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China’s Economic Growth and Strides Towards Equality in Reflection of The Maoist Era

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China has reduced poverty so greatly that it has significantly reduced the global poverty rate. The World Bank found that between 1990 to 2013 the number of people living in extreme poverty was decreased from 35% to less than 11% of the global population. [1] This large reduction of poverty is mainly credited to China, among other East Asian countries. China has drastically improved their financial state, from being one of the poorest countries to being a leading, innovative economy. Senior advisor at the World Bank, Francisco Ferreira, says “The pockets of poverty that remain will become increasingly harder to reach and address,”. [2] By evaluating China’s path to overcoming extreme poverty we can learn strategies and models that we can apply to today’s struggling countries. The World Bank’s report predicts that at this rate, by 2030 the percentage of people living in extreme poverty can be reduced down to 3%. The country of China has truly shown the world just how poverty reduction can be accomplished and their successes can be used as an example to all other countries.

Most of this transformation happened during, or can be accredited to, the Maoist era. This was a crucial time in China’s history in which it underwent major industrial, educational, and social reform. The Government renovated their strategies and ideals to focus on maximizing production, distributing wealth and power, and strengthening and unifying the people. Despite its early economic success, the Maoist regime faced many challenges, and struggled to find a balance between politics and economics. This struggle proved to be necessary, and the result was that both areas, by inching along one at a time like a tug-of-war, were able to advance together over time. Over the last century, China has greatly reduced its poverty rates by making major industrial, educational and social changes, working towards equality and improving the quality of life for all of its residents.

Figure 1, Mao Zedong, 1893-1976.

Following the rule of the Communist Party of China beginning in 1921, Mao Zedong founded the People’s Republic of China in 1949. This was not an easy time in Chinese politics. It was in the wake of the Civil war, and the economy was in need of serious reform. That is exactly what Mao had in mind. He would attempt to unify the people and rehabilitate the economy by cranking up industrial production as much as possible. Eventually, he hoped to move towards distribution of wealth and power between the government and its constituents but revolutionary change was restricted by the need to preserve the economy. The Chairman had almost absolute authority which was quite contrary to China’s previous customs. In the CPC (Communist Party of China) and prior authorities, leaders were not glorified or celebrated. Instead they were thought of as just one of the people whom they represented. In Mao’s case, he was exalted comparably to the way Joseph Stalin was in the Soviet Union. [3] In many ways, Stalin and Mao were similar. In fact, Mao idolized Stalin for the way he had forced industrialization in the USSR in the late 1920’s. Mao’s regime intended to reform China’s economy by “applying the policies of ‘control of capital’ and ‘equalization of land ownership’.” [4] Of course, this would take quite some time, and they did not immediately take over capitalist property to apportion it. In the first few years there was great development under the People’s Republic of China.

Figure 2, Factory in Hong Kong, 1966, just before the beginning of the cultural revolution.

The first of the Five Year Plans was introduced in 1953.  It was not published when it was announced. It is thought of as an ambitious focus on improving the economy by stressing industrial productivity. It is believed that there was never an official plan with clearly established goals. [5] It was more about the principle of working hard to build, repair and thrive. The regime made people work hard, most in crowded factories. The Five Year Plans were very effective and it became apparent that they had exceeded their goals for rehabilitating the economy and overcoming the deficit. The Great Leap began in 1956. Its intent was to gradually begin the social reform seeing that they had made progress and seemed to be on the right financial track. By 1958, 80% of the enterprises that were owned by the central government were handed to local authorities. [6] The government began allowing people more control over industry and giving them positions of leadership. At this time, the stresses of industrialism were being felt, and the pressures and demands for achievement were more relaxed accordingly. Mao’s early efforts were all about increasing production and building China into a powerful industrial economy.

The agrarian revolution was another program that the People’s Republic of China started at this time. The idea was to produce enough agriculture to support the growing population and much more so that they could exchange goods for industrial equipment and technology. Though the push for agrarian revolution was not as forced, it was very successful and much less volatile than the system implemented to increase industrial production. China invests a lot into agriculture because they realize the central role it plays. “Much effort has been put into irrigation, pumping, and other water-control systems permitting both an increase in multiple cropping and heavier fertilizer applications.” [7] China is also proportionally stronger in the industries surrounding agriculture which probably plays a smaller factor in why they are able to produce so much. This includes the manufacture of tools used by farmers, fertilizers etc. The government makes commanding investments in agriculture in other ways as well. “Government procurement prices for grains and other major crops have been raised moderately since 1960, while prices of manufactures have tended downward, so that agriculture’s terms of trade have been improving.” [8] This is how China’s government controls areas of the economy by creating incentives to encourage output. Agricultural output was increasing at a rate of 3% yearly. [9] At this rate, agricultural demand is extremely high considering the large and growing population and the amount of goods that are exported daily. The government set quotas for farmers to encourage them to produce, as well as collecting a large 30% tax on the sale of goods exceeding quota. This way, the farmers are not restricted by limits and there is always money to be made. Meanwhile, the better each farmers did for themselves, the more the government would collect. This is how China wisely conditions their industries to ensure economic success on the whole. The Government had a lot of control which they used in this non-democracy to benefit the people, as well as the nation. Agricultural development was not always successful under Mao, however. “On this view, the only positive phases in the story of agricultural development are seen to be 1952-55 (before the High Tide), and the first half of the 1960’s, both seen as periods when markets and prices still played a significant role in the rural economy.” [10] The agrarian market was largely run by bureaucratic powers and “the potential of agriculture as a market for China’s own industrial goods (let alone imported ones) was obviously deliberately limited by Mao’s strategy of forcing agriculture to rely on internal sources to build up the necessary production capability to raise agricultural surplus further and to meet its own consumption and producer goods demands.”[11] Mao constantly feared external conflict and found it necessary for the nation to be self-sufficient and invulnerable. The agrarian revolution was in place up until Mao’s death (when a lot of social systems were rectified in his absence), at which point “Collective farmlands were officially redistributed (or “reparcelled”) to peasant families for individual farming in January 1984.” [12] Great agricultural development took place under Mao’s regime, most especially during the Cultural Revolution. During this time period, China discovered new equipment and technology and built a strong foundation in agriculture, positioning themselves for long-term growth and sustainability.

Figure 3, Communist propaganda poster from the Cultural Revolution named “Scatter the Old World, Build a New World”.

The regime made people work very hard. In the beginning it was necessary but as time went on, people grew tired of this and some began to resist. The Cultural Revolution was launched by Chairman Mao in 1966 and lasted in different forms until his death in 1976. His goals remained focused on productivity and profit. During the Revolution he attempted to rid China of the customs and ideas that he believed slowed the country’s economic progress. “The Cultural Revolution was aimed at destroying much of the Chinese Communist Party (CCP), an entity that Mao had periodically scaled back through ruthless purges, and was also targeted against anyone suspected of being an “intellectual”.” [13] He encouraged young students to riot and build his ‘New World’. Hundreds of people were tortured and persecuted. Those who held high-ranking positions were publicly denounced and ritualistically humiliated. He led people to destroy educational institutions and revolt against the parties that the institutions represented. “During the Cultural Revolution…China had to face serious economic and social disruption.” [14] This was a chaotic time period with lots of conflict and violence. It began when Mao attempted to eliminate several rebellious groups, formed under Liu Shaoqi, that were raising disarray and becoming problematic. The Red Guards responded excessively which had undesirable effects on industrial productivity. There was a great deal of backlash from these groups. The manufacture and transportation of various goods was interrupted by shortages of fuel, raw materials and even food. Riots and strikes took place in factories, impeding production. Industrial machines and tools were damaged so they could not run. Rebellious groups throughout china fought back with demands and anarchic violence. Though records were not released during the Cultural Revolution, it is estimated to have brought down China’s industrial output by 10-20%. [15] This was not how Chairman Mao had expected things to go. The Revolution was quite harmful to China’s economy and threatened Mao’s power, but it was a necessary struggle for society and it helped them out in the long run. This happened because people were tired of working so hard for Mao’s regime that constantly had new plans to work even harder. Finally, Mao’s empire had begun distributing the power between the Chinese Government and its citizens. Mao was very powerful and was on the people’s side, or so they thought. At the time, he was viewed by many as China’s savior and was depicted in a godly manner. Giant posters of Zedong were displayed around China and the people were thankful to him. There were constant rallies with millions of Red Guards and civilians in attendance. Mao supported the troops’ cause and they supported his. Under Mao, people felt united and inspired. Seemingly everyone carried with them Mao’s “Little Red Book” or “Mao Zhuxi Yulu” which was a collection of quotations and ideas from Chairman Mao Zedong, created in 1964. “Mao is shown here to be a nearly perfect Machiavellian prince, hiding his intentions from those he chooses as enemies and lying to them until he can spring traps on them.” [16] In reality, his intentions were to boost the economy making himself, and his empire rich and powerful and almost nothing else. Eventually, counterrevolutionaries began to play a vital role in the economy. China’s economy was shifting increasingly into the control of its people.

Figure 4, Red Guards rally at Tiananmen Square waving the book ‘Mao Zhuxi Yulu’: Quotations from Chairman Mao, 1966.

This, of course, slowed the economy, but it was a give and take, working different aspects at a time to achieve balance. China wanted to be a strong, self-supporting country. The regime recognized that they could best do this by promoting both social change and production at once. China was starting to accept equality-based ideals in the interest of repairing socioeconomics. Mao’s regime repositioned itself to benefit the people and give them control and protection. Social change had to be accepted in order to maintain order and preserve the economy.

Healthcare in China improved dramatically as a result of the booming industries. This is an important part of the trend of reducing inequality. “Several factors account for the apparently close relationship between urbanization, industrial output, and hospital bed availability.” [20] The explanation for this is that with growth in these areas more hospitals were made available in heavily populated (productive) areas. “…the financial terms of access to curative facilities favored areas with high concentrations of workers covered by the 1951 Labor-Insurance Regulations.” [21] The government provided healthcare and insurance for ‘critical’ industry workers to protect the industries. All of these improvements in China are interrelated and seemed to rise and fall in correspondence with each other. As usual, China did a good job of controlling and incentivizing by providing health services proportionally to the working population. This was a huge stride for equality. Of course, it progressed as generally everything did in China throughout Mao’s reign. China put themselves in the position they are in today today by very effective planning from around 1950 to 1980.

Originally, Mao’s focus was on industrialization, which did not directly take away from other areas. Under Mao’s rule, literacy increased from about 20 to over 95%. [17] There were major advancements in the education system; more people became educators and new universities and other institutions for higher learning were formed. Strengthening the educational systems was originally a part of the plan to give the people more power, and it benefitted the country’s development in many areas. The plan for education started out quite successfully. It was not until the Cultural Revolution when the regime enforced new policies to regain control. Education was hit hard by the Cultural Revolution, and there was lots of conflict. The goals and agenda of education, instilled by the government, switched from academic achievement and research, to Maoist ideology. This was also reflected in the selection of students. The intention was to minimize disruption, maintain governmental control and progress the economy. They even discouraged the use of foreign language. All of this was in hopes to create power and effective control over the people. In 1966, Middle and Primary schooling were cut down from 12 to 10 years and students were required to work for 2 years either in factories or in the countryside before they were able to attend university. University programs were cut down to 3 years, even in medical schools, and all graduate level training was cut. [18] When Mao died in 1976, policies were completely reformed and educational systems were fully reinstated. This meant that all students could go to school. The objectives of the educational system were focused on advancing the sectors of modernization. These included: agriculture, industry, defense, and science and technology. [19] Though, it took a while for the institutes to regain their full enrollment numbers. After Mao’s era, and once new ideology was introduced, education began to thrive again; this time for good. This sectional improvement did not come during, but rather as a reaction to, Mao’s overbearing empire. His direct effect on education was not consistent because he did not prioritize education over politics. However, the policies that he had placed on education before he died undoubtedly caused the bounce-back effect, which led to the major reform.

In Mao’s absence, China was able to reflect upon, and redesign social systems that had suffered. Though it was a difficult and tumultuous era, it separated China from other countries and set them up to thrive. China has improved mostly over the last 30 years.  Today, China is roughly 18% of the world’s population which has decreased from 40% in 1830. [22] Since they have such a large population, lower transaction costs have helped to accelerate the economy. Although, this does not explain why other countries with large populations haven’t had the same consistent growth. Surely, it comes down to a combination of many factors. The World’s changes seem to have been very fortunate for China. These changes are advances in technology that make manufacturing much more efficient. These changes allow countries to quickly rise, or catch up, with others. “Chen said that the center of global textile manufacturing has moved from England to the United States to Japan to China within two centuries, reflecting how technological developments have enabled a sector in one country to quickly catch up with that of another.” [23] China got rich at the right time. Another reason China may be so successful is because their government is very involved in the economy and has lots of control. China is not a democratic country so leaders can quickly and effectively make decisions and changes to advance the economy without the public’s agreement. For these reasons, China has maintained steady growth since the reign of Mao Zedong.

In the wake of The Civil War, The Communist Party of China, founded by Chairman Mao, pushed for an extreme increase in production and labor. They were very successful in drastically rebuilding the economy and quickly becoming a leading, powerful nation that could stand on its own. However, people eventually began to push back against the high demands of the regime, causing massive conflict. This resistance was met with a campaign of propaganda and even more rigorous demands for conformance in which Mao’s leadership attempted to eliminate all of the practices that he thought hindered the nation’s ability to grow and develop. Since Mao was only truly interested in financial development and the overall strength of the nation, he targeted the education system, political leaders that did not accept his ideals, and all people that were deemed “intellectual”. During The Cultural Revolution, he made examples out of his enemies and rallied the youth to perpetuate his will through acts of violence and destruction. After Mao’s death, there was major reform in all of the areas that he had forcefully rejected. While Mao’s establishment was directly responsible for the advancement of  China’s economy, the improvements in social rights, equality and education were a result of people pushing back where they had previously been restricted. Although, none of these strides would have had such success without a strong and stable economy. The Maoist Era created the foundation for China’s economic growth in the 1950s, setting them in a position to thrive as a nation. By improving health care, education, and excelling in the ever-changing industrial market, China has made astounding advancements both socially and financially over the last century. Without the struggles of this this time period, China would not be as it is today: one of the world’s leading, most powerful, nations.


Works Cited:

[1] “China sets example for world to tackle extreme poverty, world bank official.” Xinhua News Agency – CEIS, October 02, 2016,(accessed January 15, 2017)

[2] Xinhua News Agency – CEIS, October 02, 2016.

[3] Lawrence Sullivan, “Leadership and Authority in China.” Blue Ridge Summit: Lexington Books (2012): (accessed April 26, 2017.) ProQuest Ebook Central 141.

[4] T. J. Hughes, “China’s Economy-Retrospect and Prospect.” International Affairs 46, no. 1 (1970): 64. doi:10.2307/2614210.

[5] Hughes, “China’s Economy” 65.

[6] Hughes, “China’s Economy” 65.

[7] Lloyd G. Reynolds, “China as a Less Developed Economy.” The American Economic Review 65, no. 3 (1975): 421.

[8] Reynolds, “China as a Less Developed Economy.” 421.

[9] Reynolds, “China as a Less Developed Economy.” 422.

[10] Y. Y. Kueh, “Mao and Agriculture in China’s Industrialization: Three Antitheses in a 50-Year Perspective.” The China Quarterly 187 (2006): 702. doi:10.1017/S0305741006000336.

[11] Kueh, “Mao and Agriculture in China’s Industrialization:” 703.

[12] Kueh, Mao and Agriculture in China’s Industrialization:” 703.

[13] Mark Kramer, “Mao and the Cultural Revolution in China.” Journal Of Cold War Studies 10, no. 2 (2008): 97-98. Military & Government Collection, EBSCOhost (accessed April 25, 2017). 97.

[14] Hughes, “China’s Economy” 68.

[15] Hughes, “Chinas Economy” 69.

[16] Kramer, “Mao  and the Cultural Revolution in China.” 99.

[17] Philip H. Abelson, “Education, Science, and Technology in China.” Science 203, no. 4380 (1979): 505.

[18] Abelson, “Education, Science, and Technology in China.” 505.

[19] Abelson, “Education, Science, and Technology in China.” 505.

[20] David M. Lampton, “The Roots of Interprovincial Inequality in Education and Health Services in China*” The American Political Science Review Vol. 73, No. 2 (1979): 470.

[21] Lampton, “The Roots of Interprovincial Inequality” 470.

[22] Usman Hayat,  “What Explains China’s Growth, And Is It Sustainable? CFA Institutes.  (Dec. 2011)

[23] Hayat, “What Explains China’s Growth,”


Figure 1, Mao Zedong, 1893-1976. Encyclopedia of World Biography. 

Figure 2, Factory in Hong Kong just before the beginning of the cultural revolution, 1966.

Figure 3, Communist propaganda poster from the Cultural Revolution named “Scatter the Old World, Build a New World”.

Figure 4, Red Guards rally at Tiananmen Square waving the book ‘Mao Zhuxi Yulu’ or Quotations from Chairman Mao, 1966.