Deng Mao Chinese Economy

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During the Maoist era, just after the Civil War in 1949, China suffered from a fragile economy. As described in a Xinhua article, all currency and credit were under centralized control and the economy was entirely regulated by the state; trade associations were established, quotas were set, and agricultural taxes were collected to maintain the economy. During the “Great Leap Forward” in 1958, wages were strictly calculated according to the Marxist principle of “From each according to his ability, to each according to his need.” Predictably, any ideas of capitalism and free market were banned. Since the 1960s, however, the change in leadership in China brought about a shift in ideals and a movement to economic reform. In the past thirty years, China has been experiencing unprecedented economic development, validating the success of Deng Xiao Ping’s implementation of capitalist market principles and amalgamation of central planning with market-oriented reforms. Having studied in Europe during the Great Depression, Deng witnessed the setback of absolute market economies; yet, he had always expressed concerns regarding the entirely planned economy in the USSR. Some even argue that Deng has anticipated the inevitable collapse. Therefore, unlike Mao, he held a more pragmatic view in managing the economy, as embodied by his well-known remark, "It does not matter whether they are black cats or white cats; so long as they catch mice, they are good cats.” Starting with coastal cities designated “Special Economic Zones”, Deng gradually introduced aspects of a capitalist economy to the rest of China. He lessened government’s role in planning and managing the national economy in three main ways: decollectivizing agriculture, promoting Forei... ... middle of paper ... ...conomy and capitalist ideals, China was fast to prosper into one of the strongest economies in the world. The staggering rate of annual growth and unmistakably favorable outlook of the Chinese economy not only serves to threaten power-holding countries in this world, but also proves that economic reform is possible without an extensive change in regime. However, China’s prosperous economy does not resolve its social issues, such as corruption, unequal distribution of wealth and deteriorating environment. Though these problems can be concealed temporarily with blossoming economic success, the root lies within the political institution and system of governance in China. Until corruption diminishes substantially, wealth is more equally distributed and stricter regulations about the environment are set, China will be the world’s economic powerhouse, but nothing more.

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