China After Mao: The Rise of a Superpower

by Frank Dikötter

In 1976, according to the World Bank, the country’s gross domestic product, when calculated per capita, ranked 123rd in the world. By 2001, after a quarter of a century of relentless emphasis on economic growth, it had dropped to 130th. The International Monetary Fund gave slightly different figures, but likewise highlighted how overall per capita output had barely kept pace with the rest of the world. The figures may have been dubious, given the lack of transparency, and the absence of properly trained accountants operating independently of the government, but they indicated the glacial pace of what some foreigners acclaimed as an economic miracle. The numbers also hid a structural issue: the household share of gross domestic production was among the lowest of any major economy in modern history. Ordinary people, especially in the countryside, worked very hard, but received a disproportionally small share of growth. They had to save as much as possible in order to make ends meet, besides paying inflated charges for basic services such as schools and hospitals. Despite falling prices, they would not or could not spend. They could deposit their savings in state-controlled banks, buy shares from state-controlled companies or buy bonds issued by the state. They could also buy shares in private companies, but fraud and corruption were so rife that few villagers were willing to take the risk.