Great Leap Forward

DEFINITION of 'Great Leap Forward'

An economic and social campaign that intended to change China from an agrarian economy into a modern society. The Great Leap Forward was an effort made by the Communist Party of China (CPC) under the leadership of Mao Zedong (also known as Mao Tse-tung) to transform China into a society capable of competing with other industrialized nations, within a short, five-year time period. In January 1958, the Great Leap Forward, the second Five-Year Plan, was launched, and between 1958 and 1960, millions of Chinese citizens were moved to communes to work on farms or in manufacturing. Private farming was prohibited.

BREAKING DOWN 'Great Leap Forward'

The Great Leap Forward, intended to be a five-year effort, was halted in 1960 after three brutal years. The initiative is said to have cost an estimated 20 to 48 million lives as a result of catastrophic economic policy, compounded by adverse weather conditions including a flood that killed 2 million people and the subsequent crop failures that led to starvation. In addition to the fatalities, the Great Leap Forward had negative environmental impacts as communes were encouraged to set up "backyard" production plants for needed supplies such as steel, timber and cement. In 1960, an extensive drought further added to the country's troubles. Mao Zedong was forced to resign from his position as Head of State, although he was able to remain in a powerful party position.

RELATED TERMS
  1. Index Roll

    A passive index investing strategy that is established by using ...
  2. Long-Term Equity Anticipation Securities ...

    Publicly traded options contracts with expiration dates that ...
  3. Qualifying Transaction

    A type of transaction that occurs when a company issues public ...
  4. Building Society

    A type of financial institution that provides banking and other ...
  5. Industrialization

    The process in which a society or country (or world) transforms ...
  6. Capital Pool Company (TSX Venture)

    A new, fledgling company trading on Canada's TSX Venture exchange ...
Related Articles
  1. Professionals

    Long Term Equity Anticipation Securities (LEAPS)

    Long Term Equity Anticipation Securities (LEAPS)
  2. Economics

    Will China's Latest Economic Policy Save the Day?

    The Chinese economy is an enigma to many investors. Will its recent policy help its slowing economy?
  3. Economics

    How China Makes Money (PFE, GSK)

    China has the first or second largest GDP in the world but is not nearly as developed as others in the top 10.
  4. Fundamental Analysis

    Capital Markets: Where They Matter Most

    See which countries and regions dominate the world's capital markets and why American entrepreneurial spirit and risk-taking give the United States an edge.
  5. Economics

    4 Ways China Influences Global Economics

    Learn the four ways China's economy can influence the global economy. The recent decline in Chinese stock markets should be the least of your worries.
  6. Financial Advisors

    Why When China Sneezes the U.S. Catches a Cold

    The size and breadth of the Chinese economy will naturally affect the U.S. Making clients aware of it can help manage portfolio expectations.
  7. Investing

    Impact of the Chinese Economy on the U.S. Economy

    The economic growth of China has been decreasing since 2010. What impact does this have on the US and the world economy?
  8. Options & Futures

    Creating Highly Effective Hedges With Index LEAPS

    Index LEAPS can be a highly effective way to hedge a retirement portfolio consisting of index or mutual funds, without the effort of short-term options trading.
  9. Investing

    Why U.S. Investors are Concerned About China

    Since the U.S. and China's economic relationship is so extensive, the recent Chinese turmoil has elicited fear in the eyes of U.S. investors.
  10. Economics

    5 Things to Know About the Chinese Economy

    China’s economy has been a big deal for a while now having grown at an average of 10% since beginning the implementation of free-market reforms over 30 years ago. In case you didn’t know, here ...
RELATED FAQS
  1. If a LEAP option is purchased and held for more than 12 months, is the tax treatment ...

    A LEAP (long-term equity anticipation security) is a call or put option that allows the buyer a long-term expiration on the ... Read Answer >>
  2. What country is the world's largest exporter of goods?

    Learn about the rapid economic growth China has experienced in recent years and how the country grew into the world's largest ... Read Answer >>
  3. How valuable is the forward rate as an overall economic indicator?

    Find out why the forward rate is considered an important economic indicator, the logic behind this consideration and possible ... Read Answer >>
  4. Over what time period should I be looking at the forward rate?

    Read about forward rates and forward prices, how they function, and which rates you should look at based on your own investment ... Read Answer >>
  5. What emerging markets are best suited for getting the most exposure to the industrial ...

    Discover which emerging markets are best suited to gain exposure to the industrial sector. China is the largest variable ... Read Answer >>
  6. What impact does industrialization have on wages?

    Discover the impact that industrialization has on wages, and how the Industrial Revolution changed human standards of living ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center