An Interactive Analysis of Development: The Case of Socialist China's "Self-Reliant" Trade, 1949-1976

Sandy Xu, UCLA

What enabled Maoist China (1949–1976) to successfully implement import substitution, or “self-reliant” (zili gengsheng) trade, despite many internal and external barriers: a weak economic bureaucracy, geopolitical isolation, a US-led trade embargo, and a dearth of foreign exchange? In the postwar period, virtually all developing countries pursued some form of import substitution. By the 1980s, however, most became mired in foreign debt and were subjected to reforms that diminished their economic sovereignty and reversed decades of development. By contrast, Mao-era Chinese leaders somehow imported an industrial base while avoiding foreign loans, enabling an autonomous policy environment for reform-era leaders to implement the now much-lauded “reform and opening up” policies that facilitated the “Chinese miracle.” Explaining Maoist China’s “self-reliant” trade is not only important for empirically understanding the “Chinese miracle,” but it also contributes to development theory and policy. I contribute theoretically by identifying the internal and external conditions under which a geopolitically marginalized and economically underdeveloped state may exercise market power in the global economy. While these historical conditions likely cannot be repeated in toto, my research speaks to policy. My findings thus far suggest that low- and middle-income countries may can gain market power by centralizing purchasing power into a monopsonic trade organization. Furthermore, as China becomes a leading exporter of technology, developing countries will have more suppliers from which to choose. They may be able leverage the new international balance of power for their own development, pitting competitors against each other.

No extended abstract or paper available

 Presented in Session 3. Crises, Transformations, and Resilience in Historical Perspective: Insights from Global Comparative Research