The main causes of the economic downfall can again, be pointed towards Chairman Mao. The disillusion that he set within the students [red guards] blinded him and the people of China too. The chaos, the fervor--these were the factors that led to making of swift and poorly planned programs such as the great leap forward. Another determining factor in the economy was the maintenance of international relations, especially with Russia. When the Sino-Soviet split took place in the early 1960's and as hostility grew between the two nations, Russia slowly started to withdraw the technical experts, leaving half-built infrastructure in China. Although not the only causes of the economical demise of China during Mao, these were the primary reason why the economy failed to progress, and why China was back only a little ahead of where it used to be.
A general breakdown of national economic planning and coordination led to gross inefficiencies in the production and distribution of goods and materials, fiscal policies based on the acceptance of inflated production reports and shortage of raw materials for industry.
…
