Deng Xiaoping and Chinese Economic Reform

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  • 0:04 Reform in China
  • 1:26 Deng Xiaoping and Economics
  • 2:54 Deng Xiaoping Economic…
  • 4:13 Lesson Summary
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Lesson Transcript
Instructor: Jason McCollom
After Mao's death in 1976, reformer Deng Xiaoping led China's economy through a transition from state ownership to capitalism. Learn about these reforms and their outcomes in China.

Reform in China

Long-time Chinese communist leader and founder, Mao Zedong, had repeatedly warned his comrades about 'taking the capitalist road.' Since 1949, China's social, political, and economic life was dominated and tightly controlled by Mao and the Chinese Communist Party (or the CCP). For the economy, this meant all businesses, industry, and agriculture was owned by the state (the government). There was no private property, no free market, and essentially no freedom to be found anywhere.

By the mid-1970s, however, China was politically and economically unstable. The Cultural Revolution, a mass movement of radical young people, disrupted political and social life, and the economy was not performing.

Then, Mao died in 1976, leaving the much-more moderate Deng Xiaoping, the second leader in communist China, in charge of the CCP. Deng spearheaded political reforms in an attempt to bring stability to the country and to solidify support. Though the CCP's repressive policies eased somewhat, the party maintained a tight grip on political and social life. In the economic realm, though, Deng's reforms had significant repercussions. By the 21st century, China was challenging the United States as the world's greatest economic power.

Deng Xiaoping and Economics

Deng realized that without a capitalist-based economy, China wouldn't prosper. So, he transformed a state-owned and -operated economy into one that allowed private property, relatively open markets, and international commerce.

In agriculture, state farms that had been collectively run were dismantled. Now, individual farmers could claim a plot of private land, work it, and sell their proceeds. All across the vast rural spaces of China, small-scale private farmers went into business for themselves.

In the industrial quarters of China, the government eased its control over factories and large businesses. The number of state-owned industries decreased, and factory owners began to make decisions without the CCP dictating operations. Businesses then began to seek profits. The CCP even proclaimed that 'to get rich is glorious,' and Chinese-made goods poured into the markets of the world. If you look at many of your clothes and electronics, you're likely to see the 'Made in China' sticker, stamp, or tag. You've probably also heard politicians mention 'bringing jobs back from overseas to Americans'; they're usually talking about bringing jobs back from China.

Due to Deng's reforms, the Chinese economy opened itself up to the world. It exported mass-produced goods and invited foreign investment. Mao would likely be rolling in his grave: China had taken the capitalist road.

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