In July 1921 only 13 delegates, representing only 50 members met in Shanghai to found the Communist Party of China. The young Mao Zedong was one of these bold founder members. In the first half of the 1920s, the Chinese Communist Party established itself surprisingly fast. The Guomindang (National People’s Part) , led by Dr Sun Yatsen increasingly turned to the Soviet Union. They were disappointed by the lack of support from the West and were impressed by the Russian revolutionary. There was an official coalition between the Guomindang and the Chinese Communist Party of China. They jointly set up a military academy in Whampoa near Canton. Chiang Kaishek was in charge of the academy while the Communist Party leader Zhou Enlai was his deputy. In a joint venture, the Southern Republic fought against the local military commanders in the North. Chiang Kaishek , the commander-in-chief of the Nationalist forces, by February 1928, succeeded in controlling the whole of China.

His main enemies were the Communists, with whom he had broken off relations towards the end of the "northern expedition". The fight against them consumed huge sums from the state budget. The Communists were able to avoid the Guomindang and their numerous campaigns to eradicate them and they retreated to the Jinggang Mountains in the south-east. This was where Mao Zedong developed a new strategy for the revolution in the late 1920s . Until then, influenced by the Soviet advisers, the main focus attention was on the cities and the industrial problems. Mao realized that in China, it was the peasants who would be most important force for a revolution. At the same time, he developed guerrilla strategy and tactics. The most important item in the political programme was land reform which of course the impoverished peasants agreed to and supported.

Between 1931 and 1935 Chiang Kaishek started five campaigns to annihilate the Communists. In order to escape the constant attacks, the Communists left southern China, where they were based and began their legendary Long March. It led through 11 provinces of this enormous country and covered a distance of 12,000 km. Only one tenth of the 130,000 people who set out the very beginning of this gruelling trek survived, but nevertheless the march had considerably improved the Communist Party’s standing. In 1935, Mao was able to establish himself as leader of the Chinese Communists and remained in this position until his death in 1976.

As early as 1931, Japan had annexed part of north eastern China. But the Japanese was planning to further conquests China. Faced by this threat, Chiang Kaishek was unable to use his troops against the Communists. Furthermore, some cristism were being voiced within his own party. The critics wished to end the civil war and join forces with the Communist against the Japanese. Chiang Kaishek was forced to negotiate with the Communist by his own party. The Communist agreed to abandon parts of their programme because anything other than the task of national resistance should be put aside. The Communists fought a guerilla war from their bases in the North, while Chiang’s troups resisted the Japanese invaders in the South. The Guomindang and the Chinese Communists eventually stopped the Japanese advance. As a result, the American gained military superiority over the Japanese after 1942, and this was a turning point in the events of World War II.

With the words "China has risen again!" Mao Zedong proclaimed the People’s Republic of China from the Gate of Heavenly Peace (Tiananmen) on 1st October 1949. The Communist had succeeded in uniting China and forming a central government. At the time, China was considered the sick man of Asia. The population had suffered incredibly. In addition, war and civil unrest had weakened the economy and the infrastructure. There was to be no help from the Soviet Union or the American. The Communist had taken on a difficult tasks. They had won the revolution, but how were they to rebuild the country ?

In the early years of the People’s Republic of China, the war damage was settled and this created a conducive environment for industrialising and modernising the country. Mao Zedong developed the idea of a "New Democracy", which meant working together with the patriotically-minded national entrepreneurs who had not collaborated with foreign "imperialists" before 1949. Initially they were allowed to retain possession of their factories, but all enterprises which were controlled by foreign capital or the bourgeoisie were nationalised.. The most important event of this time was the land reform in 1952. Hundreds of millions of peasants were allocated land which had been expropriated from the big landowners. Hundreds of thousands of wealthy landowners were put before the people’s tribunal and were mostly sentenced to death.

With the support from the Soviet Union and East European states, the People of Republic of China set up its first five-year plan (1953 - 1957) which concentrated on developing heavy industry. By the end of this period, nearly all the enterprises had been nationalised. After a short period of independence, the peasants were grouped together in cooperatives. In 1854, the People’s Republic declared that the transitional period of the New Democracy had ended. In its first constitution, it was defined as a socialist state, ruled by the proletariat, led by the Communist Party. The economic situation at the end of the first five-year plan was much improved. Mao Zedong, encouraged by this and supported by virtually all members of the party leadership, propagated the "Great Leap Forward" in 1958 which is to made China to be on an equal footing with economically advanced countries such as Great Britain, but it ended in disaster.

In 1959, the Tibetans started an unsuccessful revolt against the Chinese. Their leader , the Dalai Lama, fled to India and has lived in exile ever since. In 1960 an open conflict broke out between China and the Soviet Union. The Soviet Union ceased all forms of economic aid and recalled its advisers and all their technical documentation. Between 1961 and 1965, which followed the disastrous "Great Leap Forward", internal politics were characterised by a pragmatic attitude for which politicians like Liu Shaoqi and Dend Xiaoping were responsible.

Between 1958 and 1961, the urban population had increase by 20 millions, agriculture was quite incapable of producing sufficient food for such a vast population. In order to ease the situation, young people were sent to work the land in underdeveloped regions. In 1966, the discontent of the young people culminated in massive protests at the universities Mao Zedong exploited these protest in order to eliminated his opponents within the party. He initiated the "Great Proletarian Cultural Revolution" compliant cadres provoked a mass movement of the Red Guards so that the country was once again in chaos and close to a civil war. Politicians, intellectuals and artists fell victim to the terror of the Red Guards. One of these victim was Mao’s main opponent Liu Shaoqi, who succeeded him as president in 1959. Hundreds of thousands of people lost their lives during the "revolutionary excesses". While many of his opponents were being deprived of their positions and persecuted, Mao enjoyed being worshipped almost like a god in personality cult unprecedented anywhere in the modern world.

Liu Biao who had been instrumental in creating the personality cult around Mao and had been designated as his successor in 1969, also began to disagree with Mao’s politics. After one failed attempt on his life, he died in 1971 while attempting an escape.

In the following years, the debates between the moderate and radical political factions increased in intensity. One key figure was prime minister Zhou Enlai, who had always taken on the role of mediator between the two sides in any party political clashes. In 1973, he recalled Deng Xiaoping as his deputy and developed a more pragmatic approach in rebuilding the economy and education system of the country. Zhou Enlai also made great effort to overcome the isolation from foreign countries. After China had become a member of the United Nations in 1971, President Nixon visited the country in 1972. The Federal Republic of Germany also established diplomatic ties with China in1972. The group around Mao’s widow Jiang Qing, who were called "the Gang of Four" showed increasing determination in their attempts to put an end to the pragmatic of Zhou and Deng and to take over the leadership of the party. Zhou Enlai died in January 1976 and on the commemoration day for the dead in April of the same year, there were spontaneous mass demonstration against the Gang of Four and in favour of Zhou Enlai and Deng Xiaoping. Mao Zedong died on the 9th September 1976. A month later, the leader of the radical groups were arrested. Once the radicals had been deprived of power, the conditions were set for a change. Changes only became concrete after 1978-1979 when Deng Xiaoping came to power. In 1978, the "Democratic Movement" began to form itself in Beijing and other major cities, In addition to the "Four Modernisation" this movement demanded a fifth modernisation namely democracy. Although the movement was prohibited by the Communist Party of China, and some of its leaders were imprisoned, it nevertheless made basic changes in internal as well as foreign politics. The long term aim is to create a mixture of both state and market economy. It was also to build up a socialist legal system.

In 1982, a new constitution came into effects. Although it still defines the Communist Party as the leading force in the Chinese nation, it too shall be subject to constitutional laws in the long term. An open door policy to foreign countries is one important step in the modernisation programme which is designed to quadruple China’s economic power by year 2000.

This programme of modernisation and reform is not without controversies. When Deng Xiaoping’s protégé Hu Yaonag became general secretary of the party in 1981, and Zhao Ziyang became prime minister, opposition grew in conservative circles, especially in the army. At the end of 1983, a campaign was set in motion against "mental pollution", many serious criminals were being publicly executed. At the end of 1986, students demanded more democracy, this led to the conservative party leadership pressuring Hu Yaobang to retire as the party’s general secretary, as he had felt sympathetic towards the students and their grievances. Zhao Ziyang, who was regarded as a relative liberal suceeded Hu, and in 1988 Li Peng took over from him as prime minister. After the suppression of the democracy movement in 1989, Zhao Ziyang who, like Hu before him, appeared sympathetic to the protesters was sacked. Jiang Zemin became general secretary. By 1990, Deng Xiaoping had officially retired from politics but he remains de facto ruler of China until his death in June 1997.