China’s emergence over the past four decades from the wreckage of the Cultural Revolution to become a political, economic and technological superpower to challenge the US for the position of the world’s largest economy has been unparalleled in history.
The story of the country’s transformation is well known; the long period of post-war rule by Chairman Mao Zedong had resulted in a centrally planned economy comprised mostly of state-led production and collectivised farming, largely closed off to the outside world and poor. In 1979, three years after Mao’s death, China’s economy accounted for just 1.8 per cent of global gross domestic product (GDP) and just 0.8 per cent of global exports.
That changed quickly under the eye of his reforming successor Asean Xiaoping. Out went Mao’s economically catastrophic Cultural Revolution. In came market reform that opened China to the world. By 2010 its GDP had risen to represent approaching a tenth of the global economy, and over 8 per cent of its exports. An abundance of cheap labour meant Chinese factories became essential cogs in the global supply chain, surpassing the US as the world’s largest manufacturer in 2011. Capitalist methods had worked; as Deng had put it: “Poverty is not socialism. To be rich is glorious.” Now investors are eyeing the country with the same mentality.