Social and Economic Events of the Chinese Economic Revolution (1949 - 2013)

Diploma Thesis, 2013

101 Pages, Grade: 10/10







1.1. Overview of the People’s Republic of China
1.1.1 Population and Geography
1.1.2 History
1.1.3 Government:
1.1.4 China’s Currency
1.1.5 People
1.1.6 Beliefs and religion
1.1.7 Language
1.1.8 Art and culture
1.2. Global vision of the economic and social situation in China
1.2.1 Viewpoint of the United States of America: world power
1.2.2 Viewpoint of the European Union
1.2.3 Viewpoint of South America countries
1.2.4 Chinese opinion of their own situation

2.1. History of Maoism period
2.1.1 Who was Mao Tse Tung?
2.1.2 Mao political ideology and its implementation in the CPC

3.1. Deng Xiaoping
3.2 Economy Reform in 1978
3.3. Legacies of the economic evolution of China
3.3.1 Advantages
3.3.2 Disadvantages

4.1 Poverty and wealth in China
4.2. Economic Reform vs. Social Inequality
4.3. Social Gaps of China
4.3.1 Unequal access to education
4.3.2 Unequal distribution of government expenditures
4.3.3 Hukou System Restrictions
4.3.4 Land Policy
4.3.5 Workers rights
4.4 Human Rights Violation
4.5. Economic reform plans announced by the Chinese Government
4.5.1 Policy implications to reduce disparities

5.1. Chinese Economic Projections
5.2. Prediction of Rural-Urban situations up to 2030
5.3 Possible solutions to decrease the latent social gap in the Republic of China



ANEXX No. 2 A Interview
ANEXX No. 3 B interview
ANEXX No. 4 C interview


There are a number of people without whom this thesis might not have been done, and to whom I am greatly indebted. This thesis work is dedicated to my lovely parents, Julio and Azucena, who have been a constant source of support and encouragement during the challenges of graduate school and life. Without my parents, I would have never gotten this far. Also, this thesis is dedicated to my wonderful husband, Xavier, who has given me his unconditional and emotional support with his love and trust to finish this important stage of my studies. I thank him infinitely. Especially I give my thanks to God, the Divine who has given me enough health and intelligence to wind up my thesis.


In this graduation paper, I thank my teachers of the School of International Studies of Universidad del Azuay because they have transmitted me their deep knowledge.

I would like to express my deep appreciation to my Professor Miguel Llora, who with his knowledge, experience, motivation and help had the attitude and faculty to be my thesis supervisor.

I also want to thank Mr. A, who helped me to get contacts from Chinese citizens to proceed with my interviews in China during three weeks. He also aided me to do a deep field study in different cities: Guangdong, Shanghai and Guzhen.


Illustration No. 1 National Party Congress of China

Illustration No. 2 Communist Party of China

Illustration No. 3 Yu Garden Zone Shanghai

Illustration No. 4 Millions of poor in China from 1978 to 2010

Illustration No. 5 People living on less than $1,25 a day

Illustration No. 6 People living on less than $5 a day

Illustration No. 7 China GDP 1960 -2009

Illustration No. 8 Main reasons of Chinese Economic Development 1970-2000

Illustration No. 9 China low income vs. The United States low income

Illustration No. 10 Wage levels in selected cities and regions in China (yuanes)


The purpose of this thesis is to identify how the Chinese Economic Revolution (1949-2013) has caused economic and social gaps between the poor and the rich. Nowadays, unfortunately, many Chinese still live in poverty, considering that China has overpopulation with 1.369’811.000 citizens. The phenomenon of overpopulation has led to the creation of the “One Child Policy”, which has consequences: aging population, abortions; thus violation of human rights.

There is the need to inquire deeply into the history of China, its beliefs, its dynasties, and its government. Thereby, it is easier to determine the main reasons and consequences of their economic revolution. The People's Republic of China or the "Middle Kingdom", founded in 1954, shows its Sino-centrism throughout its political, economic and social history. On the other hand, the Communist Party of China, with Xi Jinping as president, is the essence for the orientation of the interests of the Chinese, for the development of China’s productivity, and for the starting point that the government uses to make national and international decisions.

Mao Tse Tung and Deng Xiaoping were the promoters of the transformation of China. Mao Tse Tung based mainly on the socialist industrialization and socialist agricultural changes; however, those events were the reason of millions of deaths in China and the worst famine of the world. Deng Xiaoping followed the development process of Maoism, but he did it whit his own ideals, such as: application of economic reforms, trade liberalization, implementation of productivity factors. It helped to establish an economic model of investment, saving and exports in China.

Nowadays, China’s social development faces challenges to which economic and social policies will need to answer for. A main challenge is to fight for the high inequality in incomes, consumption; and access to education, health care, jobs and social protection. In addition, China not only needs to overcome the rapid aging of the population, but also, it needs to manage growing cultural, social and economic diversity to reduce the gap between the poor and the rich and decrease the current human rights violation.


Nowadays, Asia is considered one of the most dynamic, complete and complex continents worldwide. China has contributed to open Asia doors to the world due to the fact that China’s economic revolution does not stop. However, it is important to expose the gaps that Chinese economic development has caused, especially social ones, in which China is involved in as a country in vogue. In terms of GDP per capita China shows a meager economy with unsustainable environmental pollution and other latent social inequalities. With the above background, we should not lose the perspective that China is still a developing nation.

Focusing on China’s economic evolution, it was the world’s largest and fruitful country from the early 1500s until the early 1800s. The next two centuries were chaotic for China due to the fact that it was invaded by the British thus its economy went through catastrophic decline. Furthermore, Maoism policies were too hard. When Deng Xiaoping became the leader, China could lay down its economic foundations for post-1978.

This work conducts to an investigation into the social and economic gaps caused at present considering the Chinese economic evolution as a foundation for the time period 1949-2013. This analysis is split up into three stages: from Maoism era of 1949 to the economic reform of 1978 with Deng Xiaoping, the Chinese economic development from 1979 to 2012, and finally the economic strategies and the social consequences for rich and poor due to Chinese economic revolution.

Secondly, it is essential to emphasize the underlying and main reasons for the current social gap unseen but felt in China. Therefore, this thesis will take into account the opinion of Chinese people through direct interviews to determine their real points of view about the economic development of China and its legacies, the rank of social inequality and the level of hidden capitalism in their everyday living. Finally, it is indispensable to determine possible ways to get over this gap through some likely strategies as suggestions.


1.1. Overview of the People’s Republic of China

1.1.1 Population and Geography


The People’s Republic of China has the largest population in the world ahead of India. According to the World Bank Statistics, China population is 1.369’811.000, which became the 19,54% of the world population by the end of 2013. Unfortunately, many of Chinese remain in poverty.

Chinese population has a life expectancy of 71 years. There is an imbalance between boys and girls. The Chinese prefer boys’ births because part of the population thinks that only men can support a family. Furthermore, the cost of raising a daughter is even bigger because of her marriage, time when girls leave their families. That is why some Chinese use a known proverb: “Raising a daughter is like watering your neighbor’s garden”. There is a big imbalance between male-female sex ratio. The ratio is 118 men to 100 women across the country. This problem has provoked a “marriage squeeze” because nowadays 30 million men do not think on marriage. Therefore, prostitution, female trafficking and women missing have increased. (Kerr, 2014)

In terms of science and technology, both of them are considered essential elements that lead us see in a blink of eyes the Chinese overwhelmed growth. China has not only the world’s longest high-speed rail network with 9.676km, but also expressways with 85.000 km. Bachelor degrees in sciences are graduated than any other country; and renewable energy technology locates to China as the largest investor worldwide. However, around 900 million Chinese work for 20 cents per hour under deplorable conditions. (Kerr, 2014)


According to Dr. Sterling Kerr, professor of International Studies School at University of Azuay in Cuenca, China has been the most populated country worldwide for many years. On one hand, at the time of Mao, it was not possible to talk about overpopulation due to the fact that he considered it an anticommunist action if there was any attempt to decrease population. Approximately 51% of the population is urban, and it may increase to 70% by 2035.

On the other hand, Deng Xiaoping, Mao’s successor, was conscious in which consequences the Chinese demographic growth could provoke in the future. He analyzed that the population can become double after nineteen years. In this context a polemic issue appears: “One Child Policy”. This plan was adopted in 1979. It was strictly applied to the Han Ethnicity and citizens of urban areas. It restricted Han Ethnicity couples to have more than one child. Nevertheless, the rural population was allowed to have a second child five years after the first child. Slightly over 250 million births from 1979 to 2011 were prevented. It provoked millions of forced abortions. Nowadays, abortions continue at the rate of 500,000 per year. This preference for boys and selective abortion of female fetuses have incited gender imbalance among Chinese children. This situation will cause a giant gender inequality, thus the increase of an approximately thirty-five millions men more than women in 2019. (Palacios & Ramirez, 2011)

A, one of the interviewees for the development of this thesis, explained that “One Child Policy” is especially applied in the North of China. If he and his wife have more than one baby, they have to pay a fee that represents two years of Andy’s income: 100.000,00 RMB, being approximately 16.000,00 USD. When Andy was asked if he would like to have a big family with more than one baby, he answered: “Yes of course, but I cannot. I need to take care of 7 people: my parents, my parents in law, my wife, my baby and I. It is impossible to have a second baby in my family.” He plans to have a baby after 5 years. In addition, they do not have time even to enjoy a weekend because their jobs are the most important. Finally, he affirmed that this policy could affect to the economically active population of the country in a near future. Then, he stopped talking about this issue due to the fact that this topic is dangerous if there are negative opinions of the government.


The People’s Republic of China is subdivided into 32 local government units: 23 provinces, 5 autonomous regions, 4 municipalities; all of them are under direct management of the central government. China limits with fourteen countries occupying 22.000 kilometers of perimeter: Afghanistan, Bhutan, Burma, India, Kazakhstan, Kyrgyzstan, Laos, Mongolia, Nepal, North Korea, Pakistan, Russia, Tajikistan and Vietnam. (Palacios & Ramírez, 2011)

China impresses with its vastness and variety, being the third largest land area in the world with 9,6 million square kilometers behind Canada and Russia. Many Chinese do not find an affordable place to live, while many cities are almost empty without habitants. However, thousands of Chinese have left the country because of unhealthy pollution and the marked differences in the Chinese social strata. (Palacios & Ramírez, 2011)

Chinese mountains are the largest on the planet, the Everest with 8.848 meters of height. Its Gobi desert in Mongolia is the third largest desert on the planet with 1.166 square kilometers, after the Sahara and Arabian deserts. And finally, China also has the deepest area of the world, Turpan Depression, located at 154 meters below sea level. (Palacios & Ramírez, 2011) China has 3 important rivers:

Yellow River:

The Yellow River, with 5.464 meters of length, flows through the North China Plain and flows into the Bohai Sea. The “Yellow River” name comes from its yellow color due to the loess silt. The Yellow River overflows causes hazards for the inhabitants of the area. The Yellow River produces a strong economic unification of the region. (Kerr, 2014)

Yangtze River:

The Yangtze River is the third longest river worldwide after the Amazon and Nile. It has 6.418 Km of length and it flows through central China to the sea by Shanghai. This river has a huge catchment basin. The Yangtze River, considered the most active river around the world, is an important basis for the Beijing’s governmental plan: to equilibrate the economy supported by the interior Heartland. (Stratfor, 2012)

The Yangtze River, often named as the Mississippi of China, splits the area up into three segments: the upper portion from Sichuan to Chongqing; a middle centered region on Wuhan and the lower part up to Shanghai. Due to the influence of the Yangtze River in the western and central zones, there is a possibility of launching not only a second industrial base, but also a rural urbanization in the zone. Through this plan, a new middle class can appear with higher wages, without the need of migrating as far away. The Yangtze River provides a big navigable part with 2.800 Km. This river helps transport water, instead of using a rail or road. (Kerr, 2014)

Pearl River:

Even though the Pearl River is the shortest one in China, it is also important. The Pearl River is formed by three tributaries: the Bei River, the Dong River and the Xi River. It is located in the South of China, becoming a benefit for Macao and Hong Kong.

In terms of Geology, China is very susceptible to natural phenomena, especially earthquakes. The worst earthquake in Chinese history has been the Shaanxi Earthquake in 1556.

A billion people habit the Han Heartland, located in the eastern region; which includes the Northeast China Plain, the North China Plain, Lower Chang Basin, Southeast Uplands and Lower Xi Basin. The Han Heartland is available for fertile lowlands and foothills; hence agriculture is practiced over there. (Kerr, 2014)

1.1.2 History

Nowadays, talking about the People´s Republic of China, there is a relation with an early civilization and a rich history. Some inventions made by Chinese ancients, such as block printing, papermaking, gunpowder and compass, have contributed to the progress of humankind. The traditional name of China is Zhongguo, and it means: “The Middle Kingdom”. This idea of centrality is present in its whole history. (Oppenheimer, 2006)

Oppenheimer stresses that Chinese Empire, with its peculiar geography, was pushed to an inner development, being carefree of external threats. It provoked two serious consequences:

- The creation of a “civilizational system”, where Chinese considered themselves the unique civilized nation in the world. Hence this Sino centrism concept arose: “All under Heaven”. This system lasted almost three thousand years. China, as the Middle Kingdom, saw other nations from its intrinsic superiority.
-The other consequence was the conception of China´s history through dynastic cycles. Its official chronology registers 22 successive dynasties.

Chinese, just feeling safe with their geography, never had a special interest in military issues. That lack of a military system led small subversive groups defeat each ruling dynasty. However, each dynasty achieved any development and prosperity, especially in economic issues.

China is also recognized around the world by its engineering feats such as The Great Wall and the China Grand Canal. Due to fossil remains, it has been determined that Chinese men have lived long. For example, archaeological finds of primitive ape men have been found in many parts of the country, like the Yuanmou Ape Man fossil remains, which stayed in Yunnan Province approximately 1,7 million years ago. (Chinese Government Official Web Portal, 2013).

Chinese feel really proud to be offspring of the Yellow Emperor, who was a tribal chief habitat of the Yellow River Valley four millenniums ago. The Yellow Emperor taught men to domesticate wild animals and to grow some types of cereals.

Nowadays, the Yellow Emperor is considered the ancestor of Chinese people, those one calls themselves the “descendants of the Yellow Emperor”.

The Xia Dynasty was the first one that emerged in China 4,100 years ago. Smelting and casting of bronze helped to reach a higher level of productive growth in China, time in which history started in this country. The Xia Dynasty was a slave society and it was defeated by warriors of Shan Tang (about 1046BC - 221BC), founder of the Shang Dynasty. There was disintegration of the slave system at the end of this dynasty.

The Qin Dynasty (221BC-206BC), commanded by Emperor Qin Shi Huangdi, carried out different reforms, where standardization of weights and measures was included. The launching of a single currency was implemented. Qin Shi conscripted approximately 300.000 workers to build the Great Wall. Handicrafts and agriculture marked the progress during this dynasty, with prosperity in arts, science and culture. Qin Shi is the developer of the Chinese writing, which became a cultural phenomenon. Other countries as Japan, Korea and Vietnam adopted Chinese writing to transcript their own languages. This dynasty was one of the most famous of the 22 dynasties. (Chinese Government Official Web Portal, 2013)

Western Han Dynasty was full of corruption. That is why Liu Xiu replaced the Western Han Dynasty with the Eastern Han Dynasty that was founded in AD25. Culture and science continued in ongoing progress.

Sima Yan, influence of the Kingdom of Wei, established the Western Jin Dynasty. However, some ethnic groups broke out, becoming as result: 16 small kingdoms in northern China and the collapse of Western Jin Dynasty, provoking the setting up of the Eastern Jin Dynasty in the south.

In 581, China was unified under the Sui Dynasty; however, the country’s economy was ruined by Emperor Yang Di’s corruption due to an excessive military expense. In reaction to this mismatch, peasant uprising swept the country. Taking advantage of this situation, Li Yuan, a military commander of this dynasty, founded the Tang Dynasty.

The Tang Dynasty (618AD-907AD) formed a powerful China; ranked among the most advanced countries around the world, with a large foreign relation as ever before. The relation ties with Korea, Japan and other countries of West Asia, Europe and Africa became stronger. A high level of technology in handicraft and agriculture areas was peaked during the Tang Dynasty. Furthermore, Tan Dynasty was honored by inventions in its time, such as: the gunpowder, the block printing and the astronomical clock. This dynasty is known as “The period of 5 Dynasties and 10 Kingdoms” because it suddenly came to its end in 907. After this dynasty, five more dynasties and ten kingdoms appearing between 907AD-979AD.

In 1644, after the Later Zhou Dinasty, the Ming Dynasty appeared under the command of Li Zicheng and Zhang Xianzhong. Both of them beat the peasant armies, forming the Qing Dynasty between 1644-1911. During this Dynasty, China enjoyed extensive territory and boomed production. However, Qing had an isolationist policy that plugged the country into ignorance of Western political, military, cultural and economic issues.

One of the biggest events that the dynasties went through was the revolution of 1911, when Sun Yat-sen overthrew the Qing Dynasty (1644AD-1911AD) in, and it led the founding of the Republic of China in 1912 up to 1949. It put an end to the feudal and monarchic systems that lasted more than 2.000 years.

Since 1699 China and England tied relations based on the opium traffic, even though Chinese laws prohibited this activity. In 1842 the first Opium War exploded against China, launched by the British imperialists. Other countries joined the invasion. The main foreign powers of the world pushed the corrupt Qing government to sign several unequal treaties. As a result, China became a feudal and colonial country. Few years later, the Second Opium War (1856-1860) broke out. This war was done with the Treaty of Tientsin. This treaty obligated China to legalize opium traffic and surrender 11 Chinese ports to Western powers.

In 1919, the “May 4th Movement” broke against imperialism and feudalism. Then, the Communist Party of China was launched in 1921. National monopoly capitalism emerged in China under Chiang Kai-shek’ rule. His fascist rule plunged China into misery and poverty.

After 1931, Japan intensified its aggression against China. It provoked the Anti- Japanese War after 6 years. The Communist Party of China and the Kuomintang Party (Sun Yat-sen party) joined their forces to face Japan. This war extended during 8 years. Finally, Japan gave up in 1945.

In 1949, Chiang Kai-shek regime was ousted. Then, Mao Tse Tung was proclaimed president with the formation of the People´s Republic of China on October 1st, 1949. It was considered a communist country similar to the USSR.

Between 1949 and 1956 the People´s Republic of China introduced a new “democracy” with socialism, economy rehabilitation, economy plans, and socialist transformation of the private ownership of production in most of the country. The guidelines of this Party led to phenomenal successes in China.

Mao Tse Tung looked for recovering the long-lost Chinese pride through his revolution. At the beginning, Mao applied several changes and rules, such as: unification of financial and economic jobs, elimination of bandits in the mainland, restructuration of government, confiscation of capitalist enterprises transforming them into state enterprises, stabilization of prices, counteraction of corruption.

Mao Tse Tung turned around the educational, scientific and cultural institutions of ancient China. In 1952, industrial and agricultural production of the country peaked high levels of success. Mao Tse Tung, in his proposal, embodied step by step a socialist industrialization and a socialist agricultural transformation in a long-term period. His governmental ideal was based on the idea that socialist industrialization is an essential requirement to get the country’s prosperity and independence. Mao Tse Tung raised a capitalism transition when his Party charted bases for socialist transformation, adapting the specific conditions of China.

In 1954, the Constitution of the People’s Republic of China was launched in the First National People’s Congress. In 1965, China had the chance to become self-sufficient in oil; thus that petrochemical and electronic industries were established rapidly. The capital growth in agriculture began on a massive scale.

The “Cultural Revolution” (1966-1976) was the main reason for the heaviest losses suffered by Chinese, since the founding of the People’s Republic of China. In fact, the “Cultural Revolution” was a political rebellion with a clash of social strata, demonstrating that it was a struggle of citizens against the capitalist road.

In 1980 the Communist Party of China (CPC) and the State Council established four economic zones in Shenzhen, Zhuhai, Shantou and Xiamen. It carried China into a stronger relation with overseas and the openness to international business. In 1984, 14 coastal port cities were opened. Chinese caught up economic development even in other areas, such as the Yangtze River Delta, the Pearl River Delta, the Bohai Sea Rim and the southeast Fujian Province.

China felt a big change with the second revolution of Deng Xiaoping, who taking advantage of the achievements of Maoism, offered a better future for China. His main actions were: reduction of the strict Maoist rules, attention to private enterprise, foreign investment, application of measures for population growth, legalization of land and the emergence of a new entrepreneurial class.

Deng Xiaoping decided to put forward some diplomatic strategies to find domestic stabilization and feel a peaceful international environment in China. According to Chinese’s Government Web Portal, China follows a new international political and economic order through Five Principles of Peaceful Coexistence, including: respect for sovereignty and territorial integrity, non-aggression, non-interference in internal affairs, equality, and peaceful coexistence. Deng Xiaoping instigated to establish diplomatic relations between the United States of America and the People’s Republic of China, deal a peaceful treaty with Japan, regularize the relation between the CPC and the Soviet Communist Party, and also develop ties with the Third World countries. Furthermore, Deng Xiaoping has contributed to China’s modernization, development of the human being and protection of the world peace. (Palacios & Ramírez, 2011)

1.1.3 Government:

The type of government of China is “communist state”. Its latest Constitution was promulgated on December 4th, 1982. It was amended several times, having its last amend in 2005. Chinese can go to the polls when they are 18 years old.

The executive branch of China was elected in March 2013, and it is formed by:

- Chief of state: President Xi Jinping, who had a total of 2.952 votes; and, Vicepresident Li Yuanchao, who had a total of 2.940 votes. National People’s Congress elects those authorities for a five-year term.
- Head of government: Premier Li Kegiang, Executive Vice-Premier Zhang Gaoli, Vice-Premier Liu Yandong, Vice-Premier Ma Kai, and Vice-Premier Wa Yang. The Premier is elected by the president and confirmed by the National People´s Congress.

Talking about the legislative branch, it is a unicameral National People’s Congress. This branch occupies 2.987 seats. Its members are elected by municipal, regional, and provincial people’s congresses, and People´s Liberation Army to serve five-year- term.

In the judicial branch there are:

- Highest Court: it is the Supreme People´s Court. It consists of approximately 40 judges including the chief justice; 13 justices organized into a civil committee and different tribunals cases of civil, economic, transportation, administrative and communication issues. The People’s National Congress, with a limit of two consecutive 5-year terms, appoints the chief justice. - Subordinate Courts: It establishes Higher People’s courts, Intermediate People’s Courts, District and Country People’s Courts, Autonomous Region People’s Courts, Special People’s Courts for maritime, transportation, military and forestry issues.

The Communist Party of China (CPC)

The People’s Republic of China is ruled by a unique party: The Communist Party of China (CPC), founded in 1921, which is formed by approximately 80 million members, being the 6% of China population. Male mostly forms the Party, with few female members that are less than a quarter of the total. The CPC is a unified entity organized according to its constitution and the democratic centralism principle.

According to the International Department Central Committee of the CPC, the Communist Party of China is the precursor of both the working class and the Chinese nation. The CPC is the essence of socialism with Chinese characteristics, and it represents the orientation of China’s culture, the development trend of China’s productive forces and the main interests of Chinese. The highest goal of the Party is the realization of communism.

According to Guido Zambrano, one of the most well known events of China was the “Long March” between 1934 and 1935. It was a 10,000 km trip through the interior of China in 370 days, preceded by the troops of the Chinese Red Army (forces of the CPC). It supposed the rise of Mao Tse Tung for the next decades. After this event, the CPC came to Beijing on October 1st, 1949. From this date, the Chinese socialism started to be built under the command of Mao Tse Tung. Since then, the Party has the power to make decisions and the State is the organ that applies those decisions. Thus, the form of government is “Party-State”. (Zambrano, 2012)

Illustration No. 1 National Party Congress of China The Central Organizations of the CPC

illustration not visible in this excerpt

Elaborated by: Verónica Álvarez


The National Party Congress:

It is the CPC’s organ of supreme power, held one every 5 years, and the Central Committee convenes it. Its functions and powers are:

- To hear and analyze the report of the Central Committee,
- To hear and examine reports of the Central Commission for Discipline Inspection,
- To decide on main issues of the Party,
- To check out the Party constitution, and,
- To elect the Central Committee and the Central Commission for Disciplines Inspection.

The Central Committee

The National Party Congress selects to the Central Committee. The Central Committee leads all the work of the Party when the National Party Congress is not available. It is elected for five years.

The Political Bureau and the General Secretary

They are elected by the plenary session of the Central Committee. When the Central Committee is not available, the Political Bureau and its standing committee occupy the functions and powers of the Central Committee.

Offices and departments

There are offices and departments under the Central Committee: the Organization Department, the General Affairs Office, the Publicity Department, the United Front, the International Liaison Department and the Policy Research Office.

Illustration No. 2 Communist Party of China - Heriarchy

illustration not visible in this excerpt

Elaborated by: Verónica A. Álvarez A.


The 7 Standing Committee members (Politburo Standing Committee -PSC) are the main leaders of the government during 10 years; time when all rules and norms are made by mutual deal. This Committee is on the top of the Party’s hierarchy, becoming the most powerful policy and decision-making entity. In its field of operation, the delegates to the Congress elect 25 Politburo members, who select the Standing Committee. Following the process, the Central Committee has 205 full members and 171 alternate members, group where Politburo members are included. As we can note, each member has a rank from one to seven, and each one is responsible for a specific portfolio. Finally, 2.270 delegates form the Party Congress.

In 2012, the CPC elected its two main leaders: Xi Jinping (General Secretary of the CPC Central Committee and current president), and Li Keqiang (Premier).

Xi and Li have considered the next matters as issues of concern:

- Control of buffer areas,
- Set up a protective naval perimeter on the East Sea, Yellow Sea and South China Seas,
- Elimination of expenses on infrastructure projects without sense,
- Increase of a stronger middle class,
- Reduction of corruption,
- Encouragement to export production in cheap work areas of Africa and Asia,
- Retreating of pollution; and,
- Reduction of the urban-rural gap.

The government has enlisted reforms, but just some of them have been addressed. This imbalance has caused unconformity in terms of party’s ideology, which has become a reality of Chinese politics and social sphere.

1.1.4 China’s Currency

The official currency of China is the Renminbi (RMB) that means: “currency of the town”. The RMB’s value, against the U.S. dollar and other currencies, has been an issue of concern for many. In 1994 China began to stabilize the RMB about 8,28 RMB per dollar; and it kept this rate constant up to 2005. The pressure of major trading partners carries the currency to have a managed peg system, allowing the RMB to regularly appreciate over the next three years. Since July 2008, China suspended RMB appreciation due to the effects of the global economic crisis on China´s exporters. The RMB appreciation started again in June 2010. Calculating in 8 years (2005-2013), the RMB appreciated by 34% on a nominal basis against the dollar. The last two years, China´s account surplus has declined dramatically; causing a low of foreign exchange reserves. That is why some analysts agree that the RMB is not an undervalued currency against the dollar, as it was once. (Labonte, 2013)

Many analytics contend that China should take strong steps to rebalance its economy, by reducing its dependence on exports and fixed investment, but encouraging the level of domestic consumer demand. China’s government has guaranteed to continue making its currency policy more flexible; however a fast appreciation of the RMB could cause a lot of job losses, especially in export sector, thereby cutting the economy off.

1.1.5 People

Thousands of Chinese have left their land to around 34 countries overseas; showing how the “incredible development” of the country has profoundly affected the social sphere of their people.

There are two important elements that describe Chinese identity. First of all, the importance of paid or unpaid work. Chinese always want to be an active actor in society because this ideology is related to the ideology “worth and belonging”. The second element is the impact that the lack of labor or an unbalanced job can provoke in their identity, thus, in society. This unbalanced impacts its identity due to the fact that a regular quantity of Chinese citizens is considered workaholic.

China is a multi-ethnic nation with 56 groups. The 91,6% of the population belongs to the Han ethnic group. The other 55 ethnic groups are ethnic minorities. Those minorities are distributed over vast areas, occupying 64,3% of China. They are mainly located in the north of the country. (Chinese Government Official Web Portal, 2013)

1.1.6 Beliefs and religion

China, an ancient civilization, is the result of a secular heritage with religious aspects that have shaped a peculiar worldview. Three religions or schools of thought, which arrived at different times, provide the Chinese cosmology: Confucianism, Taoism and Buddhism. The local Gods are always considered important. There are different kinds of Gods: river gods, home gods, hills gods, soil gods, and so on. Above them are the God in heaven and the Mountains God. This is polytheism where people believe in the survival of souls. What is amazing is that different religions can coexist, without any problems, in a same temple. (Palacios & Ramírez, 2011)

In today's China, there is greater freedom to express religious beliefs. Despite their efforts, Maoism tried to disappear religious beliefs; however, when circumstances allowed, they have reappeared. Now religions are considered identity instruments capable of giving coherence and strength to the Chinese society of the XXI century.

Religious freedom appears in the Constitution of 1982 when the State restored Chinese religious heritage. However, the rest of the current religions in China are fearful, as Tibetan Buddhism, which is an identity instrument for Tibetans.


Confucianism is a religion and a philosophical attitude that matches a religiosity feeling with skepticism and agnosticism. Confucianism became an inherent class system of Confucius: the Chinese intelligentsia. Thus, it is said that Confucianism was and is the expression of the lawyers or the mandarins, who became the officials of the new China. They represented the authority of the State that was consolidated with the first great empire, the Han.

Emperor Wau founded the Great School of Confucianism in 124 BC and now it is based on five classic books: “Mutations”, “Odes”, “Documents”, “Spring and Autumn”, and “Rites”. Between the VIII and XII centuries, the neo-Confucianism was readjusting Confucianism guidelines and setting the official doctrine of Chinese wisdom.

Confucianism interprets the world respecting the Chinese tradition, but running from primitive popular beliefs. Confucianists use old words and grassroots concepts with a new philosophical sense. For example, the yin and the yang, which represent contrary images and ideas. The yin and the yang regulate the seasons, the alternation of day and night, cold and heat. In humans, this duality is expressed in love and hate, joy and anger. The principle of this alternation is the Tao. A Chinese proverb expresses well this statement: "once ying, once yang; and the unit generates, the Tao."

This explains that as the nature follows its Tao, men are free to depart from the way of the Tao, breaking the pattern of righteousness, and destroying the world with their evil deeds. That is when the man, according to Confucianism, cause physical disturbance as earthquakes, floods; and human reactions as famines, uprisings, and so on.

The Prince or Mandarin has a high level of superiority that is not questionable; and it justifies obedience and respect that he deserves, as Confucius says. Confucius preached respect, humility, submission and subordination to superiors in rank and age.

Confucianism is an intellectual, political and social organization at the same time. Thanks to it, China preserved rationalism against the religious actions of Taoism and Buddhism, which were strong up to X century.

Confucianism in turn was banned with the proclamation of the People's Republic of China in 1949 due to the fact that it was considered as an element that encouraged people to passivity. The communism had to fight against Confucius preaching to change society, especially in Cultural Revolution moments between the years 1966- 1976. Because of atheism force, both Taoism and Buddhism were banned, religious and faithful were persecuted; and temples and museums were closed or converted.


Taoism is contemporary of Confucianism, and it appeared in the protracted crisis of China between VI and VII BC. Taoism is a religion of salvation and a mystical quest. Its founder is Lao Tzu. This popular religion is characterized by the worship of various deities and ancestor veneration.

Taoism is a mystical search for the absolute and immortality. The Tao, that means “the way”, is the supreme principle of order and unity of the universe corresponding to the forces that are at the heart of nature and act on the cosmos.

The cosmos works through the action of two forces, yin and yang. The yin is composed of kwei, a specification of evil spirits; while the yang is composed of good spirits, the shen. The kwei goes into darkness and the shen goes into heaven. Hi Fu is the father of the cosmology of yin and yang in Taoism. The practice of Taoism was banned in 1927 by the nationalist government of Sun Ya Tsen, Protestant Christian; however there is still population who practices this religion. (Palacios & Ramírez, 2011)


Buddhism is chronologically the last of three big China's religions that was imported by missionaries from India and Central Asia. It came to China with the Han Dynasty at the beginning of the Christian era. Between IV and VI centuries Buddhism became the most widespread religion in China, achieving its greatest strength between VI to VIII centuries, becoming the official religion of the Empire.

Buddhism found opposition from Confucians and Taoists in the intellectual and the political field within China. Buddhism suffered various persecutions, the hardest one in the year 845, which virtually ended his public influence.

Buddhism is based on these moral precepts for a righteous life: no killing, no stealing, no nasty utter words, keep a proper sex life and forbear of drugs and alcohol. Buddhism says that everything happens with a reason, thus it does not believe in random. Buddha believed that living things are the results of their own Karma.

There are followers of Buddhism thanks to the Tibetan diaspora and also thanks to the Westerners interest, for whom this religion, without a god, is also seen as a philosophy and as a more affordable religion. Tibetan Buddhism preaches tolerance and peace, posing as a humanism that is intended to guide human life to avoid suffering. (Palacios & Ramírez, 2011)


Neo-Confucianism, known in China as "School of Nature and Principle" predominates from the XI century up to the contemporary time. The initiator of the school was Zhou Dunyi.

Neo-Confucianism has two aspects: one more reformist, concerned about politics and society; and other more speculative, metaphysical, moral and even mystical.


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Social and Economic Events of the Chinese Economic Revolution (1949 - 2013)
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Verónica Álvarez Álvarez (Author), 2013, Social and Economic Events of the Chinese Economic Revolution (1949 - 2013), Munich, GRIN Verlag,


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