Economic Development Prospects and Problems in China

Abstract

Maoist ideology and economic policies imposed on the realities of China's economic backwardness and the scarcities resulting therefrom have produced a peculiar and sharply contrasting pattern of development during the past two decades. The differences in economic performance were so marked—characterized by rapid expansion in the fifties and stagnation in the sixties—that it almost seems as though one were dealing with economies in two entirely different settings, perhaps even in two different countries. The attempt at deliberate industrialization in China represents an unprecedented case in the history of modern economic growth, comparable only to India. Of the presently developed countries, only pre-industrial Japan was comparable to contemporary China in terms of per capita income, average productivity of labor, and intensity of population pressure on arable land resources. However, the dynamics of population growth was quite different, and there are of course vast differences in size and geographic configuration, all of which compound the problems of communication and diffusion of innovating influences in China as compared to Japan. In spite of these handicaps, China's economic growth since 1949 was of the same order as the long-term expansion in Japan since Meiji. However, the 4 percent aggregate and roughly 2 percent per capita rate in China represents an average of sharply fluctuating rates during these past two decades, based on markedly differing development strategies adapted by the Chinese leaders in the past two decades.