The Introduction of Free Enterprise into China
The industrialization of China began in the days of colonial domination. In Shanghai and other port cities, capitalist industries were established under foreign control. Chinese business entrepreneurs attached themselves to the foreign enterprises, but were kept in a purely financial or middleman role, excluded from the industrial factory productive process. Colonial industrialization did not proceed very far. The Chinese civil war of the 1930s and then the Japanese invasion of 1938 halted what little industrial progress had been made.
Once Mao and the Communist Party took over after World War II, the program for industrialization followed the Russian model very closely. With the British out of China, the Japanese the hated enemy, and the Americans blockading the Straits of Taiwan and still backing Chiang Kai-shek, the Russians were the only ones the Chinese could turn to for advice and support. Convenience, however, was of course not the primary reason that the Chinese communists followed the Russian lead. As is well known, Mao, Chou, Deng, and other Chinese party leaders had been to Paris in the days when Paris was the bastion of socialist thought. They had then gone to Moscow to observe and study the first major socialist revolution.
The Chinese Communist Party leaders saw Russia move from a backward, militarily weak nation to an industrializing nation with one of the most powerful military machines on earth. Most Americans, for instance, between 1948 and 1958, came to fear Russia's military might, respect its scientific achievements, and accept the fact that basic industrial progress had been accomplished there. Given this American perception, we should not be surprised to find that the Chinese leaders shared that perception.