State and Market in China’s Socialist Industrialisation

The leadership of the Chinese Communist Party (CCP) who assumed power in Beijing in 1949 saw rapid industrialisation as the basic way to strengthen China as a nation and raise the living standards of its people. There was no question of whether or when to industrialise, but how. In this basic aim, they differed little from the late Imperial and Nationalist governments before them. Like their predecessors, moreover, CCP leaders saw the role of the State as primum mobile in the process of industrialisation. In the last decades of the Qing dynasty, the imperial government had attempted to foster the growth of modern industry through the so-called guandu shangban system (literally ‘official supervises, merchant manages’), whereby the government sponsored private industrial and commercial concerns. Similarly the Nationalist (Kuomintang) government in its heyday (1928–37), attempted to lay the foundations of an industrial economy by regaining national economic sovereignty and developing heavy industry through public enterprises with a strategy of ‘controlled economy’ under state direction (White, 1982a).