A Chinese nation-state was forged under the leadership of the Communist Party and the guidance of Marxism. However, it had far more to do with Chinese nationalism, with the reassertion of China ’s former glory and future modernization, than with the universal principles of communism. [286]

As we shall see in Part II, the contours of Chinese modernity bear the imprint not just of the Communist present but, far more strongly, that of the Chinese past.

ECONOMIC TAKE-OFF

Ultimately China was undermined in the nineteenth century by its failure to industrialize at more or less the same time as the Western powers and Japan. From around 1860 there were significant examples of Chinese industrial development that were comparable with those in Japan, notably in Shanghai. [287] But, given China ’s vast size, they were too limited and too scattered. China, above all, lacked two crucial ingredients of Japan ’s modernization: a strong modernizing state and a prosperous agrarian sector that could generate the surpluses needed to fund industrialization. [288] In the second half of the nineteenth century, Chinese agriculture stagnated or even regressed as a result of the destruction wrought by civil war, insurrections, the rising price of silver, floods and famines. Worse, after the defeat by the Japanese in 1894, China was almost bankrupted by the terms of its reparation payments and then found itself defenceless in the face of yet further Western and Japanese demands. [289] The Western powers exploited China ’s vulnerability by carving out new spheres of influence and acquiring the so-called ‘leased territories’. [290] Foreign capital poured into China as the number of foreign businesses expanded rapidly, keen to exploit a situation where they could operate virtually without restraint or discrimination. [291] By 1920, Jacques Gernet writes:

the whole Chinese economy was dependent on the big foreign banks in Shanghai, Hong Kong, Qingdao, and Wuhan, and on powerful [foreign] companies… The customs, the administration of the salt tax, and the postal service were run by foreigners, who kept all the profits. Western and Japanese warships and merchant shipping were everywhere — in the ports, on the coast, and on the Yangzi River network. Apart from a few Chinese firms… the whole modern sector of industry (cloth mills, tobacco factories, railways, shipping, cement works, soap factories, flour mills and, in the towns, the distribution of gas, water and electricity, and public transport) was under the control of foreign companies. [292]

China’s plight during this period is illustrated by the fact that in 1820 its per capita GDP was $600, in 1850 it was still $600, by 1870 it had fallen to $530, in 1890 it was $540, rising very slightly to $552 in 1913 — still well below its level in 1820, almost a century earlier. By 1950 it had fallen to a mere $439, just over 73 per cent of its 1820 level, and lower than in 1850. [293] These figures reveal the disastrous performance of the Chinese economy over a period of 120 years, with foreign intervention and occupation being the single most important reason. It is hardly surprising that China now refers to the period 1850–1950 as the ‘century of humiliation’. Over eighty years after the Meiji Restoration — and well over a century and a half since the commencement of Britain ’s Industrial Revolution — China had barely begun its economic take-off.

Apart from restoring the country’s unity, the central task facing the PRC was industrialization. To this end, it engaged in a huge project of land redistribution and the creation of large communes, from which it extracted considerable agricultural surpluses in the form of peasant taxes, which it then used to invest in the construction of a heavy industry sector. Its economic policy marked a major break with past practice, eschewing the use of the market and relying instead on the state and central planning in the manner of the Soviet Union. Despite the wild vicissitudes of Mao’s rule, China achieved an impressive annual growth rate of 4.4 per cent between 1950 and 1980, [294] more than quadrupling the country’s GDP [295] and more than doubling its per capita GDP. [296] This compared favourably with India, which only managed to increase its GDP by less than three times during the same period and its per capita GDP by around 50 per cent. [297] China ’s social performance was even more impressive. It enhanced its Human Development Index (a measure of a country’s development using a range of yardsticks including per capita GDP, living standards, education and health) [298] by four and a half times (in contrast to India’s increase of three and a half times) as a result of placing a huge emphasis on education, tackling illiteracy, promoting equality (including gender) and improving healthcare. [299] This strategy also enabled China to avoid some of the problems that plagued many other Asian, African and Latin American countries, such as widespread poverty in rural areas, huge disparities of wealth between rich and poor, major discrepancies in the opportunities for men and women, large shanty towns of unemployed urban dwellers, and poor educational and health provision. [300] The price paid for these advances, in terms of the absence or loss of personal freedoms and the death and destruction which resulted from some of Mao’s policies, was great, but they undoubtedly helped to sustain popular support for the government.

The first phase of Communist government marked a huge turnaround in China ’s fortunes. During these years, the groundwork was laid for industrialization and modernization, the failure of which had haunted the previous century of Chinese history. The first phase of the PRC, from 1949 to 1978, reversed a century of growing failure, restored unity and stability to the country, and secured the kind of economic take-off that had evaded previous regimes. Despite the disastrous violations and excesses of Mao, the foundations of China ’s extraordinary transformation were laid during the Maoist era. The 1949 Revolution proved, unlike that of 1911, to be one of China ’s most important historical turning points.