes,
Chinas
new
leaders
poured
resources
into
activities
and
industries
linked
to
the
expansion
of
national
power.
Production
of
steel,
machinery,
and
build-
ing
materials
multiplied
prodigiously.
China
succeeded
in
fabricating
nuclear
and
thermonuclear
weapons.
Although
these
advances
relied
initially on
technical
and
financial
support
from
the
Soviet
Union
and
its
east
European
allies,
Chinas
success
in
penetrating
new
industries
and
mastering
new
technologies
following the
withdrawal
of
Soviet
aid
Thomas
G.
Rawski
speciahlzes
in
the study
of
China's
economy.
He
is
Professor
of
Economics
and
History
and
UCIS
Research
Professor,
University
ofPittsburgh.
INTERNATIONAL
JOURNAL
Winter
1999-2000
China's
economy
after
fifty
years
demonstrated
that
a
succession
of
Five-Year
Plans
had
propelled
China
to
a
new
level
of
development.
In
addition
to
steel
and
locomotives,
socialism
delivered
important
material benefits
to
China's citizenry.
Although
economists
are
still
struggling
to
map
out
the
exact
dimensions
of
national
product
and
other
economic
aggregates,
demographic
figures tell
a
remarkable
story
of
improved
welfare.
Comparison
of
the
census
results for
1953
and
1982
shows
that
average
life
expectancy
rose
from
just
over
40
years
to
nearly
70
years
during
less
than
three
decades.
The
census
figures, espe-
cially
those
for 1953,
are
hardly
precise,
but
there
can
be
no
doubt
that
Chinese
socialism
produced
large
gains
in
life
expectancy
and,
further-
more,
that
these
gains
were
not
confined
to
Chinas
(relatively)
pros-
perous
urban
minority,
but
extended
to
the
farm
populace
as
well.
Chinese
socialism
anticipated
the
World
Bank's
strategy
of
emphasiz-
ing
the
provision
of'basic
needs'
to
entire low-income
populations
as
a
foundation
for
socio-economic
development.
These
gains, however, came
at
a
high
cost.
The
Great
Leap
Forward,
a
series
of
political campaigns
that
disrupted
normal
economic
life
during
1958-60,
triggered
an
immense famine
that
may
have
claimed
30-40
million
lives.
Shortly
after
Chinas
economy
recovered
from
this
cruel
blow,
Mao
Zedong
unleashed
a
fresh
barrage
of
political
cam-
paigns,
known
as
the
Cultural
Revolution,
which
again
dislocated
eco-
nomic
life,
although
less
severely
than
the
Great
Leap.
To
these episodes
of
largely
self-inflicted damage
must
be
added
the
toll
of
stifled incentives,
productivity
shortfalls,
and
wasted
resources
inherent
in
any
system
of
central
planning. 'Storming'
or 'shock work,'
in
which
enterprises
race
to
fulfil
monthly,
quarterly,
or
annual
plans
creates
a
peculiar
(and
costly)
pattern
of
seasonal
output
fluctuations
that
two
decades
of
reform
have failed
to
eradicate.
Excessive
vertical
integration
is
another
hardy
legacy
of
the plan
system.
Because
their
attention
is
focused
on
satisfying
their own
plan
requirements,
suppli-
ers are
least
reliable
as
important
deadlines
approach,
thus
firms
and
agencies
struggle to
create
captive suppliers.
These
efforts
cumulate
to
vast
and
costly
duplication
of
component
manufacture,
repair
services,
even
whole networks
of
schools
and
telecommunications.
Growing
awareness
that
economic
growth
among
its
east
Asian
neighbours
had
far
outdistanced
Chinas
economic
achievements
con-
tributed
to
muted
but
widespread dissatisfaction
with
China's
eco-
nomic
performance.
The
extraordinary
economic
gains
of
Taiwan
and
INTERNATIONAL
JOURNAL
Winter
1999-2000
63
To continue reading
Request your trial