Since the establishment of the Peking government in 1949, the Chinese Communist regime has dedicated itself to the achievement of rapid industrialization and world power status. Communist China's leaders have shaped both their domestic and foreign policies to these ends, and Peking has in recent years assumed a role of steadily increasing importance in economic competition between the Communist bloc and the West.
The high degree of totalitarian political power possessed by Mao Tse-tung and his colleagues has enabled the Peking regime to mobilize the manpower and resources of China for domestic economic development in a manner impossible for past Chinese governments. The Chinese Communists, using the Soviet Union as a general model but experimenting also with new approaches and methods, have proceeded to socialize China's economy and to initiate an extraordinarily ambitious program of industrial expansion.
As a result, Communist China's economic position has undergone fundamental changes during the past nine years. The institutional basis for economic life in China has been completely reshaped. The wealth of the country has been ruthlessly redistributed and brought under effective government control. By keeping living standards close to the minimum required for subsistence, the Chinese Communists have been able -- as the national income has risen -- to achieve an unprecedented rate of national saving and investment and, consequently, to initiate an impressive program of economic growth.
The focus of this program has been upon industrialization. Particularly since the start of China's first Five Year Plan in 1953, the Chinese Communists have been rapidly and energetically building China's industrial base, concentrating primarily upon heavy industries, and they have made significant progress. During the last year of the first Five Year Plan, 1957, the stresses and strains created by the industrialization program began to make themselves increasingly felt in China, but Peking's leaders decided to push ahead in their development program' as rapidly as possible nonetheless, and in 1958 they announced a dramatic "great leap forward" and embarked upon audacious programs to "communize" the peasants and to develop decentralized small-scale industries.
Basic changes in China's foreign economic relations have accompanied these domestic developments. Upon achieving power, the Chinese Communists not only aligned themselves immediately with the Soviet Union in a political sense, but they also proceeded to reorient China's foreign economic relations . . .