China's rise was planned
Part 1 of ? featuring a short series of the ramblings of my mind put on paper.
“Even when one day our country becomes strong and prosperous, we must still adhere to the revolutionary stand, remain modest and prudent, learn from other countries and not allow ourselves to become swollen with conceit. We must not only learn from other countries during the period of our First Five-Year Plan, but must go on doing so after the completion of scores of five-year plans. We must be ready to learn even ten thousand years from now. Is there anything bad about that?”
– Mao Zedong, On the Ten Major Relationships
“Hide your strength, bide your time, never take the lead.” – Deng Xiaoping
Do you think China’s rise was deliberate or a happy accident?
This is a question I find myself contemplating quite a lot recently. When I was first studying China in the 2010s, the broad consensus was that over the previous few decades, China became the world’s second largest economy largely by shirking its socialist values and taking advantage of a decline in Western industrialisation and an increase in outsourcing to countries with cheap labour.
There was plenty of authoritative research stating that China’s meteoric growth was accidental, its plans reactive and a response to external factors, and its overall strategy lacked coherence. For example, in his refutation of the ‘Beijing Consensus’ hypothesis first put forward by Joshua Ramo, Scott Kennedy writes in 2010 that:
“The fourth problematic aspect of Ramo's thesis is that he assumes that the different elements of the Chinese state have acted in concert with each other, that together they have pursued a well-defined goal, and that China's economic performance is a reflection of those plans. Such a view ascribes the central role in the story to Deng Xiaoping and subsequent Chinese leaders. While no doubt immensely influential, the record indicates that they have not been all-powerful rulers able to force their vision on the rest of society. To a large extent, China's leadership has had to react to economic and political pressures not of their choosing. During the first 15 years of the Reform era, many policies reflected a compromise between liberal and conservative wings of the Communist Party…
Many of China's most successful policies were first adopted locally, not as centrally-approved experiments, but as violations of central policy, and then were only subsequently endorsed nationally. The bottom line is that compromise between different groups, not consensus, has been the source for most of China's economic policies.”
– “The Myth of the Beijing Consensus”, Scott Kennedy
And of course my arch nemesis, Minxin Pei, has a book entitled China’s Trapped Transition in which he argues “because the Communist Party must retain significant economic control to ensure its political survival, gradualism will ultimately fail.”
At the time of their writing, I think these arguments were well-founded. China was still playing ‘catch-up’ if you will (one could argue they still are) and these pieces were written in the middle of China’s story, before it had anywhere near its current power levels. There were also questions that remained unanswered: would the lack of liberal democracy hinder progress? Would China get caught in the middle income trap? Were predictions about future success just a Japan 2.0?
But now we’re in the future, I think we know enough to start challenging these views. I haven’t done enough research to truly debunk these theories in an academic sense, but more and more finding myself disagreeing and wanting to outline why.
My doubts really started emerging over the past few years, watching the Chinese EV industry explode and watching the US flounder in the face of China’s dominance of not just domestic exports but also supply chains and manufacturing capabilities. Now we’re seeing China become a major economic player in former powers like the UK (a topic for a series I’m planning on UK-China business relations!), and it seems like this is all more than an accident. As I discussed in a previous newsletter, the dominance of China’s EV industry is no fluke, it is 20 years in the making, and involved meticulous planning both at the central and local levels, requiring several industries to be co-opted and actively oriented toward this state-led goal.
The more I read recent research, the more I think the tide is turning there as well. It seems more people are coming round to thinking that, at least over the past few decades, China has actively planned its rise to power, as opposed to just riding some fortunate wave of which they happened to find themselves on the crest. I would extend this further, arguing that China’s rise was planned right from the start; right from when Mao Zedong declared that China would overtake the US and UK in steel production by 1962. And that’s what I’m going to attempt to explain… or prove (I fear I’m setting myself up for a bit of an anti-climax here).
To be clear, I’m not arguing that China’s growth model is perfect or, god forbid, a mould for others to cast upon their own nations. There are deep flaws in the Chinese mode of development, leading to deepening cracks such as local government debt, lack of a robust domestic consumer market, corruption, and increasing dissatisfaction with everyday life. This isn’t supposed to be a deep economic analysis (I’m a Sinologist so literally not capable of that haha), but rather a dissection of the steps China has taken to get as far as it has, and how it could go even further.
If we’re to argue that China’s long-term vision extends beyond what the average analyst generally acknowledges, there are some key questions we’ll have to address along the way. What were the stages of this plan? How is this goal of parity or even dominance over Western powers balanced with the CCP’s other major goals of socialist modernisation and common prosperity? What will the next stage be?
Some of these are more speculative than others, but I wanted to share with you, over at least a few newsletters, what I’ve been reading and some conclusions I’ve come to. I hope you enjoy it, and there’s some lively discussion as I think this is a really important topic worth dissecting!
The Grand Plan
When trying to capture the mindset Mao and his economic planners had when designing China’s future, the name “The Great Leap Forward” is pretty illuminating. It’s almost a direct translation from the Chinese, 大跃进 (dayuejin), and sums up pretty neatly exactly what the party aimed to achieve: a great advancement in every aspect of China’s economy to set it on the path to becoming a modern and prosperous nation.
When contextualising this mindset, it always important to remind ourselves of where China was at the time, which was:
A ruined nation that had been bombed to hell during WWII
A poor nation with almost no infrastructure that had just come out of imperial rule into modernity;
A new nation led by a new government with no experience of leading an entire nation and seemingly besieged on all sides by enemies, with only a tentative ally in the USSR for about 6 years.
With these starting conditions, it's easy to see why many historians have concluded that China’s path was primarily guided by external factors. The CCP in the infancy of the PRC was left with very limited choices as to how to sustain, grow and modernise the economy. They had few resources, even fewer friends, and a population of over 600 million people to manage.
And yet, within only 9 years of coming to power, this new leadership chose to go big, taking an ultimately ruinous decision to launch a nationwide commune project that led to a terrible end. And it wasn’t as if they did have options. Cooperativisation happened in just under 4 years (if you don’t count the work started in 1947 in Communist held areas), and could have continued pretty much indefinitely until the results were proven and the people acclimatised to this radical change. But the jump from that to full communisation was just another 5 years. Why go for ‘great’ when ‘moderate’ would have done?
Because there was a grand plan, and it was not simply that China recovered from the devastation of almost half a century of continuous warfare. China’s main architects had a vision for the society they were trying to create, independent of the variables that the domestic and international geopolitical situation had thrown at them.
By using the word ‘great’, Mao’s true aim was to lay a foundation for China’s future growth. The plan was bad, and it failed, but intent matters (at least for the purposes of this analysis). The aim of these grand reorganisations was to bring the country to a place where it could finally begin to shape its true future, and escape its past as an imperialist backwater.
When writing about Mao’s vision of China expounded during an enlarged meeting of CCP leaders at Beidehai in 1958, Jonathan Spence details Mao’s long-term vision for the country:
“Referring to the Great Leap as a continuation of the previous blooming and contending among the hundred Flowers, Mao professed to see in it the promise of a China without hunger in which the Chinese themselves would no longer pay for food and the surplus would be given away free to the poorer people elsewhere in the world. An extra billion or so added to China’s population would make no difference. Deep plowing, close planting, reforestation and the economies of scale made possible by enthusiastic massed labor power would produce this surplus, in which a third of China's land would lie fallow every year. The sprouts of Communism were already present, said Mao. Hard work and discipline would bring better health to everyone, just as Mao had experienced it in the cave dwellings during the civil war, and physicians would have nothing left to do except research.
Mental labor would fuse with manual labor, and education would be merged with production. Nobody would need to put on airs – clothes would be indistinguishable in cut and texture, and would be as free as food. Differentiated wage systems would vanish, as would any need for private housing. Morality would improve so much in the new society that no supervision would be required, and all would have the inspired and selfless spirit that had been such a force in the past revolution, when ‘people died without asking anything in return.’ The whole of China would be a lush and landscaped park so that no one would even need to travel anymore to see the sights.”
(This sounds a bit farcical, but in a later newsletter I’ll get on to why some of these ideas are actually not that far off what today’s leaders are trying to achieve.)
Just because Mao moved fast, it doesn’t mean that his end goal was immediate.
In his writings and speeches, Mao often referred to a ‘basic transformation’ of industry and the countryside in order to set the stage for a longer-term transformation that would enable China to catch up with Western powers. Again, the idea was to move relatively quickly: get China out of a bad spot, and put it in a position to compete on an even playing field with the West. The implementation of this vision was restricted by ideology, but the vision itself was more holistic, which is exactly what enabled it to be picked up by future generations of leaders:
“By 1962 steel production may reach 50 or 60 million tons a year. By that time it may be said that we have basically transformed the entire country. We will then have reached the standards in Britain and America of today. By that time should we still refrain from speaking about basically transforming the entire country? Transforming a nation of over 600 million at such a speed seems incredible… Maybe we can strive for basic transformation in five years and thorough transformation in 10-15 years.
When we set the time for the transformation a little longer, we are not being anything but “opportunists.” Such opportunism is very interesting and I am willing to practice it. Marx appreciated such opportunism. He would not have criticized me.”
– Speech At The Sixth Plenum Of The Eighth Central Committee, 1958
A history of waiting
It’s also worth considering that the CCP in general was used to having a long-term view. Following their betrayal by the Nationalists in 1927, the ensuing encirclement campaigns and Long March of the early 1930s, and the Yan’an period until 1945, the CCP was basically forced to become the embodiment of patience.
The Jiangxi soviet and revolutionary areas occupied by the CCP during the Yan’an years provided them with an opportunity to practice their ideals before putting them into practice. Apart from the actual policies, a lot of the work of the party in this time was what many consider ‘indoctrination’ or ‘propagandising’ of the populace. It turns out this initial work was crucial to ensuring the hard launch of the PRC in 1949. Mao’s China is famous for its numerous campaigns and social engineering schemes, but they were not vanity projects formed to stroke Mao’s ego. The idea was to orient the entire society towards a singular, shared goal.
This is just my own opinion, but having studied 1950s and 60s propaganda in China for my PhD, I think this mindset was infused into Mao’s – and by extension, the CCP’s – plans, policies, and communications. It can be seen in writings, art, movies, speeches. It underscored every movement and every message: we are on this journey together, and only together can we achieve our goal.
A bad man and his dream
I’m not here to debate Mao’s character or ethics. I’ll reserve my judgement as to whether he was ‘evil’, ‘ruthless’, or a ‘lord of misrule’ as Spence puts it. There’s no doubt that this period was beset with violence and tragedy on a huge scale, only sharpening the contrast with how far China had come in terms of living standards, education, and economic scale by the time of Mao’s death. To be honest, I often feel that focusing on Mao as a person distracts from the story of China itself; I won’t go into how I feel about arguments claiming Mao was the only person to have any say over China’s trajectory. Another time perhaps.
My focus is solely on whether or not the Maoist period is positively correlated with the current shape of China’s economic and geopolitical power. And I feel undeniably that it is.
If we follow the thread of Mao’s vision through the decades, through the different leaders, through the different global political and economic tides, we can see a clear continuation of his original dream. A transformed country that has reached the level of the West; an opportunistic nation that continues to learn from its mistakes and the mistakes of others; a self-reliant industrial power that can share the fruits of its labour with others.
Mao’s vision was the beginning, but it has been left to others to implement, to cosign, to moderate and even ignore at times. He was pushing for something, something that others could obviously see otherwise they would not have pushed so hard with him, or continued to push so long after he was gone.
Of course drastic changes to the original plan were made, but the current achievements of modern China – whether that be in industry, business, technology, or whatever – owe their success to a foundation laid by Mao.
The truth around nations outcomes is probably complicated - because it always is. 😉 China's rise was planned and accidental in the same way the rise of the US was both 200+ years ago, the way the British rose, and then fell, etc., etc. I think our times colour our perceptions; everyone seems smart until something goes wrong.
I am not sure whether the “plan” helps China’s rise that much. At best it had a mixed record. But China’s rise is for sure wanted, and willed, and pursued by the majority of its people, within state apparatus or not. That factor alone is quite rare in the world, from I can see.