China Swot Analysis

After the civil war and the establishment of People’s Republic of China and Mao Zedong assuming power in 1949, poor China’s new government planners realized the need of socioeconomic development. As socialists, they decided to copy the successful socialist economic model of the Soviet Union which is their communist political resort. This socioeconomic development relied on: the “command economy” that mainly depended on the state’s governance and control over the resources allocation, the ownership of all important large factories and enterprises “cash caws”, dominant of the raw materials, nomenklatura system and agriculture with cheapest prices, price system control. All of that were resources to finance the prioritized “Big push industrialization”

There were five main leaps (in which investments surpassed 20%) and four retrenchments. During the so called the First Five-Year Plan 1953-1956, China could achieve rapid transformation and economic growth thanks to the Soviet developmental assistance and Big Push strategy. The capital was Soviet while the revenues were in favor of non-experienced Chinese. Two economic peaks were there, the first was due to the application of the mixed economy. The state granted space to the business and household agriculture sectors while keeping them under its fist through agricultural cooperatives and governmental contracts. This intertwined private-public relationship continued in favor of public sector. Mao’s interventionist campaigns had a role in accelerating and increasing the entry into the agricultural cooperatives from 2% in 1954 to 98% in

The socialist China based its sustainability throughout Chinese history on three main features. The Public Ownership, that’s the Chinese government owned all sectors, large factories, communication and transportation enterprises to be state-owned. Full stabilization for the price system by the state and assigning low prices to agricultural products while high prices for the industrial outputs were there with autonomous investment decision making in order to secure surpluses to enhance its Big Push industrialization strategy. There wasn’t a parallel path between market and state, it was diffused. The Political Patronage, under Mao’s rule, represented in the monopoly of power by the communist party. It monopolized any managerial career paths appointments only for people guaranteeing their loyalty to the communist party and to silence any opposition voices to its strategy. This was materialized intensively in the period of 1972-1976. And after Mao’s death, all of the elites managed to eliminate one another and construct their own patronage networks ended by the victory of Deng’s patronage network (Bruno Marshall Shirley, 2014). The Crony Communism, was represented in the intertwined relationship among the State, the Communist Party- dominated the formal political sector- and the private sector stakeholders. It’s sort of collusion of wealth and power