I'm not sure if I posted both of these papers here already but I just got my grade back for them - a distinction - in the current polity of it all so I'm posting them here now for whatever purpose it serves.

I think alot of the wild activity I for one have been witnessing increases in has been due to communications and even transport development for whomever industry are behind its elements - but I kid not when I say that there is high levels of activity evvery single day.

So - if anyone does read these papers I'm specifically looking at the situation with EU and with the suggestion of private asia and friends finance in lieu. really. It's offically on offer if the contract tenure can be sold.

The only real criticism I received for these was not declaring a strong enough bias on both the china finance model in the first and on marxist direction in the 2nd. I might have done that on purpose


I can only die once I think at very worse so here it is.

Blooming tianshi lotus.

[quote 1]

Choose one of the following questions and answer it in approximately 2000 words.

  1. Critically evaluate the following statement: All political issues aside, the Mao years established an excellent foundation for the Chinese economy.

The Mao years are considered to be the period from 1949 to 1976. This period succeeded the collapse of the last Chinese dynasty after defeat in foreign invasion centred on trade issues. The era has been marked from the world changing time after the defeat of Kuomintang, when Mao first rose up declaring to the world that “Chinese people have stood up!” thereby formally establishing the People’s Republic of China. Experts in the field have stated that this period forged at least an initial decade of reasonably successful economy under the first Chinese communist party and established a great foundation for the future Chinese economy (Griffith, 2010)< mao yrs intro (Richardson, 1999) (Liew, 1998).

The Mao years have notoriously received a lot of criticism and some academics say that they did little but send China into economic instability and hardship. This argument proceeds with the idea that Mao had insisted stability meant trouble brewing under the surface (Griffith, 2010). Although Mao was quite open about his notion of buduan geming or ongoing revolution in the Cultural Revolution era, the question remains of whether Mao did even have an intention of creating long term economic stability (Clark and Smith, 2010). Some have argued that Mao’s goal seemed more to stir up and institutionalize as much anarchy as he could under a centralised government in attack of the bourgeoisie (CECC, 2006).

Although the Mao years did produce left and right wing polarities in actual institutional terms, long term benefits in such a rapidly changing economy are still uncertain despite the initial success of centralizing control which did deliver an amount of stability in China in its early period (Clark, 2010). Despite later reform of policies implanted during the Mao Years, particularly by Deng Xiaoping and Hu Jintao, economic turmoil and hardship in China since the Mao years began however, has not necessarily been at all in question (Chow, 1994) (Liew, 1998) (Elegant, 2008).

Left winged Mao himself openly admitted to the economic failure of the Great Leap forward and stood down from office because of it, eventually the PRC government leadership going to the communist right wing party with Deng Xiaoping’s succession in 1978 (Liew, 1998). Additionally, despite a great recovery by contemporary standards, the Asian financial crisis of 1997 arising with financing issues with the European hosted World Bank is another demonstration of hard times economically since (Chow, 1994).

This essay will firstly demonstrate the economic history and character environment the Mao years entered into the Chinese economy. In the second section it will present in more specific detail what it was the Mao years contributed to the Chinese Economy of the time and implications and considerations for the future of the Chinese Economy. Finally in the last section I will characterize the current state of the Chinese economy and the retrospective debates of the impact of the Mao years toward it.

The pre- Mao Years economic environment

In the old traditional order of Chinese society in the pre-1911 collapse of the dynastic system, control over people and not territory was emphasized, and nor were the borders even permanently fixed (Griffith, 2010). Another standout feature of the rule was the concept of ‘tianxia’ or all under heaven. This meant that even for example Britain, was a part of China in the Sino-centric view of the time, despite it being too far away to need to exercise control over. The additional implication of that was that everything was for the sole use of the Emperor and whatever he deemed fit (Griffith, 2010).

Despite the Treaty of Westphalia in 1648 where agreement was to each remain to one side of an imaginary partition line, during the 18th and 19th centuries Europe began to challenge this idea and eventually between 1839 and 1842, with economic and military support of India, Britain came to be in loggerhead in the opium wars with China for open mutual trade interaction and access of China’s resources (Gleason, 2010) (Richardson, 1999).

One of the main economic management policies of the dynastic era was to use available land for the subsistence of the population and to demote status of conspicuous consumption and merchants, because it was believed reinvestment in the subsistence for the Chinese population would be in danger of compromise without this policy (Richardson, 1999). While a great deal of the goods and income provided to the Chinese people at the time did come from market activities, and education for one’s self and one’s son was still important to the Chinese culture for induction into the gentry and officialdom, consumerism was limited to mostly local manufacture and focus was still insular (Richardson, 1999).

Although the Chinese government understood the importance of merchants in creating wealth and opportunities, and eventually first gave way for salt merchants, generally merchants were highly frowned upon. Also, the Chinese government of the time wasn’t really interested in profiteering and had the idea that replacing cash crops with already budgeted crops for subsistence may lead to a decrease in capacity for provision of essentials (Richardson, 1999). Equally, initiatives which might lead to deficit by redirection of labour and land or to lack of reinvestment than just consumption were proactively discouraged also, with equity being the main concern for bureaucracy (Young, 1998). Accompanying what seemed to be a Chinese insecurity, this also meant that no-one could establish any large scale business without official approval, coincidently closing the door to capitalism and opening the door for bribes, corruption and secret consumption (Griffith, 2010) (Minxin, 2007).

The immediate economic impact of the Mao years

The Mao Years enter after the encroachment of demands of Western powers centred on trade with China for proactive involvement with almost half a century prior of turmoil and massive change (Richardson, 1999) (Griffith, 2010). China now faced the option of rapidly transforming herself or potentially losing her rights of self-administration and state owned land and assets to foreign capitalist takeover (Richardson, 1999).

Mao’s greatest economic achievements occurred from 1950. People had been left landless post dynastic collapse and land which was previously delegated per capita for use of production of subsistence enough for the entire Chinese population, had begun to be used instead for foreign countries and their consumptionwithout their reinvestment (Drysdale, 2009). In 1950 therefore, Mao devised a land reform involving the returning of land to peasants to use for agricultural farming (Eckerstein, 1975).

From 1953 – 1957 Chairman Mao installed his first lot of two five year plans for the Chinese economy. Besides the land reform which continued, Mao constructed peasant coops termed ‘collectivizations’ meaning that land was delegated to groups of farmers to pool resources and labour to produce agriculture, of which they would have to use to fulfil a quota (Eckerstein, 1975). This became a part of Mao’s communist planned economy and ensured an ‘iron rice bowl’ as a communist welfare strategy (Griffith, 2010). Being modelled on the third phase of the Soviet economic development plan focus was centred on heavy industrialization. The central Chinese Government brought in many highly skilled and specialized Soviets to assist and establishment of Chinese industrialization focussed on steel manufacture began (Eckerstein, 1975).

Collectivizations were a big hit with a large growth in agricultural production and the recovery of earlier famine. The idea was that farmers would naturally move into the primary- cooperative stage and purchase property together. Collectivisation was completed with between 760,000 to 800,000 cooperative farms with 160 families each totalling about 600 to 700 hundred people on each farm. This increased China’s economic development by 9% in 1957 (Griffith, 2010). This plan was therefore a success and led into the next 5 year plan and the Great Leap Forward in the early years of it (Eckerstein, 1975).

The Great Leap forward was employed between 1958 and 1961. This plan also entailed that China would develop even larger communes, and by the end of 1958, there were 195,825, 000 communes with an average of 5,000 families on each (Griffith, 2010) (Eckerstein, 1975).
With a government target of 19% growth for steel production, backyard furnaces started to appear to meet the quota with an estimated 60, 000 furnaces by 1958, and a goal to double that figure over the next year (Griffith, 2010).

By 1958 though, grain production had dropped massively by 1/3 of total production also accompanied by the environmental disaster of a ravenous amount of trees being logged to fuel the furnaces and the additional problem of labour from all sorts of necessary sector being diverted to furnace operation. One of these sectors was agriculture (Griffith, 2010). Before long, the quality of the metal started to become compromised and there was not enough harvested agriculture to feed the population. A great deal of this trouble seemed to stem from the withdrawal of soviet technical support arising from Mao’s refusal to allow Soviet communication stations to be housed in China. As a result of a subsequent starvation crisis private agriculture plots started to appear and there was a shift away from industrialisation-reliant food production (Chow, 1994)

This poverty climaxed in 1960 and 1961 and because quotas were not being met millions of people died of either starvation or murder including by local officials. By 1962, there was some recovery in both iron manufacture and crop production, but Mao had already stepped down in 1959 admitting that the plan failed (Griffith, 2010).

Failure of the Great Leap Forward, and the socially and economically disastrous Cultural Revolution from 1966-76, now gave the right wing party a chance to assert its voice more credibly. They used that voice to advocate economic recovery based on science and technology, and as a result, Deng Xiao ping was appointed to the Chairman’s position in 1978 leading into one of most rapidly sustained periods of economic growth in any country in world history (Chow, 1994) (Griffith, 2010)!!

Chairman Mao and the two other Chairmen of China since Mao had stepped down received a great deal of economic policy criticisms representing the left wing. A major incident of this is the criticism of China’s third left Chairman Hua Guofeng which won Deng Xiaoping the first right winged Chairman’s succession in 1978 (CECC, 2006).

By the end of Deng Xiaoping’s rule, in the early 1990s, the Chinese economy had to the world experienced a miraculous transformation from a planned economy into a market economy (Eckerstein, 1975). The economic miracle in this transformation blared China to the world and as market participants because of the contrast between China as a “socialism with Chinese Characteristics” with other socialist economies who had failed such as in Northern Asia and Eastern Europe (Chow, 1994).

The Post-Mao Years Chinese economic environment
With political legitimacy now resting on economic success and growth, one of the first policies Deng Xiaoping excelled the Chinese economy through was the four modernizations, initially installed by Chairman Zhou Enlai. These four modernizations focussed on Agriculture, Defence, Education and Science and technology as a means to establish a new economic basis for interaction (Griffith, 2010).

Deng Xiaoping made bold effort forwarding a reform process policy with two main dimensions in processes of that policy to firstly introduce the Chinese economy to market economy and to then open the Chinese economy up to the rest of the world (Liew, 1998). Despite heavy critique of the continued use of Mao’s full planned economy policy, one of the boons to the Socialist Modernization era in Chinese economic development history in regard to the Mao years planned economy was that it allowed for the Pareto-improving strategy’s shock minimization tactic in the dual tracking system (Chow, 1994).

This meant that throughout the transition, the Chinese government was able to continue providing food stuff essentials at the planned economy price, and simultaneously ween into duality with market prices for consumer items, and allow for mixed public and private ownership (Liew, 1998) (Young, 1998). Also as part of the dual tracking system was the household responsibility production system. This meant that households were now for the first time openly allowed to sell their excess production above the plan quota on the free market (Chow, 1994).

This proved extremely successful for the contemporary Chinese economy, especially in GDP per capita comparatively against what became Russia who instead adopted the approach of full immediate over night entry into market economy (Liew, 1998). By the time the transformation into a market economy was complete, in the early1990s, after the installation of Town and Valley Enterprises, the attractiveness of being able to exploit free market trading in lieu of providing to the quota became overwhelming. With the ending of the iron rice bowl, many people avoiding paying the quota, and with a dramatic prevalence of unemployment, the Chinese government officials fell to rent seeking behaviour from the local enterprises (Fan, 2006-2010) (Eckerstein, 1975).

This lead to phasing out of the dual track system and to today’s Chinese Government leadership under Hu Jintao addressing appropriate welfare provisions and reassertion of the Chinese people’s rights to education, employment, medical, old age care and housing (Fan, 2006-2010). Whether or not this means that China is developing into a full and successful capitalist or Marxist economy where class groups are openly addressed and accepted and processed via the market is still anyone’s guess yet (Liew, 1998) (Eckerstein, 1975).

Having heard the economic history of pre-Mao years and the economic events and implications during and after, it is likely that reader will understand the ongoing debate supporting the fact the Mao years were an excellent foundation for the Chinese economy and additionally may have saved the Chinese Economy from falling completely into the hands of foreign ownership beyond recovery (Liew, 1998).


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China CSR
China: 5.8% Of Migrant Workers Suffer Wage Arrears

Chow, G (1994). Understanding China’s Economy. How and why China succeeded in her economic reform. Ch. 3. pp 27-38. World Scientific. Singapore.

Clark, M and Smith, D (2010). The Song Remains the Same: Converging views on a Rising China. Available online (May, 2010) https://learning.secure.griffith.edu.au/courses/1/PAC241_2101_OT/content/_1137234_1/clarksmith.doc?bsession=40692366&bsession_str=sess ion_id=40692366,user_id_pk1=247173,user_id_sos_id_ pk2=1,one_time_token=

Drysdale, P (2009). Chinese Foreign direct investment in Australia: policy issues for the resource sector. China economic journal. Edn. ‘China as a new foreign investor in Australia’s resource sector’.

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Fan, C, C (2006-2010). China’s Eleventh five-year plan (2006-2010): “Getting rich first” to “common prosperity” Eurasian geography and economic, 2006, 47, No. 6. pp. 708-723

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[quote 2]

Current Issue in the Chinese Political Economy Report

China in global trade 2010
In a recent discussion with China’s Chairman Hu Jintao, when he was asked what the current major concern is for the Chinese Economy and its growth, he wasted no time in announcing that it was unemployment (Elegant, 2008). In April 2010, The WTO made a decision to support China’s economic growth opportunities by granting approval to have China continue its export of poultry into the United States (Beijing Review, 2010). This comes as a notable incident in the direction of China’s economy because not only has a lot of China’s domestic food expenditures leaned predominantly toward better quality sources of protein since China’s increased participation in the global market through more money supporting local production, but also recently in an improvement from 2008, two of China’s dairy giants, Mengniu and Yili, both list in the world’s 20 top dairy producers list appearing at 16th and 17th respectively (Beijing Review, 2010) (Speedy, 2010).

This move by the WTO to decide in favour of China in its appeal against a 2009 US Law clause to stop imports of poultry from China is significant not just for the fact that if the United States appeals and loses, it will be its last opportunity to have done so. Additionally, using the 1997 Asian Financial Crisis as a major platform, Vice Chairman of the China Centre for International Economic Exchange has proposed that CMIM and the larger Asian foreign exchange holders like Japan, itself and South Korea should combine a resource pool with a main idea of creating a constant source of employment (Beijing Review, 2010) (Wenlei, 2010).

With confidence in European finance down this year after a series of Stimulus package funding and an unemployment crisis potentially looming in Europe, this news creates a strongly reaffirming bond between Asia and Western governments and banking institutions and supports public funding potentials within China and circular returns for Europe (Beijing Review, 2010). The Beijing Review suggests that despite lending constraints, although the weaker European dollar is largely responsible for export capacity of other smaller countries, resolution of labour and finance hampering may be loosened by restructuring after the recent global financial crisis (Beijing Review, 2010).

This is a poignant note as the Chairman of the China Centre for International Economic Exchange admits that most of the larger exchange holders are in East Asia and any benefits of the arrangement will also filter westward from those nations (Wenlei, 2010).

The news additionally comes with Google’s withdrawal and allegations of a decline in China’s investment environment (Beijing Review, 2010). With new demands from China though for privilege of systems information from those it’s in trade with, as India moves to insulate itself from that arrangement through China, the idea that China’s investment environment is deteriorating has not been the sentiment coming out of the Asia Annual Conference in Hainan Province this year (Beijing Review, 2010) (Economy Watch, 2010).

In a refocussing of China’s public ownership sector and new arrangements appearing where national and multinational corporations are forming multi-million, billion and trillion dollar contracts with national governments, like Australia, China and in Europe with regard to mining and natural resources, Andrew Forest, Chairman of Fortesque Group, Australia’s third largest iron producer, is confident that 90% of an expected 15 million ton output increase of iron ore will be supplied to China (Wenlei, 2010) (Yue, 2010).

According toKim Fausing, COO of Danfoss A/S, a Denmark-based energy efficiency solutions provider, with such a current high standard of education in China, and foreign investment in China looking strong, they personally expect China to be one of their largest global trade partners within two to three years (Beijing Review, 2010).

One of the major impact predictions of the new arrangements especially in China where China’s banks are providing funding for national and multinational corporations to invest in for example overseas mining is that besides generating employment local to the mining site, it has the great potential to increase employment in other areas of manufacture, such as in the high consumer climate of the United States (Wenlei, 2010). According to Chen Wen and Liu Yunyun reporting for the Beijing review from Washington DC, the offer from China to the United States is a trade of employment opportunities from manufacture all the way up to engineering in exchange for trade from the high consumer nation, also floating on the international exchange and through the European institutions returning benefits to them also as described above (Chen and Yunyun, 2010). With this new restructuring consideration, it therefore justifies the position of the WTO in its support of reinforcing China’s export capacity into America of which Daniel J. Ikenson, Associate Director of the Center for Trade Policy Studies says that it’s not America China is in competition for labour with but that rather the relationship is complimentary (Beijing Review, 2010).

Political economist, David Caploe, in May 2010 explained to economywatch.com that this move by China enables it to benefit from Western technology without having to spend the time and finances in developing it and is a normal part of standard operating procedures (Caploe, 2010). Ph.D Caploe, Chief political economist for economy watch, besides telling of the American trepidation at potentially having their technology trade industry completely gutted by a high level of this sort of activity, also warns that a major deficit in China’s trade capacity with the West, despite the demands for systems information, would begin a turn around in fortunes not just for the Chinese economy but for that of the entire world, the reasons for this also outlined above (Caploe, 2010).

Although Ikenson comments that China is in labour market competition with India and Indonesia, China’s CCP Chairman Hu Jintao in Beijing on May 16 and 17 2010 says that underdeveloped struggling western regions of China, such as the North West Province of Xin Jiang, hold massive potential for economic growth. This would take economic pressure off Western nations through institutions such as CMIM, return benefits to them through the process and reincorporate development and deeper levels of participation from both India and Indonesia through arrangements such as CMI and ARF (Beijing Review, 2010) (Wen and Yunyun, 2010) (Icrier, 2009).

In direct line with China’s economic development plan of the past 30yrs as it’s picked up momentum, is China’s renewed commitment to participation and economic growth via the science and technology industry, particularly in terms of consumption (Fulin, 2010). Additionally to similar reports from Caploe, Ding Wenlei reports for the Beijing Review stating that China is forwarding a low-carbon emissions green technology program. This program’s aim of sustainable development was presented in Beijing recently by China’s top think tank of the National Development and Reform Commission at the ChinaCenter for international Economic Exchanges. They have suggested of the unresolved issues of the UN Climate change conference in Copenhagen 2009 that a program like this will assist other nations in developing green economy understanding of their own toward a mutually sustainable environmentally sound economic future (Wenlei, 2010).

In summary of the Chinese economy and its role in global trade in 2010, one of the major resounding comments from any side of the confidence or direction argument of trade matters with Chinaseems to be centred on familiarity and experience (Beijing Review, 2010). For example, in the Beijing review, David Gosset, the director of the Euro-China centre for International and Business Relations at CEIBS, Shanghai and Euro-China forum founder explains that while Beijing has experience, the world shouldn’t look toward adopting a Chinese model because, in this author’s opinion, being a new comer to capitalism and consumer trade with the West, at this stage experience is all it has (Gosset, 2010).

Alternatively, in an article describing the potential of economic downturn of the world, Special Advisor at the IMF and Vice Governor of the People’s Bank of China, Zhu Min, says that issues like trade protectionism limiting America’s import of Chinese goods is seeing an unstable US dollar and as both labour markets are struggling with unemployment. Zhu also comments that while excess liquidity and ongoing sovereign debt crisis are plaguing European economies, China and India are expected to contribute 50% of the world’s economic growth this year. This comes with the United States still pledging to prop up its employment and weak market toward long term global rebalance and both Europe and Japan gear up for a foothold in manufacturing and yet he asks who will save the governments who have been providing finance and stimulus to failed institutions as Asian institutions are being capitulated onto the global stage also partly as a result of the crisis (Min, 2010).

While an answer to those questions may not be immediately forthcoming at this time, and it’s still not clear on whether adopting a Chinese model globally is the best approach in near future, the IMF has responded with the statement that although delayed consolidation in countries facing high spreads could trigger further losses of confidence in fiscal stability, a crisis management framework has been recently established and the Anaemic growth in the Euro area is definitely being addressed (Beijing Review, 2010).


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