Economic Policies
China in 1949 was in a bad economic position. The economy had been disrupted by eight years of bloody fighting with the Japanese and then four years of civil war. Inflation made the currency useless and industrial output reduced by 75% since 1937. In order to stabilize the economy, the People's Republic introduced a new currency, controlled it strictly, and set all wages by the price of five staple products: rice, coal, flour, oil, and cotton. As the prices of these commodities changed, wages would correspondingly increase and decrease. So while wages constantly changed from week to week, the power to get those wages remained constant.
In 1950, the government passed the Agrarian Reform Law, which officially ended land ownership in China. The enforcement of the law led to bitter trials in local rural communities. Poor peasants accused the greedy actions of landlords and rich peasants – most lost everything and many were executed.
The Great Leap Forward
In February, 1958, the "Great Leap Forward" was announced. This said that massive increases in steel production and electrical and coal output was required. The goal was to beat British industrial output by 1972. In order to do this, the government ordered everyone in the country, no matter who they were, to participate in industrial production. Backyard steel furnaces popped up in everybody's backyard. The Great Leap Forward produced spectacular results in output; the quality, however, was extremely low. Most of the steel produced was simply useless, for backyard furnaces could not produce quality steel the way giant steel mills could.
The Sino-Soviet Split
Mao's Great Leap Forward proved to be a disaster for the Chinese. It crippled the economy so badly, that the people of China avoided famine only because of the government's strict and efficient rationing system. This also resulted in criticisms from the Russian leader, and Mao, in turn called him a coward, and a capitalist. Krushcheve ( the Russian leader) then cut off all economic and military aid to China. China and Russia had for almost three hundred years been deadly and suspicious enemies; the communist bond could not undo centuries of Russian expansion and imperialism and Chinese suspicion. As a result, however, China was internationally cut off, for it now had no friends in the world.
The Cultural Revolution
Cultural Revolution was a tragic period for the Chinese people and their civilization. The Cultural Revolution was designed to destroy the culture of pre-Communist China, to shake up the ranks of the party cadre from their positions of rank and privilege, to punish the cadre for the criticisms that were lodged against Mao's failed Great Leap Forward experiment, and to continue attacks against the intelligentia.
- http://www.culturalbridge.com/cnadd.htm
Mao probably thought he had little time left to set China back on the course he really wanted, as at the age of 71, he had Parkinson’s disease, and had suffered from a stroke (so Western historians believe). This, probably more than anything else, lent to his new programs a sense of urgency and radicality. In 1965, in order to combat the counterrevolutionary slide into bureaucracy and capitalism, Mao launched the "Great Proletarian Cultural Revolution."
However, the Cultural Revolution devastated the Chinese Communist Party as well as the economy of China. So much energy was put in the purges that agricultural and industrial production fell off sharply.
China and the International Community
China was thoroughly isolated after the Sino-Soviet split in 1960 and it rejoined the international community when Richard Nixon (President of United States) visited the People's Republic in 1972.
In 1972, Japan accepted China as rightful government and had trade agreements with China. This began a series of diplomatic missions to China; by Mao's death in 1976, China had fully re-entered the international community.
China today
The Communist Party - China has the largest Communist Party in the world. About 40 million Chinese people belong to the party. But they make up only about 4 per cent of the total Chinese population. China also has a number of minor political parties, but such parties have little or no power. The Communist Party has four main decision-making bodies. These are the National Party Congress, the Central Committee, the Politburo (Political Bureau), and the Secretariat. The National Party Congress has more than 1,900 representatives who are selected by party members throughout the nation. The Central Committee consists of about 300 leading party members. The members are elected by the National Party Congress. The Politburo has about 20 members, who are top party leaders elected by the Central Committee. The Politburo includes a standing committee of 5 or 6 of the most important Communist Party leaders. The Secretariat has about 5 members who are elected by the Politburo's standing committee.