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The Economic Fundamentals of Chinese Communism’s Successes and Failures

From the Great Leap Forward to family-planning restrictions, China's rise has been marred by serious policy failures. Whether the Communist Party can avoid similar mistakes in the the future will depend on its recognition of a crucial distinction between such interventions and those that have fueled its economic success.

EVANSTON – “Over the past hundred years, the [Communist Party of China] has united and led the Chinese people in writing the most magnificent chapter in the millennia-long history of the Chinese nation,” President Xi Jinping declared at the CPC’s centennial celebration, in a speech that emphasized the Party’s role in driving China’s success, including its economic rise. But the CPC’s economic record is actually mixed, and even those who recognize this often overlook that its successes and failures stem from the same economic fundamentals.

Xi is right that, under the CPC’s leadership, China has achieved the “historic leap” from one of the world’s poorest countries, with “relatively backward productive forces,” to a middle-income country with the world’s second-largest economy. What he left out is that this record is marred by major failures, such as the Great Leap Forward (1958-62), which led to the largest famine in human history, and decades of strict family-planning laws that contributed to an escalating demographic crisis.

The CPC’s ability to mobilize resources effectively has enabled it to provide large-scale public goods that helped to drive development. Most notably, the Party made massive investments in public health and education, beginning in the early 1950s. As a result, China achieved among the fastest-ever sustained increases in life expectancy at birth, from 35-40 years in 1949 to 77.3 years today. School enrollment rates also soared, from 20% to near-universal at the primary level, and from 6% to about 88% at the secondary level. Literacy rose from 20% in 1949 to 97% today.

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