How Did China's Five Year Plan For Social And Economic Development

Unlike most countries, China was not under one colonial master but was shared among many, but never fully conquered. China consolidated its territories after a Civil War in 1949, with Communist Party of China (CPC) at the helm and Mao Zedong as its Premier. The People’s Republic of China adopted Five Year Plans for social and economic development. There was only one party, CPC and it decided the course of governance. Under Mao, party’s workers consisted of farmers, workers and soldiers, who came in to the party because of the political activism during the Civil War. The percentage of college educated people (considered as intellectuals by the Chinese) was less than 1%. But, the situation changed after the death of Mao. Deng Xiaoping assumed the power and led the country through economic reforms and control over
China followed the USSR in developing planned economy. State controlled the resources and allotted them to those industries which it thought served the national interest the best. The industries produced goods as per the orders from the government instead of demand from the market. The government also decided the price at which the final produce was to be sold. Banks were mere actors of government which were meant to provide investment. The situation flipped with the coming in of economic reforms. State control was replaced with the market competition, with demand supply taking over the resource allocation. The firms no longer enjoyed the support from banks who charged on competitive market rates. The firms could now decide on how much they want to produce and at what rate they want to sell their produce in the market. The state on the other hand limited itself to providing basic services like infrastructure, education and security, in other words, capitalism started to see its way in to China, which China calls as “Market Socialism” or “Socialism with Chinese