China’s New Industrialization Strategy
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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.
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Chapter 12: Foreign Economic Relations Readjusted, 1979–84

Y. Y. Kueh


* THE PRELUDE Obscure as it may now appear to be, it was in fact Hua Guofeng, the heirpresumptive upon Mao’s death for the 1976–78 interregnum, who initiated the most dramatic turnaround towards the West. Falling back on the earlier 1973–74 Mao-Zhou efforts with the urea plants imports from the United States, Hua embarked on a massive technology imports programme for 1978, which was worth double the combined value for similar imports for 1973–77, as is shown in Table 12.1. No doubt Hua was then greatly buoyed by the rapidly improved political relations with the United States and her major allies. However, this ‘open-door’ strategy of Hua represented the only major plank of his overall economic programme that had survived through the Deng era. For both Hua and Deng, access to foreign technology was clearly crucial, not only to the continuous pursuit of modernization but also for merely arresting, in the first place, the declining trends in industrial productivity due to years of repetitive investments in capital-intensive but dated industrial technologies. The common orientation towards foreign trade ends here, nevertheless. For Hua, the key to resolving the economic predicament should be bound up with an overall strategy which favoured economic growth at rates well in excess of those historically achieved, which continued to emphasize heavy industry (symbolized by the ambitious 60 million tonnes target for 1985 steel output), and in which the organization of the economy was recentralized, with no significant concessions for market incentives and...

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