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Reflecting on 70 Years of Economic and Social Development in China

By Wei Liqun Source: English Edition of Qiushi Journal Updated: 2020-03-20

The history of a nation is its foundation. Looking back on the 70-year history of the People's Republic of China (PRC) and reviewing the achievements made and the experience gained over that time can help us build a better understanding of where we are and where we are going, inspire us to uphold and develop socialism with Chinese characteristics in the new era, and drive us toward realizing the Two Centenary Goals and the Chinese dream of national rejuvenation.

I. The PRC's 70-year history of economic and social development

In the 70 years since its founding, the PRC has gone through three periods: the socialist revolution and economic development period, the reform, opening up, and socialist modernization period, and the new era of socialism with Chinese characteristics since the 18th National Congress of the CPC held in 2012.

1. The socialist revolution and economic development period

The founding of the PRC in 1949 put an end to the reactionary rule of imperialism, feudalism, and bureaucrat capitalism across the country, finally allowing the Chinese people to stand up. This laid the political foundations necessary for all of contemporary China's development and progress, and set the Chinese nation on the path toward national rejuvenation.

At the time of its founding, the PRC was a country in shambles. It had been seriously damaged by protracted wars, its economy was frail and backward, and its people were utterly destitute. Thanks to the hard work of people throughout the country, the national economy, long-embattled, was fully restored over a period of three years. In 1953, the CPC Central Committee introduced the general guideline for the transitional period, and by 1956 the three socialist transformations (of agriculture, handicrafts, and capitalist industry) were essentially complete, bringing about the broadest and most profound social change in Chinese history. The CPC then led the Chinese people in carrying out all-round socialist economic development, and exploring with arduous efforts a path to socialism best suited to China's conditions. This was a process in which we made many great achievements, but were also sidetracked by unfortunate errors.

Although this was a period with many ups and downs, what matters is that socialist construction was ultimately successful. China took the initial steps to establish and develop its socialist system, laying the basic institutional foundations for socialist development. Meanwhile, the founding and formation of a relatively comprehensive industrial system and national economic system offered the material base crucial for the socialist modernization drive. Major technological breakthroughs were made in both the military and civilian sectors, including the development of China's first nuclear weapons, first intercontinental ballistic missile, and first artificial satellite. China also saw groundbreaking progress in its foreign relations, including rapprochement with the US and restoration of its rightful seat in the UN.

In 1958, the first Hongqi sedan was produced, marking an important milestone in the PRC's industrial development. Today, China has already become the world's leading manufacturer. It has industries in all of the categories defined by the UN, and is the world's largest producer of automobiles and more than 200 other industrial products.


Top: Workers inspect a finished sedan on a Hongqi assembly line on April 9, 2019. PHOTO BY XINHUA REPORTER XU CHANG

Bottom: A photo of China's first car factory which produced the first Hongqi sedans, taken in 1958. FILE PHOTO

2. The reform, opening up, and socialist modernization period

The Third Plenary Session of the 11th CPC Central Committee held in December 1978 ushered in a new period of reform, opening up, and socialist modernization. The CPC thus successfully founded socialism with Chinese characteristics. The important proposition to develop a uniquely Chinese form of socialism and the strategic goal of building a moderately prosperous society were introduced at the 12th National Congress of the CPC held in 1982, putting the reform and opening up drive into full swing. In 1987, the 13th National Congress laid down the Party's basic guideline for the primary stage of socialism, and also defined the three-step strategy for modernization.

In the period between the 14th National Congress of the CPC in 1992, when the objective of instituting reforms to develop a socialist market economy was established, and the 18th National Congress in November 2012, China made major progress in reform and opening up.

On the basis of the requirement to establish a basic framework for the socialist market economy set forth at the Third Plenary Session of the 14th CPC Central Committee, systematic reforms of the fiscal, tax, financial, foreign exchange, planning, and investment and financing systems were carried out. Deng Xiaoping Theory was confirmed as the Party's guiding thought at its 15th National Congress in 1997. After that, Hong Kong and Macao returned to the motherland, while cross-Straits relations continued to expand. In 2001, China acceded to the World Trade Organization, marking a major milestone in its opening up to the world. The CPC later founded the Three Represents Theory and devoted major efforts to strengthening Party building, thus successfully launching Chinese socialism into the 21st century.

After the 16th National Congress of the CPC which was convened in 2002, China entered a new stage of development centered on building a moderately prosperous society in all respects and speeding up socialist modernization. As a result of solid progress made through initial reforms, the Chinese economy grew at an unprecedented rate and was able to deal with the 2008 international financial crisis effectively. By introducing the Scientific Outlook on Development and the strategic goal of building a harmonious socialist society, the CPC Central Committee succeeded in upholding and developing Chinese socialism from a new historical starting point.

3. The new era of socialism with Chinese characteristics

Since the 18th National Congress, the CPC Central Committee with Xi Jinping at its core has led the Chinese people of all ethnic groups in advancing the five-sphere integrated plan, promoting the four-pronged comprehensive strategy, and driving forward reform, opening up, and socialist modernization across the board. With historic changes and achievements made in the cause of Party and the country, socialism with Chinese characteristics entered a new era. The report to the 19th National Congress of the CPC laid out a grand blueprint for securing a decisive victory in building a moderately prosperous society in all respects and for all-out efforts to build a great modern socialist country. The report also established Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guiding ideology that the Party and country must adhere to over the long term.

II. Great achievements made over 70 years of economic and social development

The PRC has gone through an extraordinary journey in the 70 years since its founding. Under the leadership of the CPC, the Chinese people of all ethnic groups have overcome all manner of challenges and endured through all manner of trials, and China has captivated the world with the achievements it has made in economic and social development.

1. Economic development has continuously progressed in leaps and bounds.

Over the past 70 years, China has developed at a rate seldom seen in the world, with rapid progress in industrialization, informatization, urbanization, marketization, and internationalization and significant enhancement of its capacity to promote scientific and technological advancement and independent innovation. As a result, China has transformed from an utterly destitute country into a world leader in terms of economic and technological power, defensive capabilities, and overall national strength. After 70 years of development, the Chinese economy passed the 90 trillion-yuan mark in 2018, accounting for nearly 16% of the world economy. Calculated at constant prices, this is 174 times larger than it was in 1952, representing an average annual growth rate of 8.1%. China is currently the only country in the world to possess all of the industrial sectors classified by the UN, and ranks first in the world for output of more than 200 industrial products. Despite the fact that it has less than 10% of the world's arable land, China has ensured that all of its nearly 1.4 billion people are properly fed. Development of infrastructure concerning areas such as water conservancy, transportation, energy, and information networks has advanced at an incredible speed. The pace of scientific and technological progress and innovation has accelerated, positioning China at the forefront of the new scientific and industrial revolution that is now sweeping the globe.

Education is the cornerstone of national revival and social progress. Over the last 70 years, the people's sense of fulfillment from education has constantly grown stronger. Around the time of the PRC's founding, more than 80% of the population was illiterate, whereas in 2018, the retention rate over nine years of compulsory education reached 94.2%.


Top: Children participate in a music class at Washan Yuzhong Kindergarten in Banmu Village, Ximeng Wa Autonomous County, Yunnan Province on December 7, 2018. PHOTO BY XINHUA REPORTER YANG ZONGYOU

Bottom: A teacher reads with students at Ximeng Primary School, the first primary school built in Ximeng Wa Autonomous County, in 1954. FILE PHOTO

2. China's economic and social structure has continued to improve.

Over the past 70 years, constant optimization and upgrading of China's economic structure has become an important driver of national development. Meanwhile, continued adaptation of the social structure to transformation of the economic structure has ensured that the economy and society develop in a stable and coordinated manner.

The industrial structure has been upgraded. Over the past 70 years, the relative proportions of the three industrial sectors have changed significantly. In 1952, the ratios between the primary, secondary, and tertiary sectors were 50.5:20.8:28.7 for GDP and 83.5:7.4:9.1 for employment. By 2018, the ratios between these three sectors had shifted to 7.2:40.7:52.2 for GDP and 26.1:27.6:46.3 for employment.

The ownership structure has been appropriately adjusted. Since the launch of reform and opening up, China has explored ways to improve its basic economic system for the primary stage of socialism in accordance with the country's conditions and the need to develop productive forces. The public sector of the economy has been consistently consolidated and developed through continued reform of state-owned enterprises, while the non-public sector has developed vigorously and grown more dynamic. This has led to a favorable situation in which each of the two sectors reinforces and complements the other.

Innovation has gradually become the primary driver of development. Whereas China had to try to catch up in scientific and technological innovation, it has gradually become a contender and even a leader in more and more fields over the last 70 years. Since 2013, China has ranked second in the world for R&D expenditures behind only the US, and first among developing countries.

Social undertakings have grown and flourished. Marked achievements have been made in education. In 2018, the retention rate over nine years of compulsory education reached 94.2%, the gross enrollment rate was 88.8% for high school and 48.1% for higher education, and the vast majority of people entering the workforce had received at least a high school-level education. Meanwhile, as our cultural projects have flourished, we have made steady progress in strengthening China's cultural foundations, and increased the international appeal of Chinese culture. We have also made great progress regarding health care. With consistent improvement of the public health system, our citizens have continued to become healthier overall, with average live expectancy rising from 35 years in the early days of the PRC to 77 years in 2018.

A new pattern of coordinated regional development has emerged. Around the time of the PRC's founding, industries were almost all concentrated in coastal cities like Guangzhou and Shanghai. During the First and the Second Five-Year Plan periods (1953-1962), the distribution of the nation's productive forces was significantly adjusted, mainly through 156 key projects constructed with the assistance of the Soviet Union. After the launch of reform and opening up, a series of policies and plans were introduced to ensure coordinated development of China's different regions, including strategies to kick start development in the western region, energize the central region, revitalize the northeastern region, and encourage the eastern region to spearhead development. With each region leveraging their comparative advantages, regional development has become more balanced. Since the 18th National Congress of the CPC, a series of major regional development strategies have been put forward, including the Beijing-Tianjin-Hebei Integration Initiative, the Yangtze River Economic Belt Initiative, the Guangdong-Hong Kong-Macao Greater Bay Area Initiative, and the Yangtze River Delta Integration Initiative, which have helped give shape to a new pattern of regional development.


Luo Zongming (right) of Luanzhou, Hebei Province sorts through family financial records with his wife on September 18, 2019. Families are microcosms of the country, while the country is made up of millions of families. Through 70 years of forging ahead, the people have seen their living standards improve dramatically as China has grown stronger and more prosperous. To Luo Zongming, every entry in his 388 books of meticulous records represents a cherished memory, from buying his Flying Pigeon bicycle to buying their small family car and from buying a pager and a portable phone to buying a smartphone, as well as building five houses and moving four times. PHOTO BY XINHUA REPORTER YANG SHIYAO

The urban-rural relationship has consistently improved. In the early years of the PRC, the strategy of prioritizing the development of heavy industry gradually led to the formation of a structure that divided urban and rural areas. After the launch of reform and opening up, this system was gradually dismantled, allowing urban and rural areas to become integrated over time. Calculated according to permanent resident population, the urbanization rate rose from 17.9% in 1978 to 59.6% in 2018, while the number of cities in China increased from 132 to 672 between 1949 and 2018. A new structure featuring urban clusters in which cities of all sizes and small towns develop in coordination with each other has begun to emerge. As a result, the urban-rural dichotomy is giving way to urban-rural integration.

3. Great achievements have been made in opening up.

In the early days after its founding, the PRC conducted trade primarily with other socialist countries. In 1950, China's total volume of trade in goods was only US$1.13 billion. As a result of reform and opening up, however, trade volume increased from US$20.6 billion in 1978 to US$4.6 trillion in 2018, representing growth by a factor of 223. China is now the world's largest trader of goods, the second largest service trader, and the second largest outbound investor, and is in the process of transitioning from focusing on "bringing in" to laying equal emphasis on "bringing in" and "going global." 

4. Living standards have kept rising.

Over the past 70 years, the CPC has always made ensuring and improving the people's living standards the immutable aim of economic development. Employment in both urban and rural areas has steadily improved thanks to expansion of the job market and gradual optimization of the employment structure. Self-employment and entrepreneurship have transformed China's employment landscape, and mass entrepreneurship and innovation are quickly becoming the primary means for expanding employment and bringing prosperity to the people in the new era. Per capita disposable income has continued to increase in both urban and rural areas. In 2018, national per capita disposable income reached 28,228 yuan, while the ratio of per capita disposable incomes between urban and rural residents decreased to 2.69. Urban and rural consumption has risen rapidly, with national per capita consumption expenditure increasing from 88 yuan in 1956 to 19,853 yuan in 2018, while the national Engel's coefficient fell to 28.4% in 2018. The days of shortages and rationing are long gone. Ownership of household appliances, cars, and other durable goods has surged, and housing conditions have improved significantly. China's success in poverty alleviation has attracted worldwide attention. According to 2010 standards, the rural poor population shrunk from 770 million in 1978 to 16.6 million in 2018, while the rural poverty rate dropped from 97.5% to 1.7%. China thus accounts for 70% of global poverty reduction over this period. By 2020, China will win its fight against extreme poverty and accomplish the goal of building a moderately prosperous society in all respects. The social security system has also seen consistent progress, with more than 900 million people covered by basic pensions and more than 1.3 billion people covered by medical insurance at the end of 2018. Basic public service facilities at all levels and in all categories have continuously improved, with national basic public service projects and standards implemented across the board.


Note: The 2010 rural poverty standard is 2,300 yuan per person per year (at 2010 constant prices). Highway mileage includes village roads starting in 2005. Pre-1981 fixed asset investment data is the fixed asset investment of state-owned organizations, while post-1981 data is total fixed asset investment. Total retail sales of consumer goods for 1992 and before refers to total sales of commercial goods; this figure does not include housing purchases starting from 1997. Household savings (RMB) data comes from the People's Bank of China; pre-2015 data is the RMB savings deposits of urban and rural residents. Beginning in 2016, participants in new rural cooperative healthcare were gradually merged with participants in urban and rural basic medical insurance for statistical purposes, and as a result of this change it is not possible to calculate average growth. ① 1952 data ② average growth from 1953-2018 ③ 1950 data ④ average growth from 1951-2018 ⑤ 1956 data ⑥ average growth from 1957-2018 ⑦ 1989 data ⑧ 1994 data ⑨ 1978 data.


5. China's international standing and influence have risen markedly, bringing it closer to the world center stage.

Over the past 70 years, China has broken through external efforts to keep it isolated, and gradually shifted from being completely or partially closed off to being fully open by pursuing an independent foreign policy of peace, promoting economic, political, and cultural exchanges with other countries, and learning from advanced countries. Since CPC's 18th National Congress in particular, all-round efforts have been made to advance major country diplomacy with Chinese characteristics and a new pattern of complete openness covering multiple dimensions, levels, and fields. As China has taken active steps to promote a global community of shared future and a new type of major-country relations, its international standing and influence have risen markedly, and it has made major new contributions to international peace and development.

III. Lessons and experience drawn from 70 years of economic and social development

Through all of its great endeavors conducted over the past 70 years, China has accumulated a wealth of experience and learned a number of valuable lessons.

1. We must uphold and strengthen the CPC's overall leadership.

The leadership of the CPC is the defining feature and greatest strength of the Chinese socialist system. As socialism with Chinese characteristics enters a new era and the CPC takes on the historic task of leading the Chinese people toward national rejuvenation, the Party must have the courage to make changes and continue strengthening its ability to purify, refine, and reform itself so that it may always remain the firm leading core of the Chinese socialist cause.

2. We must uphold and develop social-ism with Chinese characteristics.

Socialism with Chinese characteristics represents a fundamental achievement made by the Party and the people through countless hardships and at enormous cost. Our history and experiences have proven that only socialism can save China, and only Chinese socialism can enable China to develop itself.

3. We must work with the understanding that China is still in the primary stage of socialism.

Our experience over 70 years of economic and social development has taught us that we must ground our efforts to modernize socialism in our actual national conditions.

4. We must remain committed to a peo-ple-centered philosophy of development.

Through every historical period from revolution, economic development to reform, China has relied on the people and upheld their principal position, while the people have always been the fundamental force for driving forward socialist construction, reform and development. We must always make it our goal to satisfy the people's yearning for a better life, actively respond to their needs, concerns, and desires, and do everything possible to see that they have more abundant, direct, and tangible feelings of fulfillment, happiness, and security. We must also promote well-rounded human development and ensure that everyone shares in prosperity.

5. We must continue to drive deeper with reform and opening up.

Reform and opening up is a crucial means by which the Party and the people may keep abreast of the times, and the necessary approach for upholding and developing Chinese socialism. Reform and opening up is an ongoing process that will never come to a stop but will always serve as our driving force. We must maintain lasting and unwavering commitment to putting economic development first while upholding the Four Cardinal Principles and reform and opening up, making this integral to our practice of socialism with Chinese characteristics in the new era.

The construction and upgrading of rail lines linking Beijing and Zhangjiakou represents a new success in the development of transportation since the founding of the PRC. Completed in 1909, the Beijing-Zhangjiakou rail line was the first trunk line designed and built independently by China, which broke the monopoly of foreigners in Chinese railway construction. At the end of 2019, the Beijing-Zhangjiakou high-speed rail line officially came into operation, becoming China's first smart high-speed rail line. This line is designed to carry trains at a speed of 350 km/h, and is the first to use China's independently developed Beidou satellite navigation system.

6. We must remain committed to the underlying principle of pursuing progress while ensuring stability.

We have learned the need to pursue progress while ensuring stability from both positive and negative experiences in our economic work over the last 70 years. Since the 18th National Congress, the CPC Central Committee has introduced the new development philosophy, and thoroughly implemented the underlying principle of pursuing progress while ensuring stability, thus allowing economic and social development to reinforce each other through a positive cycle. We must earnestly reflect on our successes over the last several years, continue pursuing progress while ensuring stability, and promote high-quality development so that our economy and society may develop in a sound, stable, and sustained manner.

7. We must remain independent, self-reliant, and hardworking.

These three qualities are what have enabled China to win victory after victory for the last 70 years, and they reflect the Chinese nation's spirit of perseverance and quest for self-improvement. In this new historical context, we must stick to these qualities so that we are able to take the initiative at a time when the world is undergoing profound changes and build China into a great modern socialist country more effectively.

8. We must keep striking the right balance between reform, development, and stability.

This is an important lesson that Chinese Communists have learned through the process of revolution, economic development, and reform under the guidance of Marxism. It is precisely because we have continued to uphold dialectical and historical materialism, made development our objective while relying on reform for momentum and stability for foundation, and struck the right balance between reform, development, and stability that we have consistently maintained overall social harmony and stability throughout 70 years of economic and social development. As we work toward becoming a great modern socialist country, we must continue to properly balance reform, development, and stability, seeing that they function in tune with each other and are mutually reinforcing. 

Wei Liqun is Executive Vice Chairman of the China Center for International Economic Exchanges.

(Originally appeared in Qiushi Journal, Chinese edition, No. 19, 2019