AI Overview
During the period from the 1950s to 1978, China's economic policy underwent radical and often tumultuous changes, largely driven by Mao Zedong's ideological campaigns
. Moving from a Soviet-style centrally planned economy, these policies culminated in the disastrous Great Leap Forward and the chaotic Cultural Revolution, leaving the economy on the verge of bankruptcy by the time Mao died.
Phase 1: Post-1949 reconstruction and Soviet-style planning (1950–1957)
After the founding of the People's Republic of China, the new government prioritized economic recovery and consolidation, adopting a Soviet-inspired model of a centrally planned economy.
Land reform: Between 1950 and 1952, the Chinese Communist Party (CCP) eliminated the landlord class and redistributed land to approximately 300 million peasants. However, private land ownership was short-lived.
Collectivization: Beginning around 1952, the government pushed farmers into Mutual Aid Teams and then into Agricultural Producers' Cooperatives. By 1957, nearly all farming households were part of these collectives, though this forced consolidation later harmed farm production.
First Five-Year Plan: Launched in 1953, this plan focused on rapid heavy industrial development with Soviet assistance. State-owned industries thrived, but this came at the expense of agriculture and consumer goods production.
Phase 2: The Great Leap Forward (1958–1962)
Mao became impatient with the Soviet-style model and launched the Great Leap Forward to accelerate China's transition to a communist society. This was an economic and social catastrophe.
People's Communes: Existing collectives were merged into massive People's Communes, which stripped peasants of their remaining private plots and resources.
Backyard furnaces: Labor was diverted from farming to build small, inefficient "backyard furnaces" in a futile attempt to increase steel production. This resulted in millions of tons of useless, low-quality pig iron.
The Great Famine: The diversion of labor, combined with disastrous agricultural policies, led to the Great Chinese Famine (1959–1961), causing an estimated 15 to 55 million deaths from starvation.
Sino-Soviet split: Tensions with the Soviet Union, including disagreement over economic policy, led Moscow to withdraw its advisors and assistance in 1960, exacerbating China's economic problems.
Phase 3: Economic recovery and renewed upheaval (1962–1976)
Following the failure of the Great Leap Forward, pragmatic leaders like Liu Shaoqi and Deng Xiaoping implemented more moderate policies. However, this period was cut short by Mao's return to radicalism.
Readjustment: Moderate leaders loosened control over the economy, allowing for private plots and markets. The commune system was restructured into smaller, more manageable units.
Cultural Revolution: In 1966, Mao launched the Cultural Revolution to reassert his control and purge opponents. This caused a decade of intense political and social chaos that severely damaged the economy.
Economic disruption: Industrial and agricultural production plummeted as factories closed, and workers participated in political activities. Foreign trade and investment were restricted, and the purges of managers, technicians, and intellectuals led to a massive loss of expertise.
Phase 4: The end of the Maoist era (1976–1978)
With the deaths of Mao and Premier Zhou Enlai in 1976, the Cultural Revolution ended, leaving China's economy severely damaged. The post-Mao leadership, eager to reverse the stagnation, began to shift toward more moderate and market-oriented policies. This set the stage for the dramatic economic reforms of 1978 under Deng Xiaoping.
