chinese economic development

This book outlines and analyzes the economic development of China between
1949 and 2007. Avoiding a narrowly economic approach, it addresses many of the
broader aspects of development, including literacy, mortality, demographics and
the environment. The book also discusses the Great Leap Forward, the Cultural
Revolution, the aims of Maoism and the introduction of an outward-looking
market economy since 1978.
The distinctive features of this book are its sweep and its engagement with
controversial issues. For example, there is no question that aspects of Maoism
were disastrous, but Bramall argues that there was another side to the programme
taken as a whole. He urges that China’s Cultural Revolution of the 1960s and
late Maoism more generally (1964–78) need to be seen as a coherent plan for
development, rather than the genocidal programme of vengeance portrayed in
some quarters. The current system of government in China has presided over
three decades of very rapid economic growth. However, the author shows that
this growth has come at a price. One of the most unequal countries in the world,
China is rife with inequalities in income and in access to health and education.
Bramall makes it clear that unless radical change takes place, Chinese growth
will not be sustainable.
This wide-ranging text is relevant to all those studying the economic history
of China as well as its contemporary economy. It is also useful more gener-
ally for students and researchers in the elds of international and development
economics.
Chris Bramall is Professor of Chinese Political Economy at the School of East
Asian Studies, Shefeld University, UK.
Chinese Economic Development

Chris Bramall
Chinese Economic
Development
First published 2009

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© 2009 Chris Bramall
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reproduced or utilised in any form or by any electronic, mechanical,
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British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Bramall, Chris.
Chinese economic development / Chris Bramall.
p. cm.
Includes bibliographical references and index.
1. Economic development—China—History.
2. China—Economic conditions—1949- I. Title.
HC427.9.B64 2008
338.951—dc22
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ISBN10: 0-415-37347-6 (hbk)
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For Sophie, Rosa, Alexandra and Kay

List of boxes ix
List of gures x
List of tables xiii
Glossary xv
Introduction xxi
PART 1
Starting points 1
1 Measuring development 3
2 The Chinese economy on the eve of revolution 44
PART 2
The transition to socialism, 1949–1963 77
3 Early Maoism, 1949–1955 79
4 The Great Famine, 1955–1963 118
PART 3
The late Maoist era, 1963–1978 143
5 The late Maoist development strategy 145
6 The revolution in education 174
7 Collective farming 213
Contents
viii Contents
8 The Third Front and rural industrialization 261
9 Late Maoism: an assessment 286
PART 4
Market socialism, 1978–1996 323

10 The era of market socialism, 1978–1996 325
11 Foreign trade and inward investment since 1971 360
12 Industrial development since 1978 394
13 China’s developmental record in the era of Deng Xiaoping 435
PART 5
The transition to capitalism, 1996–2007 467
14 Chinese capitalism since 1996 469
15 The Revolution betrayed? 497
16 Summary and conclusions 544
Bibliography 555
Index 594
1.1 The determinants of economic potential 29
3.1 The Marxian theory of history 81
3.2 Pivotal moments in Chinese development during the early 1950s 86
4.1 The key speeches and initiatives of the Great Leap Forward 120
5.1 Phases of late Maoism 146
5.2 The evolution of Maoist thought 149
5.3 The logic of the late Maoist development strategy 155
5.4 A political chronology of late Maoism 159
6.1 Summary effects of late Maoism on years of education by class 207
7.1 Chinese agricultural institutions, 1949–2007 215
10.1 Chinese economic policy, 1978–1996 330
10.2 Agricultural institutions, 1976–1984 338
12.1 Strategies designed to improve SOE performance, 1978–1996 408
14.1 Key events of the post-1996 era 476
Boxes
1.1 The Gini coefcient 17
2.1 Modern cotton spindles in China, 1890–1936 47
2.2 Chinese geographical regions 59
2.3 Average annual rainfall in northern Chinese cities 60

2.4 Average annual rainfall in southern Chinese cities 61
2.5 Per capita GDP by province, 1953 64
2.6 Chinese crude death rates, 1953 67
3.1 The growth of light and heavy industrial output, 1952–1957 90
3.2 Growth of industrial GVA and gross xed capital formation
(GFCF), 1952–1957 92
3.3 The dispersion of provincial GDP per capita, 1952–1957 109
4.1 Share of xed investment in GDP 122
4.2 Mortality rates by province, 1960 127
4.3 Grain output, procurements and rural availability during the Leap 133
4.4 Trends in gross value-added in agriculture and industry 136
4.5 Coefcients of variation for provincial per capita GDP 138
5.1 Population growth, 1949–1978 157
5.2 Share of gross xed investment in GDP 157
5.3 Industrial value-added during late Maoism 162
6.1 School enrolments, 1949–1965 178
6.2. Primary school gross enrolment rates 179
6.3 The enrolment gap, 1949–1965 183
6.4 Primary enrolment rates and number of graduates, 1962–1978 192
6.5 Promotion rates to junior and senior middle schools, 1964–1978 193
6.6 Illiteracy rates in 1982 by year of birth 194
6.7 The gap between progression rates in urban and rural areas,
1962–1978 203
6.8 Literacy rates by county and city, 1982 205
7.1 Net grain exports 214
7.2 Distribution of idle time in agriculture by month in the early
1930s 223
7.3 Growth of agricultural output, 1952–2006 229
7.4 Rice yields in Asia and the USA, 1961–2004 231
Figures

Figures xi
7.5 Trends in labour productivity under collective farming, 1955–1981 233
7.6 Cultivated and sown area, 1949–2006 244
7.7 The internal terms of trade, 1950–1984 246
7.8 Production and imports of chemical fertilizer 248
8.1 The share of the secondary sector in GDP at Panzhihua,
1952–1978 268
8.2 Growth of commune and brigade industrial output, 1962–1978 271
  8.3  Coefcients of variation for per capita industrial output  279
8.4 Share of accumulation in national income in fast and slow-growing
provinces 280
8.5 Industrial employment in 1982 by county and city 282
9.1 Food consumption in China, 1963–1978 294
9.2 Chinese infant mortality rates, 1963–1978 297
9.3 The dispersion of per capita GDP by province and municipality 301
9.4 The urban–rural gap in terms of per capita GDP, 1963–1978 302
9.5 Regional variations in infant mortality at the time of the 1982
census 307
9.6 The urban–rural infant mortality gap, 1963–1978 309
10.1 The impact of Readjustment 334
10.2 Annual growth rate of GNI during Readjustment 335
10.3 The growth of agricultural value-added, 1963–2006 340
10.4 The internal terms of trade, 1978–2006 347
10.5 Growth of gross national income and the consumer price index,
1982–1991 351
10.6 Growth of government consumption and capital construction
expenditure 354
11.1 The share of exports in Chinese GDP, 1931–2006 360
11.2 The changing composition of Chinese imports, 1950–1978 364
11.3  Exports of crude oil and rened petroleum, 1971–1982  366

11.4 Trends in foreign direct investment and the share of exports in
GDP, 1996–2006 370
11.5 Ratio of the value of exports from Jiangsu and Shanghai to those
of Guangdong, 1991–2005 377
12.1 Trends in labour productivity in Chinese industry, 1965–1978 403
12.2 Trends in defence spending 410
12.3  Rates of prot in the SOE sector, 1978–1996  415
12.4 Value-added per worker in manufacturing in China as a percentage
of value-added in other countries, 1978–1994 417
12.5 Industrial employment by sector 422
12.6  The 
rate of prot in the SOE sector since 1996  425
12.7 Growth of industrial GVA, 1996–2006 426
12.8 Urban unemployment after 1993 428
13.1 Indices of per capita GDP in transition economies 439
13.2 Fluctuations in GNI and the retail price index, 1978–1996 442
13.3 Junior and middle school enrolment rates, 1968–1996 443
xii Figures
13.4 Poverty in rural China, 1978–1996 448
13.5 Estimated rates of urban poverty 453
13.6 Coefcients of variation for per capita GDP at the provincial
level, 1978–1996 457
14.1 Growth of real GDP and the consumer price index, 1996–2007 471
14.2 The western region of China, 1997 482
14.3 The ratio of per capita GDP in Guizhou to per capita GDP in
Guangdong 486
15.1 Particulate matter concentrations in Panzhihua 500
15.2 Average life expectancy at birth, 1977–2005 507
15.3 Numbers living below the rural poverty line in ve provinces,
1996–2004 511

15.4 The growth of farm and rural income, 1996–2005 512
15.5 Poor counties in China (map) 513
15.6 Ofcial urban unemployment rates, 1996–2006 515
15.7 Urban–rural illiteracy rates in 2004 519
15.8 Migration and the Chinese labour market 523
15.9 Progression rates to junior and senior middle school 538
1.1 Estimates of GDP per person using national and US prices in 2005
($US) 7
1.2 Mismatch between trends in life expectancy and per capita GDP 10
1.3 HDI and per capita GDP rankings: some country examples 12
1.4 Ginicoefcientsforarangeofcountries 17
1.5 Ratio of black to white mortality rates in the USA, late 1980s
(for men and women aged 35–54) 23
2.1 GDP per capita on the eve of modernization 54
2.2 The share of agriculture in GDP and employment in poor countries 56
2.3 Industrial production, 1952 66
3.1 Shares of gross industrial output value by ownership 90
3.2 Growth of industrial production, 1949–1955 92
3.3 The growth of agricultural cooperatives in China, 1950–1955 96
3.4 Alternative estimates of grain production in the early 1950s 98
3.5 Estimates of GDP growth, 1914–1955 102
3.6 Human development indicators, 1949–1955 104
3.7 Differentials in the Chinese countryside, 1954 107
3.8 The distribution of income by class and by region, 1951–1952 111
4.1 Collectivization in China, 1955–1956 121
4.2 The famine in Sichuan province 128
4.3 Famine mortality and participation in communal canteens 129
4.4 Trends in economic aggregates during the Leap and its aftermath 131
4.5 Population trends, 1957–1964 138
6.1 Total JMS enrolment by place of residence, 1962–1965 185

6.2 School enrolment rates for children aged 7–12 in 1964 186
6.3 Number of senior and junior middle schools, 1964–1978 188
6.4 Provinces with illiteracy rates of over 60 per cent in 1964 201
7.1 The size of collective farms, 1959–1981 217
7.2 Trends in irrigated area, 1952–1978 225
7.3 Chinese agriculture under collective and family farming 228
7.4 The growth of land productivity, 1952–2005 230
7.5 The decollectivization of Chinese agriculture 251
7.6 Output and conditions of agricultural production, 1974–1984 254
Tables
xiv Tables
8.1 Growth of industrial output in Third Front centres, 1965–1978 267
8.2 The share of industry in employment and GDP, 1952 and 1978 272
8.3 Growth of commune and brigade industrial output by province,
1962–1989 278
9.1 Estimates of GDP growth, 1963–1978 292
9.2 Life expectancy 295
9.3 Provincial deviations in life expectancy and literacy from the
national average in 1982 296
9.4 Trends in GDP per capita by province and municipality, 1964–1978 303
9.5 Poor counties in China, 1977–1979 310
9.6 Per capita GDP growth during the East Asian miracles 315
10.1 Agricultural growth rates, 1963–2006 340
11.1 Chinese imports by country of origin, 1963–1971 362
11.2 Trade shares and growth rates in selected provinces, 1978–1988 373
11.3 International evidence on export shares, 2005 381
12.1 Prot rates in the state industrial sector at the end of the Maoist era 402
12.2 The readjustment of the commune and brigade enterprises,
1978–1983 405
12.3 Employment in the TVE sector since 1978 406

12.4 Growth rates of light and heavy industry 409
12.5 The structure of Chinese industrial output, 1980–1996 412
12.6 Total factor productivity growth in independent-accounting
industrial enterprises, 1980–1996 416
12.7 Growth of industrial output and employment, 1965–1996 418
12.8 Sectoral shares in total employment 427
13.1 Chinese GDP growth after 1978 in historical perspective 438
13.2 Chinese life expectancy, 1973–2000 445
13.3 Ofcial estimates of rural poverty 447
13.4 SSB Estimates of Chinese income inequality 454
13.5 Alternative estimates of the Chinese income distribution,
1978–1995 455
13.6 Rural daily calorie consumption per capita, 1990 460
13.7 China’s growth rate in comparative perspective, 1978–1996 461
14.1 Variation in growth rates across plan periods 473
14.2 The oating population in 2000 478
14.3 Fiscal surpluses as a share of GDP, 1978–1989 484
14.4 Budgetary revenue and expenditure in a sample of western
provinces 490
15.1 Growth of Chinese GDP since 1996 498
15.2 GDP growth rates during economic miracles in large countries 499
15.3 Water quality in China’s most polluted river basins 501
15.4 Educational attainment in China 507
15.5 Human development levels in China and India, 2004 509
15.6 Ofcial estimates of rural poverty 510
15.7 SSB and other estimates of Chinese income inequality 517
15.8 Public spending on health and education 533
Abbreviations and key concepts
CBEs commune and brigade enterprises. Renamed TVEs in 1984
CCP Chinese Communist Party

collective farming the three-tier structure of farming in operation in China
between 1955 and 1983. Under it, most land was managed by the collective
rather than by private households (which directly managed about 5 per cent
of arable area). The three tiers of collective farming were communes (renmin
gongshe), production brigades (shengchan dadui) and production teams
(shengchan dui)
collectively owned enterprises notionally distinct from SOEs in that COEs
retain prots rather than remitting them to the state, but in terms of their
actual mode of operation, SOEs and COEs are virtually indistinguishable
Cultural Revolution the term is used in this book to refer to the period 1966–8
when Red Guard (university and middle school students) launched an unprec-
edented attack upon China’s educational system, its cultural artefacts, many
of the institutions of state and leading members of the CCP seen as trying to
restore capitalism. Much of the literature uses the term to refer to the whole
period between 1966 and 1976
CV coefcient of variation
EEFSU Eastern Europe and the Former Soviet Union
FAD food availability decline. This is the view that famine is caused by a
decline in the amount of food available per person. As Sen has shown, and as
also illustrated by the case of China in 1958, famine conditions can also be
caused by changes in the distribution of income, which may lead to a decline
in ‘entitlements’ (the ability to buy food) and hence to starvation – even if
average food availability is unchanged
FAO Food and Agriculture Organization of the UN
FDI foreign direct investment
ve small industries rural industries set up to produce cement, chemical ferti-
lizer, iron and steel, machinery and power in the 1960s and 1970s
GDP gross domestic product
Glossary
xvi Glossary

GDP measured at purchasing power parity a method of adjusting GDP to allow
more accurately for differences in prices between countries and hence to
measure ‘true’ differences in purchasing power between countries
geti enterprises individual enterprises. These are best thought of as small
household or family enterprises, ofcially dened as an enterprise
employing fewer than seven workers. Larger non-enterprises are classied
as private
Gini coefcient the standard international measure of income inequality.
Varies between 0 (absolute equality) and 1 (all income accrues to one
person)
Great Leap Forward an ambitious (and ultimately disastrous) programme of
rapid economic growth launched in 1958 which centred around the creation
of communes and the diversion of the rural workforce from farming into iron
and steel production
GNI gross national income (previously known as GNP)
GVA gross value-added. The standard measure of output net of material inputs
consumed in the production process (‘gross’ because it does not allow for the
depreciation of machinery)
GVIO and GVAO gross value of industrial and agricultural output respectively.
These were key output indicators in the Chinese statistical system before
1992 and even now are widely calculated and published. However, they are
not measures of value-added, because the value of intermediate inputs is
included
hukou system the system of household registration, whereby Chinese citizens
have an ofcial place of residence. The system still operates; for instance,
unofcial migrants to urban areas still nd it hard to nd schools for their
children. However, the development of markets after 1978 (which allow unof-
cial migrants to buy food, education, etc.), means that it is far less effective
a means of control than it was during the Maoist era
HYVs high-yielding crop varieties introduced in China during the 1970s. The

package of improved irrigation, HYVs and chemical fertilizer is usually
called the Green Revolution
ICP International Comparison Project designed to adjust GDP estimates across
countries for differences in prices
infant mortality rate deaths per thousand of the population amongst infants
aged up to one year old
internal terms of trade the ratio of agricultural to industrial prices
JMS junior middle school
KMT Kuomintang (or Guomindang). The Chinese Nationalist Party
MPS the material product system of national accounting developed in the Soviet
Union and used in China between 1949 and 1992. Its key concepts include
NDMP, GVIO and GVAO
NDMP net domestic material product. A narrower measure of economic activity
than GDP because it excludes ‘non-productive’ economic activities such as
advertising
Glossary xvii
NDP gross domestic product minus depreciation
NEP New Economic Policy. The development strategy pursued in the USSR
between 1921 and 1928. It combined elements of capitalism (such as private
farming) and socialism (such as state ownership of the key industries)
NICs newly industrializing countries. Typically applied to Taiwan, Singapore,
South Korea, Singapore and to parts of Latin America and South Asia in the
second half of the twentieth century to distinguish them from LDCs (less
developed countries)
PLA People’s Liberation Army
progression rate enrolment in a given level of education as a percentage of
graduates from the previous level
SEM Socialist Education Movement (1963–6)
SEZs special economic zones. Set up after 1979 to attract foreign investment
shangshan xiaxiang the programme whereby urban youth were sent down

to the countryside. Most of the ‘sending down’ occurred between 1968 and
1972. Often abbreviated as xiafang
social formation a Marxist concept developed by Althusser. Refers to the combi-
nation of the forces of production (roughly technology and labour), relations
of production (economic organization and incentives) and the superstructure
(culture, government and the legal system). The relationship between these
three remains a controversial issue amongst Marxists
SOE state-owned enterprises. ‘State’ here includes county governments and
higher, but excludes enterprises owned by town and village governments
SSB China’s State Statistical Bureau. Now likes to call itself the National Bureau
of Statistics
SMS senior middle school
Third Front the programme of defence industrialization initiated in western
China after 1964 (and later extended to central China and to mountainous
areas within the coastal provinces). Halted in the early 1980s
TFP total factor productivity: output per unit of total input (labour, capital and
land combined)
TVEs township and village enterprises
xiafang see shangshan xiaxiang
Chinese slogans
gaige kaifang reform and opening up
liangge fanshi the two whatevers
mo shitou guohe crossing the river by touching the stones
pinqiong bushi shehui zhuyi poverty is not socialism
xian fuqilai to get rich is glorious
yiliang weigang take grain as the key link
zai nongye xue Dazhai in agriculture study Dazhai
xviii Glossary
Main political gures
Chen Yun (1905–95) The architect of the market socialist economy introduced

after 1978. Much more sympathetic towards the notion of traditional (Leninist)
socialism than Deng Xiaoping.
Deng Xiaoping (1904–97) A staunch follower of Mao in the 1950s and an advo-
cate of the Great Leap Forward. Purged in the 1960s for being a close ally
of Liu Shaoqi. De facto ruler of China between 1978 and 1997. Responsible
for introducing the policy of gaige kaifang and for the liberalization of the
economy in the 1980s and 1990s.
Gang of Four Jiang Qing (Mao’s wife), Zhang Chunqiao, Yao Wenyuan and
Wang Hongwen. All four continue to be characterized as ‘evil’ in ofcial CCP
accounts, but we lack a proper evaluation of their true role during the Cultural
Revolution and the 1970s.
Hu Jintao (1942–) Party Secretary, October 2002–.
Hu Yaobang (1915–89) Party Secretary, 1980-19–87. Purged for his failure to
check student protests.
Hua Guofeng (1921–) Mao’s rather ineffectual successor. Chairman of the
CCP, 1976–81; Prime Minister 1976–80.
Jiang Qing (1914–91) Mao’s third wife. A brilliant actress before her marriage
to Mao, Jiang became a politically important gure during the 1960s and the
leader of the Gang of Four. Arrested in 1976 and imprisoned until her death.
An object of much sexist hatred in the 1970s, and since. Probably better seen
as a puppet of Mao than as an independent political actor.
Jiang Zemin (1929–) Party Secretary, June 1989–October 2002. Largely
responsible for the abandonment of market socialism and the creation of a
capitalist economy in China.
Lin Biao (1906–1971) The PLA’s most brilliant general. Never really recovered
from serious wounds suffered in 1938, which limited his political and military
role after 1949. Named as Mao’s successor in 1966. Killed eeing China in a
plane crash in September 1971.
Liu Shaoqi (1898–1969) The leading advocate of greater use of markets in
the Maoist era, and hence identied as a ‘revisionist’ and ‘capitalist roader’.

Persecuted to death during the Cultural Revolution.
Mao Zedong (1893–1976) Leader of the CCP between 1943 (some would say
1935) and 1976. All the most recent research shows that his authority was
unchallenged from the early 1940s until his death.
Peng Dehuai (1898–1974) Famously opposed the Great Leap Forward at the
Lushan plenum in 1959. As a result, purged, and persecuted to death in
1974.
Wen Jiabao (1942–) Prime Minister, March 2003–.
Zhao Ziyang (1919–2005) Party Secretary, January 1987; purged May 1989 for
his weak efforts to suppress the Tian’anmen democracy movement.
Zhou Enlai (1898–1976) China’s Foreign Minister during much of the Maoist
era. Prime Minister, 1949–76. Often praised in China and the West for miti-
Glossary xix
gating the excesses of Maoism, but much of the evidence suggests he was little
more than a cipher.
Zhu Rongji (1928–) Prime Minister 1998–2003. The architect of China’s WTO
entry.
Note
Some of the judgements in this list are controversial. For example, I follow
Kampen’s (2000) view that the famous Zunyi conference of January 1935 was
less important in signalling the accession of Mao than CCP hagiography suggests,
and that Mao only really became CCP leader in 1943. The characterization of Lin
Biao follows Teiwes and Sun (1996).

This is a work of political economy. By that, I mean that this book discusses
political questions as well as more narrowly economic issues. I have taken this
approach because I do not believe that that we can separate the economics from
the politics in explaining, or assessing, the Chinese road to development. The very
commitment of the Party to some notion of socialism has translated into pervasive
state intervention across the economy. During the 1980s and early 1990s, the role

of the state actually expanded in the industrial realm, as new rural industries were
established by township and village governments across China. Even now, despite
the massive privatizations of the late 1990s, about a third of all industrial output
is the product of state-owned industries, a much greater proportion even than in
other state capitalist economies across the developing world. The Chinese state
is withering away, but it has dominated Chinese economy and society for many
years. It is an integral part of China’s story of development.
Perhaps more importantly, politics, education and culture cannot be ignored in
any discussion of Chinese development, because Mao saw all as instruments by
means of which the economy could be transformed. In more Marxian language,
Mao regarded superstructural change as an independent causal factor; social
outcomes were not merely the product of changes within the economic base but
were signicant in their own right. Mao’s approach to the problem of develop-
ment therefore differed from the economic determinism of Lenin, Stalin and
Mao’s successors, and this is one of the reasons why Maoism is of great interest
as a developmental strategy. Some scholars (such as Liu Kang) have argued that
Mao was a cultural determinist. I would not go so far. To my mind, the Maoist
approach is better seen as one of over-determination – that is, base and superstruc-
ture interact to determine economic and social outcomes rather than one being
more important than the other. That was not true of the 1950s, when Mao followed
a relatively orthodox Leninist approach in believing that changes in the forces of
production – though increasingly the relations of production as well – were the
only way to accelerate the pace of growth. By 1963, however, Mao had come to
the conclusion that modernization could be achieved in China only if economic
change was supplemented by fundamental cultural change brought about by the
exercise of state power and mass mobilization. Superstructure and economic base
Introduction
xxii Introduction
needed to be transformed simultaneously in order to achieve modernity. Out of
this analysis was born the Cultural Revolution.

Accordingly, precisely because Mao gave such importance to state, culture and
superstructure, it makes no sense to assess the course of Chinese development
in narrowly economic terms. The mature Mao was many things, but he was not
an economic determinist: culture was no superstructural epiphenomenon which
responded passively to changes in the economic base. On the contrary, cultural
change was a necessary precondition for economic modernization. We will never
understand the purpose – still less appreciate the signicance – of late Maoism
for the Chinese countryside unless we recognize that point. Furthermore, as we
shall see, it is state and cultural failure over the last decade which is beginning
to undermine China’s economic and social progress. Unless reversed, this failure
may ensure that it is India, not China, which becomes the next Asian giant. The
modernization of China is not only an economic enterprise but also a project
which requires a fundamental reshaping of society and a reordering of priorities.
Mao understood that very well. His successors may understand it too, but they
baulk at what it means.
This book also differs from much of the recent literature in that it provides an
extension discussion of the Maoist era. It is not fashionable to do this any more.
Very little has been written in recent years about the economics of either the 1950s,
or the 1960s and 1970s. Instead, most of the scholarly literature on Chinese polit-
ical economy published over the last two decades (it is less true of the narrowly
political literature; the Culture Revolution itself has attracted renewed attention)
has restricted its compass to the years after Mao’s death. True, such works often
start with a background chapter in which the Chinese economy has been brought
to the brink of collapse by the mid-1970s. But it is readily apparent that the interest
of the author lies elsewhere; it is the post-1978 years, so the subtext proclaims,
which demand our attention, not the wasted years of Mao. Maoism is an unfortu-
nate interlude in the pages of contemporary scholarship, a period best forgotten.
This neglect of Maoist era is unfortunate for two reasons. First, a great deal
of information has been released on the Maoist era over the last two decades,
yet very little of this has been properly assessed. If we are to appreciate what

has happened in China over the last half century, we have to understand what
happened before 1978. Second, the Maoist era is a fascinating one, much more
so than the decades after Mao’s death. This is because the development strategy
pursued over the last thirty years has been remarkably orthodox. To be sure, as
we will see, it has not been a model of capitalist economic development, at least
until 1997. Nevertheless, the focus of policy has been on promoting economic
growth, and on doing so by exclusively economic means. It is hard to get very
excited about this; capitalist economies are two a penny. The same cannot be said
about Maoism, which was a unique attempt at social and economic transformation.
Moreover, whatever one may feel about the Maoist strategy, it was nothing if not
ambitious in intent and breathtaking in scope. Few leaders have sought to remake
their country in the way that Mao did. To be sure, it was an era of catastrophe
as well as triumph. But Mao at least recognized the scale of the challenge, and
Introduction xxiii
the need to address it in a distinctive way. By comparison, everything that has
happened since 1978 speaks of the prosaic, and of a poverty of ambition on the
part of China’s leaders. Such timidity – it amounts to that – will not serve the
Chinese people well in the long run. ‘Catching up’ is a remarkably difcult task,
and few countries have succeeded. China will not do so unless the ambition of its
leaders exceeds their grasp.
The signicance and importance of Maoism for an understanding of contem-
porary Chinese development is so great that the period which I consider spans
the years between 1931 and 2007, and within that temporal compass I give full
weight to the Maoist era. I should have liked to have said more about the Repub-
lican period. However, an abbreviated treatment is mandated in my judgement by
limited data availability. We have no usable macroeconomic data before 1931 (the
year which marks the launch of a proper crop reporting system by the National
Agricultural Research Bureau) and therefore it is little more than speculation to
consider the Chinese economy before that time. Moreover, despite the heroic
efforts of a number of Western and Chinese scholars to come up with usable

estimates of GDP growth, the only period about which we can be reasonably
condent is 1931–6, and even then grave doubts hang over the estimates of farm
production.
This book also starts from the premise that we will not understand very much
about either the Chinese revolution, or Chinese economic development, unless
we recognize the extent and the signicance of spatial variation. Of course this
point about spatial variation should not be overemphasized. China has long been
a nation-state, and there is a strong sense of nationalism across the People’s
Republic. Moreover, China is not likely to go the same way as the Soviet Union.
Indeed, the extent of provincial deviation in key policy areas has generally been
rather modest since 1949. To be sure, there have been variations in the pace of
change; some provinces abandoned collective farming earlier than others at the
start of the 1980s. But these deviations have lasted for only short periods of
time, and have typically been sanctioned as experiments by central government.
Chinese structures and institutions are remarkably uniform across the length and
breadth of the country.
Nevertheless, economic and social outcomes are not. The centres of Chinese
industry have long been Manchuria and the Yangzi delta, and little has changed in
that respect over the last century. By contrast, the main concentrations of poverty
are in the provinces of western China such as Gansu, Ningxia and Shaanxi to
the north, and Sichuan, Guizhou and Yunnan to the south. This persistence of
the patterns of the past has not been for want of trying on the part of the Chinese
state, and in some respects the history of Chinese development since 1949 can be
read as a search for solutions to the problem of spatial inequality. Even now the
Hu Jintao regime pays at least lip-service to the need to develop western China.
These spatial variations not only tell us a story but provide an analytical compass.
For by investigating spatial variation, and making use of the cross-sectional data
which are available, we can tease out answers to many of the puzzles of Chinese
development. Accordingly, there is considerable emphasis throughout this book
xxiv Introduction

on spatial inequalities, and on differences in socio-economic outcomes. To give
one example, the impact of the Great Famine was much greater in some provinces
than in others. To give another, an important element in rural poverty is its spatial
dimension; many of China’s poorest people live in the western provinces, whereas
its wealthiest citizens are to be found in the great metropolitan cities along the
east coast
The central questions which this book tries to answer are twofold. The rst ques-
tion is a descriptive one: what development strategy has China pursued? There
is no simple answer to this; the strategy has varied over time. For that reason
we need to distinguish between the strategies pursued in different eras. I adopt a
fourfold categorization here: early Maoism (1949–63); late Maoism (1963–78);
market socialism (1978–96); and Chinese capitalism (1996–2008).
In dividing up Chinese development into four periods, it is probably fair to
say that 1978 is an uncontroversial climacteric, marking as it does the close of
the Maoist era. There is much to be said for choosing 1972 (the year of China’s
rapprochement with the USA, with all that implied for Chinese trade policy), or
1976 (the year of Mao’s death). In all truth, however, the policy changes imple-
mented between 1972 and 1978 were modest. Sino-American trade grew only
slowly, and economic policy under Hua Guofeng between 1976 and 1978 was little
different from that which preceded it. There are certainly important continuities
across the 1978 divide, not least in respect of the process of rural industrialization.
Even there, however, I think it hard to argue that rural industrial take-off began
before the late 1970s. I have therefore stuck with the orthodox chronology.
The other climacterics I have chosen – 1963 and 1996 – are more controversial.
I have distinguished between early and late Maoism, with 1963 as the turning-
point, because that was the year of the Socialist Education Movement (SEM).
That movement ultimately evolved into the Cultural Revolution, and it marks a
watershed in Maoist thinking. This is because it signalled the abandonment of
the Leninist orthodoxy in favour of a development strategy which gave as much
emphasis to superstructural transformation as it did to the modernization of the

economic base. The SEM was followed in 1964 by the initiation of the programme
of Third Front construction, by some way the dening economic feature of the
1960s and 1970s. My choice of 1996 is dictated primarily by the fact that it was
the last full year of economic activity prior to Deng’s death. That was, I think, an
event of great signicance, because it led to the abandonment of any attempt to
maintain a market socialist economy. The mass privatizations of the late 1990s,
the decision to join the WTO and the rapid removal of many controls on labour
migration together ensured that the Chinese economy of 2007 was capitalist in
all but name. By contrast, 1991–2 is much less important as a turning-point, even
though some scholars have chosen to adopt that as a climacteric. To be sure, the
pace of growth accelerated, and so too the inow of foreign capital. In its funda-
mentals, however, the Chinese economy of early 1997 was little different from the
Chinese economy of 1991–2.
The second question which I try to answer in the pages which follow is that of