China’s Industrialization

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May 25, 2019: “Nanhai No.2,” a semi-submersible drilling platform of China National Offshore Oil Corporation, has been in operation for 41 years since 1978. China’s industrialization witnessed rapid development in the past seven decades. by Wang Yuguo/Xinhua

After World War II, industrialization became the goal of almost every emerging economy and developing country. Not until the founding of the People’s Republic of China (PRC) in 1949 did the country begin building a complete industrial system of its own. Large-scale industrial exploration and construction beginning in the early days after the founding of the PRC continued for about 30 years, resulting in a solid foundation for China’s historic reform and opening up that started in the late 1970s.

 Heavy Industry as Development Priority

When the PRC was just founded, the country lacked virtually any industry. To change the situation, China carried out large-scale industrial development for three decades, which can be roughly divided into three stages. The first phase was centered on 156 key projects launched during the first Five-Year Plan period (1953-1957) and large-scale construction consisting of 694 programs which laid out a springboard industrial system for New China. The second phase was the “three-line” construction starting from the mid-1960s. Construction started from southwestern and northwestern China and expanded to the large areas south of the Great Wall and west of the Beijing-Guangzhou Railway by the 1970s. The drive was a strategic decision to fundamentally change China’s industrial concentration in coastal areas and actively develop the economy in old revolutionary base areas, regions heavily inhabited by ethnic minorities, frontier areas and poverty-stricken places, setting the foundation for the continuous optimization of China’s industrial layout. The third phase began in the early 1970s. As China-U.S. relations improved, China established diplomatic relations with a number of Western countries. Embracing a wave of advanced technology and equipment from these developed countries, China later launched a group of industrial projects. These projects laid the material and technical foundation for China’s economic development later in the 1980s.

June 12, 2019: Workers install the battery pack for a new energy vehicle, Xi’an. Both the production and sales of new energy automobiles have maintained steady growth in China in recent years. by Shao Rui/Xinhua

China’s industrialization officially started with its first Five-Year Plan. During this period, the country’s independent industrial system began to take shape. In 1956, China completed tasks of the first Five-Year Plan ahead of schedule. Some industries which China had lacked such as the production of aircraft, automobiles, power generation equipment, heavy machinery, new machine tools, precision instruments, alloy steel, plastics and electronics were built from scratch. Such efforts fundamentally filled China’s industrial void and increased its basic industrial strength.

In the early days after the founding of the PRC when the devastated country needed to be rebuilt and its economic strength was weak, China elevated the development of heavy industry on the country’s agenda for national development. It was a careful decision made by the government based on the historical conditions at the time. China is an independent and dignified country, which deserves its own independent and complete economic system, especially an independent and complete industrial system. But China’s choices were limited due to the international political environment at the time. In those days, socialist countries and capitalist countries staunchly opposed each other. As a socialist country, China had to protect its national security by developing heavy industry. And this industry was an intrinsic need for China’s economic development at that time. Equipment manufacturing industries, which hold great importance in economic development, are mainly concentrated in heavy industry. The scientific and technological development of a country is also primarily exhibited through its equipment manufacturing industries.

Complete Industrial System

Initially, China’s industrialization process was carried out within the framework of a planned economy. In the early days after the founding of New China, the country’s industrialization made good use of its system. It pooled resources and made systematic development plans for key industries. This method is ideal for countries with late-mover advantages, especially developing countries, to more efficiently use scare resources.

September 14, 2017: China’s “Fuxing” bullet trains are assembled, Changchun City, Jilin Province. Over the past decade, high-speed railways have developed rapidly in China, promoting integrated transportation development in the country. by Zhang Nan/Xinhua

During its industrialization process, China has been attaching great importance to international cooperation. In the first 30 years after the founding of the PRC, the general principle for the country’s industrialization was “independence and self-reliance,” which was determined by China’s domestic and international political environment at that time. However, the Chinese government never gave up introducing advanced foreign technologies once the international political environment improved. In the 1950s, China introduced 156 projects from the Soviet Union. In the 1970s, with the improvement of China-U.S. relations, complete sets of advanced technology and equipment were introduced from developed countries to China in large scale, which facilitated China’s industrial upgrading and promoted China’s industrialization process.

After World War II, almost all emerging economies and developing countries were promoting industrialization. However, after decades of development, only China has established a complete industrial system and realized real industrialization. The reasons for this unique success should inspire thought. First, China has institutional advantages. After October 1949, relying on its socialist system, the country greatly promoted productivity and realized basic industrialization within a short period of time. Second, China enjoys a demographic advantage. The country’s massive domestic market formed by its huge population has provided a market guarantee for China’s complete industrial system. The country’s abundant labor helped shape a complete industrial system. Third, China has advantages in terms of scientific and technical professionals. In the early days after the PRC was founded, fewer than 500 professionals in the whole country were engaged in specialized scientific research. Research of new technology was almost non-existent. However, this situation changed quickly. By the 1970s, China had already established a relatively complete education system and wielded a huge team of scientific and technical professionals.

Industrialization in the early days after the founding of the PRC heralded the dawn of both the theory and practice of New China’s industrialization. It provided an important reference for the formation of China’s industrial theory and a roadmap for the days to come. Thanks to an industrialization foundation laid over the three decades, China launched a series of economic reforms and promoted opening up after the Third Plenary Session of the 11th CPC Central Committee in 1978. New industrialization patterns since the beginning of China’s historic reform and opening up constantly evolve and improve based on the work of the first 30 years. 

The author is a member of China’s National Manufacturing Strategic Advisory Committee and a professor of industrial economics at the Business School of Renmin University of China.

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