The Economy of Communist China, 1949-1969: With a Bibliography of Selected Materials on Chinese Economic Development
The Economy of Communist China, 1949-1969: With a Bibliography of Selected Materials on Chinese Economic Development
Excerpt
When the Chinese Communists assumed power in October 1949, they inherited an economy that can be called backward by any quantitative criterion. Prolonged external war and subsequent civil strife had inflicted immeasurable damage. Confronting this situation, the new government set forth two major economic goals: first, to restore the deteriorated economy as soon as possible, and second, to begin a rapid, forced-draft industrialization program to break the vicious cycle of backwardness and poverty.
In the course of industrialization, the economy experienced acute inbalances, strains, and supply bottlenecks, which forced the planners to alter their scheme. In terms of scale of priority, rate of capital formation, and investment technique, the development strategies followed between 1949 and 1969 can be roughly divided into four consecutive stages.
The Unbalanced Growth Strategy, 1949-57
During the early years of the industrialization program, the Chinese development strategy almost completely duplicated the Soviet model.
In the choice of technique and scale, the Chinese planners also followed the Soviets, by investing in relatively large and capitalintensive projects. More than 85 percent of the capital investment was allocated for the 694 large industrial projects, leaving only 15 percent for the more than 10,000 small projects.