Contemporary Centres of Power
The rise of China
Compare China's reforms with Russia's shock therapy.
After the communist revolution of 1949, led by Mao Zedong, China followed the Soviet model: state-owned heavy industry, a planned economy, and making goods at home instead of importing them (import substitution).
It worked partly. China met people's basic needs, wiped out much extreme poverty, and grew at 5–6 per cent a year. But a fast-growing population and weak farming held it back; growth was not enough for its huge numbers.
Then China changed course:
| Year | Step |
|---|---|
| 1972 | China ended its isolation and opened relations with the US |
| 1973 | Premier Zhou Enlai proposed the four modernisations: agriculture, industry, science and technology, and the military |
| 1978 | Deng Xiaoping announced the 'open door' policy: foreign investment and technology welcomed |
| 1982 | Agriculture privatised: farmers could sell their produce |
| 1998 | Industry privatised step by step |
| 2001 | China joined the World Trade Organization |
Special Economic Zones (SEZs) were set up, where foreign companies could invest and trade freely. China became the most attractive place in the world for foreign direct investment.
China and Russia compared: Russia used shock therapy, changing everything at once, and its economy collapsed. China opened step by step, farming first and industry later, and the state stayed in control. China's economy boomed.
But growth brought problems: not everyone gained. Unemployment, rising inequality between town and country and between regions, pollution, and corruption all grew.
Today China is the world's leading manufacturer and one of its largest economies: a major centre of power.
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