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China anniversary: Seven decades of Communist China

With a massive military parade, China celebrated the 70th anniversary of Communist Party rule today. The parade featured more than 15,000 troops marching through part of Tiananmen Square, Beijing, as jet fighters trailing coloured smoke soared overhead. As expected, China unveiled new unmanned aerial vehicles (UAVs) and showcased its advancing intercontinental and hypersonic missiles.

Defence experts see it as a message to the world that China‘s military prowess is growing rapidly, even as it faces mounting challenges, including months of anti-government protests in Hong Kong and a slowing economy.

China has undergone a great deal of change in the last 70 years. It veered from a planned economy to today’s market-oriented economy, welcoming foreign trade and direct investment by introducing the open-door policy.

However, even if the financial market reforms are accelerating – taking for instance the recent QFII quota drop -, experts are waiting for more significant moves. The control by the government and China’s ruling party is still apparent.

China anniversary: from planned to market-oriented economy

How has China developed since 1949? Below are some important moments from an economic point of view:

1949: Mao Zedong proclaims the People’s Republic of China on Oct. 1 in Beijing.

1958-1961: The Great Leap Forward attempts to catapult China into the modern industrial age by collectivizing agriculture and creating steel in “backyard furnaces.” It led to a massive famine – an estimated 30 million people, mostly peasants, starve to death.

1966-1976: The Cultural Revolution – aimed at preserving Chinese Communism – caused widespread political chaos and severely disrupted the China economy.

1971: The People’s Republic of China joins the United Nations, displacing the Nationalist-led government in Taiwan, which had held the China seat.

1976: Mao dies. Veteran Party members defeat a power grab by his wife, paving the way for Deng Xiaoping to take charge.

Economical reforms and opening up

1978: “Reform and Opening up” policy revives agriculture as peasants regain the right to farm their own plots. Over the next decade, food shortages vanish and foreign investment begins.

1978-1979: “Democracy wall” posters support political reform.

1979: United States and China reestablish diplomatic relations.

1985: China runs a trade surplus with United States for the first time.

1989: Students and workers protest for political reform and against inflation on Tiananmen Square for weeks before the army crushes the movement on June 4, killing hundreds, if not more.

1992: Deng revives economic reform with his Southern Tour.

1997: Deng dies.

1998: The Asian financial crisis coincides with reform of state-owned firms, throwing an estimated 30 million out of work.

2001: China joins the World Trade Organization.

2012: Xi Jinping becomes head of the Communist Party, and president the next year, kicking off a massive crackdown on corruption and civil society, with dozens of senior officials jailed for graft and rights activists jailed on charges that include subversion.

2013: Xi unveils landmark initiative to re-create the old Silk Road, now called the Belt and Road Initiative.

2017: U.S. President Donald Trump visits Beijing. The next year the two countries embark on a trade war, underscoring deteriorating ties between the world’s two largest economies.

2018: China changes its constitution to lift presidential term limits, meaning Xi can remain president until he dies.

2019: Mass and at times violent protests in the Chinese territory of Hong Kong against a contested extradition bill. Protests morphed into demands for greater freedom from Beijing.

(With content by Reuters)