The People’s Republic of China at 69: From War and Poverty to Peace and Prosperity

China has celebrated National Day, marking the 69th anniversary of the establishment of the People’s Republic of China (PRC) in 1949. The PRC was forged at a time of political turbulence, social upheaval and human tragedy. The suffering of the Chinese people under Japanese occupation beginning in 1937 led to over 22 million civilian casualties while the liberation of China in 1945 only led to a return to a protected civil war pitting Mao’s Communists against Chiang Kai-shek’s nationalists.

Even before the Japanese invasion, China had suffered what is known as a century of humiliation when foreign regimes reduced China’s sovereignty through a combination of wars, exploitative imperial business practices and multiple unfair treaties that China’s leaders were coerced into signing.  The formation of the PRC in 1949 looked to change all of this by re-asserting a bold, forward looking government that would restore the strength and independence of China while modernising an economically crippled society.

Through the growing pains of the Great Leap Forward and Cultural Revolution, China did modernise and regain its international strength but for a majority of Chinese at the end of the 1970s, life still meant poverty and struggle.

At the turn of the 1980s, over 88% of all Chinese were living in poverty according to the international definition of having an average daily income of $1.90 or less. Today, China’s poverty rate hovers around 2% of the entire population or 30 million people. This poverty is now entirely confined to rural areas while by 2020 China looks set to completely eliminate all poverty throughout the country.

No country has lifted as many people out of poverty at such a rapid pace as has the PRC. This accomplishment is all the more astounding when one thinks of the anguish that the Chinese people had faced throughout most of the 19th century and well into the 20th.

Much of the credit for the Chinese miracle that turned an overpopulated agrarian economy into a  prosperous industrial powerhouse can be placed on the shoulders of the PRC’s great late 20th century reform Deng Xiaoping.

In 1978 Deng Xiaoping emerged as China’s paramount leader and decided to implement measures designed to ensure the maximum long term success of the Chinese nation. While Mao’s Three Worlds Theory hinted at a departure from doctrinal absolutism and signalled a shift towards a more pragmatic understanding of the challenges facing developing nations, it was Deng Xiaoping whose theories helped to create a political atmosphere where it was understood that no ideology can be called a success unless its implementation leads to meaningful results in the real world and for real people.

While Deng did not repudiate any specific ideology, it was his aim to make his party become one focused on problem solving in the name of material results rather than endless theorising which can never put food in one’s mouth or a roof over one’s head. In this sense, Deng’s Theory built on the studies of the past and helped to make the efforts of previous generations of Chinese work towards fostering growth whose fruits could be easily plucked by the hand of ordinary men and women.

The China Deng inherited was one of the world’s most impoverished nations whose retarded economic fortunes were made all the more protracted by a crisis of overpopulation. When Deng proclaimed,  “It doesn’t matter whether a cat is black or white, as long as it catches mice”, he sounded a clarion call of pragmatism in a 20th century still dominated by ideological claptrap and political subterfuge. By rejecting secular mythology as much as theological mythology, Deng prepared China to confront its very real problems with a very orderly sense of problem solving. While others spoke, Deng set out to achieve results and the results he achieved were beyond the expectations of even the most optimistic idealist.

Deng’s economic miracle saw China’s GDP rising dramatically throughout his time in power, a trend which continues to this day. By transforming a poor agricultural economy that could not feed its own bloated population into a country that is today the world’s most prolific industrial producer, Deng helped to modernise Chinese society without relying on the influence of alien cultural or economic trends. Deng’s miracle was extraordinary not only due to its scope but due to the fact that it was ‘Made in China’.

At a time when much of the world was still arguing over the benefits of capitalism vis-a-vis socialism, Deng decided that both terms were inappropriate absolutes when discussing pragmatic economic management. Deng instead favoured a market socialist economy which allowed for enterprise, entrepreneurialism, innovation and rising consumer standards – typical features of the most efficiently run capitalist economies including Singapore. But he also favoured tight regulation on capital outflow, investment strategies, banking practices and further ensured that the profits generated by the Chinese nation would be reinvested into the Chinese nation whether at the level of re-investment into industry or putting money into housing, public transport infrastructure, education, poverty relief programmes, agricultural reforms, the building of modern cities and a more robust security apparatus.

In consecrating a market socialist system, Deng was able to combine the best features of all existing economic models and harness these virtues to traditional Chinese cultural characteristics that have allowed China to develop rapidly using its own economic model which reflects its own societal and historical values.

Beyond this, Deng’s market socialist model appears to be the best placed to take advantage of the revolution in robotics, factory automation and artificial intelligence, sectors where China is currently a world leader in 2018. While in strict market economies the profits generated by the artificial hand can lead to a collapse in the job market, in China, the profits generated by artificial intelligence and automation will be reinvested into the Chinese marketplace and society thus allowing individuals to hone their skills in sectors concerned with research and development, invention and innovation as production becomes increasingly the responsibility of machines rather than man.

In this way, China is set to not only be a leader in the automation revolution but the economic model which dates back to Deng’s reforms that can best harness the benefits of these new technologies for the benefit of the people as a whole.

The third world which Mao redefined and Deng spoke of in 1974 is today a developing world that is increasingly supportive of China’s Belt and Road initiative which looks to place in the hands of developing nations the power to elevate themselves out of poverty the way China began doing under Deng. Crucially, the Chinese model for openness and cooperation is based on bilateralism and bespoke solutions to unique national and regional issues rather than a unilateral, hegemonic zero-sum model that puts pressure on partner nations to sacrifice their national characteristics on the altar of western liberalism.

Today, it is the western nations that remain among the most focused on dogmatic ideology in terms of both domestic and foreign policy.  While China embraces good relations with all based on existing realities, many in the west still confuse reform for violent change. Deng Xiaoping Theory helps to present an alternative to the violent neo-liberalism of many western nations in that his views can be summarised as those where faith in the obscure is no substitute for reason and where the scapegoating implicit in dogmatic and self-indulgent intellectualising can never accomplish that which can be achieved through realistic problem solving and a strong forward looking work ethic.

China’s current President Xi Jinping has now set a task of transforming China into a moderately prosperous society through a series of initiatives including Made in China 2025 and Create in China. While Deng transformed the country from a developing agrarian society into an industrial powerhouse, Xi looks to elevate China to the status of the world’s top innovator in science, technology, medicine, consumer goods, pharmaceuticals, space travel, public transport, environmental/green technology and security hardware.

While other nations were largely caught off-guard by the revolution in artificial intelligence and robotics, the market socialist system is well placed to make the most of these developments as the profits generated by the artificial hand will be re-invested into human development based on the same cyclical model through which profits generated by the human hand are re-invested into public welfare, culture, infrastructure, research, development and education.

In this sense, by combining modern market socialism with Chinese characteristics, China’s new era will be one in which the height of modern innovation will be harnessed to the unshakeable collective human values of social harmony that will consequently continue to elevate the condition of the Chinese people as a whole.

While China’s Purchase Power Parity (PPP) is already the highest in the world, the International Monetary Fund has stated that by 2040, China’s overall GDP will also be the highest in the world, thus complete China’s journeyer from humiliation to one of peaceful world leadership in economics, innovation and invention. Some experts meanwhile predict that China’s rise to the top in terms of overall GDP will occur well before 2040.

China’s road to prosperity has not be an easy one but it has been a remarkably rapid one. As China looks to accomplish even more economic and social miracles in the 21st century than in the 20th, it is safe to say that while Chinese people are enjoying the highest living standards in their history, for the PRC, the best is yet to come.

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