Back to the Future

When the People’s Republic of China was founded in 1949, years of civil war had destroyed the country’s infrastructure. Constant political turmoil, dating back to the late 19th century and the collapse of the Chinese Empire, had torn apart China’s intellectual class, and driven millions out of the country. The Communist Party promised a period of peace and stability. Many in the West feared that China would come to dominate Asia, and possibly the world. Those fears only grew after the Korean War.

It wasn’t to be. Mao Zedong’s disastrous economic and social policies, from the Great Leap Forward to the Cultural Revolution, not only killed millions but upended China’s social order far more than the chaos of the early 20th century. Only in the past three decades has China begun to fulfil the potential promised in 1949. In that time, the east coast cities have attained GDP per capita to rival developed nations like Portugal. With the financial crisis, the People’s Republic has become a lender and consumer of last resort. Some in China now talk of a G2 of powers; the Obama administration has not exactly quashed this idea.

The visionary largely responsible for this growth was Mao’s contemporary and successor Deng Xiaoping. (Deng was never leftwing enough for Mao: he was repeatedly purged, and his son was paralysed after being thrown out of a third-story window during the Cultural Revolution.) His economic reforms weren't that dramatic: they mimicked many of the strategies of other high-growth Asian nations – focusing on exports, attracting foreign capital, using state planning to build up critical sectors of the economy. But convincing the leaders around him, many of whom had grown up alongside Mao, to go along with the reforms – that was Deng’s genius.

The Communist Party managed to survive the fall of the Berlin Wall by remaking itself into an organisation more like Mexico’s PRI or Japan’s Liberal Democratic Party, clinging to power by delivering economic growth, winning over the business community, and distributing just enough graft to keep the population docile.

However, China still faces some of the same massive problems that, back in 1949, brought the Communist Party to power. Just as in the pre-Communist era, big business dominates the cities on the eastern seaboard while the rural poor starve. Many hospitals I’ve visited turn away patients if they don’t have cash in hand. Millions of people in the big cities live in makeshift temporary housing. Once one of the most equal societies in Asia, today China’s income inequality is close to Latin American levels. It’s a shock to travel from Shanghai, with its malls full of yuppies shopping for Italian shirts, to the rural interior, which has hardly changed in decades.

And the people are angry. There are tens of thousands of protests each year in rural China, which often turn into armed attacks on local officials, factory owners or police: the very figures of state authority or big business that, before 1949, the Communist Party led revolts against.