Conditions and Prospects for Economic Growth in Communist China

Abstract

Regardless of whether a detailed Five-Year Plan is in operation or not, there is in Communist China every indication of a determined, relentless, and massive effort to pursue a program of industrial expansion. The rapid rate of recovery, the restructuring of the institutional framework, the possession of an industrial base in Manchuria, the termination of hostilities in Korea, and, above all, the application of political and social power to the mobilization of resources in the hands of the state are all factors that have enabled the regime to raise the rate and level of investment considerably above that of the past. At the same time, the regime is mobilizing not only capital, but technique and entre-preneurship as well. In essence, the Chinese economy—after being more or less stationary for centuries, with only erratic and partial spurts of growth in recent decades—seems to be entering, for better or for worse, a self-sustaining growth process.Barring another world war or a major agricultural crisis in China, the long-run question before us is not whether the Chinese Communist economy will grow at all, but whether the rate of growth will be sufficiently rapid so that the forces of the industrial revolution will be in a position to defeat the Malthusian counterrevolution. Given the previously discussed conditions and limitations, how rapidly may industrialization be expected to proceed? Obviously, these questions can only be answered conditionally and hypothetically. However, before approaching this problem, it may be well to take a schematic look at the “size” and “structur” of the Chinese mainland economy in 1952, which may be considered as the point of departure for the upward climb.