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Communist China: the Sustainability of its Economic Growth

Sebastian Sutch '24 & Everest Schipper '24

 

A mere century ago, China was in a state of utter disarray. Following the Opium War (1839-1842), the nation’s economy—along with its sense of unity and patriotic spirit—had been decimated. A shambolic Qing empire could do little but watch, hapless, as its once-great empire plummeted towards collapse. Once the empire eventually fell, a decades-long period of violent political instability ensued, wherein the socialist, nationalist Kuomintang and the Communist Party contended for power. And while the Communist Party’s installment into government following the Chinese Civil War (1927-1949) seemed to promise the nation a semi-defined path towards redemption, it failed to fulfill it. Masterminded by the strong-headed, errant-minded MaoZeDong, the Great Leap Forward (1958-1962) merely compounded China’s myriad woes. Designed with the intention of transforming China’s agrarian economy to a modern, industrial one—one which could rival its European counterparts—the Great Leap Forward had the absolute opposite effect. Beginning in 1958, the government began to implement a network of ‘communes’ throughout the country. Under this system, the notion of ideological purity—sheer devotion to the Communist party—was strongly emphasized, and political matters were abruptly decentralized and controlled by provincial officials. The peasants who inhabited these ‘communes’ were divided into brigades: men were sent to work the fields and melt steel in backyard furnaces, while women maintained their domestic roles as homemakers. Due to a series of natural disasters, though, harvests yielded close to naught, and as Soviet support was withdrawn from China, the nation truly hit rock-bottom. From 1960-1962, a staggering thirty million people succumbed to starvation, making it the single-largest famine in human history. And for survivors, life was a near-equally brutal struggle, as the possibility of escaping poverty was practically non-existent. The gross domestic product of China in 1962 was a mere $47 billion USD. Meanwhile, the United State’s GDP was $605 billion USD—nearly 13 times greater than China's economy at the time. This period of national struggle, wherein the GDP per capita remained below $200 USD, existed until 1978 when Deng Xiaoping, then China’s paramount leader, announced the Open Door policy, which effectively opened the country up to foreign investment.


Prior to 1978, China’s approach to trade had been highly restrictive and generally limited to small communist and socialist nations. Under Deng’s new strategy, though, this insular, conservative outlook would be completely reversed. Suddenly, China was open to business with the world, something which had never before happened in its five-millennia history. In seven Special Economic Zones, or ‘SEZs’, foreign businesses were granted free market-oriented economic policies (like duty-free benefits) and flexible governmental measures, which enabled them to invest with greater ease. Between 1981 and 1993, the nation’s GDP experienced average GDP growth of 9.8%. The economy of Shenzhen, the first of the ‘SEZs’, grew at an astonishing rate of 40% per year. And China's per capita income increased fivefold between 1990 and 2000, from $200 to $1,000. Between 2000 and 2010, per capita income also rose by the same rate, from $1,000 to $5,000, thereby demonstrating the sustainability of the nation’s growth, lifting more than 770 million individuals out of poverty. Asahina's middle class is predicted to number 1.2 billion by 2027, more than one-quarter of the world’s population, there appears to be an incredibly defined road towards economic growth which the country can continue to tread.


But the question that I pose is, whether this economic growth is sustainable? If we try to predict the future it is difficult to say that their growth is going to be long-term. Forbes analysts have created predictions for the state of the Chinese economy by the year 2050. Analysts say that the most probable outcome for the Chinese economy is one where it suffers from “internal conflict, water shortage, and a slowing economy,” but they do say that it is probable that “China will maintain its position as the most powerful nation in Asia.” The next most probable outcome for China is a stagnant economy where it falls back into “widespread poverty and environmental destruction.” The final outcome which analysts classify as unlikely is “China growing to a point where they are more powerful than the United States”, and they believe that economic implosion is improbable. The Forbes article ends by painting a picture of China falling stagnant due to corruption, too strict of control, loss of control in places with a strong minority influence, and unrest in Hong Kong and Taiwan. They say that Hong Kong’s position as a global finance and trade hub will cease to exist as 2047 nears because “Hong Kong's wealthiest individuals will leave the city taking their capital with them.” The picture painted for Taiwan is a similar one -- one where the Chinese government has no choice but to give Taiwan its independence as China loses control of places even on the mainland. These predictions certainly do not seem hopeful for China.


A seemingly larger problem for China and her people is unrest and the growing anti-government sentiment within the population of 1.4 billion. In a 2020 Human Rights Watch, it’s stated that “China’s government sees human rights as an existential threat.” The Chinese government has been building and reinforcing methods of suppression of the Chinese people since the Communist Party took control in 1949. The notion of having to live within these strict social confines seems unfathomable to Westerners, but Chinese people are forced to do so. Such methods of discreet oppression include The Great Firewall: a series of laws and regulations that block and censor certain information that is harmful or disruptive to the Chinese Communist Party. The Great Firewall also makes cross-border communication much more difficult, which effectively gate-keeps damaging information from the Chinese people. Another form of near-dystopian suppression is unconstrained surveillance. The Human Rights Watch states that “a nightmarish system has already been built in Xinjiang… [wherein] the job of the [province-wide] security system is to scrutinize and report ‘problems such as people who pray or show other signs of active adherence to the Islamic faith.” This perpetual surveillance makes it impossible for Chinese nationals, especially Muslims, to live their life with the freedom of religion—one of the key pillars that the United States was founded upon. However, we do not know how long these oppressive rules and regulations will exist for because in that same report the analysts write “Chinese leaders worry that slowing economic growth will increase demands from the public for more say in how it is governed.” This shows that unless China can continue to sustain the same economic growth at the same pace, which we have already seen is unlikely, then public angst, and therefore revolt, is more likely to happen.


All of these reasons contribute to why I believe that the Chinese government will have changed its way of governing by 2050 - The Communist Party’s lifting of an estimated 800 million people out of poverty makes it hard to not support them, but the world that these previously impoverished people were brought into was one that was partially shrouded in secrecy, misinformation and a government with seemingly absolute power. The question is whether the Chinese people will stand to live in the nation as it is now?


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