The founding of the People's Republic of China was announced in Beijing by Mao Zedong on October 1, 1949. While the first years saw an impressive economic restoration, much of the progress was lost when by the end of the 1950's the policies of the so-called Great Leap Forward were enacted. The Great Leap Forward was attempted on two fronts: in agriculture and in industry.

In the area of agriculture, the Great Leap Forward concentrated on massive irrigation projects and the formation of huge so-called People's Communes, with the total collectivization of agricultural production. Collectivization went so far that there wasn't even any cooking done anymore at private households. Alas, contrary to the howling communist prognoses, the new system was utterly unproductive. There were no incentives for ordinary farmers to show any special eagerness to increase production, or even just to keep it at former levels.

At the same time, while large-scale projects were favored in agriculture, industry, and especially heavy industry, was decentralized. While before, the state had favored large industrial complexes, the directive of the day during the years of the Great Leap Forward was decentralization, epitomized in the proliferation of backyard steel furnaces where useful instruments, such as household utensils, were melted into useless metal pebbles.

As if the effects of the Great Leap Forward weren't disastrous enough, China in 1959 and 1960 experienced a series of serious floods and droughts, leading to severe famine with millions of Chinese starving. Many of the policies of the Great Leap Forward were thereafter abandoned, fist of all the decentralization of the steel industry. The system of the People's Communes lingered on, and it was revived during the Cultural Revolution a few years later, principally because it had the personal backing of Mao Zedong.

The Cultural Revolution was launched by Mao Zedong in 1966, initially probably because he wanted to get rid of rivals in the hierarchy of the Communist Party, such as Liu Shaoqui. Mao used his support within the general population to confront party officials whom he either considered insufficiently loyal to him, or whom he considered lacking in revolutionary fervor. The pretext for the Cultural Revolution at first were alleged counterrevolutionary tendencies among intellectuals but soon the scope of the attacks widened to include any bureaucracy and authority, with the exception, of course, of Mao Zedong.

Many of the initial events of the Cultural Revolution were directed by Mao Zedong's wife, Jiang Qing. However, after the first Red Guard groups had been formed by Beijing university students, the situation soon got out of hand. Red Guard bands were moving against authorities on any level, and destroying, throughout the country, religious and historic sites in great numbers. For the four years of the Cultural Revolution, from 1966 to 1970, practically all universities and schools in the country were closed.

The first year of the Cultural Revolution, from 1966 to 1967, was the most chaotic as the Red Guard were virtually free to attack whomever they wanted. Initial targets were low and mid-level officials and party cadres, but soon even the highest officials, except Mao and very few people in his immediate surrounding, became fair targets. However, once Mao's competitors in the highest party echelon were purged, even Mao wished for an more orderly course of the Cultural Revolution. Therefore, in 1967, the Chinese People's Liberation Army was declared the vanguard of the Cultural Revolution. Defense minister Lin Biao rose to become the second most powerful man in China, after Mao Zedong, and was officially designated Mao's chosen successor.

Nevertheless, by 1971, Mao viewed with discomfort the deep penetration of all aspects of public life by officers of the PLA. When it became apparent that Mao was to demand self-criticism from senior PLA leaders, defense minister Lin Biao, according to official reading, plotted an attempt on Mao's life. The circumstances of what exactly happened on September 13, 1971 have never been fully clarified. The standard explanation is that Lin Biao and his family attempted to flee on board of a Trident jet to Russia, but the jet allegedly didn't carry enough fuel and crashed in Mongolia.

Mao Zedong died on September 9, 1976. His initial successor was Hua Guofeng who had been prime minister after the death of Zou Enlai in January 1976. Hua Guofeng had been a compromise candidate, acceptable to both the radical and pragmatist faction of the CCP, principally because he lacked his own power base.