When Stalin came to power in 1924 Russia was facing several economic problems. Firstly the industrial production was still very low after the hardships of WW1. Secondly a lot of food was needed for the growing industrial population and the export of food would also give an extra raise in economic growth. Stalin’s main policies to face these problems were the five year plans to increase industrial productivity and the collectivization of farms to increase agricultural productivity. In a speech 1931 he made the goals of his policies very clear, “We are 50 or 100 years behind the advanced countries. We must make good this distance in 10 years. Either we do it or we will be crushed”. The first five year plans were a great success, and by 1940 the USSR was comparable to many of the more advanced western countries concerning the export of heavy industrial products. The collectivization however were less of a success, even if production and export increased it caused great suffering to the Russian farmers and many animals were killed resulting in great famine in parts of the USSR. This model of economic policies would become the way of Russia and China until the late 1970s.

At this time China was in a civil war crisis where the KMT turned out to be the dominant figure at first. The leader of the party Chiang Kai-shek was right-winged and favored the landowners before the peasants and no great economic reforms were made. Although the country was officially under KMT rule the Warlords still had much power in certain areas and were self-governing, so there was no constant overall economic policy taking place in China until 1949, when Mao became the leader of China and could carry out his economic policies.

In 1949 things in China became more interesting, as the CPC becomes the ruling government of the whole of China and Mao carries out his economic policies. These were