China - The Temple and the Monks

The temple and the monks is a Chinese saying. The temple is rich and the monks are poor. Applied to China it means that the state holds the wealth and the people who produced it keep very little of it.

The state announces a growth figure, 5% of GDP, and every province, city, and village must hit it. So a dug hole counts toward the figure. The concrete that fills it counts. The empty house on top counts, and the bigger empty house that replaces it counts too. The state owns every plot of land, 99.5% of bank assets, the energy, and the big industry. A billionaire owns his fortune until the state decides otherwise. Wealth flows from everyone toward the state and does not come back to the people, so the household share of the economy is among the lowest of any modern economy.

The bullet trains run empty and are paid for by the savings of people who cannot afford to ride them. The factories export because nobody at home can buy what they make. The machine that does this was built over a century by a party that had one member in every twelve thousand people. It took the country with Soviet guns and with an American arms embargo on its enemy. At least 45 million people starved in its attempt to overtake Moscow. It then purged the party, the countryside, the cities, and the army.

Core takeaways

• GDP in China is a quota, not a measurement. A dug hole, the concrete that fills it, and an empty tower on top all count toward it. Output counts whether or not anyone buys it.
• The state owns every plot of land, 99.5% of bank assets, the energy, and the big industry. Wealth flows to the state, and the household share of the economy is among the lowest of any modern economy in world history.
• The bullet trains and the empty cities are paid for by the savings of people who cannot afford to use them.
• Communism does not produce too little overall. It produces too much of one thing and too little of another. China sells the surplus abroad because nobody at home can buy it. A country that wanted to match that would have to strip its own workers of their pay and their rights.
• The party that runs the machine had about 40,000 members in 1936, one in 12,500. It won with a Soviet army, an American arms embargo on its enemy, barrier troops, human waves, and starved cities.
• At least 45 million people starved between 1958 and 1962 because the state controlled who was allowed to eat. The purges that followed removed everyone who could threaten the chairman. The man in charge in Beijing today does the same work.

What a visitor sees

A visitor sees highways, towers, a bullet train that leaves on time and arrives on time, and shopping malls with luxury shops the size of supermarkets. The train is empty, because ordinary people ride the slow one. The towers are empty, because the cities were built for people who are not there. The highway turns into a two-lane road at the city limit and a dirt track after that. There are no shanty towns and no homeless people in the People’s Republic, because anyone who would sleep on the street is sent back to the countryside. The state builds and guards that image with the same care it gives to anything else it makes.

Growth as a quota

• 5% growth is the quota every province, city, and village must report.
• A hole, the concrete in it, the house on top, and the bigger house that replaces it all count as GDP.
• Debt has passed 280% of GDP and runs 300% to 320%.

In a market economy GDP is a measurement of what happened. In China it is a quota, a command from above. The mayor of a city, the head of a province, and the head of a village must each show 5% growth whether or not anyone has money to buy anything. So they can do anything that counts. Dig a hole and it is GDP. Fill it with concrete and it is GDP. Build a house on top and it is GDP. Destroy the house and build a bigger one, still empty, and that is GDP too. The measure counts what comes out and not what went in, and it counts output whether or not anyone buys it. The quota is one Stalinist feature. Counting output that nobody buys is the second.

The debt that pays for all this has passed 280% of GDP and now runs 300% to 320%. In 2008 the United States poured money into its economy, and the People’s Republic poured in far more as a share of its own. For a time the debt looked large but growth looked larger, so it seemed the debt could be outgrown. That was never the case. The debt has accumulated steadily. Infrastructure was needed in the 1980s after decades of neglect and is now overbuilt to meet the quota. Real estate became a scheme in which one builder built to hit the quota and sold to the next, and ordinary people trying to buy a first home lost money when prices fell. What is left is exports.

Who owns what

• Not one person in China owns a plot of land.
• 99.5% of bank assets belong to state banks.
• The household share of GDP is the lowest, or among the lowest, of any modern economy in world history.

The founding principle has not changed: the means of production belong to the state. Not one farmer owns a plot of land, and not one person in China owns land at all. 99.5% of all bank assets belong to state banks. Most primary materials, energy, and big industry are controlled by the state, directly or through others. A billionaire holds his assets today, and tomorrow they belong to the state. People fall out of windows, disappear for years, and reappear as faithful servants of the party. So the state keeps absolute control of the largest parts of the economy and can carry out enormous projects. It does so with money that belongs to the people.

Why the wealth does not come back

Wealth produced at every level flows toward the state and not toward the people, so the household share of GDP is the lowest, or among the lowest, of any modern economy in world history. People who keep so little cannot buy what the factories make.

When outsiders say China must rebalance toward consumption, they are naming a political problem that will not be solved. To let people consume more, the state would have to give them a larger share. A state with a smaller share can build fewer trains, cannot build up its army, and cannot prepare to invade Taiwan or confront the countries it calls the imperialist camp.

Empty trains and empty cities

• The high-speed rail network is 900 billion US dollars in debt and will never make money.
• The people who ride the slow trains fund the fast ones through their deposits in state banks.
• A village reports 100 people where 80 live and keeps the benefits for the 20.

The high-speed rail network is the showpiece. It is 900 billion US dollars in debt and will never make money. Some lines between nearby cities do well. The rest run empty across a country the size of a continent. Ordinary people cannot afford the fares and ride the slow parallel system. Their deposits in the state banks are what funds the fast one. So the people who ride the slow trains pay for the fast ones. A visitor sits in an empty bullet train and looks out at skyscrapers that are also empty.

The empty cities come from the same machine plus one more fact. A communist country cannot count its people, because nothing is open, so people lie at every level. A village reports 100 people when it has 80 and keeps the benefits for the 20 who do not exist. Nobody knows how many people the country has, and cities get built for a population that is not there.

Too much of one thing and too little of another

• Overproduction was about a fifth of GDP at the Asian crisis of 1996 and 1997.
• The trade surplus is about 1.1 trillion dollars.
• Every county built its own bicycle, sewing-machine, and refrigerator factory in the 1980s, and in 2001 the World Trade Organization let the goods be shipped abroad.

Europeans complain about overcapacity in solar panels and electric cars as if it were new. It goes back at least to the Asian crisis of 1996 and 1997, when about a fifth of GDP was overproduction, in bicycles and washing machines then, and it is intrinsic to communism. The common belief is that communism means underproduction. What it means is too much of one thing and too little of another: a mountain of size 42 shoes and not enough size 38. Nothing is transparent, and the state decides what matters and invests in it regardless of what people can produce or want to consume. At the height of the great famine, while people were starving, mountains of grain sat uncollected on dusty roads.

The export machine runs on local subsidy. Every county built its own bicycle factory, sewing-machine factory, and refrigerator factory in the 1980s, so a hundred good factories became thousands of bad ones. Local governments give free land, tax subsidies, and energy below the cost of production, and tell the factory to churn. What matters to them is who pays tax locally. Every other locality does the same, so everyone cuts corners and sells below cost. Then in 2001 came the World Trade Organization, and the goods nobody wanted could go on a boat to California. Bangladesh cannot compete in garments, because it has no such subsidies. Nobody can compete. The account’s point is that trying to compete leads to serfdom. To match China a country would have to ban its unions, nationalize its industry, end free speech, subsidize on the same scale, and keep a labor force with no rights. The workers do the work and are not paid. The trade surplus of about 1.1 trillion dollars is applauded as success. It exists because nobody inside China has the means to buy.

The empire the party inherited

• The Qing conquered China in 1644 and fell in 1911.
• The Taiping wars killed 70 million or more, and the century’s rebellions passed 100 million.

The China of today sits on the borders of the Qing empire, which the Manchus conquered in 1644 and which collapsed in 1911. The Bolsheviks inherited the borders of the Tsars the same way. Xinjiang and Tibet were Qing conquests. The account calls the People’s Republic an empire that has yet to decolonize, which is why a Uyghur who is not in a camp lives on Beijing time and speaks Mandarin. The Qing fell because they were overstretched and had conquered so much by violence that every sign of weakness brought revolt. Western books give the Taiping rebellion of the 1850s and 1860s a toll of 20 million with nothing in the footnotes. The demography says 70 million or more were massacred on both sides, and with the other rebellions of the century the toll passes 100 million. The account does not think China is more brutal than anywhere else. A modern regime in Cambodia killed 1.6 to 2.4 million people, 20 to 25% of its population, and one Chinese prefecture of 8 million lost 2.4 million to starvation between 1958 and 1962, the same proportion in a far larger country.

None of the men who won those wars took on the ideas arriving from Europe, the separation of powers and the vote, so the revolution of 1911 was not followed by democracy. The fear of disunity in a country the size of Europe has always been stronger than the fear of a firm hand from above. Even so, the Republic from 1911 to 1949 was an open period. People could read, travel, publish, and come home to open a shop. It held to the standards of the League of Nations and was far more open than the regimes that appeared in Europe in the 1930s.

A party of one in twelve thousand

• The party was founded in 1921 by 12 people for about 50 members in a country of 400 to 500 million.
• By 1936 it had about 40,000 members, one in 12,500. Portugal had one communist in 280, Finland one in 700, and by 1940 the Comintern counted China at one in 1,700, the same as the United States.

The communist party was founded in Shanghai in 1921 by 12 people representing about 50 members in a country of 400 to 500 million, by an agent sent from Moscow. By 1936 it had about 40,000 members in a country of half a billion, roughly one in 12,500. Portugal under its fascist dictator had one communist in 280 people. Finland had one in 700 with the party banned. By 1940 the Comintern’s own count put China at one in 1,700, the same as the United States. China was about as far from communist-inclined as a country could be. Land reform, the communist formula everywhere, had nothing to take, because there were no serfs and no aristocracy, only families on small plots. Where the party held a sliver of poor mountain land it squeezed the villagers “like a lemon,” in its own leader’s words in 1934, until they stopped producing. By 1936 the party had almost no influence in the country.

Moscow’s money and the underdog story

• The Long March left in October 1934 with about 80,000 and arrived with 6,000 to 8,000.

Moscow paid for the party from the start. By 1926 hundreds of Soviet advisers were in China and whole armies had been set up with Soviet help, under a united front in which the nationalist central government accepted communists as members in order to get that help. The front collapsed in 1927. The party’s Long March of October 1934 began with about 80,000 people and ended a year later with 6,000 to 8,000. Then a journalist from Missouri visited in 1936 and wrote the book that put the party on the map in every language. It told an underdog story of democrats who would fight the Japanese better than the central government. The account calls that book the source of all the propaganda since. Moscow’s order in 1936 was to stop fighting the central government and fight Japan, which had taken Manchuria in 1931 and invaded the rest of China in 1937. The chairman took a year to see the use of that message. He then held his troops back, let the central government fight the Japanese, and moved into territory once the Japanese had cleared it.

The army that arrived

• In August 1945 the Soviet Union sent 1 million troops into Manchuria and handed the countryside and the weapons to the party.
• In May 1946 the American envoy stopped the central government’s advance, and the siege of Changchun in 1948 lasted 8 months and killed 160,000 civilians.

Even in 1940 the party was a minority. It won the way East Germany and Poland became communist: an army arrived. In August 1945 the Soviet Union sent 1 million troops into Manchuria, the richest region and the strategic gateway to China. It held the region for months and stripped it. It then handed the countryside to the communists, along with weapons by the shipload, training, and officers sent to Moscow. The United States had made the Republic of China one of the four great allies. It then forced the central government to seek a coalition with the communists, on the belief that they were agrarian reformers and not real communists. In April 1946 the Soviets withdrew, and the central government pushed the communists to the Siberian border. In May 1946 the American envoy ordered a halt on pain of ending weapons deliveries. He later imposed an arms embargo on the central government. So the communists were helped by Moscow and protected by Washington at the moment they were nearest extinction.

From there they took grain and men from Manchurian villages at gunpoint. They used barrier troops that shot any soldier who turned back. They sent unarmed civilians forward in human waves to absorb fire. They starved cities into surrender. The siege of Changchun lasted 8 months and killed 160,000 civilians. After it the commanders of other cities, Beijing among them, surrendered rather than face the same. In 1949 the red flag went up over the Forbidden City. When an American general in Korea later complained that these troops were impossible to fight, the head of the central government, by then on Taiwan, asked how he had been expected to fight them in 1948 with no help.

The Great Leap

• At least 45 million died between 1958 and 1962, and some Chinese historians say 50 million, in a population of about 800 million.
• One prefecture of 8 million lost 2.4 million. The head of Sichuan reported 9 to 12 million starved and called it a good thing.

From 1950 to 1951 the party eliminated real and imagined enemies in a campaign of terror. By 1955 and 1956 every industrialist and shopkeeper had handed his deeds to the state with a smile and become a state employee, because the state was now the only employer. By 1956 and 1957 every farmer’s land and tools had been collectivized. That was not enough. The chairman wanted what every communist leader wanted: to take the grain straight from the field into the state granary, sell it abroad, and buy whole industries with the currency. He had one advantage, people. If every man and woman in the countryside worked day and night, China could overtake the Soviet Union and not just England. The man who had brought a quarter of humanity into the communist camp would then lead the camp. So from 1958 every cup and tool was collectivized, people slept in dormitories and children in kindergartens, and the reason to work disappeared, as it had in the party’s mountain slivers in the 1930s. Farmers who would not work were whipped. Every village competed to report more grain than it had, and the inspectors took the grain the reports promised. Work points earned in the field bought the ration, so the pregnant, the sick, the old, and the undesirable were cut off from food as a punishment. The account’s minimum, from the archives, is 45 million dead between 1958 and 1962, and some Chinese historians say 50 million, about the toll of the Second World War worldwide. The head of Sichuan, a province the size of France, reported 9 to 12 million starved and told the chairman it was a good thing, because the survivors were the core and the dead were the slackers and riffraff. The sparrows were killed with gongs and drums so that they could not land, and the locusts they had eaten thrived. Backyard furnaces smelted pots, pans, and door handles to meet the steel quota. The trees went for fuel, so a tree in China older than about 70 years is hard to find.

The purges

• The Cultural Revolution ran from 1966. The general who besieged Changchun died in 1971.

The chairman knew about the famine, because he ran a machine built to find out everything about everyone. When party members raised the famine in the summer of 1959, he read it as a threat, purged them, and pushed harder. He then said what Moscow’s dictator had said, that the further the revolution goes the more counter-revolutionaries there are, and purged the countryside from 1962 to 1966. The Cultural Revolution from 1966 purged the cities. It was not about culture. It asked ordinary people, for the first time in any communist regime, to denounce party members, and they did. From 1968 to 1971 the army purged the people. With the death in 1971 of the general who had besieged Changchun, the army was purged too. The test of loyalty was to denounce someone close, a friend, a colleague, a family member. Millions were purged, the party’s number two was tortured to death in a dungeon, and hundreds of millions had their lives destroyed. By 1974 the chairman could say there was no threat left. Leaving no one who could threaten him was the purpose of the purges.

The man in charge in Beijing today does the same work. His military commission had seven members. He purged five, and the sixth has not been seen. Politics is in command, as the party’s own slogan says, and in April 2020 the slogans in Hong Kong said it plainly: politics first, science second.

What is real and what is not

The towers stand, the trains run, and the trade surplus is a trillion dollars. What is false is the meaning given to them. Growth is a quota. Output goes unbought. Wealth never reaches the people who made it. The image is kept clean by deporting anyone who would spoil it. The people pay for what the state builds and cannot use it. The account’s advice is to study the history. Overcapacity, the managed image, and politics in command are not new, and very little about the country is.

Related pages

• Socialism - The Calculation Problem holds why an economy run by command cannot price what it makes, which is the mismatch of too much of this and too little of that on this page, and the century’s death toll under socialist regimes.
• Socialism as Moral Correction holds the moral case for a bigger state, which the temple-and-monks arrangement is the end of.
• Per Capita holds the division from a total to a rate, which turns a 1.1 trillion dollar surplus into a household share.
• Validity and Truth holds the method by which the pages in this wing are read.
• Europe - The Slow Agony holds the other continent’s quarter century, including the overcapacity Europeans complain about.

Open questions

• The account’s own numbers are estimates from archives and demography, and it says an exact figure is impossible. What is the current best range for the Great Leap toll, and how much of the spread is method?
• If the household share of GDP cannot rise without the state doing less, what event would force the state to do less?
• The account says a country cannot compete with China’s exports without becoming like China. Which countries have tried a middle path, and what happened to them?

Sources

• Triggernometry, How China Fakes Its Success with Frank Dikötter (YouTube, published 2026-09-05, 1 h 35 min; also posted in full on X). https://www.youtube.com/watch?v=7mSj7mBMmqY. Read from YouTube’s original-language auto-generated captions. The whole page is this account. The historian is Frank Dikötter, who says the 45 million figure is his own and five other historians’ from the archives of the People’s Republic. People named in it and kept out of the body: Mao Zedong, the chairman; Xi Jinping, the man in charge in Beijing; Chiang Kai-shek, the head of the central government; Lin Biao, the general who besieged Changchun and died in 1971; Liu Shaoqi, the number two tortured to death; Stalin, Lenin, Khrushchev, Trotsky; Edgar Snow, the journalist from Missouri, and his book Red Star Over China; Henk Sneevliet, the Comintern agent who founded the party; Zhang Guotao, who said “we squeeze it like a lemon”; Henry Wallace and George Marshall, the American envoys; Salazar; Pol Pot; Walter Duranty; Friedrich Hayek and the road to serfdom; Winston Churchill on studying history; Voltaire; Gogol’s Dead Souls; Albert Kahn, the American architect who built Moscow’s factories. Figures the historian gives as his own estimate: the Taiping toll of 70 million plus and the century’s 100 million, the Great Leap minimum of 45 million, the Sichuan figure of 9 to 12 million.
• No position from the owner on China is on record as of 2026-09-06.