China’s economy 70 years on: A tale of two women

How the fastest economic expansion by a major country in history affected the lives of two people and their families.

Mao Zedong 1952.
When Mao Zedong founded the People's Republic of China in 1949, his country was among the world's poorest. Today, China is the world's second biggest economy, and catching up rapidly with the United States [February 21, 1952: AP]

For a related story on the progress of the Chinese economy, read China’s economy 70 years on: By the numbers

Beijing, China – A cool autumn breeze caught 16-year-old Yu Shu’s hair as she hurried through the campus of Harbin’s Soviet School of Music in China‘s eastern Heilongjiang Province, a book clamped under her arm with sheet music and traditional Chinese artwork sticking out from between the pages.

Around 1,200km to the southwest, in Beijing, 25-year-old Zhao Qinghua stopped to listen to the distant sound of military vehicles, carried on a gust of wind that whipped around the grey brick walls of the community where she worked as a warden.

The date was October 1, 1949, and in Beijing’s Tiananmen Square, not far from where Zhao was standing, the country’s new leader, Mao Zedong, would soon declare the founding of the People’s Republic of China.

It was an event both women recall vividly, and one that would radically alter the trajectories of their lives and the lives of everyone in their country.

China marks 70 years since the founding of the republic this week. Anyone too young to remember the years immediately after the revolution that brought Mao to power is likely to take the country’s economic achievements for granted. 

But the road to economic prosperity has been a rocky one, both collectively for the nation and for individuals like Yu and Zhao.

‘Very poor’

China was a “very poor” country in 1949 when the Communist Party came to power, Julian Evans-Pritchard, senior China economist at Capital Economics in Singapore, told Al Jazeera. The economy mostly revolved around subsistence farming.

According to China’s National Bureau of Statistics, the size of its economy in 1952, the earliest available year for such data, was around 119 yuan per person. That was equivalent to $54 at the exchange rate at that time, according to consultancy PriceWaterhouse Coopers (PwC).

Gross domestic product (GDP) per capita in the United States in 1952 was $2,349 – or 44 times that of China, PwC says.

By 2018, that gap had narrowed considerably. The US now has a GDP per capita that is 6.4 times larger than that of China, which is the world’s second-biggest economy after the US – and growing at roughly twice the pace.

The World Bank describes China’s growth as “the fastest sustained expansion by a major economy in history,” adding that “more than 850 million people have lifted themselves out of poverty”.

China econ 70 years Yu Shu and family
Yu Shu, seen here in 1933 (centre, seated on her father’s knee) came from a wealthy family that owned a shipping company and properties before the Japanese occupation and Mao Zedong’s communist revolution [John Butcher/Yu family via Al Jazeera]

Ahead of the anniversary, China’s leaders and officials have been reminding their citizens just how far they have come.

“Over the past seven decades, the Communist Party of China has united and led the Chinese people of all ethnic groups to forge ahead and work tenaciously, promoting the economic progress of the country by leaps and bounds,” Ning Jizhe, director of the National Bureau of Statistics, said at a news conference in September.

On that October day in 1949, the country had emerged from four years of civil war, and before that, a crushing Japanese occupation.

There was a “sense of peace,” says Zhao. “It was a turning point for China. We were hopeful for the future. Optimistic.”

The Great Leap Forward

But for Yu, the longing for peace was tinged with worry about what the new leaders might do.

The years immediately after Mao’s communist revolution were disastrous for China’s economy, and people like Yu and Zhao suffered along with many of their compatriots. Two policies in particular left millions destitute, hungry or dead. China’s meteoric rise to prosperity wouldn’t begin for another 30 years.

“In the early years they did see some success in terms of supporting industry and shifting the economy away from agriculture to some degree, but a lot of that initial progress was undone during the Great Leap Forward and the Cultural Revolution,” says Evans-Pritchard.

Mao’s Great Leap Forward, from 1958 to1962, was an ill-fated plan to industrialise the country that resulted in an estimated 30 million deaths, mainly from starvation.

China Great Leap Forward
Mao’s Great Leap Forward, from 1958 to 1962, was an attempt to industrialise China using socialist economic principles. It resulted in starvation for millions in rural communities, such as this village on the outskirts of Shanghai [June 11, 1961: Shikashige Haraikawa/Yomiuri Shimbun via AP]

Zhao says she felt “insulated” from many of these events. Her family was relatively well-off, living in a large house in Beijing, where the impact of Mao’s big experiment with collectivised production was not fully evident.

Yu’s family, on the other hand, did not escape so unscathed by the new regime. Before 1949, they had once been among the richest people in China, owning a shipping firm and considerable land and properties. They lost much of their wealth to the Japanese.

When the Communist Party took power, the family shifted some assets out of China, fearing the worst. What they could not get out was soon confiscated by the government, except for one large building in Harbin where the family lived.

Yu worked as a pianist and artist, smuggling her traditional Chinese paintings out of the country to buyers in the US.

Her father found work as a technician, as he was unable to access the family’s overseas wealth.

In 1951 the family moved to a hutong house – one of many single-storey traditional grey-bricked homes often built around an open courtyard – in Beijing, for her father’s work. They were unhappy with the government, she says, but as educated people, they still had a reasonable standard of living.

The Cultural Revolution

But that was before the Cultural Revolution, which Mao launched in 1966 and which lasted another 10 years.

Its aim was the removal of what Mao saw as bourgeois elements within the Communist Party and throughout society – elements he thought were intent on corrupting his revolutionary vision.

Schools and universities were shut, ancient relics ransacked, historic buildings destroyed and anyone accused of being a rightist humiliated, imprisoned or killed.

Zhao recalls “chaos” during that period, which resulted in her losing her position as a community warden. She later found work making clothes, and as a result “I didn’t go through suffering,” she says.

But the Cultural Revolution did result in trauma for Yu’s family, which lost even more of its wealth. One morning, the sound of boots outside heralded the arrival of government soldiers, who ransacked the house taking what valuables they could find.

In 1976, when Mao Zedong died and the Cultural Revolution ended, Yu recalls being “happy” that period had come to an end.

Deng Xiiaoping 1982
Deng Xiaoping set China on the road from communist central planning to a market-style economy [May 8, 1982: Neal Ulevich/AP]

Two years later, at a 1978 government legislative meeting in Beijing, Deng Xiaoping, who had taken charge of the Communist Party following a bloodless power struggle with Mao Zedong’s successor Hua Guofeng, introduced a policy called Reform and Opening Up that would set the People’s Republic on a new course.

Gradually introducing free-market capitalism and allowing in foreign investors, it brought with it rapid development.

Yu felt immediate effects on her life, and was now able to sell her art to dealers in the US openly.

Zhao watched her children grow up with an education and land good jobs, one as a doctor.

The Reform and Opening Up period was what really spurred China’s economic growth, says Evans-Pritchard.

Initially, it introduced market forces back into agriculture by allowing some farmers to sell excess produce above quotas on the open market. Previously, all agriculture was organised around rural communes that turned their produce over to the state.

Zhao Qinghua, China 70 years on
Zhao Qinghua, 95, lived through Mao Zedong’s creation of the People’s Republic of China on October 1, 1949, and survived the Great Leap Forward and Cultural Revolution [John Butcher/Al Jazeera]

Allowing the market into agriculture improved production, eradicated food shortages, and enabled people to move into other non-agricultural jobs, he says.

The next wave of reform, which also began in the late 1970s, was the introduction of free trade zones that allowed foreign capital into China. The country had little of its own capital, and this move allowed for the construction of factories and helped to industrialise the economy in the process, says Evans-Pritchard.

Today, 95-year-old Zhao lives alone in a small apartment block in the north of Beijing. She hopes China can “stand up more” and be “stronger and better” than the Japanese, her views coloured still by the trauma of the Japan-China war. 

Eighty-six-year-old Yu’s residence is a prestigious care home in the far west of the city. It resembles a miniature Forbidden City, with high brick walls painted in deep red, and a guard at the gate. Her one hope now is to live out her remaining days comfortably.

China econ 70 years Yu Shu in Beijing care home
Yu Shu, now 86, in her Beijing care home [John Butcher/Al Jazeera]

But a byproduct of China’s rapid development has been a widening income gap. In research published by the London School of Economics earlier this year, French economist Thomas Piketty and two colleagues said:

“By our estimates, the share of national income earned by the top 10 percent of the population has increased from 27 percent in 1978 to 41 percent in 2015, while the share earned by the bottom 50 percent has dropped from 27 percent to 15 percent.”

For younger Chinese citizens, there could be more economic growing pains ahead, says Evans-Pritchard. China’s current leader, President Xi Jinping, seems determined to roll back the reforms that Deng Xiaoping initiated.

“I think an increasing issue in China is [that] previously where economic and political interests were mostly aligned, we have reached a point where they are less aligned,” he says.

China’s economic interests at this point are intertwined with greater social and political liberalisation, he says, but that is something the present leadership seems “unwilling to accept”.

“A calculation has been made,” Evans-Pritchard says. “They are unwilling to continue to go down that previous path because it poses a threat to the continued existence of the Communist Party.”

“They will accept slower growth if it means continued political stability.”

Source: Al Jazeera