Chapter 3 The first chapter asks history: where is the source of China's economic growth?

At present, the Western world is experiencing a serious economic crisis that has not been seen in decades, and many people are looking to the East helplessly for the future.Not only will the Anglo-Saxon economies suffer for several years, some people believe that this crisis marks the beginning of the West's withdrawal from the global economic dominance, and also marks the return of Asia, especially China, to the center of the world stage.Not too long ago, China lost that seat. In 1820, China's economic aggregate accounted for one-third of the world's total economic aggregate, and its unrivaled status was comparable to that of the United States today.If the Chinese economy continues at its current pace of growth, China will achieve glory again in a generation or two.Today, China's economic output accounts for only 6% of the world's total output.A deep understanding of the forces that created and then destroyed China's economic prosperity is crucial to every serious observer of the Chinese economy.Therefore, it may be advisable to regard the first chapter of this book as an "Introduction to Chinese Economic History" - the context of history will lead us to understand how this country reached the pinnacle of the global economy, and how it rose from this position during the 19th and 20th centuries. fell down.The guide for this chapter is Professor Angus Maddison. He not only conducted outstanding research on Chinese economic history, but also is an authority on world economic history. Tracing long history and data.Maddison's personal homepage http://www.ggdc.net/Maddison.His recent books include Contours of the World Economy 1-2030 (Oxford University Press, 2007) and his recently republished book on China, Chinese Economic Performance in the Long Run, 960-2030 (OECD, 2007), is a masterpiece .For example, perhaps it is through his calculations that we can know that from the 10th century to the 15th century, China’s per capita GDP was higher than that of Europe. In 1820, China’s GDP accounted for 33% of the world’s total (2003 China’s GDP accounted for half of this number).Madison read a lot of historical materials, most of which were researched and recorded by Chinese scholars.Few other nations can match the rigorous attitude of the Chinese toward their own history, and thus they have accumulated rich historical documents and materials.However, what is not surprising is that, with the arrival and departure of dynasties, the conspiracy deep in the court curtain and the ups and downs of princes and generals have occupied the theme of history books, and the economic history of this country has been relatively ignored.Perhaps, a change should be made.

Today's China is a country that is very different from that under the rule of the Song, Ming, and Qing dynasties: it is dominated by industry and is no longer an agricultural society; the northern Great Plains has long since disappeared from the coveting and intrusion of nomads; the importance of global trade has never been greater (even compared to the time of the Silk Road); also unprecedented is the ever-changing technological progress.However, wandering through history, we will still find striking similarities sometimes leaping above the scroll of history.For example, the relationship between the bureaucracy and the business elite has changed over history, sometimes healthy (as in the Song Dynasty) and sometimes bad (as in the late Ming Dynasty).Another example is that agriculture is not as prominent in the economy today as it used to be, but the government still regards agricultural issues as the focus of national policy.

The first important economic transition experienced by the land of China occurred in the Song Dynasty (960-1280). Although the previous dynasties were generally economically depressed, it was China’s first transition from an agricultural society to an industrial and commercial society during the Song Dynasty. Lay the groundwork.The short-lived Qin Dynasty ruled brutally. Qin Shihuang left a deep mark in history for realizing the unification of China. However, in view of the atrocities of this emperor's burning of books and burying Confucianism, and the hardship of the people's livelihood under his rule, I really can't put it into words. Count yourself as his fan.The Han Dynasty once implemented a recuperation policy, but still failed to achieve economic transformation, and eventually fell into a divided country.During the Sui Dynasty, China was reunified and the law of land equalization (returning the freedom of land cultivation to farmers) was implemented throughout the country.However, the Sui Dynasty spent limited tax revenue on digging the Grand Canal and military expeditions, so this growth pattern could not be sustained.The Tang Dynasty ushered in a prosperous economic scene, and its foreign trade made great progress.However, commerce (including the salt industry) still rarely developed under the state monopoly system, and the land state-owned system eventually collapsed, and the corresponding tax base disappeared.Before the Song Dynasty, the Chinese economy had been stumbling for thousands of years.

History entered the Song Dynasty.The Song Dynasty was divided into two periods, the Northern Song Dynasty and the Southern Song Dynasty, based on the capture of Kaifeng by the Jin people in 1127, and the Song Dynasty was forced to move southward.Whether before or after the capital was moved, China's economy has reached a level of prosperity.Given the high cost of moving the capital, this is a remarkable achievement.During the Song Dynasty, per capita income increased by 30%, and the population doubled to nearly 100 million. Compared with the previous thousand years, it can be called a revolutionary change. In 1127, the capital of the Song Dynasty was moved from Kaifeng to Lin'an (now Hangzhou). At that time, Lin'an was just a village on the east coast.At that time, a large number of people moved south to escape the rule of the Jin people.Immigrants carried out large-scale land reclamation activities in the south, the government built irrigation facilities, and introduced the early-maturing rice variety Champa rice from Vietnam, which made the economy of the Southern Song Dynasty continue to prosper.The lack of arable land forced farmers to constantly find ways to reclaim new arable land and invented the famous terraced fields.After the capital moved to the south, grain transportation can be carried by the Grand Canal, thereby reducing the cost of grain transportation, which was a huge expense in previous dynasties.It can be said that this is the first reason for economic prosperity, that is, the prosperity of agricultural productivity and the expansion of cultivated land.Since China was an agrarian economy at the time, this was critical, but not the whole story.

The Song Dynasty was also a prosperous period of technological innovation.Movable type printing brought a boom in the paper industry, accelerated the speed of education and cultural transmission, and thus increased social mobility.As we will discuss in detail in Chapter 6, education is still the key to China's future development prospects.Among merchants in Sichuan, "Jiaozi" backed by gold and silver coins began to circulate, which is the earliest banknote in the world.Europeans and people in other parts of the world later learned that there was a huge savings in transaction costs from bartering to the use of money.Opening the door to the world economy also played a role in the prosperity of the Chinese economy at that time.Fujian's shipbuilding industry flourished - not only to meet the needs of coastal military defense, but also to meet the needs of trade, and the ocean trade between the Song Dynasty and the Middle East and South Asia developed.As a prosperous international metropolis, new technologies from all over the world are flooding into Lin'an.Lin'an became one of the earliest global cities in human history, followed by Rome, Florence, Amsterdam, and London.

Another important reason for the prosperity of the Song Dynasty was that although the government monopolized the production and trade of salt, wine and tea, private industry and commerce had a large room for development.Private steel mills produced ever-improving production tools.Industry and commerce were greatly developed, and various guilds (governments) emerged in the shops to determine and manage market prices. From the 16th century to the middle of the 17th century, guild organizations in European cities were considered to have played an important role in the creation of European civilization, but the formation of guilds in China was 500 years earlier than in Europe.

However, these guilds did not eventually lead to the full formation of the capitalist system as in Europe.China's top-down unified bureaucratic system is one of the reasons why the buds of capitalism are not fully developed.The sons of merchants and rich local gentry who are interested in official careers can enter the imperial court through the imperial examination.For many, this is the best path out of the risky fortunes of a businessman and into the circles of a stable income and a decent living.Some scholars believe that this has led to the failure of capitalism to truly develop in China. (will be discussed below).

The successful transformation of nature in the Song Dynasty is just a profile of China's long-term unremitting efforts to increase grain production under the natural conditions of more people and less land.In China, only 10% of land is arable, compared with 19% in the US and 28% in Europe.Please see Table 1.4. In 1993, the per capita arable land area in China was only 0.08 hectares, while the per capita arable land area in the United States was 0.73 hectares, and the per capita arable land area in India was 0.19 hectares.Throughout the course of China's history, there has always been an extreme shortage of arable land.With the expansion of the population, especially in the early years of the Song Dynasty and the Qing Dynasty, due to the lack of arable land, people went to the mountains to deforestation and reclaim wasteland on a large scale. The practice of prohibiting abandonment of wasteland was eight centuries earlier in China than in Europe.China has never had "public" plots for grazing like European countries did in the 18th century.Today, the land is used for agricultural cultivation.

The lack of arable land not only deeply affects economic development, but also leaves a deep imprint on Chinese culture and food.The protein in the Chinese dietary structure mainly comes from chicken and pork. The raising of such poultry (livestock) does not require special farms, so it is more economical.There are also legumes and freshwater fish.Argentines love to eat beef, simply because of the huge pastures that God has given them to enjoy this luxury.In Chinese history, the bureaucratic system has generally played a role in promoting the development of agriculture and mulberry, such as building large-scale irrigation projects, supporting the cultivation of crop varieties, building granaries (for military conquests), and publishing agricultural guides (the invention of movable type printing has given great great convenience).These practices greatly increased agricultural productivity, which was the only way to cope with continued population growth.In contrast, the bureaucracy and the royal family did not always regard the merchant class as friends, especially in the Ming Dynasty.

After experiencing severe inflation and plague disasters at the end of the Yuan Dynasty, in the Ming Dynasty (1368-1644), social stability was restored, but the economy did not experience a major boom, and technological innovation was much less than that of the Song Dynasty.In the early Ming Dynasty, the founding emperor Hongwu attempted to make agriculture self-sufficient and cut off the link between the village and the town.He despised commerce, imposed heavy taxes on merchants, forced small businessmen to register their goods once a month (creating such redundant rules was a bureaucratic way to increase business costs), and restricted merchants from taking imperial examinations.However, with the social and economic development and maturity of the Ming Dynasty, the status of merchants changed greatly, which had a profound impact on their class relationship with the bureaucracy.Merchants were able to finance some of the country's large infrastructure projects and participate in the salt monopoly.The Ming Dynasty also set up a special business registration, and the merchant class once again had the opportunity to take the imperial examination and become a civil servant.

In the early 15th century, construction of the Forbidden City in Beijing began, and the Grand Canal built in the Sui Dynasty was restored.The Grand Canal was abandoned after the Song Dynasty moved its capital to the south, and the Ming Dynasty moved its capital to Beijing obviously out of concern about the invasion of the northern Mongols (if someone else might move in the opposite direction, the choice of the Ming Dynasty at least shows that it should threatening great confidence).During this period, foreign exploration also reached a new height and scale.About 2,000 large ships made in Jiangnan carried Zheng He and his fleet on seven voyages to the West, covering the coasts of Africa, South Asia, and the Middle East.These expeditions cost a lot. After Zheng He died of illness on the seventh voyage, the fleet returned, and the original voyage expenses were diverted to build the Great Wall to resist the Mongol invasion.However, the construction of the Great Wall has never been able to really keep the enemy out of the pass. For the Mongols who are brave and good at fighting against China, the wall less than one person is by no means an insurmountable barrier.In fact, although many people today regard the Great Wall as a great symbol of the Chinese nation, in ancient times, few people seemed to think so.At many points in Chinese history, the construction of the Great Wall actually meant that the central government would enclose itself and retreat.This is undoubtedly the case in the Ming Dynasty.As time went on, the Ming Dynasty increasingly closed the door to the outside world. In the middle of the 15th century, the archives of Zheng He's fleet were burned, coastal ports were closed, and the increasingly large state bureaucracy regained control of international trade.Under the interference of domestic instability, China has once again made itself unique. The strength of the Mongols on the outer side gradually strengthened and united with the nomadic peoples in the north, posing a peripheral threat to the Ming Dynasty. The domestic political economy was in a mess, and the prosperity of the Ming Dynasty finally came to an end in an economic crisis. In the 1620s and 1630s, the global trade in silver (silver was used as money, especially for tax purposes) dried up.The hoarding of silver became a common phenomenon, and the imperial court was facing a extinction of taxes. To make matters worse, a severe famine occurred, which became the last straw that overwhelmed the Ming Dynasty. The ruling territory of the Qing Dynasty (1644-1911) was the largest in Chinese history, and the state governance in the early Qing Dynasty was also the most efficient in the world.For the first 150 years of the Qing Dynasty, China was the largest and most successful economy in the world.In many ways, China at that time was like America today.The Manchu conquerors jumped off their horses to study Nongsang. They realized that a huge bureaucratic system could help the huge empire run normally. When the Manchus were nomadic on the northern grasslands on horseback, they had little time and energy to study the bureaucracy.During the Qing Dynasty, they not only integrated into the traditional Chinese culture, but also gradually regarded themselves as the guardians of Chinese art and culture. During the Ming Dynasty, the stagnant grain production was greatly increased between 1650 and 1750, which laid the foundation for the population birth peak between 1700 and 1820.During this period, China's population more than doubled, almost twice as fast as in Europe during the same period, while per capita income growth remained at the same level.Many new food crops (such as sorghum, corn, peanuts, and potatoes) were introduced during this period, which enriched food nutrition.At the same time, taxes on farmers were lower than ever (until the Qing government started raising agricultural tax rates in 1770). At the same time, China's land area has also been greatly expanded, from 6 million square kilometers in 1680 to 12 million square kilometers in 1820. Mongolia was conquered in 1697, Taiwan was conquered in 1683, and Tibet entered the territory of the Qing Empire in 1720. In 1757, Xinjiang was included in the territory.The tea produced in Fujian, the "official kilns" in Jingdezhen, and the porcelain made in countless "private kilns" in many places were exported overseas, creating a huge trade surplus and pouring in silver. In 1820, China's total economic output accounted for a full third of the global GDP, and its per capita GDP was equivalent to 90% of the world average, reflecting the superb skills of managing the economy. However, the "Heyday of Kangxi and Qianlong" will not last forever.In the middle and late Qing Dynasty, corruption became more and more serious, the agricultural tax rate was raised repeatedly, and peasant uprisings occurred from time to time.Although agricultural productivity was greatly improved before 1820, China's agricultural productivity basically stagnated until Deng Xiaoping's reform and opening up at the end of the 20th century.The Grand Canal was silted up, the Yellow River's embankments were in disrepair for a long time, and it was difficult to move food and other goods in the country, and the villages were increasingly hit by floods.The government has lost popular support. As many dynasties in China's long history have done, once the country becomes weak, the central government will close the door further - and when the economy declines, the closed door policy will also accelerate.By the 1840s, the Qing government had no dedicated diplomatic missions, no coastal fortifications, and little knowledge of the outside world.Tensions with foreign powers that were not provoked by China are generating and intensifying.These Western countries are getting stronger day by day, while China's decline is getting worse day by day. In the middle of the 19th century, Britain bought Chinese tea every year, and British merchants began to feel frustrated with the trade situation of only buying but not selling.For the purpose of reversing the trade imbalance and other purposes, ships full of opium sailed into China. After 20,000 boxes of opium were seized and destroyed in Humen in 1839, British businessmen encouraged the British government to launch a war, and they achieved their goal. After the Treaty of Nanking was signed in 1842, the British Navy took control of Hong Kong Island.Other foreign powers have followed suit, dividing territory and setting up concessions in many "treaty ports" in China.By 1917, 19 countries controlled or actually influenced 92 ports in China (only 48 maintained customs checkpoints, the rest were "ports of call" for foreign ships). The country as a whole is also torn apart. The Taiping Heavenly Kingdom Movement broke out in 1850, and the leader of the movement, Hong Xiuquan, took up arms in Guangxi. He enjoyed great prestige among the peasants and there were many responders.After the Taiping Heavenly Kingdom, Tianjing (now Nanjing) was established as its capital, and once occupied half of the country.The Taiping Heavenly Kingdom put forward the slogan of overthrowing the rule of the Qing Dynasty and expelling foreign aggression.Hong Xiuquan was not only a nationalist, but also an early idealist.In terms of land policy, the Taiping Heavenly Kingdom promulgated the "Tianchao Tianmu System", which clearly advocated the abolition of feudal land ownership, stipulated the elimination of all private property, and implemented a common property system and equal distribution.Hong Xiuquan practiced a Puritan style of management, prohibiting gambling, opium, and alcohol (perhaps he believed that gambling, opium, and alcohol would weaken the country and its people).Some scholars regard Hong Xiuquan as the earliest communist.However, Hong Xiuquan's regime quickly exposed problems such as lax discipline, corruption, fierce power struggles, and poor governance capabilities, and failed to win the support of domestic elites. In 186, the Taiping Heavenly Kingdom was finally brutally strangled by the Qing government and foreign forces. However, the fate of the Qing Dynasty did not last long. The extravagant life of the Empress Dowager Cixi and the magnificent royal projects further weakened the financial strength of the Qing Empire. The birth of the Republic of China in 1912 heralded the end of Qing rule and the feudal monarchy. The wheel of history has entered the 20th century, but before discussing the loss of the Kuomintang in the mainland and the gains and losses of the new China's economic construction, it is worth asking such a question that has troubled Chinese and foreign scholars for many years: What went wrong?Why did a powerful country that was once glorious and wealthy fall into disintegration?Some scholars, including Madison, attribute one of the main reasons to the bureaucracy.Bureaucracy is both a positive driver and a negative constraint on the economy—maintaining the delicate balance between its pros and cons remains a challenge for most economies today (as we will see in Chapter 8 deals with this issue in detail). A professional, respected, and powerful bureaucracy was one of the hallmarks of most dynasties in Chinese history.This system has obvious advantages.In Europe, Napoleon was the first person to advocate "opening the way for the talented", which was several hundred years later than the system of filial piety and honesty in the Han Dynasty.The imperial examination system began in the Tang Dynasty and was further developed and improved in the Song Dynasty. The examinations were fairer and more efficient in selecting the best talents in the whole society to enter the national bureaucracy.Becoming a court official will bring high social prestige and economic benefits-the imperial examination system can ensure the selection of the brightest and most capable young people for a long time. From the 16th century to the 17th century, a total of 10,000 to 15,000 people were selected as court officials. The difficulty of the examination was unbelievably high (it is estimated that candidates must memorize at least 430,000 words of Confucian classics thoroughly). They are the elite group of society and have no opponents (party).This is very different from Europe, where different forces exist in the political environment, participating in the struggle for power together. Compared with Europe, there has never been a feudal aristocracy with taxation power and military power in China's historical dynasties.In European countries, kings and queens often need to negotiate with the nobles to please the nobles by providing loans, providing troops, or financing the nobles' conscription.The emperor of China didn't have to worry about this - he controlled the military and, through the bureaucracy, directly controlled the other resources of the empire. China has not formed a powerful religious force with land and power like Europe.This is also the great difference between the historical development process of China and Europe.In Europe, the church collects various taxes through the parishes under its jurisdiction, and holds the power of life and death, which can make you go to heaven or go to hell.Religious forces have deeply involved and controlled European politics throughout most of European history. They funded aggression, suppressed the government, and caused all kinds of troubles.The church also competed with the king for popular support.Likewise, the emperor of China need not worry about these things.In fact, the Chinese emperors supported a very different way of thinking about life.If someone dares to violate the social order that should be followed, he will not be able to obtain the afterlife.In the Han Dynasty, Confucianism, which advocated obedience to the secular government, gained political supremacy and became an enduring guiding ideology in ideology.The promise of an afterlife makes people vulnerable to manipulation by another group of people with political intentions, and is a weakness of governments that cannot control the afterlife. The last difference is that the various guilds that arose in Chinese cities were firmly subordinated to the bureaucracy, while the European guilds developed their own industry rules during the 16th and 17th centuries. The influence of cities and even regional politics is also on the rise.This may be because Europe before the 17th century was not composed of unified nation-states.City-states, small principalities, churches, and nobles all control parts of the land.In this divided governance environment, businessmen in the city have enough space to accumulate wealth, so capitalism can flourish, and businessmen can use their money to create influence and hire troops to protect themselves.Whereas China had been a unified country long before that, merchants never had a chance to gain a foothold, and if they got too powerful, they often faced a situation of either being picked up or being submissive to bureaucrats to work with. Therefore, generally speaking, the emperor and the bureaucracy have been the holders and rulers of power since the Han Dynasty.Unlike this unified power system, the history of Europe is also a history of competition among various forces, including material, economic and spiritual forces. China's bureaucratic system has operated for hundreds of years, and generally has a positive effect on agriculture (which has been the foundation of the economy until the 1950s), because officials need to ensure the food supply of the city, ensure the army's supplies, and protect the imperial court. and their own good life.The great British historian Joseph Needham, known for his research on the development of science in China, believed that the bureaucratic system (especially during the moderately governed Song Dynasty) was the source of social progress and the key to economic development.The official selection system enables talented people to enter the power system.This was good for society as a whole, meaning protracted wars between kings, churches, and fiefdom elites were avoided.Looking at the wars of various dynasties in China, it is not that the winner is the king, and the loser is the bandit.In Europe, however, military conquest meant only the beginning of negotiations with all the powers involved.After the fall of Rome, Europe waited until the creation of the European Union to unite under one banner.Of course, the EU is by no means the end of nations and individual national governments. But the day bureaucracy was born also sowed the seeds of its own destruction.The bureaucracy is the protection of its own power and status, and it prevents the formation of an entrepreneurial class through strict control, heavy taxation and monopoly in all important areas.Some dynasties were looser, such as the Song Dynasty and the early Ming Dynasty.But even these periods failed to develop an independent class of the wealthy and a powerful capitalist class as in Europe. The bureaucracy continued as usual until the world changed in the 15th century and Europe entered the modern age.This is a new world where the economy is no longer just agriculture but industry.This also means that some factors have become very important, such as education, because creating wealth requires a smart mind, not just digging with a hoe; such as technological innovation, because industry not only creates production means Progress creates motivation.The spirit of innovation has become the dominant spirit of modern society.The spirit of innovation asks questions, then seeks answers, and seeks progress in the process, so it is bound to conflict with established authority and old production methods. Needham believed that at this time, China's bureaucratic system encountered obstacles. It could not submit itself to the new authority and scientific methods, and was unwilling to continue to promote innovation by industry and commerce.Previous success achieved through the old ways, powerful vested interests, and the growing Confucianism (which advocates stability above all else) all mean that the old system is still alive.During the same period, the West has become increasingly powerful under the combined force of industry, technology and enterprises, which in turn promotes the improvement of labor productivity, promotes the creation of value, and then brings wealth. In 1792, the British envoy Lord McCartney came to China after careful planning and met Emperor Qianlong at the Chengde Mountain Resort.The most well-known scene in this story is that the Qing Empire categorically rejected the British trade request, so it has a certain flavor of this ancient empire's contempt for the Western world.In fact, at that time, Britain sincerely hoped to develop trade with China in order to enter the huge Chinese market.The 600 boxes brought by the Macartney mission were filled with planetariums, globes, astronomical telescopes and all kinds of the latest mathematical instruments.At least in the eyes of scholars such as Madison, Emperor Qianlong and his court failed and were unwilling to recognize the great progress of the outside world, showing some signs of imperial weakness and ignorance. Far away, let's go back to 1912 and continue our story. When the Qing Dynasty fell, China's GDP per capita had fallen to less than half of the world average.China then entered the period of Beiyang warlord rule, and its economic situation was extremely bad. From 1890 to 1952, the annual growth rate of GDP per capita was zero (after several recessions), and according to Madison's estimates, the average annual growth rate of overall GDP was only 0.6%.That means living standards have largely stagnated. In 1928, the Kuomintang took power and announced some tax reduction measures, such as the abolition of the lijin tax (a tax levied on domestic local goods transactions to raise military pay for the suppression of the Taiping Heavenly Kingdom during the Xianfeng period of the Qing Dynasty), and the introduction of some new taxes, such as import Tariffs (foreign powers continued to receive tariff revenue through treaty tariffs until treaty ports were abolished in 1943).The central government of the Kuomintang set up a central bank in Shanghai and introduced the issuance of banknotes. The only thing the central bank did at that time was to keep printing money to make up for the huge fiscal deficit, mainly military expenditures.The deluge of paper money led to severe inflation from 1937 to 1941. The positive aspect of the economy here is that foreign investment in China is relatively prosperous. As of 1933, 2.5% of China's GDP was created by foreign enterprises.Nearly half of the foreign direct investment went to Shanghai, and the rest was mainly invested in the construction of the eastern coastal railway.The length of laid railroad tracks increased from 10 kilometers in 1890 to 22,238 kilometers in 1950.Of course, these foreign investments are not purely commercial investments, especially as they violate China's sovereignty in many areas.Later, the situation took a turn for the worse. The Japanese invasion brought great disasters to China, and North China was almost razed to the ground.Eight years after the victory of the Anti-Japanese War, China fell into the civil war between the Kuomintang and the Communist Party, and there was no chance of any improvement in economic policy or domestic economic conditions.On the eve of the founding of the People's Republic of China, the GDP per capita had dropped to the level of 1890, that is to say, China lost another 60 years. After the founding of the People's Republic of China, the economy was completely taken over by the government and a strong bureaucracy made all the policies.This is a bureaucratic system very characteristic of the 20th century. It focuses on the development of industry and completely abandons the old economic management methods.But obviously, this bureaucratic system has found a good fit with the ancient tradition.Economic policy follows the Soviet model. The core command center of the planned economy is located in Beijing, which allocates funds and major resources across the country, organizes transportation, sets prices, and separates the national economy from the outside world.Authorities seek scientific methods to organize the economy, doing a lot of complex math to balance supply and demand. During the first 30 years of the CCP’s ruling, the national economy and per capita GDP both increased.According to Madison’s estimate (comparing the economic conditions of various countries in different periods on the basis of purchasing power parity), between 1950 and 1977, China’s per capita GDP doubled, and the overall economic scale expanded by 3.4 times.Let's look at the changes that have taken place in the agricultural and industrial sectors separately. Madison reminds us that before the New Democratic Revolution, Chinese agriculture was not really "feudal" as we often hear, at least not in the traditional sense of the world.There were no large fiefdoms under the aristocrats, though there were rich and fairly widespread poverty; nor were feudal manors formed, with most peasants living off farming their own land, or getting paid to farm it for others (whereas in a true feudal system, Peasants or serfs lived hand to mouth).A survey before the revolution showed that only 10% of rural households had no land, and the average cultivated land area per household reached 1.7 mu, which could support 6 people.However, the CCP has grander plans for rural land reform.Agricultural reform closely revolves around increasing agricultural productivity so that agriculture can nurture industry.To achieve this goal, the CCP drew on Stalin’s model of agricultural collectivization, but it did not copy it. The scale of China’s agricultural collectivization (communes) was much larger than that of the Soviet Union. In the early 1950s, nearly half of the arable land was confiscated and redistributed, 4% of the population lost their land and 60% gained it.After land redistribution, China began a massive agricultural cooperative movement.Grass-roots government organizations set up mutual aid groups to uniformly allocate labor, cattle and farm tools according to production needs. From 1956 to 1957, each high-level agricultural production cooperative concentrated the land and labor of 160 households on average, and only 5% of the collective land was cultivated by individuals for vegetables and other crops.By the summer of 1958, 123 million peasant households had been merged into 26,000 people's communes, with an average of 4,600 peasant households in each commune (30 times the size of Soviet collective farms).Thus began the booming "Great Leap Forward", during which almost all land was owned by communes, and the people's communes were expected to be self-sufficient.However, due to improper agricultural management, farmers' willingness to grow grain is low, causing the grain harvest to collapse.After the famine occurred, some provinces with serious disasters did not request the central government or neighboring provinces to transfer food for disaster relief, because requesting food transfers was tantamount to indicating that a serious famine had occurred in the province. From 1958 to 1962, at least 6 million people died of starvation or starvation-induced disasters. disease. After 1962, agricultural collectivization was adjusted to a "three-level ownership, team-based" system.The production brigade, which is composed of about 30 peasant households, is the basic unit of agricultural production.Private plots and family sideline businesses have been preserved and expanded, and farmers' markets have quietly emerged.By the mid-to-late 1970s, with the support of some courageous and resourceful local cadres, farmers in Anhui and Sichuan began to regain de facto autonomy over their land.What happened after that, we already know, is recorded in history. The agricultural growth rate in the second 30 years after the founding of New China was more than twice that of the first 30 years, and the per capita GDP was about three times that of the first 30 years. During the entire period of socialist construction, priority should be given to the development of industry.Agricultural policy, including the Great Leap Forward, was more or less aimed at getting as much resources as possible from agriculture to put into industry.No one really cares about the service industry - in fact, education, healthcare, food and entertainment, all of which are supplied by the state.Compared with the past, the service industry has achieved the greatest development in the second 30 years. A large amount of industrial investment turned out to be a waste, but according to Madison’s estimates, in the first 30 years after the founding of New China, the growth rate of industrial labor productivity was not satisfactory, with an average annual growth rate of 3.1% between 1952 and 1978.After reform and opening up, industrial productivity growth accelerated to 4.8%.Such progress is remarkable considering the enormous difficulties faced by the industry in its infancy. In 1960, the Soviet Union stopped industrial aid to China, which meant that China lost funds, design planning and technical assistance. In the 1950s and 1960s, due to concerns about the international situation and missile attacks, China relocated important industries inland and west.The relocation process was costly and disruptive to industrial development—with enormous efficiency losses in terms of transporting supplies across the country.By the end of the 1960s, with the outbreak of the "Cultural Revolution", the Chinese economy came to a standstill.By the mid-1970s, the problems of contradictions and inefficiencies in the planned economic model became increasingly prominent.The sheer amount of math is too complex to always answer the right questions about how the economy works, there is no efficient way to collect and process all the information planners need, and there is no incentive mechanism for work, technological innovation, and increased productivity.During the same period, the United States, Europe and most Asian economies developed rapidly, and the market economic system was obviously more conducive to the improvement of living standards.The enlightened people in China's top leadership realized the limitations of the socialist planned economic system for economic development. Deng Xiaoping and the top party leadership realized the need to grasp the balance between the government and the market, which helped the Song Dynasty to achieve a wealthy and powerful country.They saw that the health of China depended to a large extent on the health of its agriculture and rural economy.They also realize the great advantages of openness and stop trying to be self-sufficient.Openness is accompanied by domestic reforms.It seems certain that Deng Xiaoping and the party's top leadership had doubts about whether the party's organs and their intertwined relationships could be independent from the outside world and ensure the successful operation of the Chinese economy.The competition that openness brings has its advantages.今天，最初的改革步伐迈出30年后，中国经济面临着哪些重大问题？本书的其余章节将一一道来。