Introduction: Transitions
In the late 1500s, the accounts of Portuguese mercenary and pirate Galeote Pereria's exile in southern China became the first first-person accounts of life in China distributed in Europe since the diaries of Marco Polo over 200 years earlier. In this journey, no one Galeote Pereria talked to had ever heard of China, 'Zhongguo 中国', or any other equivalents. They explained that they lived in distinct countries that all had the same ruler; that 'Great Ming 大明' was a union of distinct nations. The first narratives of a common Chinese identity, based around Han ethnicity and culture, were formed in the mid-1800s at a time when China was ruled by the foreign Manchus and threatened by European expansion.
The Chuang journey will publish three articles on the history of the Chinese economy: one about the socialist period and its immediate precursors, one from the reforms of the 1970s to the deindustrialization of 'iron rice bowl' in the 1990s, and one from the 1990s to the present.
The socialist period saw the breakdown of the previous mode of production and the expansion of the state bureaucracy to fulfill the role of the bourgeois in industrialization. Under the socialist system, markets were largely abolished, money became a reflection of state planning, taxation was replaced by grain levies from the countryside, and the rural-urban divide became more fixed than at any previous point in Chinese history. There was no substantial urbanization during the socialist period, beyond the immediate relocation of refugees to the cities in the immediate aftermath of the civil war. Rural populations also became more restricted and immobile than they had ever been.
The Communist movement within China was led by the Chinese Communist Party, whose popular mandate from its resistance to the Japanese gave it control over areas previously dominated by anarchists. This popularity was maintained by redistribution in rural areas and reconstruction in urban areas. Communist Party popularity collapsed in the late 1950s because of the famine triggered by the Great Leap Forward and strikes in coastal cities. Losing popular backing, the Communist Party focused more heavily on combining state and party mechanisms and forging a developmental regime. China was influenced by the Soviet experience, and the USSR had immense influence, particularly over practices in the northeast of China, but the People's Republic of China also inherited other economic models from the imperial era, the Republican era, Japanese occupation, and Western enterprises.
Part 1: Precedents
Peasants during the imperial period were not only farmers, but also produced handicrafts and textiles. Production was mainly concentrated in rural areas of China until the socialist period, with the country actually becoming more rural from the 1200s until the 1800s. Even during industrialization, new technologies were simply incorporated into preexisting rural production networks, which still produced 72% of all Chinese manufactures in the 1930s.
During the late Ming period, commercialization and the rising value of rural production increased wealth inequality in China and made the tax system increasingly difficult to maintain. Rural China became dominated by a landlord gentry, especially in the south. Peasants either rented land from landlords or were hired labor on plantation farms run by landlord gentry. This control of peasant labor also extended to owning the means of production of rural manufacturing. Under this system, peasants became gradually poorer and tenancy agreements more impersonal, as gentry increasingly became absentee landlords living in cities. The system collapsed in the late 1500s, as rural poverty disrupted tax revenues and prompted destabilizing migration to cities.
The transition period between the late Ming and early Qing dynasties witnessed a number of peasant rebellions resisting rent and taxation, resulting in expanded tenant rights under the Qing dynasty, the end of bonded labor, and the replacement of plantations by smaller family farms focused on subsistence. Production was thus almost entirely controlled by peasants households during the Qing period, although markets and capital were controlled by the gentry. This division gave the capital-rich gentry almost no incentive to invest in increasing production.
China became integrated into global markets around the end of the 19th Century, with increasing numbers of rural agricultural goods and manufactures being bought and sold internationally. Urban areas were more integrated than rural areas, but not massively so. When the Guomindang 国民党 united China in the late 1920s, the economy remained overwhelmingly rural and agricultural, industry constituted only around 7.5% of GDP, international trade was still small, and there was no integrated national economy. The Guomindang government had plans to spur industrialization and integrate the economy based on the model of Italian fascism, but these were not realized prior to the Japanese invasion.
The vast majority of modern Chinese industry during the Republican period consisted of foreign-owned factories build in coastal areas, particularly between the 1910s and 1930s. Labor practices in these coastal cities were strongly influenced by earlier 'coolie' labor markets, with absentee owners hiring Triads to run the factories, as well as supply and organize the workforce.
During its colonial occupation, Japan build enormous industrial complexes in Taiwan and Manchuria, together equally more than double China's industrial capacity. In Manchuria, these factories were centrally organized and planned on Taylorist principles, although still staffed mainly by rural migrants procured by labor bosses. Faced with labor shortages during WWII, Japan began staffing these factories with impressed and slave labor.
During its rural insurgency, the Communist Party came to focus primarily on national unity over class conflict, finding that class divisions in northern villages were less intense than elsewhere. It focused on mobilizing villages, including gentry merchants and wealthy peasants, against the Guomindang and the Japanese. Major land reform was largely postponed until complete victory over the Guomindang, at which point they carried out extensive land redistribution that eliminated the gentry as a class. This redistribution was often violent in northern China, as it pitted neighbors against each other, whereas the dominance of absentee landlords in southern China meant it was carried out without much bloodshed. By 1953, when land reform had been completed, over 300 million peasants had gained land, land was equally distributed, and the Communist Party had established a strong base among the peasantry.
When the Communist Party won the civil war in 1949, they had very little presence in urban areas, being almost entirely a peasant movement. Originally, the Communist Party had been primarily urban, based among intellectuals and skilled workers, but brutal repression by the Guomindang, culminating in the 1927 Shanghai Massacre and the subsequent purging of Communists across China -- in which upwards of 300,000 were killed -- destroyed the urban Communist movement and left only its rural peasant cadres intact.
The Japanese occupation destroyed the economy of Republican China, damaging infrastructure, causing hyperinflation, and chronic food shortages. When the Communists seized control of urban areas, they inherited a damaged industrial environment, destroyed by the Japanese or sabotaged by retreating Guomindang forces, with high unemployment and large refugee populations. Economic conditions deteriorated further as the American-led blockade of Communist China began.
The Communist Party took control of Manchuria early on in the civil war with Soviet assistance. The industry there remained intact, but these were poorly run by workers with little or no higher level technical or administrative experience, and there was no transportation between these factories and the rest of the country. In early 1950, the Sino-Soviet Friendship, Alliance and Mutual Assistance Treaty was signed, securing a $300 million loan, and sending Soviet engineers into the Northeast to run factories and train Chinese engineers.
In the port cities, factories were run by the same bosses and capitalists as before, many of whom had not fled with the Guomindang. The Communists also sent military representatives and urban party cadres to oversee factories, but they were few in number and often lacked knowledge about factory management. The Communists did promote skilled workers to positions of authority, but widespread illiteracy made few capable of factory management. By 1953, some 80% of managers still ran their factories as these bourgeois were the only group with the knowledge and access to credit needed to run the factories. During this period, the Communists encouraged private enterprise to promote economic growth by purchasing huge numbers of goods at market value, particularly military goods during the Korean War.
Communist support for bourgeois capitalism in the early 1950s upset many Chinese workers, resulting in strikes. This was temporarily resolved by wage increases and the creation of new unions. In 1952, the Party began the 'Democratic Reform Movement', followed by the 'Three Anti- Movement', and the 'Five Anti- Movement', encouraging mass denunciations of bosses and coworkers. This resulted in many factories coming into state ownership and an upending of the previous system of gang labor. The Party was scared of militant workers and the economic decline during the campaigns, so it stopped these campaigns by the mid-1950s.
In the early 1950s, hundreds of cooperative retails and commerce companies were created to realize state control over the retail sector. The Party also took over nearly all foreign trade by 1952.
Part 2: Development
The Communists planned to collectivize agriculture and nationalize industry in five stages:
- the expropriation of foreign industry
- nationalization of the banking system
- nationalization of private firms
- cooperatives for handicrafts and retail
- establishment of urban communes.
Plans for nationalization were delayed in the port cities, where even foreign capitalists were allowed to continue operations, although most foreigners did eventually abandon their industries to the Communists. Nationalization of banks was rapid and complete by 1952. Private firms came under state control slowly, first through taking government contracts during the New Democracy period, then being transformed into joint enterprises following planned quotas, and finally owners being bought out of their companies by the state by the mid-1950s.
Nationalization of retail and commercial firms was a slow process and China initially only nationalized the largest firms, which still retained the same management, structures, and employees. Getting handicrafts and small merchants, still responsible for the vast majority of production in China, into cooperatives that owned their tools and produced to meet state procurement took years. In 1955, only 29% of these small producers were in cooperatives; this changed with a registration campaign in 1956, that organized 92% of all artisans into producers cooperatives. The grain market was an exception, being declared a state monopoly in 1953 as a way to extract value from rural production by undervaluing grain and overvaluing manufactured goods.
Manchuria made up almost half of all Chinese modern industry during the 1950s and accounted for almost all of its iron and steel production. Central planning had been introduced here by the Communists, but ran into inefficiencies and fraudulently inflated quotas. Between 1951 and 1953, they tried a new system of central planning directed by worker input, but it was still poorly run and large amounts of overtime were needed to meet quotas. During both periods, actual managerial control was not exercised by the Party, but by tens of thousands of Soviet engineers or the 80,000 Soviet-trained Chinese engineers.
The first 5 Year Plan, implemented between 1953 and 1957, was largely based on the Soviet model and the management of Manchurian industry, even being developed by Gao Gang 高岗, who had previously been responsible for the Northeast. New administrations were created to promote divisions of labor, statistical collection, and high-level economic planning across all Chinese industry, seeing an expansion of the Party by 720,000 cadres to 3.31 million members and the recreation of a hierarchical bureaucracy similar to that which existed under the Japanese occupation and the Guomindang; costs similarly increased, and wages for bureaucrats took up around 10% of the state budget.
Economic growth was high during this period, with national income tripled between 1949 and 1958. The institution of new state-imposed wage grades meant that some workers benefitted while others saw significant declines in their earnings. The system never worked well and caused constant tension over wage gradation, often settled through debates among workers. Almost half of all factories essentially gave up and switch to payment on a piece-rate basis. The stellar economic growth threatened to cause an inflationary crisis in 1953, to which the Communist Party responded by having industries compensate workers in the form of food, housing, and medical care; this arrangement would characterize the socialist period.
Dissatisfaction over falling wages, less democratic management, underfunding of light industries under the first 5 Year Plan, unpaid overtime during rushes to meet quotas, and general deterioration of working conditions in port cities compared to the New Democracy period led to the largest wave of strikes in Chinese history in 1956 and 1957. Workers, who explicitly referenced the contemporaneous Hungarian Revolution, demanded greater control. As early as 1956, and frightened by comparisons to Hungary, the Communist Party tried to address these criticisms under the rubric of the Hundred Flowers Movement. The All China Federation of Trade Unions [ACFTU], under Lai Ruoyu 赖若愚, was particularly important in proactively replacing the 'one man management' system with mass participation and even workplace democracy, but this still failed to address the core concerns of disparities between different types of workers, state underfunding of light industry, or unpaid overtime as a result of production drives. Instead, strikes continued and intensified throughout 1956 and 1957. In 1957, the state repressed the strikes, arresting striking workers and dissident ACFTU members, who were then imprisoned, sent to labor camps, or executed. This repression was successful because of preexisting divisions among workers, with strikers often being a disadvantaged minority at their own factories. More privileged workers -- older, permanent, urban, or employed in heavy industries -- usually sided with the government against strikers who tended to be young, temporary, rural migrants, or employed in light industry; in some cases, privileged workers even put down the strikes themselves.
The first 5 Year Plan and other development initiatives greatly increased the rural-urban divide in China, shutting down traditional handicrafts production in rural areas and cementing a division between grain-consuming industrial urban areas and grain-producing agricultural rural ones. The goal was to develop industries that could then manufacture the technologies -- railroads, tractors, fertilizer, etc. -- necessary to raise agricultural productivity. This divide was cemented in the hukuo 户口 system, by which peasants were tied to their villages, and the danwei 单位 system, tying urbanites to their specific factories, with almost no labor mobility even within cities, by linking access to employment, land, and food rations to registration at a specific factory or commune. Labor demands in cities meant that this policy was not fully articulated until the mid-1960s.
Throughout the 1950s, rural China went through 4 stages of collectivization. This began during land reform, as villagers were organized into 'mutual aid teams' of around 6 households that shared equipment, animals, and purchased inputs from a common fund. Between 1954 and 1956, the second stage of collectivization transformed mutual aid teams into 'lower agricultural producers' cooperatives' of around 20 households that collectively managed land and labor, with the profits being divided through an arcane 'workpoints' system to roughly approximate contributions in land and labor. In the third stage, between 1956 and 1957, these cooperatives were rolled into collective farms of between 40 and 200 households and all land, livestock, and equipment was collectivized; profits were no distributed solely based on labor. Gains in agricultural productivity at each stage were never as large as expected by Communist officials.
The Great Leap Forward was initiated in 1958 and saw the final stage of collectivization, in which collectives were turned into massive communes including tens of thousands of peasants across multiple villages and all land, including private family plots, was collectivized. These communes directed peasant labor towards large-scale irrigation and infrastructure projects, as well as rural industrialization. The movement of peasant labor away from agriculture caused a large decline in grain production, with output in 1962 at only 79% of 1957 levels. The workpoints system was partially abolished and replaced with free provision of food and services by the commune. Farm output was grossly over-reported, leading the Communists to move more peasants out of agricultural work and into industry, either in rural areas or cities. By 1959, there were food shortages that prompted the end of unregulated communal dining halls and the reintroduction of workpoint systems. Famine began in 1960, killing tens of millions, driving mass migration to urban areas, and destroying the base of Communist support in the countryside.
In cities, the Great Leap Forward was a push to rapidly industrialize by loosening previous restrictions on rural labor flow to cities, demanding constant overtime at all industries, and greatly decentralizing control of factories to provincial and local party cadres. This decision was in response to the fact that economic growth in China in the 1950s barely kept pace with population expansion due to limited capital available for investment because of the expenses of the bureaucracy and improving urban living conditions. Tens of millions of rural migrants were allowed to enter factory work during the Great Leap Forward and were given full danwei benefits of food, housing, medical care, etc. All workers were incentivized by new regulations allowing factories to keep part of their revenues, meaning harder work resulting in better food, housing, etc. These incentivizes replaced all previous bonuses and other methods of payment. Actual management of factories was increasingly done by worker participation, with cadres directing fierce criticism of technicians and management. The quotas needing to be met, however, were designed by provincial and local cadres, whose unrealistic quotas meant constant overtime shifts every day of the week. Under the decentralized system, provincial and local cadres became directly involved in running factories, despite knowing fuckall about manufacturing, resulting in terrible management and lots of fabricating fraudulent production numbers that sounded good to higher ups.
Part 3: Ossification
The famine precipitated by the Great Leap Forward crashed the development model and forced the government to enact emergency measures in 1961. In immediate measures, China bought grain on international markets, legalized local markets, and restored household plots within peasant communes. Peasants were forced back into agriculture, as rural factories were shuttered and over 20 million rural migrants were deported from cities. In cities, factories made up for this sudden loss of labor by abandoning overtime production drives, reducing welfare spending, and readopting previous systems of piece-rate and bonus pay. This was a time of austerity for many urban workers, with some factories organizing fishing crews to provide necessary food at their workplaces.
Although the danwei and hukuo systems were strictly enforced during the 1960s and 1970s, factories continued to employ rural migrant labor under the 'worker-peasant labor' system promoted by Liu Shaoqi 刘少奇. Under this system, peasants are recruited to work in factories during slack periods in agriculture and then returned when agricultural labor is needed. These worker-peasants were excluded from danwei welfare benefits and thus cheap for enterprises to employ. They were mainly used by smaller firms who would fulfill contracts for the larger, more critical, industries. The main legacy of the Great Leap Forward on industry was that management of the economy remained concentrated in the hands of provincial, and sometimes local, party cadres and the military. Previous tensions between technicians and cadres began to dissipate, however, as more technicians gained political credentials and more cadres acquired technical skills. The legalization of local markets allowed both workers and managers to run small businesses on the side, with cadres using their position to engage in gross corruption and dominate the black market.
The drive to push peasants back into agricultural worker after the Great Leap Forward finally killed rural production networks; industry only began to return to the countryside during the 'New Leap Forward' of 1970 and even then focused on agriculture and employed less than 10% of the rural workforce. In 1962, the previous commune system was broken up and a three-tier system was implemented, with all actual farm work and management handled by 'production teams' of 10 to 50 households. The two higher tiers dealt with local administration, organizing large infrastructure projects, and providing education, healthcare, and other welfare services -- services that greatly increase living standards in rural China during the 1960s. In 1961, the Communist Party tried to incentivize agricultural production by instituting a household contract system were peasants were given quotas and all grain produced in excess could either be kept or was compensated at a higher rate. However, the contract system created inequality between peasants, however, and was replaced by a workpoints system in 1963. The state constantly experiment with how to best organize and distribute the workpoints systems throughout the 1960s. Small household plots, constituting approximately 5% of arable land, were also restored to peasants to provide them a buffer against famine. The produce from these household plots were often sold on reopened local markets. Grain production increased through the 1960s and 1970s, but primarily because of a larger workforce; the productivity of agriculture actually dropped from the 1920s to the 1970s. The large rural population was mobilized to construct massive infrastructure projects, but often for minimal productivity gains.
The intensification of the Sino-Soviet split cut China off almost entirely from the rest of the world, as well as depriving it of what had been its largest trade partner. Chinese industrialization in the 1960s was heavily militarized and focused on building up industry in the 'Third Front', the rugged interior, that would be protected from either American attack by sea or Soviet attack over the northern border. The Third Front was industrialized during a massive investment campaign started in 1963 and carried out in 3 phrases: the first focused on Yunnan, Guizhou, Sichuan; then Hunan, Hubei, Shaanxi; and, lastly, Qinghai, Gansu, and Ningxia.
Part 4: Ruination
Although the designations of class background included in the hukuo system had originally been flexible and allowed the reintegration of bourgeois or kulaks into Communist society, by the 1960s there was a stronger focus on class background, which had become an inheritable part of the hukuo system, as a means of selecting targets of persecution. This inherited status was articulated in 'bloodline theory', which accorded privileged status to the children of 'red' bloodlines, descended from proletariates, PLA soldiers, or revolutionaries, and discriminated against the children of 'black' bloodlines, descended from bourgeois, landlords, Guomindang officials, or Japanese collaborators.
The Cultural Revolution began in Summer 1966 in Beijing and was originally dominated by conservative 'red' student groups who harassed, attacked, and killed those of 'black' background or ancestry. The original Red Guards restricted membership to a small number of people with pure 'red' bloodlines. These Red Guards brutalized, kidnapped, tortured, and killed those of 'black' backgrounds. Across Beijing, those of 'black' backgrounds were humiliated and ostracized; eventually over 77,000 were deported from Beijing. At least half of those persecuted had merely inherited their status. By Winter 1966, students of non-red backgrounds organized to defend themselves and attacked conservative Red Guards and affiliated cadres, accusing them of being secret capitalists or Guomindang agents promoting a 'bourgeois reactionary line'. Both factions felt they were supported by the directives of the Communist Party leadership.
The Cultural Revolution spread from Beijing in Winter 1966, first to Shanghai and then other cities. Unlike Beijing, Shanghai had a large working class, with around 40% of workers being temporary workers, 'worker-peasants', or otherwise precariously employed. Many had participated in the 1957 strikes and seen their wages and danwei benefits stagnate or fall during the 1960s. The city also had a large population of veteran workers laid off due to austerity measures. These marginalized workers responded to the Cultural Revolution in November 1966 by organizing themselves as the 'Rebel Headquarters of Red Workers'. Similar groups formed across other Chinese cities, organizing themselves nationally as the 'All-China Red Laborer Rebels’ Headquarters'. Hundreds of thousands of rural migrant workers who had been deported in the aftermath of the Great Leap Forward returned to cities in late 1966 to join the Red Laborers.
Factory managers in Shanghai and other cities quickly kowtowed to the demands of the Red Laborers, returning factories to the highly participatory management style practiced during the Great Leap Forward and granting permanent status and full danwei status to all workers. Fighting raged in the streets, however, between the roughly 400,000 members of the Shanghai Red Workers and 'Scarlet Guards', composed of skilled and privileged workers aligned with the municipal government. This conflict ended in December 1966 with the defeat of the Scarlet Guards in Shanghai and the severing of the railroad between Beijing and Shanghai. The economy collapsed amidst the urban warfare, with Shanghai experiencing looting and bank runs.
In January 1967, the government used the chaos in Shanghai as a justification to send the PLA to seize control of transportation and communication infrastructure in the city. The Communist Party announced its support for workers in Shanghai and the establishment of the 'Shanghai Commune', a new local government staffed by groups allied with the former municipal government and the Scarlet Guards. The authority of the Shanghai Commune was rejected by the vast majority of workers' groups in Shanghai, but supported by the PLA. The new Shanghai Commune almost immediately issued orders for the police and the PLA to attack rival groups in the city, as well as the deportation of over 100,000 rural migrants back to the countryside. In February 1967, the Shanghai Commune was dissolved and replaced by a 'revolutionary committee' composed of the PLA, party cadres, and selected rebel organizations. This system of 'triple alliance' government was replicated across China, with rebel groups rushing and competing to secure positions on the new revolutionary committees. Those areas without cooperative rebel organizations were placed under direct military rule, with 10 provinces under military control by March 1967.
The next spasm of violence in the Cultural Revolution occurred in July 1967, when the military division commander in Wuhan, Chen Zaidao 陈再道, intervened in the conflict consuming the city to side with conservative Red Guards factions against Red Laborer forces. He laid siege to the city, took multiple high-level cadres hostage, and killed over 1,000 people before another army was sent to stop his attack. The actions of General Chen convinced leftist factions that the army had been infiltrated by 'capitalist roaders' and Guomindang agents, leading to attacks on military depots and trains carrying war materiel in late July and early August 1967.
Only around 20% to 25% of casualties during the Cultural Revolution were the result of factional fighting in the early years, the remaining being organized campaigns of terror by revolutionary committees dominated by the PLA and conservative Red Guard factions. Most of the violence was directed by those privileged under the socialist system -- skilled workers, older workers, those with red bloodlines, party cadres -- against marginalized groups, mainly temporary workers and rural migrant workers.
Most oppositional and rebel groups operating during the Cultural Revolution had limited goals and lacked a broader vision for society; the main exception being the ultraleft 极左派 movement that formed during this period. The ultraleft movement began in Winter 1966 with newspaperist Yu Luoke 遇罗克, who inveighed against bloodline theory and the Red Guards prior to his arrest and execution. His supporters founded the 3 April Faction. The shared beliefs of the ultraleftist were that bureaucrats constituted a new exploitative class, oppressing the peasantry in particular, and that civil war was needed to overthrow this class to achieve 'real communism'. The ultraleft was the strongest in Changsha, where it had a base among PLA veterans and rural migrant workers from multiple provinces. Ultraleft groups were outlawed before they could become widespread; they were suppressed by the PLA in 1968, and again targeted by violence in 1972. Because they assumed (wrongly) that Chairman Mao was ultimately on their side, the ultraleftists always operated in the open, allowing them to be easily targeted by repression.
Ideological fervor and the cult of personality grew during the Cultural Revolution, with material rewards replaced by tokens of party support that conferred social status, like pins and books of quotes. These practices grew from indigenous Chinese religious and folklore practices. People made pilgrimages to sites of historical importance to the revolution. History was also rewritten to fit this new ideological mythology, with official accounts being rewritten to fit contemporary political positions.
The Cultural Revolution saw the limited promotion of women and peasants to positions of prominence but did not make substantive changes to the real social position of most women and peasants; exemplified by the promotion of Chen Yonggui 陈永贵 to the Politburo and Vice Premiership and the prominence of Jiang Qing 江青, Mao's wife, in the Politburo. The privileged positions of cadres were challenged during the Cultural Revolution, but in ultimately unimportant ways. Universities were effectively shut down during this period and the privileged children of elites sent to do manual labor. Cadre power was limited in factories by newly participatory factory management, although these new systems kept in place the privileging of older, male, permanent workers.
Access to education, healthcare, and party membership was greatly expanded during the Cultural Revolution, especially to rural areas. The New Leap Forward of 1970 also saw the return of some industry to the countryside. These moves secured the support of the majority of the population and prevented the outbreak of civil war.
Conclusion: Unbinding
The socialist project in China was informed by the failure of the European-inspired development projects of the Guomindang government and the vulnerability of anarchist peasant societies to European and Japanese imperialism. China instead forged its own development path independent of previously existing capitalist systems. However, this developmental project used industrialization as a market of progress and ended up prioritizing economic development over any attempt to actually build a communist society.
The socialist system in China effectively collapsed in 1969 and was only preserved by the massive expansion of the military to dominate all economic sectors. Even this was a stopgap measure, with further economic collapse prevented only by the reforms of the 1970s, spearheaded by the privileged ruling class of 'red engineers'.
The socialist period saw China retreat from global markets, first isolated from the capitalist global economy and then, following the Sino-Soviet split, cut off from all but a tiny number of Third World nations. Prior to the 1970s, there was little outside pressure for this isolation to end. This changed as falling profits across the West and diminished transportation costs made it profitable and desirable to relocate factories to South Korea, Taiwan, and potentially China, where wages and costs were lower. Even then, China only responded to this economic opportunity because of the failure of its socialist developmental regime.
— Eunice Noh, December 2019
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