The First Five Year Plan in China

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  • The First Five Year Plan in China 1952-1956
    • Was introduced for Industry
      • Closely mirrored that of the Soviet Unions and the shift to centralisation.
        • Market forces would not influence how much was produced so clear targets were produced and monitored.
        • "The Communist Party of the SU is our best teacher and we must learn from it"
        • "The SU's today is our tomorrow" - CPP SLOGAN
      • According to CCP statistics, the CCP in 1949 was just 10-20% of its pre-Second WW peak.
    • A trade embargo meant China had limited trading partners
      • The SU was China's only real ally after their involvement in the Korean War.
        • This forced them to rely on economic help from the Soviet Union because no one in the West would trade with them,
        • The USSR's support
          • Sino-Soviet Mutual Assistance Treaty - FEB 1950.
            • Rendered all economic help when it was necessary.
          • Their support was extensive and essential.
            • Constructed / reconstructed 156 major industrial enterprises including 7 iron and steel plants and some that were constructed in the USSR were even sent to China.
            • Sent over around 11,000 industrial experts to supply the technical knowledge that the country had lacked in organising a centrally planned economy.
            • Invited 28,000 Chinese technicians to study in Russia in order to learn from 'elder brothers'.
            • Loaned them $30,000 over the next five years.
    • The Plans Targets
      • "Gradual realisation of the industrialisation of the state"
      • A high rate of growth in heavy industry such as steel or coal.
      • Investment in advanced technology.
      • Construction of modern industrial sites.
      • Stimulate the transformation of a Socialist society - "There is only one real foundation for a socialist society, and it is a large industry" - LENIN.
    • The Plan's Successes
      • Annual growth 16%.
      • Industrial output grew 15.5% each year.
        • Heavy industry output nearly tripled.
      • Geological exploration discovered vital resources like oil and mineral in Xinjiang.
      • Industrial working class grew from 6 million to 10 million.
      • In 1953 the state began to convert private firms into joint state-private ownership. By 1956 private sector industry had been abolished, proving a closer step to socialism.
      • Work was guaranteed all year round so standards of industrial workers living improved.
    • The Plan's Failures
      • Was dependent on loans from the USSR which had very high interest rates. Forced farmers to sell their crops at artificially low prices.
      • Increases in factory production depended upon a co-operative and healthy working class, but not enough food was being imported into the cities to feed the people.
      • The supply of consumer goods was very low and although this helped the Plan as people saved more money, there was little available to buy in the shops.
      • Despite the budget being balanced as best as possible, there was little investment in healthcare or educational systems. The standards of living in China were very low.

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