1

Cameron Noyd-Nidros
POLS 2200
06 Nov 2016
Perparim Gutaj
Comparative Paper #2
North Korea and China are both socialist states in a post-communism era, both nations
had a severe personality cult, mao zedong for China and Kim Il-sung for North Korea. Both
share culture and racial background and both share a religious background. However, the
economic path that each state took produced very different results. Even though North Korea
have always been a socialist nation ran by socialist state (by way of Juche), the policies of China
and North Korea have a very strong foundation in Marxist-Leninism.
In the early part of the 20th century the Korean peninsula was a colony of Japan. As
WWII ended, Japan pulled their forces out of Korea Russia took charge of the northern region
and America the south. In time when everyone healed a reunification election was supposed to
take place however, in 1950 a Soviet backed Kim Il-sung invaded the American controlled south.
The result was the Korean war 1950-1953. Kim Il-sung failed and retreated back to its borders
establishing itself as an centrally planned economy by way of Juche.
Juche (self reliance) is a modified form of Marxist-Leninism designed to give the Kim
family power through succession and to prevent a shift in power. The DPRK adopted three
guiding policies: a self-sufficient national economy, heavy-industry-first development and
military-economy parallel development. These policies are believed to have only hindered the
DPRKs advancement. Eventually these policies were side lined by the states songun

(military-first politics) that has only left North Korea in a state of chronic economic
turmoil.
North Korea had a strong industrial phase following the Korean war as they made a shift
to Soviet thinking. a push in machinery and building supplies was seen and through the 1960s it
was getting better rather than worse however, by the 70s North Korea started large amounts of
debt and took loans from rich capitalist nation where as before they would only borrow from
other socialist nations. When the oil shock hit North Korea's export prices dropped while export
prices rose, this only perpetuated their debt. With the trade deficit they incurred their ability to
repay their debts dramatically declined and thus by the 1980s North Koreas economy started to
decline. The economic decline exposed the flaws of the centralized planned system in the form
of supply shortages, systemic inefficiency, mechanical obsolescence and infrastructural decay.
The DPRK dealt with this by doing what they have been doing but more of it hoping it will fix
the problem. Then the state nearly collapsed in 1990 with the fall of the Soviet Union, This along
with a number of natural disasters in the following years left the North relying on foreign aid just
to keep afloat.
According to the CIAs World Factbook, The North Korean government often highlights
its goal of becoming a "strong and prosperous" nation and attracting foreign investment, a key
factor for improving the overall standard of living. In this regard, in 2013 the regime rolled out
14 new Special Economic Zone setup for foreign investors, though the initiative remains in its
infancy. Unfortunately The military ambition of the nation takes priority over economic
development . According to a report by the Ministry of Unification, military spending is
somewhere between 14 to 17 percent over it is believed that the real number is 30 to 50 percent
of national GDP. There is no reliable sources of information on North Korea they are well

known to be secretive and give misleading economic information. Nothing official has come out
of the country since 1965.
In the past several decades China achieved a remarkable feat by becoming the second
largest economy in the world. With the fall of the Qing dynasty in 1911, China fell into a period
of constant instability. In an effort to catch up with the world China started various industries that
all failed. Then around the start of WWII Japan invaded China starting the Sino-Japanese war
(1937-1945) this was followed by a civil war that led to the collapse of the current Chinese
republic. In 1949 the Soviet Union offered its help to a broken China establishing the communist
party of China and like North Korea a centrally planned system was implemented. This strategy
focused on the reduction of consumption and a heavy focus on industrialization. The
government too control of most of the economy and redirected most of its resources into building
new factories, again just like North Korea. This created entire new industries but as a result small
to large private businesses were snuffed out and all capitalist activities were fined or punished.
Agriculture though had to depend on minimal resources and whatever capital gains it could
acquire to remain intact. The Soviet model they followed was aimed at setting up technologically
sophisticated, large-scale, capital-intensive plants that made other areas of industry suffer. With
the Great Leap forward (1957-1961) private plots were replaced with people's communes, large
scale factories continued to expand and networks of axillary industries were established.
However, the Sino-Soviet split (1960-1989) resulted in the reduction of assistance from the
Soviet Union which provided the ideas and technical knowledge of the system. China, left on its
on with a system whose idea was not of their own was thrown disarray and at the edge of global
humiliation. New policies created by Liu Shaoqi restored private, reduced commune sizes and
greater power to individual produces immediately saw a boost in agriculture. This boost led to a

drop in the high unemployment seen in the industrial sector both raising the economy and
improving the industrial sector. Liu Shaoqi unfortunately aggravated Mao ZeDong and died
under harsh treatment to have his honor reinstated Deng Xiaoping ( Maos successor)
posthumously.
From 1966-1976 Mao ZeDong initiated the cultural revolution in attempted to gain
political power. As a result hundreds of millions stopped working due to the confusion and strife
along with the death of about thirty million people. While output continued to capital output
ratios dramatically declined, agriculture reduced itself to what it was in 1957. With the death of
Mao ZeDong in 1976, Deng Xiaoping became the new communist party leader and leader of
China in 1978. The first thing Deng Xiaoping did when he entered office was adopt many
reforms as well as the open door policy which ended Chinas era of seclusion. This is about the
time where two nations China and North Korea split from their shared economic views. Current
Chinese policies were not put into effect until about 1992 when Deng Xiaoping called for called
for bold, across-the-board economic reform in order to let market forces play a greater role in a
socialist economy with Chinese characteristics with his After Southern Tour Speech. China
at this time was responsible for about 3% of the world's GDP after a long fifthteen year debate
China was granted admission to the WTO in 2002 where in the last decade China became
responsible for about 10% of the world's GDP. Since the death of Mao ZeDong China has seen a
dramatic economic shift through radical economic reform. The Chinese leadership took a
pragmatic approach to many political and socio-economic problems, They took ideology out of
economic policy to build a Socialism with Chinese characteristics. Political and social stability,
economic productivity, and public and consumer welfare become the top priority of the state.

And the government focused on international trade to lift their economy to become a global
contender.

Works Cited
"China Economic History." ActiveUKChina. N.p., n.d. Web. 07 Nov. 2016.
(ICFAI), Prableen Bajpai CFA. "The Constant Crisis Of The North Korea Economy."
Investopedia. N.p., 30 Jan. 2015. Web. 06 Nov. 2016.