China’s New Industrialization Strategy

China’s New Industrialization Strategy

Was Chairman Mao Really Necessary?

Y. Y. Kueh

Deng Xiaoping’s economic strategy is widely regarded as a complete anathema to Mao’s, but this study strongly argues that without the material foundations laid by Mao, it would have been very difficult for Deng to launch his reform and open-door policy. Deng basically shared Mao’s aspirations and approach in pursuit of China’s industrialization, and this had in fact helped to condition him to the successful gradualist methodology. Deng lost patience at times and resorted to the ‘big bang’ strategy, only to fail miserably. Taken together, the book tells a new story about the economics of China’s transition. This is a highly thought-provoking study, blending institutional and convincing statistical analysis.

Chapter 1: Interpreting the Economics of the Cultural Revolution

Y. Y. Kueh

Subjects: asian studies, asian economics, economics and finance, asian economics, economic psychology

Extract

* The political upheaval triggered by the Great Proletarian Cultural Revolution in China may be seen as being rooted in the controversy between Chairman Mao and President Liu Shaoqi about the long-term economic development strategy for China. Mao’s critique of Liu centres on his ‘programme of capitalist restoration’, but in essence the Mao–Liu conflict involves two different approaches to implementing the same Stalinist forceddraft industrialization strategy, rather than alternative choices between capitalism and socialism. Generally speaking, Mao’s new venture represents an attempt to revive, with some modifications, the failed Great Leap Forward strategy of 1958–1961. Liu prefers, however, to proceed with conventional Soviet-style central planning and control with enhanced price and income incentives. Liu’s approach may tally with the economic reforms in the Soviet Union and her allies in Eastern Europe; hence his being branded as ‘revisionist’ and the largest ‘capitalist roader within the Party’. In what follows I first highlight the major differences in economic thinking between Mao and Liu. The second and third parts of the chapter examine respectively the crucial implications for the government’s policy on agriculture and industry, in terms of institutional accommodating, economic planning and management, and political control. The fourth part evaluates the potential impact of the two divergent economic strategies, Mao versus Liu, on long-term economic development in China. The discussion is concluded with a brief reference to the political and ideological implications of the Mao–Liu economic controversy. INDUSTRIALIZATION UNDER AUSTERITY The Mao–Liu controversy on economic...

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