Published: 16 October 2020
Draft Topic for our ‘Transformation, a Manifesto for Democratic Socialism’
The economic transformation of China over the last four decades has seen the fastest ever growth of any nation with a 47-fold increase in output. During this expansion over 800 million people have been taken out of poverty, the greatest poverty reduction in world history. The obvious question to ask is how has this been achieved.
We hope in the following pages to explain the basis of this success. And to show how it flowed directly from the experience of the Soviet Union, both bad and good. For details on this experience go to our Topic: ‘Socialism and the Soviet Union’
The declaration of the founding of the People’s Republic of China in October 1949 and the socialist revolution that it brought represented a great victory for the Chinese people. China’s ‘October’ was the culmination of a long and gruelling struggle by China’s communists. A struggle against the vicious and corrupt nationalist forces who represented the landlords and the smaller capitalist class. And against the Japanese imperialist invaders who had sought to subjugate China and steal its natural resources.
As with many countries, the growth of a communist movement in China was first inspired by the socialist revolution in Russia. Thus, the Communist Party of China was founded in 1921. Finding support first among the intelligentsia, the communists soon began to recruit widely among the fast growing Chinese proletariat. Mass strikes and demonstrations led by the communists in the towns and cities soon established them as a serious political force.
However, they faced a major problem in the shape of a very large and militarised nationalist movement, the Kuomintang. This had been formed ten years earlier during the creation of the Republic of China.
Acting under the advice of the Soviet leadership, the Chinese communists sought to establish a positive relationship with this nationalist movement. But it was not to last long. In 1927 the Kuomintang under Chang Kai-shek, turned on the communists and massacred them in Shanghai. This sparked off a long and vicious civil war between the nationalists and the communists.
Civil War and Foreign War
In order to defend themselves against attacks by the nationalists, the communist forces organised themselves into a Chinese Workers’ and Peasants’ Revolutionary Army. At first they fought back against the greatly superior nationalist forces using conventional military methods. These methods met with disastrous results. However, one of the leading communists, Mao Tse Tung, began to develop a new approach based on peasant guerilla warfare. This proved far more successful and after a long period Mao emerged as the leading figure in the Party.
The civil war between the communists and nationalists continued until 1937 when the increasing success of the Japanese invasion of China forced the nationalists to declare a truce with the communists so that a united struggle against the foreign invaders could be waged. This truce came to an end with the defeat of the Japanese in 1945.
Almost immediately, the civil war between the communists and the nationalists restarted. The United States supplied the nationalist armies with arms, while the Soviet Union did the same for the Chinese communists. The decisive factor between the two sides turned out to be one of motivation. The communists forces were inspired by the idea of a new China free of oppression and exploitation. The nationalist troops under their corrupt and reactionary leadership fought for the status quo. And suffered from low morale accordingly. Mass desertion and defeat was the inevitable result. Within four years the communists had won control of most of the country. By October 1949 the Chinese Revolution was declared victorious by Chairman Mao, speaking in Tiananmen Square in Peking.
China was marked by absolute backwardness and poverty. Average life expectancy was only 36. The central issue facing the revolution was land. Therefore, one of the first acts of the new communist government was a radical land reform. Village meetings were held all over the country at which landlords were paraded, denounced and in many cases killed. It is estimated that up to 2 million of them died in the process. Poor peasant debts were written off and rents abolished. Large landholdings were divided up increasing the typical farm from just under one acre to three. Land was distributed to the landless. Producer cooperatives were then introduced to link the farms together. This opened up the potential for great growth in productivity and output in Chinese agriculture and initially there was a significant increase in production.
However, the focus of the new government, in line with socialist ideology, was on the need to build up industry over agriculture. And here China naturally turned to the Soviet Union for assistance.
A Potential Partnership
The Chinese communist revolution opened up a wonderful opportunity for the peaceful and prosperous development of the East. Its communist neighbour, the Soviet Union was the largest country in the world. China, the most populous. Including Soviet-controlled Mongolia, they shared a border of nearly 9000 kilometres. The combination of Soviet geography and natural resources, with China’s enormous reserve of labour, offered the possibility of a great future for socialism on a global scale. The Soviet Union had greatly progressed in industry and technology. And began by offering major help to China to move out of its poverty and backwardness. But sadly, this was not to last.
At the outset, Moscow gave considerable assistance to China. But behind the public displays of unity and solidarity there was deep distrust. Some of this came from the many disagreements between Stalin and Mao in the pre-revolutionary period. But it was further stoked by the ill-judged Korean War. In the summer of 1950, at the request of the Soviet Union, China entered the war against US and South Korean forces. But Stalin reneged on his promise of air cover for the Chinese army which brought inevitable defeat. And the death and injury of nearly one million Chinese soldiers. This was an inauspicious start to the relationship.
First Five Year Plan 1953–57
After initial hesitations, the new Chinese regime adopted the Soviet economic model, based on state ownership in the industrial sector and centralized economic planning.
The First Five-Year Plan was quite successful. Soviet planners helped their Chinese counterparts formulate the plan. As in the Soviet economy, the main objective was a high rate of economic growth, with primary emphasis on heavy industry and capital-intensive technology. With the help of Soviet loans and thousands of Soviet engineers including entire plants purchased from the Soviet Union, a solid foundation was created in iron and steel manufacturing, coal mining, cement production, electricity generation, and machine building. As a result, industrial production increased at an average annual rate of 19% between 1952 and 1957, and national income grew at a rate of 9% a year.
Government control over industry was increased during this period by offering inducements to owners of private, modern firms to sell them to the state or convert them into joint public-private enterprises under state control. Where they showed reluctance, various pressures were applied to them to comply. Thus, by 1956 approximately 68% of all modern industrial enterprises were state owned, and 33% were under joint public-private ownership, with no privately-owned firms remaining. During the same period, the handicraft industries were organized into cooperatives, which accounted for 92% of all handicraft workers by 1956.
Despite the lack of state investment in agriculture, agricultural output increased substantially, averaging increases of about 4% a year. This growth resulted primarily from the productivity naturally arising from the redistribution of land from the landlords to the poor farmers. There were also gains in efficiency brought about by reorganization and cooperative farming – by 1957 about 94% of all farm households had joined these cooperatives.
As the First Five-Year Plan wore on, however, Chinese leaders became increasingly concerned over the relatively sluggish performance of agriculture. In particular, the inability of state trading companies to significantly increase the amount of grain procured from rural units for urban consumption, and for funding the many large urban industrialization projects. This formed the basis for a disastrous, ultraleft turn in economic management led by Mao.
Unlike the coarse figure of Stalin, Mao had been an educated and charismatic communist activist with a love of poetry and philosophy, both of which he utilised to great effect in his propaganda. However, in practice he ended up imitating Stalin – like all other communist party leaders he followed Stalin’s example and encouraged a personality cult around himself. And came to run his Party as a dictatorship. This process was greatly reinforced by the circumstances around him – first brutalised by leading the Red Army from 1927-1949 during a long period of vicious civil war. And then in many years of leading the fight against the merciless Japanese. As later events were to show, during the decades of military conflict Mao lost any element of empathy he may have had in his youth.
Moreover, Mao and the whole Communist Party leadership became used to operating according to orders – either giving them or obeying them. It was natural that when they took over China they would continue with this same approach and apply it to the civilian population.
Mao’s callousness towards loss of life even shocked other communist leaders. Khrushchev recounts how when they met in 1957 Mao had told him: “We shouldn’t be afraid of atomic missiles. No matter what kind of war breaks out, conventional or nuclear, we will win… If the imperialists unleash war on us, we may lose more than 300 million people. So what? War is war. The years will pass and we will get to work making more babies than ever before.” This chimed in with Mao’s irresponsible encouragement of families to have as many children as possible in the belief that population growth empowered the country.
In the initial period of communist rule there were understandable purges against remnants of the nationalists. But then on the first of July 1955, the Party’s Central Committee turned inward against its own ranks. Launching a drive against suspected dissidents members of the Party, the governing bureaucracy and the military. Using the old Soviet methods of confession and self-criticism, it is thought that over 1.4 million intellectuals and officials were persecuted in this campaign. Even more serious, out of total of 214,000 people arrested it is estimated that 53,000 died of whom 22,000 were executed.
Kruschev’s 1956 speech Against Stalin
In February 1956 Kruschev, the Soviet leader who had taken over after Stalin’s death, launched an unexpected expose of Stalin’s crimes against the people. Mao was highly disturbed by this attack on a figure he had followed for decades. In particular, Mao was worried about the attack on Stalin’s Cult of Personality, which he had also cultivated around his own leadership.
Perhaps, reflecting his own insecurity following Stalin’s denunciation, Mao and the leadership launched a campaign at the end of 1956 entitled ‘Let a Hundred Flowers Bloom’. This was designed to promote pluralism of expression with party members and citizens encouraged to constructively criticise government policies. The only problem was that the campaign began to gain its own momentum with millions of letters arriving at government offices. Posters appeared on walls, rallies were held, unauthorised articles were published. Criticisms were voiced against the harshness of the purges and “the slavish following of Soviet models, the low standards of living in China, the proscription of foreign literature, economic corruption among party cadres, and the fact that ‘Party members [enjoyed] many privileges which make them a race apart’.” The final insult came with criticisms of Chairman Mao himself.
In July 1957 the openness campaign was put into reverse with the launch of another purge entitled the Anti-Rightist Movement. Most of the accused were intellectuals who had voiced their opinions in the Flowers campaign. The penalties against them included criticism and re-education, long prison sentences and hard labor, and in some cases execution. The actual number of victims of the purge is thought to have been somewhere between 1-2 million with an estimated 10 percent of intellectuals, engineers and technicians labeled as rightists. Deng Xiaoping later admitted that there were mistakes during the Anti-Rightist Campaign, and most victims have since been rehabilitated. Despite this, Chinese authorities and media omit references to this period which they deem to still be too “sensitive” to mention.
The Great Leap Forward
It was in these circumstances that Mao decided to imitate the worst of Soviet economic mistakes and launch ‘The Great Leap Forward’. This was an attempt to dramatically increase Chinese agricultural output and industry not with practical and realistic measures but by force of revolutionary will. Just as with ‘War Communism’ in the Soviet Union in the 1920s and 30s, Mao and the bulk of the Party leadership who followed him, wanted to skip the long process of accumulation that was required in the transition to socialism. Instead, they sought to reach the promised land in a few short bounds. And in doing so to surpass their capitalist rivals in record time – Mao forecast that within 15 years of the Great Leap China’s industrial output would surpass that of Britain. It was to take 50 years.
In part, Mao was motivated by rivalry with the Soviet leadership – relations with the Soviet leader Kruschev had sharply deteriorated. In a desire to outbid the Soviets and establish China as a rival leader of the international communist movement, Mao effectively set aside the forthcoming Second Five Year Plan and introduced a number of special measures to dramatically speed up China’s development. And to use the peasantry to pay for it.
Starting in 1958, the government decided to take full control of agriculture and establish a monopoly over grain distribution and supply. This would allow the state to buy at a low price and sell much higher, thus raising the capital necessary for the industrialization of the country at the expense of the peasantry. Part of the process was a campaign to reconstruct the country from an agrarian economy into a communist society. Private farming was prohibited, and those engaged in it were persecuted and labeled counter-revolutionaries. Individual farms and cooperatives were merged into huge agricultural collectives called ‘People’s Communes’. In this way the peasants would be brought under tighter Party control along with the sharing of tools and draft animals. A policy that closely matched Stalin’s disastrous collectivisation drive of the early 1930s.
In particular, Mao saw steel production and grain production as the key pillars of economic development. For example, it was decided that steel production would be doubled in just one year. With no personal knowledge of metallurgy, Mao encouraged the establishment of small backyard steel furnaces in every commune and in each urban neighborhood. Peasants were diverted from vital work in the fields to tend to the furnace. And a call was put out for every piece of scrap metal that could be found to be melted down. People even donated their old cooking woks to the effort. The inevitable result was a mess of unusable brittle and soft metal.
Things were even worse in the fields. A series of radical and controversial agricultural innovations based on the ideas of now discredited Soviet agronomist Lysenko were promoted at the behest of Mao. These untested innovations generally led to decreases in grain production rather than increases. As a communist, Mao considered himself a scientific socialist. Yet, the scientific approach means to carry out experiments and observe and learn from the results. Why then did Mao and the Communist Party leadership impose all these new ideas and methods across the whole of China without trying them out first in a few areas? This was to be a bitter lesson that later informed much of the reform process in the 1980s and 90s.
Perhaps the most ridiculous example of ill-thought out and untested policies applied in the Great Leap Forward was the ‘Great Sparrow Campaign’. The Chinese population was mobilised to beat trees and make noise over many days in order to wipe out the sparrows which were thought to be responsible for significant crop loss. The campaign was dramatically successful in reducing the bird population. The only problem was that the birds had also been responsible for keeping down insect levels. In their absence, there was an explosion of insects including a huge locust infestation which destroyed many crops across the country.
Last but not least, there were three years of serious drought which the Party’s campaigns only made worse including overambitious irrigation schemes which often failed through lack of expert management.
All of these problems came together in a huge decrease in food production. By 1961 agricultural output fell by 30 percent, the lowest point since 1952. With the population having risen by 100 million since then, the scale of the crisis was clear.
To make matters worse, local leaders were pressured into falsely reporting ever-higher grain production figures to their political superiors: “Local officials were fearful of Anti-Rightist Campaigns and competed to fulfill or over-fulfill quotas based on Mao’s exaggerated claims, collecting “surpluses” that in fact did not exist and leaving farmers to starve. Higher officials did not dare to report the economic disaster caused by these policies, and national officials, blaming bad weather for the decline in food output, took little or no action… Participants at political meetings remembered production figures being inflated up to 10 times actual production amounts as the race to please superiors.”
The Great Chinese Famine
Already by the end of 1958 human losses were becoming apparent. But the long years of military and political struggles had caused the leadership of the party to become hardened to suffering among the masses. A comment by Foreign minister Chen Yi in November summed up their lack of empathy: “Casualties have indeed appeared among workers, but it is not enough to stop us in our tracks. This is the price we have to pay, it’s nothing to be afraid of. Who knows how many people have been sacrificed on the battlefields and in the prisons [for the revolutionary cause]? Now we have a few cases of illness and death: it’s nothing!“
The problem was that these few cases soon turned into a torrent. The Great Leap resulted in mass starvation, with estimates ranging between 18 million and 45 million deaths, making the Great Chinese Famine the largest in human history.
The economy, which had improved since the end of the civil war, was devastated by the Great Leap Forward. As can be clearly seen in the graph below.
As Deng Xiaoping admitted later: “We acted in direct contravention of objective laws, attempting to boost the economy all at once. As our subjective wishes went against objective laws, losses were inevitable.”
Already by 1959, the economic and human disaster was apparent to the leadership and the country. In recognition of his failure, Mao stepped down as State Chairman on April 27. But remained Party Chairman, the far more important position. Mao’s Great Leap Forward policy was openly criticized at the Lushan party conference by Minister of National Defense Peng Dehuai, who accused unnamed party members of attempting to “jump into communism in one step.” Mao was incensed by the veiled criticism and used his continuing domination of the Party to remove General Peng from all positions. Mao never forgave Peng who died in prison in 1974 following many years of persecution.
Despite standing down from his government positions, Mao’s continued to expound his ultraleft stance. At the International Meeting of Communist and Workers Parties held in Bucharest in November 1960, Mao ridiculed Khrushchev’s promises of consumer goods and material plenty for the Soviet people, declaring that it would make them “ideologically soft and un-revolutionary”.
Return to Sanity
The dramatic failure of Mao’s extreme programme caused a swing back towards more pragmatic, less ideological policies. After three fateful years, the agricultural approach of the Great Leap Forward began to be halted. Grain exports were stopped and imports brought in from Canada and Australia to help reduce the impact of the food shortages.
Still Mao did not retreat from his policies, blaming the failures on bad implementation and “rightists” for opposing him. “On the eve of the conference, meeting with the first secretaries of the provincial party committees, he bellowed, “Are you for socialism or capitalism?! . . . Now some persons are in favor of introducing the contract system throughout the country, including dividing up the land. Does the Communist party favor dividing up the land?… Individual peasant proprietorship inevitably leads to polarization, and this will not take two years, stratification will begin in just one year… Khrushchev himself did not dare openly to dissolve the collective farms.”
It was almost as if Stalin with his former fantastical fear of the kulaks and capitalist restoration was speaking from the grave.
However, by 1962, it was clear that the party had changed away from the extremist ideology that led to the Great Leap. At the Seven Thousand Cadres Conference in early 1962, Mao was forced to self-criticise and re-affirm his acceptance of democratic centralism. During the conference, Liu Shaoqi, the 2nd President of China, accepted that the main blame for the famine was the far-left policies of the Great Leap Forward, and blamed it on Mao’s cult of personality.
It was decided that planning and economic coordination were to be revived and investment priorities reversed, with agriculture receiving first consideration, light industry second, and heavy industry third. Planning rather than politics would once again guide production decisions, and material rewards rather than revolutionary enthusiasm become the leading incentive for production. This was exactly the approach that had guided the Soviet Union’s New Economic Policy in the 1920s until it was abruptly ended by Stalin. Thus, we see the parallels between the two country’s economic and political choices playing out in different historical periods.
Withdrawal of Soviet specialists
As if things could not get worse for the Chinese economy, the worsening ideological and foreign policy disputes between China and the Soviet Union led Moscow to start withdrawing its engineers and scientists from 1960 onwards. “In response to the insults, Khrushchev withdrew 1,400 Soviet technicians from the PRC, which cancelled some 200 joint-scientific-projects meant to foster Sino-Soviet amity and cooperation between socialist nations.” Then in late 1962, China ended its relations with the USSR, “because Khrushchev did not go to war with the U.S. over the Cuban Missile Crisis.”
To try to overcome the gap created by the Soviet withdrawal, major imports of advanced foreign machinery were arranged with Japan and Western European but at a much higher cost.
During the 1961–65 readjustment and recovery period, economic stability was restored, and by 1966 production in both agriculture and industry had recovered. Between 1961 and 1966, agricultural output grew at an average rate of 9.6 percent a year. Industrial output was increased in the same years at an average annual rate of 10.6 percent with successful growth of rural, small-scale industries. In agrarian policy, there was gradual de-collectivization in the 1960s.
Meanwhile, Mao did not accept his humiliation and loss of control of the direction of the Party and the state. Istead, he bided his time and began to lay the ground for a recovery of his absolute power.
To this end, he encouraged the formation of the Socialist Education Movement in 1963 with the idea of reasserting ideological purity in the Party.
Mao criticized the economic reforms carried out by President Liu Shaoqi and others, describing them in February 1964 to foreign leaders as “attempts to undermine socialist collectivism and destroy socialism“.
The Cultural Revolution
In 1966 Mao Zedong launched the Great Proletarian Cultural Revolution. Officially this was to counter the Soviet-style bureaucracies that had become established in education, agriculture, and industrial management. But it was really to re-establish Mao’s personal supremacy in the Party and the state.
To achieve this outcome, Mao cynically tapped into the natural radicalism of Chinese youth and used them as a battering ram against the existing Party leadership. Students at all ages, from primary school to university were mobilised to protest and attack and overthrow his rivals in the Party.
The stated goal of this bogus socio-political movement was supposedly to enforce communism in the country by removing capitalist, traditional and cultural elements from Chinese society. Under the slogan of ‘The Destruction of the Four Olds’ – Old Customs, Old Culture, Old Habits, and Old Ideas – were all to be destroyed. The task fell largely on the students, now known as Red Guards, who eagerly followed Mao’s urging to destroy cultural artifacts, Chinese literature, paintings, and religious symbols and temples. People in possession of these goods were punished as well as Intellectuals, party and state officials. All were targeted as personifications of the Four Olds, resulting in their persecution and removal from office.
None, even the highest officials were exempt from this persecution. President Liu was persecuted to death as a “traitor” as well as a “capitalist roader”, while Deng Xaioping was also purged twice. The campaign penetrated into the factories and workplaces: “virtually all engineers, managers, scientists, technicians, landlords and other professional personnel were “criticized,” demoted, “sent down” to the countryside to “participate in labor,” or even jailed, all of which resulted in their skills and knowledge being lost to the enterprise.” All of which strongly recalled Stalin’s Great Terror in the 1930s.
The longer the Cultural Revolution campaign proceeded the more intense it became. In 1968 under the banner of the ‘Cleansing of Class Ranks Campaign’ around 30 million people were persecuted, with an estimated death toll of 0.5-1.5 million. In later years the Party and the state admitted that many of the cases in the Cleansing movement were “unjust, false, mistaken” cases.”
Not only did the Cultural Revolution paralyze the country politically but it also seriously affected the economy especially in the urban centres. The most direct cause of production halts was the political activity of students and workers in the mines and factories. A second cause was the extensive disruption of transportation resulting from the requisitioning of trains and trucks to carry Chinese Red Guards around the country. Output at many factories suffered from shortages of raw materials and other supplies.
The effect was a 14-percent decline in industrial production in 1967. And a stagnation in agricultural output.
As the Cultural Revolution proceeded, it began to descend into chaos and infighting between various factions of the Red Guards. Mao recognised that it had done its work in removing his rivals and enemies in the bureaucracy and decided to call a halt. Firstly, elements of order were restored by the army in late 1967 and 1968. Complementing this, a ‘Down to the Countryside Movement’ was initiated in which the Red Guards were dissolved and sent into remote rural areas to “learn from the peasants.”
In June 1981 the Communist Party unanimously passed a resolution drafted by Deng and others which comprehensively invalidated the Cultural Revolution, calling it “a domestic havoc launched mistakenly by the leader and taken advantage of by the counter-revolutionary gangs” and that it “was responsible for the most severe setback and the heaviest losses suffered by the Party, the country, and the people since the founding of the People’s Republic“.
The economy then began to recover with the industrial sector returning to a fairly high rate of growth in 1969.
War with Soviet Union
Another effect of the Cultural Revolution was its effect on China’s foreign policy which became more and more anti-soviet. In response, the Soviet Union made incursions on China’s border in two disputed locations. And China responded in kind. As the conflict escalated the Soviet leadership began to seriously contemplate a pre-emptive nuclear attack on China and moved nuclear weapons into position on the border. Thus, the dream of socialist brotherhood and cooperative development between two major nations had degenerated into a conflict between two stalinist bureaucracies to the point that one of them was contemplating a nuclear attack on the other.
In an ironies of ironies, the Soviet leadership were only persuaded to pull back by the intervention of the United States: “The Nixon administration warned that such an attack on the PRC would provoke a Third World War.”
This was a threat the Soviet leadership took seriously, causing them to withdraw their nuclear missiles and come to agreement with China.
China reacted to this chain of events by moving closer diplomatically to the Americans who they sought to use as a foil against Moscow. After a series of secret visits in 1971 by US National Security Adviser Henry Kissinger, it was arranged for President Richard Nixon to visit China in early 1972. This opened the way for economic cooperation between the two countries, a cooperation that significantly helped the reform process that was to come.
In September 1976 Chairman Mao died. In his final years he had balanced between the radical and reformist wings of the Party. Once he left the scene an intense struggle broke out between the two factions. At first the radical wing, led by Mao’s wife and known as ‘The Gang of Four’ appeared to be in the ascendent. They began to take steps to revive aspects of the Cultural Revolution and a drive for ideological fervour. But the intervention of the leadership of the army swung the balance decisively back towards the reformist faction. Thus, the Gang of Four were arrested in October and later put on trial.
Within a year the leading reformist, Deng Xaioping, was in charge. He reaffirmed the modernization program espoused by Zhou Enlai in 1975. And a new era of Chinese history began.
The Chinese Revolution of 1949 laid the groundwork for a transformation of the lives of one fifth of humanity. Some advances took place in health and education but many mistakes were made in the first three decades of the revolution, some of which were a repetition of those made in the Soviet Union in the 1920s and 30s. In particular, Mao repeated the mistakes of War Communism in believing that it was possible to skip from the early stages of socialist construction in a poor and backward rural society to socialism in a few quick steps. That revolutionary will could somehow replace the necessary pace of development required by the reality inherited by the Revolution. That pure socialist economic measures could somehow transform a feudal society rather than the hybrid socialist/capitalist programme that was developing under the Soviet Union’s New Economic Policy.
Sadly, the brutality of Mao’s regime and its repeated upheavals cost many lives and caused much suffering. And held back China’s development for its first three decades. But, fortunately, deep lessons were learned from these negative experiences and applied in a spectacular fashion in the period after Mao’s death. As we examine in the section of our Manifesto entitled: ‘China’s New Economic Policy 1977 – today’