26 September 2024

The Economic Record Of Socialism -- China

Francis Menton

China has proudly proclaimed itself to be a Communist country ever since Mao Zedong came to power in the late 1940s. I understand the term “Communism” in the context of a country like China to mean a socialist (state-directed and controlled) economic system with the additional element of political repression allowing no dissent from official orthodoxy.

China’s economic history is a bit more complex than just 75 years of tightly-controlled socialism. Its economy languished (including the usual mass deaths and starvation) for the first 40 or so years of Communist rule. Next, under party leader Deng Xiaoping and successors from the mid-1980s for about 30+ years, China allowed a substantial private economy to emerge and flourish. During those years it experienced rapid economic growth, and in that very short period of time its economy became the second largest in the world after the U.S. (however, more like 70th place if ranked by per capita GDP). Then in 2013, current strongman Xi Jinping came to power. In the most recent decade under Xi’s rule, the political repression has been greatly ramped up, the central planners have reasserted their pre-eminence, and the private economy has been gradually strangled.

So how is China faring under its most recent regimen of tightly-controlled socialism, central planning, and state-directed investment? I’ve had several posts over the past couple of years tracking China’s progress, or lack thereof, for example here (from August 2023) and here (from May 2024). It’s time for another one, particularly given the relevance of China’s economic results to consideration of policies advocated by the candidates (particularly Harris) in our current election.


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