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Why China at 70 Needs to Listen to the Voices of Those It Silenced

September 30, 2019 in Economics

By James A. Dorn

James A. Dorn

On October 1, 1949, Mao Zedong proclaimed the founding of the People’s Republic of China before a huge crowd in Tiananmen Square. After three years of gruelling civil war with the Nationalists under the command of Chiang Kai-shek, Mao had emerged as the victorious head of the world’s largest communist country. During his tenure as chairman of the Communist Party, until his death in 1976, Mao ruled with an iron fist.

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He imitated the Soviet system of central planning, outlawed capitalism and private property, collectivised agriculture, destroyed family life by mandating large-scale communes, and placed the party/state above the people in all aspects of life.

The model of state-led development, which Mao supported, was one that favoured autarky over open markets and international trade, depriving China’s people of the advantages of specialisation according to comparative advantage, and stripping them of the benefits of free trade.

The absence of competitive markets for resources, goods, and ideas severely handicapped China’s development.

While Mao concentrated on increasing the power of the state and suppressing individual freedom, Deng Xiaoping began China’s economic liberalisation movement under “socialism with Chinese characteristics”.

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The pragmatist Deng recognised that China’s future prosperity depended on reform and opening up to the outside world. By experimenting with new forms of ownership, and creating special economic zones, Deng facilitated the rebirth of entrepreneurial activity and the growth of the non-state sector. Peaceful development was more important to Deng than class struggle.

China prospered greatly under Deng’s leadership, until the Tiananmen uprising in 1989, at which time Zhao Ziyang, a key figure in the reform movement, was ousted as general secretary of the Communist Party and put under house arrest for opposing the use of force to end the occupation of Tiananmen Square.

From 1980 to ’87, Zhao had helped guide economic policy as China’s premier. In September 1988, following a conference in Shanghai organised by the Cato Institute …read more

Source: OP-EDS

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