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History of Chinese Economic Development 1949–78

In: China’s Economic Rise and Its Global Impact

Author

Listed:
  • Ken Moak
  • Miles W. N. Lee

Abstract

The Communist Party of China (CPC) began economic reform immediately after it ascended to power on October 1, 1949, realizing that a modern economy is che key to national salvation, improving people’s lives, building a strong national defense, and preventing foreign interventions. However, it was interrupted by the Korean War (1950–53). In the aftermath of the war, the government adopted the Soviet-style five year plan model, focusing on industrialization. The model, yielding mixed results, was quickly abandoned and replaced with a model known as the “walking on two legs” policy, allocating resources equally to modernize industrialization and agriculture.1 This model, however, was derailed by Mao’s Great Leap Forward movement, which proved disastrous for the country, pushing the economy almost to the brink of disaster and causing massive starvation. Mao’s policy failure prompted the leadership to stop the Great Leap Forward and called on Liu Shaoqi, Zhou Enlai, and Deng Xiaoping to revive the economy. The new leadership forged the material incentive program, allowing very limited free enterprise and appointing key positions to government departments and state-owned enterprises on the basis of merit and competence. Its success raised the ire of Mao, who feared that the rightist (a label for those who heeded the capitalist line) initiatives were promoting class distinction and other economic problems.

Suggested Citation

  • Ken Moak & Miles W. N. Lee, 2015. "History of Chinese Economic Development 1949–78," Palgrave Macmillan Books, in: China’s Economic Rise and Its Global Impact, chapter 0, pages 77-90, Palgrave Macmillan.
  • Handle: RePEc:pal:palchp:978-1-137-53558-0_5
    DOI: 10.1057/9781137535580_5
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    Cited by:

    1. Khoso, Noor Ahmed & Rajput, Sheraz & Aziz, Tariq & Hussain, Akseer & Jahanzeb, Agha, 2021. "Trade Openness and Income Inequality: Fresh Evidence Based on Different Inequality Measures," Asian Journal of Applied Economics, Kasetsart University, Center for Applied Economics Research, vol. 28(2).
    2. Siéwé, François & Egwuma, Henry & Ahmed, Ben & Sanni, Adunni & Abu, Sunday T. & Ojeleye, Oluwaseun A. & Nwahia, Cordelia O. & Choumbou, Raoul Fani Djomo & Abdulahi, Abubakar A., 2024. "A Best-Bet System of Rice Intensification and Poverty Alleviation in Zamfara State, Nigeria: A Mixed Method Analysis," Agricultural Systems, Elsevier, vol. 213(C).

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