From Closed-Door to Powerhouse

The Modern China


Mao Zedong declared founding of people's republic china in 1949

On 1 October 1949, Mao Zedong proclaimed the founding of the People's Republic of China (PRC) from the Beijing Tiananmen.

The China then was very different from the China that we know today. 

A new political and economic system modeled after the Soviet Union was installed.

Various stages of development took place over the years before policies of peoples republic china changed to see it open up to the rest of the world, and became what it is today.

The New China

With the founding of the new China in 1949, the government overhauled the land ownership system, and carried out extensive land reforms. The old landlord-ownership system of farmland was replaced by a more egalitarian system in favor of the poor peasants.

'Class struggle' and study of communist doctrine became the order of the day. From 1953, a series of campaigns were launched to suppress former landlords and capitalists. The door of the country was closed, and foreign investment literally unheard of.

Great Leap Forward

Leaders of the country believed that socialism would triumph over all other ideologies. Following the First Five-Year Plan based on the Soviet-style central-controlled economy, they launched the ambitious great leap forward china movement in 1958.

It was an unprecedented process of collectivization in the rural China. Activities defying convention and even logic were carried out. For example, people were urged to use backyard iron smelters to increase steel production (something impossible to produce the quality required) and farmers taken off the land resulting in large amounts of crops rotted unharvested.

The country went ahead with the movement despite the apparent damages made. Market mechanism was disrupted, and starvation was seen even in areas with fertile agriculture land. It led to famines, and thirty million people are said to have perished between 1958 and 1961.

Despite the economic and humanity disasters, politically China saw unity and sovereignty for the first time in the century. Other developments such as infrastructure, healthcare and education, nevertheless, raised the standard of living for the average Chinese.

Cultural Revolution

Another humanity disaster took place in May 1966, with the beginning of the Cultural Revolution. It was meant to impose socialist orthodoxy and rid China of "old elements". But in reality, it was a power struggle within the the ruling party. The impact of the campaign was far reaching, and affected everyone, in all aspects of life.

Red Guards terrorized the streets and tortured ordinary folks by branding them 'counter-revolutionaries'. Education and communication came to a standstill. Productions were disrupted, as people were expected to shout communist slogans, reciting Mao quotations and carry out 'class strugggles' in addition to works. Political leaders, including Liu Shaoqi and Deng Xiaoping were purged.

The campaign came to a complete end on the departure of Mao in 1976.

Deng Xiaoping and economic reforms

Mao Zedong's death sparked off a a power struggle with the Gang of Four. Eventually, it was Deng Xiaoping who took control over the top leadership.

Deng Xiaoping

Deng Xiaoping

Deng Xiaoping introduced a new brand of socialist thinking, which to a great extent contributed to what China is today.

He advocated the development of Socialism with Chinese characteristics, and promoted economic reform that can be summed up by the Four Modernizations -- those of agriculture, industry, science and technology and the military.

Under his leaderhip, local municipalities and provinces were allowed to invest in industries that they considered profitable. This has propelled the growth of the light and export-led industries. The growth were accelerated especially with the purchase of machinery from Japan and the West.

He also introduced polices that attracted foreign companies to China, beginning with a series of Special Economic Zones, where foreign investment and market liberalization were encouraged.

Jiang Zemin

Jiang Zemin became "paramount leader" of China in the 1990s, and began the post-Deng era of people republic china, which saw the country went through substantial economic growth with reforms.

His macroeconomic reforms furthered Deng's vision for "Socialism with Chinese Characteristics". After 15 years of talk, China was finally admitted into the World Trade Organization in September 2001.

It was during his tenure that Hong Kong was returned to China peaceful from the United Kingdom, and Macau from Portugal. The relations with the outside world were improved. Serious attention was given to scientific and technological advancement in areas such as space exploration. Domestically, the controversial gigantic Three Gorges Dam was built.

Hu Jintao

Hu Jintao is the current Paramount Leader of the People's Republic of China, holding the titles of General Secretary of the Communist Party of China since 2002, President of the People's Republic of China since 2003, and Chairman of the Central Military Commission since 2004, succeeding Jiang Zemin in the fourth generation leadership of the People's Republic of China. His rise to the presidency represents China's transition of leadership from old, establishment Communists to younger, more pragmatic technocrats.

Read more about the Chinese culture.

Read more about Chinese Business Mindset.

Go back to home page.