global. He also became more proactive in reducing the gaps in educational and financial conditions and
in protecting the environment and consolidating political control. As China’s powers grew and Xi’s
bold objectives (e.g., the Belt and Road Initiative and the Made in China 2025 plan) became more
apparent, especially after Donald Trump (a populist/nationalist who was elected largely by appealing to
those who were suffering from the loss of jobs) was elected president, US conflicts with China rose in a
way that was analogous to the rise of Japan and Germany to challenge the then-existing powers in the
1930s.
Let’s look at these a bit more closely.
Phase 1, 1949 to 1976: The Mao Phase of Building the Foundation
Mao and the communists won the civil war and started the People’s Republic of China in 1949 and quickly
consolidated power. In 1949 Mao was a philosopher-revolutionary who was leading a class war of workers
against the capitalists, had won the revolution, and was in the position of being the de facto emperor of
China (titled “president and chairman of the Central Military Commission”) and Zhou Enlai became his
prime minister (titled “premier”) in pursuit of the overarching mission of ruling the country on behalf of
the proletariat. To do that he turned to Marxism-Leninism and away from Confucianism. He also dealt with the
practical aspects of building a government to take care of basic services. The new government quickly repaired
transportation and communications and nationalized the banking system, which it put under the new central bank,
the People’s Bank of China. Needing to bring down inflation the new central bank tightened credit and stabilized
the value of the currency. The government nationalized most businesses and redistributed agricultural land from
large landowners to those who farmed the land. It also created “public institutions” for “education, science,
technology, and public hygiene.” No matter whether one worked or not, one got a basic pay. There was no merit-
based pay. The protections that these guaranteed basic incomes and benefits provided everyone were collectively
called “the iron rice bowl.” These changes created a stable economy but little motivation beyond the commitment
to the mission of motivating workers. But Mao was on his way to achieving his first goal of having China’s
mainland free of foreigners, shifting wealth and power to the proletariat led by him, and establishing basic
institutions to govern. In other words, he focused primarily on building a new internal order.
While China under Mao was isolationist, it wasn’t long before the new government found itself in a war. As
explained in the last chapter, in 1945 the new world order divided the world into two main ideological camps—the
democratic capitalists led by the United States and the autocratic communists led by the Soviet Union—with a
third group of countries not aligned to either side. Many of these nonaligned countries were still colonized, most
notably by the declining British Empire. China was clearly in the Soviet-led autocratic communist camp, following
a Marxist-Leninist approach with a bit of strict Legalism in the mix and opposing Confucianism. In 1950, soon
after Mao won the revolution and began the PRC in 1949, he and the Soviets signed the Treaty of Friendship,
Alliance, and Mutual Assistance to cooperate and come to each other’s aid militarily.
As mentioned in Chapter 4, at the end of World War II Korea was split, with the Russians having control of the
north and the Americans having control of the south, divided at the 38th parallel. In June 1950, guided by
Stalin/the Russians, the North Koreans invaded the South. Initially the Chinese weren’t involved in the fighting as
they were preoccupied by their own challenges and didn’t want to be drawn into a war. The United States, in
conjunction with the United Nations, responded to the invasion by bringing its forces into the fighting and then
taking the fighting into North Korea, which is on the Chinese border. The Chinese viewed this as a threat
especially since the American General Douglas MacArthur made clear that he would attack China. China couldn’t
have the United States on its border or in its territory, so China had to fight. China, like most countries, was very
sensitive about having enemies on its borders. Though the Soviets and the Chinese had a pact to support each
other, Stalin didn’t want to go war with the United States and so he didn’t provide China with the military support
it expected. Though the Chinese were ill-prepared for a war against the much greater American power, which had
nuclear weapons that China didn’t have, the Chinese entered the war and pushed the US and UN troops back to the
previously established border. This was the first great challenge to Mao and China and was considered a great
victory by the Chinese. Given China’s history with foreigners Mao/China understandably wanted extreme isolation
within its sovereign border and was able to achieve that.