Impacts of The Great Leap Forward on China’s Economy

Impacts of The Great Leap Forward on China’s Economy
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Impacts of The Great Leap Forward on China’s Economy
The Great Leap Forward of the People Republic of China was a five year forceful plan that was carried out by the Chinese People Party in 1958 which led to a sharp contraction on the Chinese economy. During this period, various changes were made with the aim of economically surpassing England. This essay’s purpose is to discuss the GLF policies and their negative impacts on China.
Chairman Mao, who was China’s leader believed in a system based on contradictions and set out to form the ‘ten major relationships’. However, what concerned him were the first key relations. These relations focused on a number of issues that were currently facing China. First and foremost, GLF policies aimed at promoting light and agriculture (Riskin, 1981). Although the rate of development of China was not as immense as when compared to other European countries, Mao believed it was important to increase the investment in the agriculture and light industry. By doing this, China would lay the foundation future industrial development. The second relation was the relation between land and sea. Mao stressed on the goal of eliminating inequality by developing the interior of cities. In order to achieve this, he insisted on taking advantage of the existing industrial base along the coast. . The third compares the investment in the economics department and the military. Chairman Mao campaigned for a 20% to 30% cut from the military’s budget while arguing that faster economic development would eventually enhance Chin military. The fourth and fifth relations consider the interests of individual workers, state, enterprise, central and local authorities. Mao worked on improving wages so as to reduce poverty and to increase the independence of the local authorities and enterprises.
The principal policies of the great leap are grouped into technological, managerial and planning and incentives and ideology. To begin with, the Great Leap played a huge role in supporting technological advancement. It enabled small scale industries and production units to rapidly develop. Additionally, new and much larger industries were built with soviet aid. In 1950, 166 industries were agreed upon between USSR and China. By 1960, most of these projects were completed thus providing a big impetus to modernization in China (Riskin, 1981). These projects were not as successful in creating employment. Mao’s promotion of technological advancement can also be said to be a way to turn China’s underpaid labor into capital. This can be seen in 1957, when one million peasants were involved in building water conservancy works. However, it is important to note that Mao’s ‘primitive accumulation bias’ system only worked briefly. People soon turned into cannibalizing resources that were made to be used for other products. There was an excess of workers in some industries and a shortage of labor in others.
Secondly, the decentralization measures permitted the central government to allocate national resources and the provinces power to carry out labor and material planning was substantially increased. The GLF approach did not revolve around rational planning. Most targets that were put forward eventually lost touch with reality and became symbols of political enthusiasm. This political system was mirrored in the working community. Most of the management activities of enterprises were taken over by ordinary workers. This was later known as the ‘2-1-3’ system (Riskin, 1981). The size of the overall staff was reduced and even those who worked in specialized positions had to participate in ordinary labor. These adjustments eroded planning. Without a centralized system in place to make decisions, many companies experienced huge losses. Thirdly, the incentive system was dominated by the ‘politics in command’ policy. Those who conformed to Maoism believed that economic policies must not only increase production but also contribute to more socialist relations of production (Mair & Kroeber, 1972). Mao weakened the bureaucracy in order to bridge the gap between urban dwellers and rural natives. The Great Leap’s attacks on inequalities were reflected on incentive policies that encouraged solidarity and mass responsibility. In the countryside, these principles were manifested in the supply system whereby a portion of free income was distributed to commune membe...