The Second Five-Year Plan

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  • How the Second Five-Year Plan worked (1958-1962)
    • Decentralisation
      • Under the plan, economic activity was to be decentralised.
      • The idea was to give more freedom to Cadres.
        • Mao believed that Cadres had the potential to unleash the potential of millions of peasants.
      • He believed that if state bureaucrats continued to control state planning, it would hold back the pace of the changes
    • Backyard furnaces
      • Industry as to 'leap' forward by producing as much steel as possible.
      • Mao announced in 1957 that steel production would quadruple in the next 4 years
      • When the target of 10.7 million tons of steel wasn't met, the backyard furnaces campaign was launched.
        • People were encouraged to build these furnaces and melt all their metal objects to create steel.
          • The response was spectacular and became a national movement immediately.
          • In September 1958, 14% of China's steel came from backyard furnaces and by October 1958, 49%.
      • Negatives
        • Food production decreased as people were focusing on melting steel instead.
        • It was only in spring 1959, that the it was realised the steel being produced was useless.
        • The scheme wasn't stopped but was cut-back
        • There were huge ecological impacts. Whole woodlands were destroyed and this lead to increased flooding.
    • State-owned enterprises
      • The enterprises that were private had been nationalised in 1956.
      • Workers were guaranteed jobs and wages as well as other benefits. This removed incentives to work harder.
      • Prices, targets and wages were all controlled by the state.
    • Construction projects
      • The new irrigation schemes were a disaster. They were not properly planned.
        • For example the Three Gorges Dam was built to control the flow of the Yellow River, however it was being rebuilt within a year.
      • There were small successful projects but the human cost was high and people were being taken away from food production.


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