Little known information on People’s Republic Of China

With more than 1.3 billion people, the People’s Republic of China (PRC) or Zhonghua Renmin Gdnghegud, commonly known as China, is the most populous state in the world. Governed by the Communist Party of China (CPC) under a single-party system, the PRC exercises jurisdiction over 22 provinces, five autonomous regions, four directly administered municipalities Beijing, Tianjin, Shanghai, and Chongqing and two highly autonomous special administrative regions (SARs)— Hong Kong and Macau. Its capital city is Beijing.

The ancient Chinese civilization, one of the world’s earliest, flourished in the fertile basin of the Yellow River which flows through the North China Plain. Ancient China’s political system was based on hereditary monarchies from the Xia (approx 2000 BC) to the later Qin Dynasty that first unified China in 221 BC. The last dynasty, the Qing, ended in 1911 with the founding of the Republic of China (ROC) by the Kuomintang (KMT), the Chinese Nationalist Party. After continued hostilities, the communists won the civil war and established the People’s Republic of China in mainland China in 1949.

The KMT-led Republic of China relocated their capital to Taipei on Taiwan and its jurisdiction is now limited to Taiwan, Kinmen, Matsu and several outlying islands. Since then, the PRC has been involved in political disputes with the Republic of China over issues of sovereignty and the political status of Taiwan.

On 1 October 1949, Mao Zedong proclaimed the People’s Republic of China with two other names Communist China and Red China. The economic and social plan known as the Great Leap Forward resulted in an estimated 30 million deaths. Subsequently in 1966, Mao and his allies launched the Cultural Revolution, which led to a major upheaval in Chinese society. In 1972, at the peak of the Sino-Soviet split, Mao and Zhou Enlai met Richard Nixon in Beijing to establish relations with the United States. In the same year, the PRC was admitted to the United Nations in place of the Republic of China for China’s membership of the United Nations, and permanent membership of the Security Council.

In 1976, Deng Xiaoping quickly wrested power from Mao’s anointed successor Hua Guofeng. Deng’s influence within the Party led the country to economic reforms of significant magnitude. The Communist Party loosened governmental control over citizens’ personal lives and the communes were disbanded with many peasants receiving multiple land leases, which greatly increased incentives and agricultural production. This turn of events marked China’s transition from a planned economy to a mixed economy with an increasingly open market environment, a system termed by the Communist Party of China as Socialism with Chinese characteristics. The PRC adopted its current constitution on 4 December 1982.

In the 1990s, under President Jiang Zemin and Premier Zhu Rongji, the PRC’s economic performance pulled an estimated 150 million peasants out of poverty and sustained an average annual GDP growth rate of more than eleven per cent. PRC formally joined the World Trade Organization in 2001. The PRC has been playing an increasing role in calling for free trade areas and security pacts amongst its Asia-Pacific neighbours. In 2004, the PRC proposed an entirely new East Asia Summit (EAS) involving ASEAN Plus Three, i.e. India, Australia and New Zealand.

The EAS held its inaugural summit in 2005. The PRC is also a founding member of the Shanghai Cooperation Organisation (SCO), with Russia and the Central Asian republics.

China maintains diplomatic relations with most major countries in the world. Under its interpretation of the One-China policy, the PRC has made it a precondition to establishing diplomatic relations that the other country acknowledges its claim to Taiwan and severs official ties with the Republic of China government.

China’s foreign policy concept of ‘harmony without uniformity’ encourages diplomatic relations between states despite ideological differences. This has led China to support states such as North Korea and Iran that are regarded as dangerous by Western nations. Though relations with the US and Japan have been strained for a considerable period, they seem to have improved in recent times. Lately, the PRC has started a policy of wooing African nations for trade and bilateral cooperation.

With 2.3 million active troops, the People’s Liberation Army (PLA) consisting of army, navy, air force, and strategic nuclear force is the largest military in the world. Due to its possession of nuclear weapons and delivery systems, China is considered a major military regional power and an emerging military superpower. As the only member of the UN Security Council to have limited power projection capabilities, China has adopted a policy of establishing foreign military relationships that have been compared to a String of Pearls. In recent years, much attention has been focused on building a navy with blue-water capability.

China followed a Soviet-style centrally planned economy from its founding in 1949 to late 1978 with non-existent private businesses and capitalism. Following Mao’s death and the end of the Cultural Revolution, Deng Xiaoping and the new Chinese leadership began to reform the economy and move to a market-oriented mixed economy under one-party rule. Collectivization of the agriculture was dismantled and farmlands were privatized to increase productivity. A wide variety of small-scale enterprises were encouraged while the government relaxed price controls and promoted foreign investment.

Foreign trade was focused upon as a major vehicle of growth, which led to the creation of Special Economic Zones (SEZs). Inefficient state-owned enterprises (SOEs) were restructured by introducing western-style management system and the unprofitable ones were closed, resulting in massive job losses.

The introduction of market-based economic reforms in 1978 has made China become the world’s fastest growing major economy, the world’s largest exporter and second largest importer of goods. Since 1978, the PRC’s investment- and export-led economy has grown 70 times bigger making it the world’s second largest economy. The PRC’s success has been primarily due to manufacturing as a low-cost producer.

This is attributed to a combination of cheap labour, good infrastructure, medium level of technology and skill, relatively high productivity, and favourable government policy. China’s undervalued exchange rate has been sometimes blamed for its bulging trade surplus and has become a major source of dispute between the PRC and its major trading partners—the US, EU, and Japan.

Rapid industrialization has resulted in reduction of China’s poverty rate from more than 50 per cent in 1981 to less than 10 per cent today. However, the PRC is now faced with a number of other problems including a rapidly aging population due to the one-child policy, a widening rural-urban income gap, and environmental degradation. For much of the PRC’s population in major urban centers, living standards have seen extremely large improvements, and freedom continues to expand, but political controls remain tight and rural areas poor. While China is being seen as a new superpower in the 21st century owing to its economic progress, military might, very large population, and increasing international influence, few economists claim that the country is headed for economic collapse.