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 8: The Three Industrial Imbalances

Y. Y. Kueh

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


* There are three major aspects to the Maoist legacy that are important for understanding the new industrialization strategy adopted in China since Deng Xiaoping’s return to power in 1978. First is the massive orientation towards heavy industry in pursuit of a maximum-speed ‘socialist industrialization’ at the expense of agricultural growth. This is the familiar Soviet-style ‘industry–agriculture dichotomy’. Second is the attempt made, abortive at times, to correct the regional imbalances in industrial distribution. That is, to narrow the enormous gap between the underdeveloped interior and the more advanced coastal areas. Third is parallel to the large-scale modern-type industries, the rigorous promotion of small-scale indigenous industries, in part for the purpose of labour absorption. This is what Professor Eckstein regards as ‘local adaptations’ of the Soviet model of forced-draft industrialization (Eckstein, 1966, pp. 31–3). The chapter falls into two main parts. The first looks at China’s industrial development under Mao with respect to the three basic strategic policy goals alluded to, and analyses the quantitative changes that have taken place under Deng and his followers during the process of economic transition. The second part attempts to define the nature and scope of the modifications made to the Maoist strategy of industrialization since the late 1970s and examines, in particular, the long-term impact of the new strategy on sectoral, regional and technological imbalances. I begin the discussion, however, by highlighting, from a global perspective, China’s achievements in industrialization and technological advances by the early or mid-1980s, in order...

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