The Rise of China: From Poverty to Superpower in Four Decades

Today, China is one of the most powerful countries in the world. However, just 40 years ago, over 90% of its population lived in poverty, and the country was plagued by starvation and economic stagnation. In 1978, China contributed only 2% to the global GDP; today, it contributes over 18%, with a poverty rate of less than 1%. China's journey from one of the world’s poorest nations to a global economic superpower is a story of resilience, strategic reforms, and transformative leadership.

Historical Context and the Century of Humiliation

Due to colonialism and internal strife, China’s historical dominance as a powerful kingdom was disrupted in the 19th century. The British East India Company’s opium trade in 1839 led to widespread addiction, weakening Chinese society. This period, known as the Century of Humiliation, included the loss of territory to foreign powers and several devastating wars, including the Taiping Rebellion and the Sino-Japanese War. By 1949, following a civil war, the Communist Party, led by Mao Zedong, established the People’s Republic of China.

Mao Zedong’s Reign: Ambitious Reforms with Tragic Consequences

Mao Zedong’s rule aimed to transform China through radical policies. The Great Leap Forward (1958) sought to industrialize China rapidly and collectivize agriculture, but it led to economic disaster and a massive famine that killed an estimated 20-40 million people. The Cultural Revolution (1966-1976) further destabilized the country, as Mao sought to eliminate opposition and strengthen his control. Millions were persecuted, schools were closed, and cultural heritage was destroyed. Despite these setbacks, Mao’s era also saw improvements in literacy rates and women’s rights, laying the foundation for future progress.

Deng Xiaoping’s Reforms: The Turning Point

Following Mao’s death in 1976, Deng Xiaoping rose to power and ushered in a new era of economic reforms that would transform China. Rejecting Mao’s rigid economic policies, Deng introduced “Socialism with Chinese Characteristics,” emphasizing market-oriented reforms within the communist framework.

One of Deng’s first reforms was the Household Responsibility System, which allowed farmers to lease land from the government, decide what crops to grow, and sell surplus produce for profit. This incentivized farmers, leading to increased agricultural productivity and the lifting of millions out of poverty. Similarly, Deng introduced the Factory Manager Responsibility System, which reduced political interference in factories and allowed managers to make business decisions, fostering a sense of ownership among workers.

Deng also prioritized education and vocational training, implementing compulsory education for nine years and increasing government spending on education. By 2012, China’s literacy rate had risen to over 95%. Investments in science and technology further fueled China’s growth, with significant funding directed toward research in energy, computers, and genetics.

Opening to the World: Special Economic Zones and Foreign Investment

To attract foreign investment, Deng established Special Economic Zones (SEZs) in cities like Shenzhen, offering tax incentives and fewer regulations. These zones became hubs of manufacturing and innovation, driving economic growth and creating millions of jobs. Shenzhen, once a small fishing village, transformed into a major global city with a GDP of $420 billion by 2020.

Deng’s open-door policy facilitated foreign direct investment (FDI), which grew from $0.06 billion in 1980 to over $333 billion in 2021. Multinational companies like Apple and Volkswagen set up manufacturing in China, drawn by the skilled workforce and favorable business environment. Infrastructure development, including extensive railway networks and modern public transport, supported this rapid industrialization.

Challenges and Legacy

While Deng Xiaoping’s economic reforms propelled China’s rise, they did not extend to political liberalization. The Tiananmen Square massacre in 1989 highlighted the government’s continued authoritarianism. Additionally, China’s rapid growth came at a significant environmental cost, with pollution and ecological degradation becoming major issues.

Deng’s policies set the stage for China’s emergence as a global superpower, but they also paved the way for the authoritarian governance seen under current leader Xi Jinping. Despite these challenges, China’s transformation from a poor, struggling nation to the world’s second-largest economy remains one of the most remarkable economic success stories in modern history.

Written by: Amna Nawaz (Punjab University.)