Academic journal article Journal of Political Studies

Chinese Economy under Mao Zedong and Deng Xiaoping

Academic journal article Journal of Political Studies

Chinese Economy under Mao Zedong and Deng Xiaoping

Article excerpt

Introduction

Imperialism remained an important feature of 18th century, where the power of a state was determined on the basis of its territorial boundaries. For this purpose, different European states started focusing upon establishing their hegemony upon numerous small or big states that were economically fragile or were plagued with internal power struggle. But before discussing imperialism and its effects on Chinese economy, it is pertinent to mention two main theories given by Karl Marx and Adam Smith. Both of these economists came up with economic theories of their own, diametrically opposite from each other. These theories, later on, played a great role in shaping Chinese economy.

In Mao's era, Chinese economy was under duress and highly instable. This weak economic condition of China was actually an outcome of variety of factors. The most important of them was an unjust distribution of economic resources among people. Mao, a communist himself, believed that the solution to all the Chinese problems was in Marxism, which is centered on the equal distribution of economic resources in a state. For this purpose, Mao established a centralized economic system, and all efforts were directed towards the development of agriculture sector which was the life line of the Chinese economy - agrarian in those days.

In the Great Leap Forward (1958-1962) major reforms in the agriculture sector were introduced. These reforms were aimed for improving agricultural output. Mao believed that the main source of state's economic development was its agriculture sector, and it was this sector which would eventually bring changes in the lifestyle of the people. Moreover, Mao was of the view that centralized economic system would curb the injudicious distribution of economic resources.

Whereas, after the advent of Globalization in the early seventies, it was observed that states started to congregate on various platforms under the auspicious financial organizations. These financial institutions had an objective of establishing a global economy by integrating different economies. Four Asian countries Taiwan, South Korea, Singapore and Hong Kong showed a remarkable economic growth in the 1970's (Vogel, 1991). This was the era of Deng Xiaoping; he realized the importance of decentralization and free market economy. He also found that these ideals could be useful in modifying the Chinese economy and enable it not only to compete with other regional and international players but also to grow at a good pace. For this purpose, he followed the principles of Adam Smith's theory of "Free Market Economy." Under this policy, Deng established exclusive economic zones, which facilitated not only domestic trade but also encouraged foreign investors to invest in different Chinese sectors. Moreover, Adam Smith's theory, "Theory of Moral sentiments," mainly encompasses four areas, which were applied by Deng for decentralizing the Chinese economy.

1. State and individual life

2. Economics

3. Private rights

4. Ethics and virtue

The roots of Mao Zedong's Long March resided within the roots of imperial legacy. Chinese imperialism is comprised of different dynasties, but among all of them, Qing dynasty (the last Chinese imperial dynasty) remained very important in terms of solidifying Chinese economic condition. So, in order to understand the circumstances and events which stimulated Mao to bring a change in Chinese economic system can be traced to the Qing Dynasty and to the economic condition of China at that time. Talking about the economic solidification in China, the Qing dynasty focused on two sectors: Agriculture and Industry. In the agricultural sector, they improved the methods of manufacturing fertilizers, achieved high productivity, and allocated small fields for the cultivation of rice. In the industrial sector, though little heed was given to technical innovation under Qing dynasty, but several areas were allocated for the purpose of flourishing the Chinese industrial sector. …

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