(Newswire.net — January 11, 2015) Beijing, Beijing — A recent commentary by Marian Tupy, senior analyst at the Cato Institute, hits the nail on the head when he says China is the big reason why the wealth gap between developed and developing countries has narrowed significantly over the past half century.
In spite of Mao’s disastrous campaigns, one after the other for two decades until his death in 1976, his successor Deng Xiaoping, the ultimate pragmatist, dared to break the shackles of the planned economy to save China from economic collapse.
At the tail end of the Cultural Revolution in the mid-1970s, the private economy was still forbidden and everything had to go through the state which dictated paltry rations and industrial coupons for basic living. People in the cities required cereal coupons to eat – about 33 to 40 catties (36.3 to 44 pounds) of coarse steamed bread or rice a month with little meat, eggs, or oil.
But, there was lots of napa cabbage, nothing BUT cabbage in the winter months. Industrial workers got up to 50 catties of cereals and more meat, albeit fatty and low quality. Farmers tilled their tiny “free plots” while working for pitifully low paying work points on agricultural communes.
For clothes, cotton coupons were required to purchase cotton fabrics during a time when man-made fabrics were still a rarity. Families had to queue up to acquire industrial coupons to purchase bicycles, foot-powered sewing machines, radios, watches, and tiny b & w TVs. Travel was restricted and special permission had to obtained for leaves from state jobs to visit relatives. It wasn’t until the late 1970s early 1980s until people were allowed to purchase private phone lines at great cost.
Deng Xiaoping’s reforms eventually did away with all that planned era baggage. Especially after joining the WTO in 2001, China’s economy surged ahead and transformed itself on the back of globalized production. That spelled the beginning of the end of China’s subsistence economy, putting it on course to become the second largest economy in the world. Within another decade, it will inevitably be the largest regardless of what the nay-sayers say.
In his comment, Mr Tupy mentions China’s 2013 per capita income in exchange rate terms was about US$6,800 but by the measure of purchasing power parity (PPP), it is closer to $10,000. While celebrating China’s remarkable achievements over the last three and one half decades, we should not forget how much farther China needs to go.
Nonetheless, the Chinese people owe their current prosperity to Deng Xiaoping.
About Canada-China Friendship Association, Greater Vancouver Chapter
The CCFA Greater Vancouver Chapter focuses on encouraging Canadian entrepreneurs and small and mid-sized businesses to take active interest in and advantage of China’s rise in a global economy.