Since implementing capitalistic reforms in the 1970s, the gross domestic product of China has risen by an average of 9.5 percent each year. This growth is expected to continue at this breakneck pace, and China is estimated to overtake the United States as the world’s largest economy by 2026 (Ding 6). This influx in wealth has catalyzed advancements in Chinese technology, has enabled better access to education for millions of people, and has increased the overall standard of living for over a billion people. However, Capitalism has brought with it drawbacks for both the Chinese people and the nation as a whole. The Chinese people still lack many basic freedoms, worker’s rights are often abused, government corruption is rampant, and the environment is being damaged more than before. As capitalism has provided both advantages and drawbacks, one might wonder if capitalism having an overall positive effect on China.
To better understand the current influence capitalism has in China, it is necessary to have both a basic knowledge of the communist system which preceded it, as well as an understanding of the nature of Chinese economic reform, which began in 1978. In 1949, Mao Zedong, the leader of the Communist Party in China, defeated his longtime rival Chiang Kai-shek, and established the People’s Republic of China. Upon seizing power, Mao began to rebuild China, a country devastated by both a Civil War and the Second World War. Mao’s first major policy was The Great Leap Forward, which forced both collective farming and rapid industrialization. Mao’s second major policy was the Cultural Revolution, which sought to promote communism within China and remove any foreign ideological influence. Both policies were horribly unsuccessful, leading to millions of deaths and stagnation of China’s social and economic growth (Guthrie).
After Mao’s death in 1976, reformist Deng Xiaoping gained power in China and began to institute Chinese economic reform. The main goal of Xiaoping’s economic reform was to undo the Mao’s policies. Xiaoping immediately privatized state farms, whose newly incentivized workers helped China avoid a major famine. Xiaoping also opened China up to foreign investment, by setting up “Special Economic Zones”. In Special Economic Zones, nations such as the United States, Japan, and Western European nations, can conduct business with much less restriction than the rest of China. Since Xiaoping’s reforms began in 1978, China stopped embracing Communism and has instead embraced a socialist market economy (Yeung).
Xiaoping’s economic reforms helped increase China’s gross domestic product more than seventeen fold since 1978 (Lu 2). This influx of money has greatly assisted in the funding of Chinese technological research, which is allocated a significant portion of China’s public budget. It is estimated that China will spend more on research and development than the United States (the current leader) by 2023 (Thibodeau). One example of the...