Following the Chinese Civil War and the victory of Mao Zedong's communist forces over the Kuomintang forces of Chiang Kai-shek, who fled to Taiwan, Mao declared the founding of the People's Republic of China on October 1, 1949. Mao's first goal was a total overhaul of the land ownership system, and extensive land reforms. China's old system of serfdom (ie. landlord ownership of farmland and tenant peasants who were bound to the land) was replaced by a land-distribution system in favour of the poor masses. A fervent Marxist-Leninist, Mao laid heavy emphasis on class struggle, and in 1953 began various campaigns to persecute former landlords and merchants. This included the execution of more powerful landlords. Drug trafficking in the country as well as foreign investment were largely wiped out. Many buildings of historical and cultural significance as well as countless artifacts were destroyed by the Maoist regime, since they were considered reminders of the "feudal" past.
Mao believed that communism would eventually triumph over all other ideologies, and following the First Five-Year Plan based on a Soviet-style centrally controlled economy, Mao took on the ambitious project of the Great Leap Forward in 1958, beginning an unprecedented process of collectivization in rural areas. Mao urged the use of communally organized iron smelters to increase steel production, pulling workers off of agricultural labour to the point that large amounts of crops went unharvested. Mao decided to continue to advocate these smelters, despite a visit to a factory steel mill which proved to him that high quality steel could only be produced in a real factory. He thought that ending the program would dampen peasant enthusiasm for his political mobilization, the Great Leap Forward.
The implementation of Maoist policies in China may have been responsible for over 70 million excessive deaths during peacetime, with the Great Leap Forward, Anti-Rightist Campaign of 1957-58, and the Cultural Revolution. Because of Mao's land reform policies during the Great Leap Forward, which resulted in massive famines, some thirty million Chinese perished between 1958 and 1961. Moreover, by the end of 1961, the birth rate was nearly cut in half because of malnutrition. Active campaigns, including party purges and "re-education" resulted in the imprisonment or execution of those deemed to hold views contrary to Maoist ideals. Mao's disastrous failure with the Great Leap Forward reduced his power in government, whose administrative duties fell to Liu Shaoqi and Deng Xiaoping.
To impose communist orthodoxy and rid China of anti-socialist or feudal elements, and at the same time to serve his own political goals, Mao initiated the Cultural Revolution in May 1966. The campaign was far reaching into all aspects of Chinese life. Mao’s Red Guards terrorized the streets as many ordinary citizens were deemed counter-revolutionaries. Education and public transportation came to a nearly complete halt. Many prominent cultural works of arts were summarily destroyed. Daily life involved shouting slogans and reciting Mao quotations. Many prominent political leaders, including Mao’s main rival, Liu Shaoqi, were purged and deemed "capitalist-roaders". This destructive campaign would not come to a complete end until the death of Mao in 1976.
Supporters of the Maoist Era claim that under Mao, China's unity and sovereignty was assured for the first time in a century. Furthermore, Mao’s supporters claimed that the development of city and rural infrastructure, heavy industry, healthcare, and education, raised the standard of living for the average Chinese. They also claimed that destructive campaigns such as the Great Leap Forward and the Cultural Revolution were essential in jumpstarting China's development and "purifying" its culture. More nuanced arguments claim that though the consequences of both these campaigns were economically and humanely disastrous, they left behind a "clean slate" on which later economic progress could be built. Supporters often also doubt statistics or accounts given for death tolls or other damages incurred by Mao's campaigns, attributing the high death toll to natural disasters and famine, or other consequences of political chaos during the rule of Chiang Kai-Shek.
Critics of Mao's regime assert that Mao's administration imposed strict controls over everyday life, and believe that political campaigns such as the Great Leap Forward and Cultural Revolution and many others during Mao's era (1949–1976) contributed to or caused millions of deaths, incurred severe economic costs, and permanently damaged China's cultural heritage.
1976-1979: DENG XIAOPING AND ECONOMIC REFORM
Mao Zedong's death was followed by a power struggle between the so-called Gang of Four, Hua Guofeng, and eventually Deng Xiaoping. Deng would manoeuvre himself to the top of China's leadership by 1980. At the Third Plenum of the Eleventh National Party Congress, Deng initiated a program of “Economic Reforms and Openness” (改革开放 Gaige Kaifang). This began with the de-collectivization of the countryside, followed with industrial reforms aimed at decentralizing government controls in the industrial sector. A major document presented in September 1979 had given a “preliminary assessment” of the entire 30-year period of Maoist Communist rule. At the plenum, party Vice Chairman Ye Jianying declared the Cultural Revolution “an appalling catastrophe” and “the most severe setback to the socialist cause since 1949.”
The Chinese government's condemnation of the Cultural Revolution culminated in the Resolution on Certain Questions in the History of Our Party Since the Founding of the People's Republic of China, adopted by the Sixth Plenary Session of the Eleventh Central Committee meeting of the Communist Party of China. This article outright stated that “Comrade Mao Zedong was a great Marxist and a great proletarian revolutionary, strategist and theorist. It is true that he made gross mistakes during the "cultural revolution", but, if we judge his activities as a whole, his contributions to the Chinese revolution far outweigh his mistakes. His merits are primary and his errors secondary.”
On the subject of Mao's legacy Deng coined the famous phrase “7 parts good, 3 parts bad”, and avoided denouncing Mao altogether. Deng championed the idea of Special Economic Zones, areas where foreign investment would be allowed to pour in without strict government restraint and regulations. Such Special Economic Zones functioned on a basically capitalist system. Deng laid emphasis on light industry as a stepping stone to the development of heavy industries.
Supporters of the economic reforms point to the rapid development of the export sectors of the economy, the creation of an urban middle class that now constitutes 15% of the population, higher living standards, which is shown via a dramatic increases in GDP per capita, consumer spending and life expectancy.