China's economic revolution during 100 years of the CCP

Since its founding in Shanghai in 1921, the Communist Party of China (CPC) has lead China through every crucial historical event over the past 100 years, becoming the protagonist of the cultural, social, economic and political changes of today's China, bringing the nation from a frontier economy to a global powerhouse.

On October 1st, 1949, almost thirty years after the founding of the CPC, the People's Republic of China was born under the leadership of Mao Zedong, leader of the party and of the nation. After a series of economic reforms that mainly targeted at the industrial sector and agricultural cooperatives, China introduced the first five-year plan in 1953, with the aim of expanding and strengthening industrial infrastructure and increasing production capacity in certain areas that were considered to be of strategic interest.

The Statistical Office in Beijing first commenced collecting data in 1953, and reported a first-year growth in GDP of 15.6%, which has been followed by more moderate growth in the following years.

By the end of the first five-year plan, China’s GDP had grown by more than 55% over the period of the plan. The Soviet-style development strategies provided for a strong involvement of the central government into economic matters, which was characterized by a decisive closure of the nation towards foreign countries, with the exception of those belonging to the Communist bloc.

Beginning in the 1970s, Beijing has begun a slow but gradual process of opening up to the outside world; In 1971 the People's Republic of China became a member of the United Nations, and in 1972 it received its first state visit by a President of the United States, Richard Nixon.

In 1978, following the third plenary session of the CPC, Deng Xiaoping ascended to the forefront of party ranks. The new leader, extolled as the "father of Chinese reform" and a supporter of economic openness through the Open-Door policy, is known for starting the Four Modernizations program, a plan to transform China into a modern economy through reforms in the industrial, agricultural, technological and defence fields.

In 1979, the first special economic zones (SEZ) were established in the southern provinces of Guangdong and Fujian: the cities of Shenzhen, Zhuhai, Shantou and Xiamen became the pilot areas in which the country could experiment with economic reforms, attract new capital from abroad, encourage international cooperation, promote technological innovation to compete with other world economies and increase the productivity of companies.

These first special economic zones, strategically located near Macao, Hong Kong and Taiwan and followed by the establishment of hundreds of other economic areas, took on a dual function of a door to the outside world and a driving force for internal economic development. Special economic zones have proven to be an effective tool to stimulate progressive liberalisation and openness towards foreign countries, attract talent, technologies, and launch economic development.

The policy of openness accelerated in the early 2000s, with the decisive moment being when Beijing joining the World Trade Organization (WTO), and in 2013, with the presentation of the Belt and Road project.

In December 2001, following fifteen years of negotiations, Beijing became a member of the WTO and, by accepting commitments to open up and liberalise the internal market and international trade rules, obtained access to a number of economic benefits, such as the non-discriminatory treatment of its goods as a WTO member and the benefit of lower duties with the other signatories.

Following the ascension to the WTO, China has negotiated and signed numerous free trade agreements, culminating in 2020 with the signing of the RCEP, the largest trade agreement involving 15 countries, 30% of global GDP and a third of the world's population.

Entry into the WTO and subsequent trade agreements have given a decisive boost to Chinese trade, in particular to exports: from 2001 to 2020, Beijing's total trade with international partners rose from $510 billion to $4,646 billion, an average annual growth of more than 12%, making China the main player in international trade.

The presentation of the New Silk Road project, or Belt and Road, promoted by Xi Jinping, the current leader of the party, highlights China's strategy to increase its influence globally through the creation and expansion of its network of partner countries. The objective of the project can be seen as promoting trade, investment flows, and the construction of infrastructure in the Southern Hemisphere and the Far East.

The first century of the CPC speaks for itself: from an economic point of view, Beijing has become a global player, the second largest economy by GDP at nominal values, first by GDP at purchasing power parities, global leader in trade, exports and FDI volume, with the largest network of bilateral and multilateral treaties for trade, investment, taxation and technology.

The economic effects have also had a significant impact on the social level, with more than 800 million people having emerged from the threshold of absolute poverty over the last 40 years. There has been a substantial increase in GDP per head from USD 300 in 1980, USD 950 in 2000 and over USD 10,400 in 2020, and the creation of millions of new jobs, keeping the unemployment rate below 6%. The transition to an urban population has progressed with the balance tipping in favour of the urbanites in 2010 and now exceeding 64% according to the 2020 census. Sector output to national GDP has followed similar trends with the tertiary sector outpacing the secondary sector in 2012 (45.5% services and 45.4% industry).

In March 2021, Beijing outlined the next medium and long-term targets, and approved the fourteenth five-year plan for the period 2021-2025 and issued the Vision 2035 objectives. At the heart of these plans are sustainable economic development, reduction of social inequalities, and improvement of living standards are the goals to be achieved through technological innovation, digital economy, dual circulation, urbanization, job creation, trade and the Belt Road investments. Development strategies include a greater focus on environmental sustainability and achieving zero emissions and carbon neutrality in 2060.

Recent estimates predict that China's GDP will exceed that of the United States as early as the end of this decade, while the level of wealth per capita will reach that of European countries by 2035, about $30,000 compared to $10,400 in 2020.

In addition to becoming the leading economy, there are many challenges that China will aim to overcome by 2049, to mark on the centenary of the constitution of the People's Republic, China’s place as the model for the Northern and Southern Hemisphere as a strong, socially advanced socialist country.