China the past

For most of its 3,500 years of history, China led the world in agriculture, crafts
and science, then fell behind in the 19th century when the Industrial Revolution gave the West
clear superiority in military and economic affairs. In the first half of the 20th century, China
continued to suffer from major famines, civil unrest, military defeat, and foreign occupation.

After World War II, the Communists under MAO Zedong established a dictatorship that, while
ensuring China’s autonomy, imposed strict controls over all aspects of life and cost the lives of
tens of millions of people. After 1978, his successor DENG Xiaoping decentralized economic
decision making; output quadrupled in the next 20 years. Political controls remain tight at the
same time economic controls have been weakening. Present issues are: incorporating Hong
into the Chinese system; closing down inefficient state-owned enterprises; modernizing the
military; fighting corruption; and providing support to tens of millions of displaced workers.

Natural hazards: frequent typhoons (about five per year along southern and eastern coasts);
damaging floods; tsunamis; earthquakes; droughts
Environmentcurrent issues: air pollution (greenhouse gases, sulfur dioxide particulates)
from reliance on coal, produces acid rain; water shortages, particularly in the north; water
pollution from untreated wastes; deforestation; estimated loss of one-fifth of agricultural land
since 1949 to soil erosion and economic development; desertification; trade in endangered
Environmentinternational agreements:
party to: Antarctic-Environmental Protocol, Antarctic Treaty, Biodiversity, Climate Change,
Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping,
Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands,
Whaling Population: 1,246,871,951 Beginning in late 1978 the Chinese leadership has been trying to move
the economy from a sluggish Soviet-style centrally planned economy to a more market-oriented
economy but still within a rigid political framework of Communist Party control. To this end the
authorities switched to a system of household responsibility in agriculture in place of the old
collectivization, increased the authority of local officials and plant managers in industry,
permitted a wide variety of small-scale enterprise in services and light manufacturing, and
opened the economy to increased foreign trade and investment. The result has been a
of GDP since 1978. Agricultural output doubled in the 1980s, and industry also posted major
gains, especially in coastal areas near Hong Kong and opposite Taiwan, where foreign
investment helped spur output of both domestic and export goods. On the darker side, the
leadership has often experienced in its hybrid system the worst results of socialism
(bureaucracy, lassitude, corruption) and of capitalism (windfall gains and stepped-up inflation).

Beijing thus has periodically backtracked, retightening central controls at intervals. In late 1993
China’s leadership approved additional long-term reforms aimed at giving still more play to
market-oriented institutions and at strengthening the center’s control over the financial system;
state enterprises would continue to dominate many key industries in what was now termed “a
socialist market economy”. In 1995-97 inflation dropped sharply, reflecting tighter monetary
policies and stronger measures to control food prices. At the same time, the government
struggled to (a) collect revenues due from provinces, businesses, and individuals; (b) reduce
corruption and other economic crimes; and (c) keep afloat the large state-owned enterprises,
most of which had not participated in the vigorous expansion of the economy and many of which
had been losing the ability to pay full wages and pensions. From 60 to 100 million surplus rural
workers are adrift between the villages and the cities, many subsisting through part-time
low-paying jobs. Popular resistance, changes in central policy, and loss of authority by rural
cadres have weakened China’s population control program, which is essential to maintaining
growth in living standards. Another long-term threat to continued rapid economic growth is the
deterioration in the environment, notably air pollution, soil erosion, and the steady fall of the
water table especially in the north. China continues to lose arable land because of erosion and
economic development. The next few years may witness increasing tensions between a highly
centralized political system and an increasingly decentralized economic system. Economic
growth probably will slow to more moderate levels in 1999-2000.

Few Chinese had any illusions about Japanese designs on China. Hungry for raw materials and
pressed by a growing population, Japan initiated the seizure of Manchuria in September 1931
and established ex-Qing emperor Puyi () as head of the puppet regime of Manchukuo
() in 1932. The loss of Manchuria, and its vast potential for industrial development and
war industries, was a blow to the Nationalist economy. The League of Nations, established at the
end of World War I, was unable to act in the face of the Japanese defiance. The Japanese
to push from south of the Great Wall into northern China and into the coastal provinces. Chinese
fury against Japan was predictable, but anger was also directed against the Guomindang
government, which at the time was more preoccupied with anti-Communist extermination
campaigns than with resisting the Japanese invaders. The importance of “internal unity before
external danger” was forcefully brought home in December 1936, when Nationalist troops (who
had been ousted from Manchuria by the Japanese) mutinied at Xi’an ( ). The mutineers
forcibly detained Chiang Kai-shek for several days until he agreed to cease hostilities against
Communist forces in northwest China and to assign Communist units combat duties in designated
The Chinese resistance stiffened after July 7, 1937, when a clash occurred between Chinese and
Japanese troops outside Beijing (then renamed Beiping ) near the Marco Polo Bridge. This
skirmish not only marked the beginning of open, though undeclared, war between China and
Japan but also hastened the formal announcement of the second Guomindang-CCP united front
against Japan. The collaboration took place with salutary effects for the beleaguered CCP. The
distrust between the two parties, however, was scarcely veiled. The uneasy alliance began to
break down after late 1938, despite Japan’s steady territorial gains in northern China, the coastal
regions, and the rich Chang Jiang ( ) Valley in central China. After 1940, conflicts between
the Nationalists and Communists became more frequent in the areas not under Japanese control.

The Communists expanded their influence wherever opportunities presented themselves through
mass organizations, administrative reforms, and the land- and tax-reform measures favoring the
peasants–while the Nationalists attempted to neutralize the spread of Communist influence.
At Yan’an () and elsewhere in the “liberated areas,” Mao was able to adapt
Marxism-Leninism to Chinese conditions. He taught party cadres to lead the masses by living
and working with them, eating their food, and thinking their thoughts. The Red Army fostered an
image of conducting guerrilla warfare in defense of the people. Communist troops adapted to
changing wartime conditions and became a seasoned fighting force. Mao also began preparing
for the establishment of a new China. In 1940 he outlined the program of the Chinese
Communists for an eventual seizure of power. His teachings became the central tenets of the CCP
doctrine that came to be formalized as Mao Zedong Thought. With skillful organizational and
propaganda work, the Communists increased party membership from 100,000 in 1937 to 1.2
In 1945 China emerged from the war nominally a great military power but actually a nation
economically prostrate and on the verge of all-out civil war. The economy deteriorated, sapped
by the military demands of foreign war and internal strife, by spiraling inflation, and by
Nationalist profiteering, speculation, and hoarding. Starvation came in the wake of the war, and
millions were rendered homeless by floods and the unsettled conditions in many parts of the
country. The situation was further complicated by an Allied agreement at the Yalta Conference in
February 1945 that brought Soviet troops into Manchuria to hasten the termination of war against
Japan. Although the Chinese had not been present at Yalta, they had been consulted; they had
agreed to have the Soviets enter the war in the belief that the Soviet Union would deal only with
the Nationalist government. After the war, the Soviet Union, as part of the Yalta agreement’s
allowing a Soviet sphere of influence in Manchuria, dismantled and removed more than half the
industrial equipment left there by the Japanese. The Soviet presence in northeast China enabled
the Communists to move in long enough to arm themselves with the equipment surrendered by
withdrawing Japanese army. The problems of rehabilitating the formerly Japanese-occupied
areas and of reconstructing the nation from the ravages of a protracted war were staggering, to
During World War II, the United States emerged as a major actor in Chinese affairs. As an ally it
embarked in late 1941 on a program of massive military and financial aid to the hard-pressed
Nationalist government. In January 1943 the United States and Britain led the way in revising
their treaties with China, bringing to an end a century of unequal treaty relations. Within a few
months, a new agreement was signed between the United States and China for the stationing of
American troops in China for the common war effort against Japan. In December 1943 the
Chinese exclusion acts of the 1880s and subsequent laws enacted by the United States
to restrict Chinese immigration into the United States were repealed.

The wartime policy of the United States was initially to help China become a strong ally and a
stabilizing force in postwar East Asia. As the conflict between the Nationalists and the
Communists intensified, however, the United States sought unsuccessfully to reconcile the rival
forces for a more effective anti-Japanese war effort. Toward the end of the war, United States
Marines were used to hold Beiping and Tianjin against a possible Soviet incursion, and logistic
support was given to Nationalist forces in north and northeast China.
Through the mediatory influence of the United States a military truce was arranged in January
1946, but battles between Nationalists and Communists soon resumed. Realizing that American
efforts short of large-scale armed intervention could not stop the war, the United States withdrew
the American mission, headed by General George C. Marshall, in early 1947. The civil war, in
which the United States aided the Nationalists with massive economic loans but no military
support, became more widespread. Battles raged not only for territories but also for the
allegiance of cross sections of the population.
Belatedly, the Nationalist government sought to enlist popular support through internal reforms
The effort was in vain, however, because of the rampant corruption in government and the
accompanying political and economic chaos. By late 1948 the Nationalist position was bleak.

The demoralized and undisciplined Nationalist troops proved no match for the People’s
Liberation Army (PLA or ). The Communists were well established in the north and
northeast. Although the Nationalists had an advantage in numbers of men and weapons,
controlled a much larger territory and population than their adversaries, and enjoyed
considerable international support, they were exhausted by the long war with Japan and the
attendant internal responsibilities. In January 1949 Beiping was taken by the Communists without
a fight, and its name changed back to Beijing. Between April and November, major cities passed
from Guomindang to Communist control with minimal resistance. In most cases the surrounding
countryside and small towns had come under Communist influence long before the cities. After
Chiang Kai-shek and a few hundred thousand Nationalist troops fled from the mainland to the
island of Taiwan, there remained only isolated pockets of resistance. In December 1949 Chiang
proclaimed Taipei (), Taiwan (), the temporary capital of China.
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