Economic History

When in 1949 the People's Republic of China was proclaimed, interested in foreign countries especially the question of how the country's huge population ever wanted to eat. More than 50 years later sees the world from a country that not only feed its population, which has more than doubled and the largest export nations in the world. The economic policies under Mao Zedong was the introduction of a planned economy on the Soviet model characterized. A plan should the market in the distribution of resources and investments to replace. The goal was the fastest industrialization and the highest possible economic growth. It was the planned economy in some areas critical to the Chinese conditions adapted. First, China was unable to provide sufficient planning and administrative staff raise, a strictly planned economy after the Soviet model introduced. Instead, were already in the 1950s to the decentralization measures taken and the makers at provincial and operational level, more freedom to implement the guidelines given. On the other hand, Mao laid great emphasis on self-development. Not only China, but also individual provinces or regions should be self-sufficient can. This isolated the country from the rest of the world especially in a time when other developing countries through active promotion of integration into the world experienced an economic catch-up.

Development of gross domestic product in China from 1952 to 2005.

The third difference from the Soviet economic model was that Mao in economic development to mass campaigns continued, such as the Great Leap Forward or the Cultural Revolution. These two primarily politically motivated movements, however, threw the country back many years, historians now estimate that the Great Leap Forward (1959-61) up to 30 million lives: the most starved, because Mao's policy of massive crop failures resulted. The Cultural Revolution (1966-1976) China appealed for an entire decade, virtually paralyzing: Schools and universities were closed, a well-known slogan of the Cultural Revolution provides "Better red than expert": So it was better to be on the political "right" to stand, than on certain skills to do so.

Mao's legacy

The economic legacy of Mao is ambivalent: on the one grew the gross domestic product from 1952 to 1975 at an annual average of 6.7 percent, the opportunities for education (particularly for women), health care and Social Security, reaching a level that exists in the history of the country previously never had, and the share of industry in economic power was about 20 percent in 1952 45 percent 1975 increase. These successes, however, were based largely on the mobilization of additional resources, the investments were becoming increasingly inefficient and relatively high economic growth was only a very small proportion in the higher consumption of the population are implemented. In the end, Mao had to admit to himself that his utopian vision of economic policy led to an impasse was. He brought in March 1973, after the diagnosis of cancer in Zhou Enlai, the economically pragmatic politician Deng Xiaoping returned to power, even though previously he had fallen in disgrace. In May of 1976, Deng Mao but again fallen. Deng Mao threw that economic success is preferable to the class struggle. Deng lost all offices and was under house arrest. Mao named Hua Guofeng as his successor.

The death of Mao in September 1976 opened the way to reforms. It is unlikely that a continuation of economic policies, as it was under Mao, long would have been possible. In September 1977 received Deng, because of the influence of pragmatic officials, all of him in 1976 deprived back offices and succeeded him, the new Party Chairman Hua Guofeng gradual disempowerment. From 1979 Deng was de facto the new party leader. Deng Xiaoping was the most urgent problems first, and took the collectivization of agriculture gradually returned. The farmers were from then on property rights to their products, land tenure, however, was still not possible. Agricultural products were soon back on the free-access, rural markets. From the mid-1980s were also non-state enterprises in the industry admitted.

In 1989 there were unrest in the nation because of price increases (Tian'anmen massacre) because of the abolition of Deng enforced by the state set prices and the student protests in Beijing, the Left Party, which rejected the economic liberalization, rise again. The wing battle was only decided in 1992, Deng Xiaoping and then joined his famous journey through southern China on which his theories of the "combination of economic planning and market economy" and the "socialist market economy" promoted.The wait-and reform-oriented class registered Deng's just call for "more courage to experiment with Draufgängertum and Abenteurermut" and its call, which is now but the opportunity to summarize Schopfheim. Deng also reassured, after years of command economy, the policy experiments that allow for, and that this is much better than anyone was forced. Since developing a private economy in the cities, which hardly existed until 1992.

Although the time under Mao in China today as a now past shall overcome, appeared in 1999 in the People's Republic of a new series of banknotes: Where previously only the 100-yuan bill, the portrait of Mao showed his face is now on all new bank.

Foreign companies in China

Later, it was foreign firms allowed to invest in China and foreign trade was liberalized. Even institutional reforms in public investment or the tax system were necessary. The policy framework was, however, nothing changed, why the economic system as state socialism or officially as the "Chinese-style socialist economy" has been described. In 1995 the economy showed a stable high growth, the previously isolated country was the seventh member of the international trade, and the quality of life grew rapidly, with the consumption expenditure of households begin to price increases by more than 7% lead. In the years 2000 to 2005, the inflation rate back in the field from 0 to 2%.

Foreign Trade

Foreign trade is developing rapidly, but the trade surplus in 2006 increased 207.5 billion U.S. dollars while the exports are significantly better than the imports increased. The foreign exchange reserves increased by October 2007 to 1455 billion dollars, which China now faces Japan (970 billion U.S. dollars), Russia ($ 305.6 billion) and Taiwan ($ 268.0 billion) the largest reserves in the world. For comparison, the entire euro-zone has only about 191.6 b.illion U.S. dollars .

In the second quarter of 2009 was the first time China's foreign exchange reserves of over two trillion U.S. dollars.

Communism as a national objective

Despite the government-sponsored market economy system, the CCP has its objective to build communism, not abandoned. The current market economic system is under the party's statutes as a precursor to communism considered. Today's idea of Chinese Communism, however, differs fundamentally from the idea of Karl Marx 150 years ago. According to official Chinese figures, the present Communist Party of China from the ideas of Mao Zedong and the theories of Deng Xiaoping-guided and the economic vision of Deng was to build a "socialist market economy.

On 30 Deng in June 1984 described the situation as follows: "What is socialism and what is Marxism? In the past, we do not really clear. Marxism in particular requires the development of productive forces. We said that socialism is the first step towards communism, and that in an advanced stage of transition, not that any more in accordance with his abilities but according to his needs can live, will be completed. This requires highly developed productive forces and an overwhelming abundance of material prosperity. Therefore, it is on the socialist stage, the fundamental task of the productive forces to increase. The superiority of the socialist system must therefore demonstrate that under him the productive forces to develop faster and better than under capitalism. If they develop, then the material as well as the cultural life of the population steadily improve. One of our mistakes after the founding of the People's Republic was that we have too little attention to the development of productive forces appealed. Socialism means eliminating poverty. Mass poverty is not socialism, much less communism.