The world's most populous country has undergone dramatic transformation from one of the world's poorest countries in the 1950s to one of the most powerful states in the early years of the twenty-first century.

The Maoist period (1949–1970s)

The People's Republic was established on mainland China on 1 October 1949 by Mao Zedong. In the first decade of its existence, together with his loyal deputy, Zhou Enlai, Mao sought to establish the control of the Chinese Communist Party over the entire country, as well as over Tibet, which was occupied in 1950. This involved not just political control, but also the realization of a Communist economy, society, and culture. The power of the gentry was broken through expropriation and the redistribution of the majority of the farmland to around 75 per cent of peasant households. Given the mass of peasants, this meant the creation of extremely small and inefficiently sized properties. Collectivization was encouraged, and encompassed almost 60 per cent of peasant households by 1954. In 1955 an impatient Mao quickened the pace of communist reform, so that by 1957 all farms were collectivized, while in the cities all commercial and industrial enterprises had been nationalized. Apart from the destruction of traditional social relationships, perhaps the most significant innovation of those years was the creation of legal sexual equality. While traditional codes between men and women were not eradicated overnight, the 1950 marriage laws, for example, gave women equal status.

By 1957 Mao was satisfied that a proletarian society had been created. He chose to show this in the Hundred Flowers campaign, which created a brief atmosphere of intellectual liberalization. Ultimately, however, the campaign confirmed the regime's hostility to intellectuals in general, and its critics in particular. In the first decade of its existence, China relied heavily on the economic and diplomatic support of the USSR, particularly after its confrontation with the USA in the Korean War. This influence led to an economic development modelled on the Soviet Union, so that resources were put almost exclusively into industrial growth, at the expense of agriculture. The severe consequences of this policy had become evident by 1958. Economic growth had averaged 7 per cent per annum, mainly as a result of economic reorganization, and was now reaching a natural limit. Moreover, investment was focused on the cities, resulting in discontent among peasants, who were, after all, the social and ideological backbone of the Communist Party.

Under increasing criticism from followers of Liu Shaoqi, Mao launched the Great Leap Forward. In attempting to create self‐sufficient communities, he sought to mobilize new labour resources (e.g. women) in the countryside, while employing the newly created labour surplus in the building and running of communal industries. Industrial output increased dramatically, and China was flooded with industrial goods of shoddy quality for which there was no demand. By contrast, there was a dramatic decline in agricultural production, which decreased by a staggering 26.3 per cent (1958–60), causing the starvation of millions of Chinese.

The early 1960s were devoted to a period of normalization organized by Liu's supporters, with Mao taking a back seat. Mao reasserted his total control, however, in the ‘Great Proletarian Cultural Revolution’, which resulted in a dramatic purge of the CCP, as well as economic and cultural elites. The reassertion of Mao's authority was further facilitated by the fall of Lin Biao.

Economic liberalization, 1976–

The death of Mao in 1976 formed a watershed in the history of the People's Republic. The Cultural Revolution was brought to an end, and the Gang of Four was arrested by Hua Guofeng. Most important was the rapid re‐emergence of the pragmatic Deng Xiaoping, whose leadership was established by late 1978. He liberalized academic debate, and introduced unprecedented economic reforms. Industrial enterprises received a stimulus through being allowed to keep some of their profits, while certain private industries and foreign investment were encouraged. In the countryside, too, individual responsibility and accountability were reintroduced in a fundamental shift away from the collective ideal. Under Deng, the Chinese economy began an uninterrupted period of growth over three decades. Economic liberalization, however, did not mean that the Communist Party was willing to contemplate political plurality, with the government brutally suppressing demonstrations in the Tiananmen Square Massacre of 1989.

Deng was succeeded by Jiang Zemin, who continued to suppress any political opposition. Impressive annual growth rates of around 10 per cent led to increasing social stratification, rather than a general increase in the standard of living, which was eroded by rising inflation (22 per cent in 1994). Domestically, the prestige of the CCP (and of Jiang) was bolstered by the incorporation of Hong Kong and Macao into mainland China. International recognition was manifested by China's entry into the WTO in 2001, and its commission to host the 2008 Olympic Summer Games.

Contemporary politics (since 2002)

In 2002, Hu Jintao succeeded Jiang Zemin as Chairman of the CCP. At home, Hu was concerned to address the negative side-effects of China's growth. The government channelled much greater investment into infrastructure and education in the countryside, as rural areas had largely been left behind by the dynamism of the urban economy. This was only partially successful: it did increase income in the countryside, but income in the cities increased even further. Perhaps of even greater import were the environmental consequences of China's development. China is predicted to overtake the USA as the world's largest emitter of greenhouse gases, with hundreds of thousands already dying from the effects of environmental pollution. China also faced a critical shortage of clean water, while pollution increased the discrepancy between the arid north and the south affected by frequent flooding. In 2006, the government embarked on a large-scale initiative to invest $160 billion in environmental protection, including the development of renewable energy sources.

By 2006, China had overtaken the USA as the world's second largest exporter of industrial goods. As the world's fourth largest economy with the largest reserves of foreign currency, it also required rapidly expanding fuel resources. For these reasons, China became a major actor on the world stage. It exerted growing influence in Africa, providing loans with none of the strings attached by bodies such as the IMF. Deriving much of its oil from Angola, Sudan and Iran, China also prevented effective UN resolutions against these countries. China also exerted its influence more aggressively within Asia, underlining its position not least by stark increases in military expenditure—over 10 per cent in 2004 and 2005, according to official figures.