The transportation system in China before the war was not highly developed, but numerous railroads connecting the main industrial centers did exist, and bus and truck services connected small towns with the larger centers.  What were missing in the pre-war years were laws to protect the investor, efficient credit facilities, an insurance system supported by law, and a modern tax structure.  In addition, the monetary system was inflation-prone.  Although sufficient capital probably could have been mobilized within the country, the available resources either went into foreign banks or were invested in enterprises providing a quick return.

The failure to capitalize on existing means of development before the War resulted from the chronic unrest caused by warlordism, revolutionaries and foreign invaders, which occupied the energies of the Nationalist government from its establishment to its fall.  Once a stable government free from internal troubles arose, national development, whether private or socialist, could proceed at a rapid pace.

Thus, the development of Communist China is not a miracle, possible only because of its form of government.  What is unusual about Communist China is the fact that it is the only nation possessing a highly developed culture of its own to have jettisoned it in favour of a foreign one.  What missionaries had dreamed of for centuries and knew they would never accomplish, Mao Tse-tung achieved; he imposed an ideology created by Europeans and understandable only in the context of Central Europe in the nineteenth century.  How long his success will last is uncertain.  One school of analysts believes that the friction between Soviet Russia and Communist China indicates that China’s communism has become Chinese.  These men point out that Communist Chinese practices are often direct continuations of earlier Chinese practices, customs, and attitudes.  And they predict that this trend will continue, resulting in a form of socialism or communism distinctly different from that found in any other country.  Another school, however, believes that communism precedes “Sinism,” and that the regime will slowly eliminate traits which once were typical of China and replace them with institutions developed out of Marxist thinking.  In any case, for the present, although the Communist government’s aim is to impose communist thought and institutions in the country, typically Chinese traits are still omnipresent.

Soon after the establishment of the Peking regime, a pact of friendship and alliance with the Soviet Union was concluded (February 1950), and Soviet specialists and civil and military products poured into China to speed its development.  China had to pay for this assistance as well as for the loans it received from Russia, but the application of Russian experience, often involving the duplication of whole factories, was successful.  In a few years, China developed its heavy industry, just as Russia had done.  It should not be forgotten that Manchuria, as well as other parts of China, had modern heavy industries long before 1949.  The Manchurian factories ceased production because, when the Russians invaded Manchuria at the end of the war, they removed the machinery to Russia.