Mao's Economic Policy In China Case Study

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People’s Republic of China was established in 1949. Since that time, China’s policy was determined majorly by one man, Mao Ze Dong. He tried to mimic Soviet Union’s pushing policy and wanted to focus China’s development towards industry. China has pursued this development strategy for 30 years, industrial sector of China has developed a lot. However, it came with a high cost. I think Mao’s economic policy created more harm than good for the Chinese economy during the pre-reform period. During the economic recovery period, 1949-1952, Mao decided to recreate Soviet Union’s economic model in China. The government redistributed many lands to poor farming households. The Communist party earned supports from grass-root level farmers by implementing this policy. The government also took over many factories in the urban areas from the Japanese after the war and those from Guomindang after driving them out from mainland. Investment was so huge in 1953 and 1957 which were named “twin peaks”. These 2 years were covered in the first of ever 5-year plan of China. The plan focused in construction of 156 large industrial projects which were all imported from soviet and Eastern Europe. In 1955-1956, the government decided to have public ownership over many things. This policy led to a drastic change to the households. At the end of 1954 only 2% of…show more content…
First of all, slowdown in economic growth. During the first 5-year plan period, China had a roughly 9-percent increase in economy. It decreased to 5-percent growth on average during 1957-1978. Mao’s policies shifted the whole country’s development from agricultural to industrial. China was not familiar with industrial at that time. A sudden change from agricultural to industrial was not good for people at that time. Also, after developing bad relationship with Soviet, China lacked the technology power to develop industry. Therefore the growth rate of the whole economy slowed

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