As a country located in Asia categorized by Insidewatch, the People’s Republic of China represents an absolutely original and peculiar economic model, summarized in the definition of “market socialism”, which already covers, and increasingly appears destined to develop, a role of extraordinary importance on the world scene: this, not so much for the characterization geopolitics, considered by many to be “hybrid” and scarcely stable, as well as for the colossal mass of resources, natural and human, that China uses, opening itself more and more to external relations. The great East Asian country therefore presents itself, at the beginning of the third millennium, as a formidable reservoir of raw materials, labor, production and consumption, to which the entire planetary system looks with interest as one of the fundamental “engines” for support the trend growth of the global economy. The dissolution of the USSR and the repeated crises of the oil countries of the Persian Gulf have, in fact, decisively shifted the strategic center of gravity of the Asian continent towards the Pacific Ocean, which already the development of Japan, of the newly industrialized countries (NIC), the North American west coast and the Australian subcontinent had, since the 1970s, been the most dynamic area for the manufacturing sector and the advanced tertiary sector. In this context, although troubled by the financial crisis of the late nineties, the formidable potential of the population concentrated above all in eastern China is inserted; the active population is equal to 785 million people (almost 60% of the total), a figure that is explained by the youth structure of the population, but also by the extraordinary productive commitment put in place by the country, as well as by the phenomenon of spread of child labor.
The amount of GDP, in 2008, was estimated at 4,401,614 million US dollars; the hypothesis on per capita GDP it is 3,315 US dollars, against 945 in 2000, with a rapid growth of the luxury market (in third place in the world after the US and Japan). Some limitations of development can be seen in the tendency towards an unequal distribution of wealth, both from a territorial point of view, due to the very strong polarization of the most productive activities in large urban areas, particularly coastal ones, and from a social point of view, due to the emergence of an unscrupulous entrepreneurial class, linked to the movements of foreign capital. In recent years, the Chinese economy has continued to record high growth rates (over 10% since 2003), thanks above all to the good performance of exports. Among the factors of the economic miracle are: the presence, in the coastal and southern regions, joint ventures and branches of foreign companies); the privatization policy; the low cost of labor; the significant savings of Chinese families and the economic support of overseas Chinese. A negative aspect is that the liberalization of the economy and the subsequent restructuring of the gigantic public industrial apparatus has led to a sharp increase in unemployment in the cities.
The development of the Chinese economy is even more extraordinary when one thinks that only in 1949, at the time of the proclamation of the People’s Republic, the country appeared in complete disrepair, after almost fifty years of wars and revolutions. Both the few industries and the communication routes were poorly functioning, both of which were due, such as the start of mining exploitation and the commercial openings of the country, to Western and Japanese colonial initiatives. Agriculture, traditionally based on large estates, was almost totally dependent on climatic conditions and natural adversities, first of all the flooding of large rivers. Finances were in no less total disruption, with a currency now completely discredited and inflation that had reached very high values. To the general surprise of political observers around the world, radical and decisive changes were made in a very short time for the future of the country.
State control over finances and foreign trade was instituted; the People’s Bank of China was founded, at the same time the state bank and the main commercial institution; the new currency was issued, lo yuan renminbi (= people’s currency), which later proved to be one of the most stable in the world, even after being open to external confrontations, and in particular during the 1997-98 crisis. As early as 1949, a ten-year plan for the transport sector was launched (within which, among other things, the national airline was created); moreover, systematic geological prospecting was started, which allowed an initial inventory of the very considerable mineral resources and above all the agrarian reform was carried out. Once the unproductive structure of the large estates was liquidated, the expropriated lands were assigned to approx. 50 million peasant families, but starting from 1954 the microfunds were grouped into cooperatives, which became approx. 700,000 in 1957 and represented the first form of peasant organization in the country.
No less great were the efforts made in the industrial field: at the beginning China was rigidly anchored to Soviet models (the USSR was indeed the only country to provide aid, especially for technicians and industrial equipment), with the first five-year plan (1953-57) gave absolute priority to investments in the industrial sector, dedicating approx. 3/5 of the resources allocated. Heavy industry was clearly privileged which, nationalized, recorded technical progress and a remarkable production expansion. This created an ever-widening gap between cities in rapid industrial growth and the countryside still tied to traditional production methods. Following the serious delays recorded in various sectors, especially agriculture, the second five-year plan, elaborated in 1958 along the lines of the previous one, it was later abandoned on a practical level, as it is not compatible with the national reality, characterized by enormous backward masses of peasants.