4-7 - China Part II Recall: China seized Japanese assets...

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China Part II Recall: China seized Japanese assets after War, industries nationalized by default After 1949, adopted central planning under Soviet tutelage Central planning: government controls economy, not market Government controls production and distribution SOEs: state-operated enterprises Prices are not indicators, money and finance play a minor role State raises revenue through the central plan Agriculture is collectivized – why? One answer: class is more important than nationality Workers around the world should have united, but did not happen – socialism in only one country Chinese policy had a strong urban bias: 1. Marx had a bias for the urban workers 2. Need to keep urban workers happy, especially in capital city This creates a strong incentive for the peasantry to move to the cities Government imposes restrictions on movement to prevent peasants from moving International trade as a residual – repression of international trade – sell leftover products Some attempt to coordinate central plans across nations – Comicon, etc. (but DPRK never joined) Effort to shut off international trade requires political repression – people naturally want to trade, need to use force to prevent them from trading Great Leap Forward, 1958 Mad dash to industrialize Industry located in southern China, Manchuria, but total amount small State squeezed agriculture in order to invest in industrialization Allocate fewer and fewer resources to agriculture and capture the surplus for industry Production fell, no recourse to trade (shut off from rest of world, also world food markets not
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4-7 - China Part II Recall: China seized Japanese assets...

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