Communism Economic System In China

Communism is an economic system that promotes a classless society where the public or community controls and owns the primary means of production. Globally, only a few countries, including China, Laos, Cuba, and North Korea, adopt this economic ideology. China is the most famous country due to its economic and political reliance on communist principles. According to Li (2021), communists in China adopted the Soviet model to strengthen their Chinese Communist Party (CCP). During the first few decades of the reign of the CCP, China faced various challenges as the leadership sought to transform economic and social institutions. In the 1960s, the country witnessed a political upheaval and financial crisis, which disrupted its economic performance (Li, 2021). Afterward, communist leaders led by Mao Zedong formulated measures that focused on transforming agricultural sectors while embracing new technologies in pursuit of industrialization and eradicating poverty. Currently, China is the second superpower worldwide after the United States. Despite this economic prosperity, the communist system has led to mixed reactions among Chinese and diverse views on its impact on China’s relationship with other countries.

The communist economic system has inspired Chinese happiness in different ways. Firstly, they attribute the economic prosperity evident in China today to communism. The CCP has invested substantially in technology, urbanization, agriculture, and industrialization. Proper planning and economic stimulation through the communist approach have helped end internal conflicts that often hurt development and growth. As a result, China has enjoyed progressive growth in the last 6 or 7 decades and is currently competing economically with the United States (Li, 2021). The ability to outshine many Western economies demonstrates the effectiveness of communism in facilitating equal distribution of resources and investments in infrastructure, industries, finance, and commerce, among other sectors. Chinese are happy with their nation’s leadership in ensuring its progress towards becoming a superpower and inspiring its expansion in the global market, especially in Africa.

Secondly, the Chinese are also delighted with communism due to its contribution to poverty reduction. By the time CCP came to power, millions of Chinese were impoverished, mainly arising from constant civil wars and administrative bureaucracies (Li, 2021). However, adherence to communist principles by various leaders led to an agrarian revolution and citizen empowerment. Opponents of the CCP also agree that communism has played an indispensable role in eliminating poverty among hundreds of millions of China’s residents. Recently, President Xi Jinping proclaimed a victory in achieving one of the CCP’s goals of eradicating rural poverty (Li, 2021). Therefore, the Chinese are glad about their improved living standards, although some still live below the poverty line.

The communist economic system has also enhanced the Chinese culture and universal social welfare. According to Li (2021), communist philosophy supports the extensive improvement of education, healthcare, childcare provision, labor productivity, and state-directed social services. For example, the treatment of people equally under communism has led to the incorporation of all Chinese, irrespective of their gender, age, and other classifications, in nation-building. Significantly, the Chinese are happy because the government, as the custodian of the means of production, offers most citizens jobs. Communism’s economic system has also enhanced the Chinese culture by strengthening traditional values such as benevolence, honesty, courtesy, harmony, and loyalty. Family emphasis has led to economic empowerment of the basic unit of society. Consequently, the Chinese appreciate government efforts to provide essential social services and unify China as a communist society.

Nevertheless, the Chinese are also unhappy with the communist economic system, mainly due to the lack of democracy. While the communist leaders emphasize establishing people’s democracy, they seem to implement contradicting principles. In reality, communist leaders, from Mao Zedong to President Xi Jinping, have interrupted China’s progress to constitutional democracy by establishing a totalitarian state. Under President Xi, the Chinese government maintains its grasp on authority by fighting all efforts toward achieving universal values, thus eliminating any chance of a peaceful transformation to a constitutional democracy (Li, 2021). Indeed, the recent suppression of democratic institutions in Hong Kong demonstrates the violation of people’s democratic rights, including their freedom of association and free press. Therefore, the Chinese also feel that the government uses communism to disguise its dictatorial leadership, which infringes on human rights relating to their social lives and participation in economic activities.

Additionally, communism has resulted in positive and negative relationships between China and the rest of the world. Economists claim that China’s exposure to other nations globally has decreased while that of the rest of the world to China has increased (Li, 2021). The exposure index means China is still a closed economy compared to other developed countries. However, many states are relying on Chinese products and services. China increased its trading activities with other nations after joining the World Trade Organization (WTO) in 2000 (Li, 2021). China decreased its tariffs to facilitate trade with regional partners in Asia and other parts of the world, thus becoming the leading exporter globally. The Chinese government also imports a substantial proportion of goods from its partners. In the recent past, China has been targeting developing nations in expanding its trading activities, which has led to an influx of Chinese products in many countries worldwide. The ability of the Chinese government to control factors of products has been significant in facilitating trade relations because it can limit demand and supply.

Notwithstanding, a negative relationship between China and most Western countries exists. The developed nations believe China is using communism to control globalization and extend neocolonialism among developing countries. For instance, they accuse China of granting unregulated and high-interest loans to developing nations in exchange for trade favors or using valuable resources as collateral. According to Western countries such as the United States and Germany, China is overburdening underdeveloped states with loans to compel them into trade agreements (Li, 2021). Further, the Chinese government has conflicts with capitalistic countries in the West due to the pursuit of different economic and social ideologies that do not align with free market economics. Subsequently, China accuses capitalist nations of empowering the rich at the expense of the less privileged, while the latter also condemns the former for expanding totalitarianism disguised as communism to undermine constitutional democracy.

The CCP under communism has transformed China since the mid-20th century. Despite challenges in the initial stages of the CCP administration, communist leaders have invested in establishing a classless society in China. The government’s ability to control production factors has been vital in the distribution of resources and citizen empowerment. Chinese are happy that communism has led to economic prosperity over the years that have helped eradicate poverty significantly and positioned China as the second superpower nation. Nevertheless, the people of China also criticize CCP for undermining constitutional democracy despite emphasizing the dire need to fight for people’s democracy. Many Chinese believe that leaders have used communism to transform China into a totalitarian state. China has also used communism to create excellent trade relations with the rest of the world. However, the country has problems with developed nations, especially the United States and Germany that accuse the Chinese government of overburdening developing countries with unregulated and high-interest loans and undermining constitutional democracy. These conflicts with the capitalistic countries are due to China’s pursuance of a communist economic system that does not align with their ideologies.


Li, C. M. (2021). The statistical system of communist China. University of California Press.