With Western analysts generally predicting a hard landing for the Chinese economy after the recent stock market crisis and devaluation of the yuan, the search continues for a new impetus for Chinese growth on which much of the world now depends.

However, senior economists from the Federal Reserve Bank of Dallas, Yale and Princeton universities and Sciences Po in Paris have been number crunching on the basis of a rather unexpected scenario for China.

In a paper published in July 2015 they asked how much would China's economy have grown if Mao Zedong's economic methods had continued from 1953 right through to2012 (Mao died in 1976). And they make predictions about how a Maoist economy would develop towards 2050.

Their conclusions fly in the face of contemporary neo-liberal free-market ideology. Indeed they estimate that a return to ubiquitous planning and the abolition of the private sector would produce a rate of GDP growth of between 4-5 percent between now and 2050. This is only one percentage lower than the rate predicted on the basis of continuing with the post-1978 reform era policies.

They find that, under Mao, the rate of increase of urban productivity lay at the core of China's growth. They predict that, with current economic policies, China will grow at between 7-8 percent until 2024 and an average of 5.2 percent between 2024 and 2036 but will slow to 3.6 percent between 2036 and 2050.

However, if China operated a nearly completely State-owned planned economy, operating as it did in the 1960s and 70s, the growth rate in the period from 2035-2050 would be 3.9 percent.

The paper is a purely economic projection and it ignores the human impact of some of the most negative political policies under Mao like the “Cultural Revolution.” However, they conclude that the economic impact of the Cultural Revolution was marginal. Their analysis confounds those who argue that China is facing problems because it has not moved far enough or fast enough to embrace free-markets.

The report says that had China not adopted market reforms the economy would have been smaller today and the agricultural labour force would be 23 percent larger. They argue that State power was systematically employed from the 1960s to extract a surplus from agriculture to finance the development of manufacturing industry.

This is known as the "price-scissors," which means that the prices of manufactured goods exceeded the amount of labour incorporated in them and, by comparison, the prices of agricultural goods were lower than the amount of labour time expended on them.

They estimate the rate of growth in China's GDP and Total Factor Productivity towards 2050. And they compare China's projected per capita GDP with that of the United States. In the case of continuing with the growth dynamics and patterns since 1978, China would reach U.S. per capita GDP around 2040. And in the case of a Maoist economy, based on the growth dynamics and patterns in the 1960s and 1970s, China would still be close to U.S. per capita GDP around 2050.

The main point about all this is the contention that China reaches this level by 2050 in either scenario. This is startling confirmation of validity of the Chinese Communist Party's tenacity and determination to maintain the core foundations of public ownership and state planning that has served national economic development so well. When markets fail, state ownership must be able to decisively step-in to prevent the kind of crises we see in Europe today.

According to Deng Xiaoping's theory, the period when China's per capita GDP would reach that of the USA signals the transition from socialism, as the primary stage of communism, towards the advanced stage of communism envisaged by Karl Marx, in which "the principle of ‘from each according to his ability to each according to his needs’ will be applied."

In the past such scenarios were distant dreams or utopian adventures but now we can envisage these economic foundations developing in China within our lifetime.

Heiko Khoo is a columnist with China.org.cn. For more information please visit:

http://china.org.cn/opinion/heikokhoo.htm

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