China: The economic epicenter

During the podcast, the hosts discuss the effects of changes in Chinese economic policy during the Cultural Revolution and after. They highlight the impact of Deng Xiaoping on China's economy and how he implemented policies to restart its development. They compare Mao Zedong's closed and cruel approach during the Cultural Revolution to Deng's more market-driven and people-oriented policies. They discuss the reform and opening up policy introduced by Deng, which aimed to open up the country, attract foreign investments, and reform the economy. They also mention the establishment of special economic zones, like Shenzhen, which contributed to rapid economic growth. Deng's policies led to job creation and increased employment. They mention the Tiananmen Square incident and the challenges it brought to China's economic development. However, Deng's southern tour in 1991 helped restart economic growth. They discuss the privatization of state-owned businesses and the shift towards a more marke Hi guys, welcome to our podcast. Today we're going to be talking about the effects of changes in Chinese economic policy during the Cultural Revolution and after, and how Deng Xiaoping made a giant impact on the way we see China's economy. I'm one of your co-hosts, Chase, and I studied some of the policies that Deng implemented to help the Chinese economy. Hi, I'm Eric. My research favorite topic is China's economy policy from 1990s to 2020s. So there's a lot. China was a very impactful country during this time period, wouldn't you say, Eric? Yes. From the late 70s to 2020s, China's economy grows rapidly and brought a big influence to the whole world. What do you think about the effects during the Cultural Revolution? Because obviously Mao Zedong had a really big impact and really, really pushing for this communist approach to the economy. But some of his methods could be seen as kind of cruel, and we see this with the culmination during Tiananmen Square, where the government's kind of going against its people. So what do you think about how his ideas compare to Deng's? Yes. China under his rule is a very closed country and has very small communication with outer world. And during the Cultural Revolution, the economy development has stopped, and even the economy decreased for this 10 years due to Mao's rule of China. And people are not paying attention to the country's basic development. They're just cleaning Mao's political components for 10 years. And after Mao Zedong and Deng Xiaoping took over the China economy, and he promoted a series of policies to restart China's economy development. Yeah, I think Deng was, he was definitely favored by a lot of people. To quote what one of the Chinese persons used on him, the day he passed, my mother cried while watching the TV announcement. Later, she told me she didn't cry when Mao passed nor when Zhou passed. In fact, none of the previous Chinese leaders passing instilled a sense of loss to her to make her cry. I think this shows how much people really cared for Deng and the difference that he made compared to like other leaders in the past. Because we see there's such like, he really connected with the people. And I think Deng's ideologies were really like, they weren't for just the country, they were also for the people. And I think he wanted to have that closer connection with the people. So his policies spread, got more widespread throughout China. So what do you think about like some of the policies that Deng introduced? What do you think like were some of his main goals? Yeah, Deng introduced a very major policy that is still in the working today, which work from 1978, that is the reform and opening up policy. And in this policy, Deng's main purpose is first to open up the country and to receive more foreign investments and also invest more in foreign lands. And reform is mainly about to make the economy system more market and reform the country owned companies and also develop new industries such as the real estate and other new industries. Yeah, I think another important part of opening up this country was he established the special economic zones, which really helped Chinese GDP, one of which being Shenzhen province, or Shenzhen city. And there was a lot there, it was home to 13 million people, which is a lot of people to have this impact on China's economy. So each year, it rose 21.6%. The GDP of the Shenzhen was 21.6% per year, all the way up to $2.7 trillion, which is a lot. Its GDP climbed from 606 Yuan to 200,000 Yuan in that amount of time. And it was also home to a lot of these really important companies that really fostered this super rapid economic growth in China. Now, talking about the job market, obviously, with so many people living in China, it's probably hard for all of them to get jobs. So what do you think about the ways Deng was trying to get more people into the job market? Yes. So reform and opening up policy do create a lot of new industries. That's one of the main parts which provided much more new jobs. Second, China is raising their basic construction investment that also created a huge amount of jobs and also pushed the economy development. Yes. So he also added, he pushed for it to go from state sector, so from being government-run job market to private sector. So now, these people are able to start their own businesses and have a little bit more freedom in who they're hiring to be their jobs. And I think it's a lot more convenient this way because now there's a lot more independence in the economy, and it wasn't so much government-oriented like how it was with Maoist ideas. Yes. So as you said before, it's a lot more market-driven. It was based on the consumer. So now we're really switching to what the people need instead of just really what the government wants. So just for some numbers, the employment increased from 75 million to 110 million in 20 years from 1978 to 1990, which is around the time, which is during the time Deng implemented these new policies. So we see this growth of 35 new million workers really shows how effective his policies were. Like while that may not seem a lot like the one billion of China, during like the late 1900s, there weren't as many people. So this was like a large percentage of the Chinese population. Yeah, I think it really just shows how much he really cared for the people. And his main goal is to increase the economic status of the people, and he definitely achieved that. Going on to my next point, he had these two phases of rolling it out. So he had the opening of investment, which we kind of covered already, and decollectivization of agriculture, and people were also able to start businesses. So he really had a lot of different policies to help China really grow as an economy. Anything to add on that? Yes, actually during the reform and opening policy in the first 20 years, there are actually a lot happened in China. First is the Tiananmen Square incident in 1989, and that shocked the world. And China's use of force on the protesting students put the Chinese government in a very disadvantaged position, and also brought several international condemnation to the Chinese government. So after this incident, many countries have withdrawn their originally planned investments in China, and China's net immigration reached 627,000 in 1989, more than twice the net immigration in 1988, which is one year before the Tiananmen Square incident. And two years after the incident, China has been in a difficult situation in economic development. But in 1991, Deng started his southern tour, which strengthened reform and opening policy, and promoted the development of the market economic system. His southern tour lasted more than 40 days, and gave many speeches, and restarted China's economic development. Yes, so he really wanted to really widespread his message throughout China, and this further bolsters the fact that he wants his policies to be seen over a lot of others, and he really wants to, I guess, push away from these malice ideologies that a lot of the Chinese people still favor, because they kind of felt so forced into favoring this with them. After the Cultural Revolution, you had all these people really funding each other, just because of the communist beliefs, and for a more democratic system, almost, like the US. So it's really interesting to see almost these people who used to always fight all the time, coming together under this one leader, who kind of represented the hopes of China, and what it really wanted to become as a country. One more thing to add, privatization was also a major part of this, because the market was very private before, so a lot of the state-owned businesses were really slow and didn't always work in people's favor, because they weren't for the people, they were for the government. The government really wanted to benefit from the businesses themselves, and didn't really put so much effort into the people. So Deng really privatized this economy, and allowed the state businesses to go into the hands of many other separate companies, which can be bought and sold, kind of like how we have stocks in the US. It's the same system, so it's a lot more oriented towards the people, and straying away from the government. So, kind of wrapping up here, what do you think, in the future, how do you think, you know, Deng's had such a big influence on China, what do you think could be some next steps for China to grow even further, or do you think this growth can't be replicated again? Well, the main, the core of this growth is to open up, but right now China seems to be starting to close again, so that's not going to help China's economic development. So, I think all what Deng did is to open up the country to foreign investments, and for example, after Deng retired from the president, China joined the World Trade Organization in 2001. That's a great step in joining the world, China joined the World Trade Organization in 2001, and that's a big step forward in joining the World Trade, and made China become a world sector. Yeah, so I think we definitely see the impacts of Deng's policies nowadays, with China being one of the world's largest economies, and having such a great population, this growth is definitely going to exponentiate over time, and we'll definitely see China get more powerful and powerful, and coming to the modern day, a lot of people think China is definitely one of the biggest world superpowers that we've known. So, really having China control and dominate the market is really interesting to see, because a lot of people aren't as invested in what the Chinese are doing, they're really focused on what America is doing, and they don't really see China really waiting in the shadows for, how is it, and don't really pay, people aren't really focused on America, and don't really pay as much attention to China, because they don't think it really concerns them, but China's making so many technological advancements, and has a huge population, and all this military power, so I really don't see why people aren't looking at China as more of an impact in their lives, because China can really do whatever they want, we don't have as much power as we think to really stop them. Yeah, I think these, yeah, so just to wrap up my point, I think, you know, China's become such a superpower now, but it's a really good step in the right direction for the country, because it's a lot better for the people compared to the time during Tiananmen Square and the Cultural Revolution, and I think the economy is a lot more stable than it used to be. Yes, the influence of Chinese economic development not only is internationally, but also domestically. In China, people's living standards have increased drastically, and China's poverty has dropped from more than 62 percent in 1990, and dropped to nearly zero in 2020. And also, China's expected wildlife life has also expanded. You got to be involved in tennis. China's economic development has not only influenced other countries, but also influenced Chinese people. From 1990 to 2020, China's poverty had dropped from 72 percent to nearly zero percent, and that means living standards of Chinese people have raised on a very big scale. Also, that means Chinese people's expected life and actual life has also extended, and they have bigger average housing, and they have more convenient transportation and living style. Yeah, so I think we really hit all the key points of how important Deng was, and how influential of a figure he was to the Chinese people, and really to China as a whole, and even going as far as the rest of the world. He really helped China out of this really bad spot following the Cultural Revolution, and I think there's a lot to be learned from his policies. I just want to thank everyone for listening to our podcast. We spent a lot of work on our research paper. We're really proud of what we did, and thanks, Eric, for doing this podcast with me, and we had similar topics. Thank you, Chase. Yeah, I hope you guys enjoyed listening, and hopefully we'll be able to do one in the future. Thanks, guys.