The People's Republic of China has changed a lot since it was founded in
1949 as a hardline socialist country, so much so that if Mao himself rose from the grave,
he'd probably fall right back into it
In the 1970s China was a country of very very poor farmers, and well now it's a world superpower and
economic powerhouse. No country in
history has grown so fast or has gotten so many people out of poverty as China has done in the last 40 years.
Throughout this time this country has grown as an average rate of almost 10 percent per year, and most importantly almost
800 million people, more than the entire population of Latin America, Spain and Portugal, have escaped poverty
But I'm pretty sure this isn't news to you or anyone else
But how did China manage to change?
Do you think that this entire transformation was the result of a carefully drawn plan?
Some intricate strategy mapped out by China's leaders. Well, dear viewer
I think that this story has a twist that is probably going to surprise you so listen up.
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On October the 1st 1949 Mao Zedong proclaimed the existence of the People's Republic of China
he did this from Tiananmen Square in Beijing and he did so with a very clear slogan and that was
China has stood up
However in the following three decades that reality had changed a lot Mao was rather obsessed with the ideology
willing to implant the societal model that he had in his mind. That's pretty much (at) any cost. And among other things dear viewer
He thought the Beijing could decide everything and determine the future of everything
How much to produce, what to produce, how to distribute the workers, how many factories were needed, how the goods were to be
Distributed and production, etc, etc, etc. And not only that
The other thing that was clear to Mao was that any dissidents was a danger that had to be eliminated
And of course as you can imagine these ideas in the hands of someone with so much power and so much stubbornness certainly had consequences
some studies estimate that during the almost 30 years that Mao was the supreme leader of China, between 50 and
70 million people lost their lives due to famine, political persecution and
absolute poverty.
And after 30 years in power after collectivizing all of China's lands and properties and brutally persecuting millions and millions of
intellectuals, academics and anyone who wasn't comfortable with the regime. Well, China was plunged into misery.
Cultural Revolution wrecked devastation on the lives of millions of Chinese people. For ten years,
the nation was reduced to a state of barbarism. Xiao Han, an associate professor at China University of political science and law.
At that time more than 80% of all chinese people lived in miserable conditions. Famine was common, political terror,
purges were the order of the day and the living standards were comparable to that of some countries in sub-Saharan Africa
and all of this while Japan and the Asian dragons of Hong Kong, Taiwan, South Korea and Singapore were taking off enormously.
That's why we can't be surprised that when Mao died in
1976 the Chinese Communist Party divided into three very different sectors: the radicals led by Jan Cheng Mao's own widow,
Hua Guo Feng's moderate reformers and the most aggressive reformers led by Deng Xiaoping
In the end after a lot of push and pull and after making it clear that China couldn't stay the way it was any longer
in 1978 it was the latter, the most convinced reformers, who took the lead
The black cat and the white cat
Do you remember the questions that I asked in the beginning of the video? Well, let's answer the first one right now
How did China manage to change its course?
In December of 1978 at the 11th Congress of the Chinese Communist Party the reformist Deng Xiaoping
took over the country's leadership
Deng Xiaoping argued that the ideological
utopia that had damaged China so much had to be set aside and that they needed to commit to modernization
In fact, you might already be familiar with his most famous phrase
it doesn't matter whether the cat is black or white, as long as it catches mice - Deng Xiaoping. And dear viewer that's precisely what
he did for the following 10 years because if we have to say something it's that the reforms weren't exactly very quick
But you might now be wondering, well, okay Simon
but what exactly were their priorities? Well, from an economic perspective
we can classify the reforms into three big blocks:
Agriculture, industry and trade, and it all began in the fields.
We've already mentioned that at the time China was fundamentally a country of peasants
While the agrarian reform decollectivized the countryside and the communes were suppressed and replaced by the usual family
exploitation model.
In addition these so-called household
responsibility system was implemented by which many decisions such as what type of crops the plants, what
investments to make, what tools and gear to buy, passed from the government from the bureaucrats to the families themselves
And not only that the peasants had to sell part of their harvests to the state and then could sell the rest on the free
market a completely free prices
And that was a huge revolution but this time the good kind.
Agricultural production soared and food prices dropped while the peasants living conditions improved a lot.
And the results were good
so Beijing decided to apply similar reforms to the industry sector, that way the government gradually transferred decision-making from Beijing's
Ministries to government-owned companies. Yes, the decisions were still coming down from the government
but let's just say they were working under different criteria.
That way, little by little, throughout the 1980s government-owned company managers were able to make decisions such as sharing benefits among workers, paying
productivity bonuses, granting the freedom to hire and fire employees, deciding which suppliers to work with, setting free prices and the list goes on.
It makes sense because who better than the company's own managers to decide what they need to work better.
Well, in addition, there was all the companies by the legalization of private companies
so suddenly
Government-owned companies they had competition. And there was also a trade reform in which little by little China allowed foreign trade by largely
dismantling import barriers and
tariffs. However, beyond agriculture the reforms they did face a huge problem. China was a very poor country
And of course, it has neither capital nor technology. So well, what did the government do? Well this gets interesting.
Special economic zones
At the beginning of the 1980s, China was a very poor country
It was closed to the world and it lacked both money and technology
But what it did have was a large workforce willing to work in better conditions than the ones they had in the countryside
So under these circumstances Deng Xiaoping's government decided for an experiment
They didn't want to completely renounce the economic model that they'd inherited from Mao
But they did want to make something so they made special economic zones in areas where the communist system had stopped working
See, in these areas foreign companies could invest and set up factories
That is, they had access to the Chinese workforce
That in itself was a huge advantage
But that wasn't all they also had very few taxes, relatively little bureaucracy and no tariffs.
It was essentially a small oasis for multinationals in the middle of the then hostile and
Hermetic People's Republic of China. Beijing's idea was very clear bring technology,
bring capital, bring work. Initially four special economic zones were set up: Shenzhen, Zhuhai
Xiamen and Shantou. These were so successful that the authorities began planting them all over the country.
There's the case for example of Shenzhen. When this special economic zone was created,
the area was nothing more than a poor fishing village with just over 30,000 people. Today
it has 12 million inhabitants. Its GDP will soon surpass that of Hong Kong itself
And it's one of the world capitals of technology, and it's all happens in just a few decades.
Do you know the companys Huawei, DJI or Tencent?
Well, they're from this city. These economic zone success was so great that we can state that they were the precursors of China's opening.
The Shenzhen special economic zone is an experiment. We need more time to see whether it has gone well.
We wish it success, if it fails it will provide some lessons - Deng Xiaoping. Because, folks, Deng Xiaoping's
initial idea was to use these areas not to open up the country but to gain resources,
so that the government could maintain the old model.
It's often thought that China's transformation was perfectly drawn designs and calculated by the Beijing government
However, and this might surprise you it wasn't like this
The marginalist revolution
We think that the Chinese reforms were plans by the Beijing governments, but were they really?
Well, you see, after Mao's death China was a wreck. The last crusade of the so-called great helmsman
The Cultural Revolution had left the country in tatters
Mao's Cultural Revolution produced a result opposite to what he presumably intended, leading many Chinese to lose faith in their government altogether
- Frank Dikotter, a Dutch historian who specializes in modern China
In fact it was during this period the black markets began to spread, places where people tried to survive outside of the system and that's also meant
a very important cultural change. Perhaps that's why after Mao's death before the transitions
chaos, some changes began to happen automatically
For example, while the government continued to promote collectivized agriculture some regions revolted and decided to implement the family
exploitation system on their own, even though this meant breaking the law and returning de facto to a private
exploitation system. And of course as this initiative started gaining more and more followers, Beijing government
finally decided to establish these changes as state policies
But it was actually following these changes that caused the change in society. Something similar happens with private businesses in the cities.
You see, after Mao's death many young people had been sent to the countryside returned to the cities, and since there was no work
they tried to sort it out themselves and the government simply had to accept it, and suddenly
private stores began to multiply like mushrooms in every Chinese city, ending the state's commercial monopoly once and for all.
And in a way the same thing happens with the municipal and regional
companies which began to emerge outside of state control. This led them to be the most dynamic in China for years.
Yes, it's true. Deng Xiaoping's government didn't stop these changes, on the contrary
he ended up implementing them as policies.
But as you can see a large part of the change far more than what we're often told
Came from the bottom up and not the top down. By the way
maybe that's why China's transformation was so great and happens in such a short amount of time
By the way, before you go and beat us up in the comments,
we do know that Xiaoping was no saint. He was a dictator and without going much further
we can say that the Tiananmen repression was his own doing.
But now, it's your turn. Do you think China will end up ever becoming a democracy?
Well, leave your answer in the comments below as well as in this survey, and I really hope you enjoyed their video
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Also, don't forget to check out our friends at the reconsider Media podcast
They provided the vocals in this episode that were not mine. And as always, thank you for watching.