Soon after its founding, the People's Republic of China implemented a CAD, catching-up strategy, prioritizing heavy industries. The purpose: to develop, as soon as possible, advanced capital-intensive and technology-intensive industries that would keep China competitive with the developed world. China tested an atomic bomb in the 1960s and launched a satellite in the 1970s. It is fair to say that the initial goal was largely realized – but at a huge cost. For a long time living standards in the country remained repressed. By the end of the 1970s a third of China's people were still struggling for food and clothing.

Between the 1940s and 1960s, the CAD strategy was embraced not only by China and other socialist countries but also by some newly independent, non-socialist countries, such as Egypt, India, Indonesia, and some in Latin America. Like China, these economies also bit the dust. The first years after the strategy was implemented usually witnessed rapid growth driven by investment, but after a while growth would slow and crises would break out.

It is a natural and legitimate aspiration for developing countries to catch up with the developed world, yet almost none of the countries that adopted the CAD strategy did this. Only a few realized that dream: Japan and the four Asian Tigers, together creating an “East Asian Miracle.” In per capita income, Japan exceeded the United States in 1987.