China Economy

• 1950 Agrarian Reform Law -eradication of landlordism, land reform meant redistribution
• Needed to calculate how much land people owned so they could be taxed accordingly
• Landlords publically humiliated and accused of exploitation- land and possessions redistributed amongest the villagers 
• Victims were then beaten up and executed by the villagers
• 1951- 10 million landlords had lost land and 40% of land changed hands
• number of deaths officially 700,000 but some estimate as high as 3 million
• Lots of anti-landlord paranoia 
• Giving power to peasants enabled party to claim that it was a peasant led revolution by making sure it was the villagers carring out the killings

• Collectivisation began rapidly so that peasants couldn't adjust to owning land
• Mao believed it would take 15 years to complete
• 1951 -Groups on 10 families encouraged to form Mutual Aid Teams (MATs) to pool the labour, animals and equipment while retaining their rights of private ownership
• This happened anyway at busy times but formalised as a permanent arrangement 
• 1952 -MATs encouraged to combine to form Agricultural Producers Co-operatives (APCs) of 40-50 families
• Land could also be pooled while retaining some land for personal use
• Strong incentive for richer families
• Profits were shared out at the end of the year according to resources contributed

• Mao was fustrated at slow pace and local officials rushed into creating APCs before they were properly planned and subsequently went into debt
• Caused Mao to call for a slow down in Spring 1953
• By this led to the peasants retreating to a capitalist system of buying and selling
• Mao condemned the slow down as a 'rash retreat' and renewed pressure to form APCs
• Better-off peasants were reluctant to join and often slaughtered their animals to eat than hand them over to the state
• 1954- poor harvest meant government began to requistion grain causing rural protest
• January 1955- Mao did another U-turn and announced a policy of 'stop, contract and develop'
• After only 6 months Mao went for all-out collectivisation
• July 1955-17 million households in APCs to 75 million in January 1956
• Official reason for the drive was in response to the demands of the peasantary but more likely to have been due to Mao's fear that supplies to the cities would continue to be unreliable until peasants stopped owning land -as they would revert to capitalism
• New APCs were classed as HPCs (higher) constiting of 200-300 households, profits shared out by work points -caused low labour productivity

• Ideologically successful -state owned food production; 90% of population worked on the land
• Developed far more quickly than imagined- tribute to Mao's authority and increased control over local people
• However changed relationship between CCP and peasants who were now servants than loyal allies
• Made Mao dangerously overconfident
• Led to the catastropic Great Leap Forward (GLF)
• It was economically disappointing as food production only increased by 3.8% per annum
• Due to amount of cultivated land per head of the population was low 
• Yields per hectare were high but labour productivity was low
• Worsened by the lack of state investment
• Demotivating effect created by the indirect benefits that linked the peasants to the land

• Made peasants reponsible for every aspect of daily life
• On paper- should maximise food production
• enable the pooling of larger resources of equipment and labour
• Initially inspired by APCs in Henan who were asking to merge
• After a tour of the countryside in 1958, Mao was convinced that he had the backing of Peasantry and local party activists
• Officially part of the GLF annouced in May 1958
• People's communes which were already beginning to be created were to be expanded
• Labour force could be mobilised to work of water conservancy schemes 
• Production of steel and grain given equal priority (walking on two legs)
• Decentalising of economic planning- no restraining by government
• First people's commune was 'Spudnik' established in Henan April 1958- 24 collectives of over 9,000 households
• Commune was chose to recreated the atmosphere of the 1871 Paris commune
• Over the next two years 750,000 collectives were merged into 26,000 communes 
• Once a commune was established it wasn't possible to move without an internal passport

• Villagers often stayed in the same houses and continued to work alongside the same people but with an added sense of communal identity
• Especially where peasants ate and slept in communal canteens and domitories
• Where this was the case couples could only sleep together on arranged conjugal visits
• Peasants were divided into production brigades usually comprising of one village
• Commune took over the responsibilities of the local government by organising local services such as education, health care, policing, militia, childcare, canteen and elderly homes
• Parents encouraged to abandon 'bourgeois emotional attachments'
• Mao spoke recklessly about what communes might achieve
• Even talking of moving away from a monetary economy
• Once the commune system was established in the countryside the plan was to extend the system to the cities

• Villagers had no choice and had to surrender any private property to the commune
• Private farming was abolished- as there was theoretically no need for personal possessions
• Reduced the motivation to work hard as the rewards would be the same regardless
• Yet were compelled to work harder by team leaders who competed to out-produce neighbouring communes
• Efforts could not be maintained as workers got increasingly less breaks and only got six hours of sleep every two days
• Many did as little as they could get away with
• Loss of personal freedom emphasised by the miliatry dimension to the communes
• Everyone between 15-50 had to be a militia member
• Peasants worked in the fields alongside antiquated riffles to invoke the spirit of fighting for a better future

• Lysenko was a Ukrainin agricultural scientist, Stalin relied on his theories
• Already being discredited by the time of the GLF
• 1958- Lysenkoism was made official policy
• 8-point programme: development of tools, use of new breeds and seeds, improved field managment, increase irrigation (common sense) as well as close planting, deep ploughing, increased fertilisation and pest control (potentially dangerous)
• Pest control focused on killing birds who ate the seeds- caused a uncontollable multiplication of insects who ate the plants and rats who destroyed grain stocks
• Increased fertilisation led to the destruction of thousands of peasants homes which were ploughed into the ground because the dung used in the construction of the walls was thought to be useful.
• Thousands were forced to seek shelter anywhere they could find it

• December 1958 -Mao annouced compleation of commune system and declared the harvest figure was a record 430 million tonnes of grain 
• This was revised down to 375 million tonnes before being released as even the party thought it was impossibly high
• Despite excelent weather it was more likely to have been around 200 million tonnes
• Only in 1980 did the government officially admit there was a famine
• It was the worst of the 20th century killing over 30 million people
• Tibet was hit the worst- killing 25% of the population
• Deliberatly made worse by forcing them to switch form growing barley to other crops not suited to the environment and preventing the nomadic yak herdsman form roaming the grasslands
• Made no economical sense- intended to destroy Tibetan identity
• Panchen Lama sent Mao a letter accusing him of attempted genocide- he was jailed
• Peasants at the mercy of whoever distributed food
• Peasants reduced to eat plants
• Increase in prostitution and banditry (which had been stamped out)
• Husbands sold wifes, parents sold children and accounts of cannibalism
• State contined to requistion grain

• Trying to develop communes at the same time as launching the 2nd five year plans
• Too ambitious, peasants couldn't supervise backyard furnaces, work on water conservancy products and produce food at the same time
• Not possible to allocate manpower efficiently enough to increase food production
• Transport and communication systems were too poorly developed to move food
• Mao even admitted to his doctor that he didn't know how it was supposed to work in practice
• Delusion of uncritically accepting Lysenkoism
• Mao was always dismissive of experts
• Overambitious nature of the plans- excessively optimistic reports of production levels
• Anyone who spoke out about the problems were sent to the Laogai- number of inmates swelled after 1958
• Contiued requistioning of grain
• Demotivating effect on peasants losing property and knowing that the reward would be the same no matter how hard they worked
• Mao's opinion that rapid industrialisation was more important that the lives of peasants
• Officially denying the famine existed -blaming peasants for hoarding food
• 1960- worst drought in a century followed by severe flooding across central China

• Rather than admitting personal responsiblity Mao shifted blame to local officials
• Campaign launched to overthrow management of communes and to root out corrupt elements
• Nov 1960- emergency directive allowed villagers to keep private plots and restored local markets
• Commune system was allowed to be dismantled by local leaders
• Fuchun was able to present Mao with grim facts without incuring his wrath, by telling him that he was correct but they, the leaders collectively made mistakes
• 1962- Mao put Liu and Deng in charge of recovery
• Many communes broken into smaller collectives and rewarded by individual input
• 2.5 million city-dwellers forced to move to countryside to release pressure on urban food supplies -Mao likened to deporting the population of a country the size of belgium 
• 1961 -Massive grain imports were arranged from Canada, Australia and the USA
• 1965 -The yield of chinese grain was back up to its 1957 level
• Replacement of ideological fanaticism by economic realism
• "Whether white or black, a cat is a good cat as long as it catches a rat"
• Mao was unhappy with the rejection of communes and the return to capitalism
• He suspected that Liu and Deng were using their popularity to plot against him

• First needed to consolidate political control and reduce inflation (1000% in 1949)
• Began in 1952 after inflation was cut to 15% and the Korean war had ended
• Overall aim was to make the PRC as self-sufficient as possible in food and manufactured goods
• Targets were set from above rather than in response to consumer demand
• Heavy Industry would come first
• Basic ideas were given a preliminary dry-run in Manchuria where heavy industry was already established
• Channeling resources away from consumer goods into heavy industry
• Forcing collective farms to sell goods at low prices would help keep workers wages low
• Only industries belonging to foreigners and those in banking, gas, electricity and transport were nationalised 
• The fears produced in the 'five anti's' campaign allowed the abolishment of private ownership in early 1956

• Followed the Soviet model which aligned China with Russia instead of the west
• Introduction of a centrally planned economy- easy as there had already been some state control through the GMD national resources committee
• The 1950 sino-soviet treaty arranged soviet advisors to help organise the Chinese economy
• These were paid for at the expense of China as well as having to house them
• Russia agreed to lend the PRC $300 million for which China had to hand over a large part of their bullion stocks and had to pay interest
• Chinese delegates were also trained in propaganda techniques
• Classical Chinese buildings were cleared for 'Soviet brutalist' office blocks
• Russian was the only foreign language taught in schools and the luch hour was pushed back to 3pm, to copy the Russian practice of six consecutive morning classes
• "The Soviet Union's today is our tomorrow"

Successes:

• Official statistics meant that most sectors of the economy succeeded in reaching their targets 
• Annual growth rate of 9% 
• Urban living standards improved at the expense of loss of freedom to travel and change jobs
• More people were migrating to the cities

Failures:

• Officials exaggerated levels of production
• Quantity over quality
• Exposed shortcomings in the skills and literacy levels of chinese workers
• Less than half the children under 16 were in full time education
• Standard of bureaucratic administration suffered as a result of national economic planners leaving under the 'anti's' campaigns
• Peasants short of food due to the exports to Russia to pay for Soviet advise
• Ironic twist that the Soviet advise of Lysenkoism and the grain formed part of the payment for these advisors was actually making repayment and peasants lives worse

• Formed part of the GLF which was announce may 1958
• Agriculture and industry was to both be modernised
• February -party took over control for economic planning- explains why it wasn't really a plan: didn't involve planners announcing carefully thought-out targets
• Organisational details were left to local party cadres
• Targets were constantly revised upwards
• Industry depended on agriculture to feed the workers
• 1958 -development of communes was sufficient enough to accelerate demands of industry
• Conservatives- advocated the 'carrot' approach to offer incentives of material goods to hard workers. Radical Hardliners- called for punative measures against low producers (the 'stick')
• Industry wasn't producing consumer goods and state couldn't afford to pay higher prices
• Wrong to see the GLF as purely the result of ration economic logic
• Mao's confidence was high due to rapid collectivisation and success of water conservancy
• Local cadres wanted to demostrate the revolutionary fervour of the peasants
• Convinced Mao that more ambitious schemes were possible
• Determined to show Russia that they could act independently
• Relied on mass mobilisation and decentralisation. Gave more scope for local initiaive to thrive 

• Decentralisation would release the potential of the millions of peasants and workers
• Backyard furnaces were used to produce as much steel as possible
• Steel target for 1958 was raised from 6 to 8 million tonnes and again to 10.8 in september
• Once it became clear that targets couldn't be met be existing steel plants, backyard furnaces were introduced
• Every family was ordered to construct their own furnaces and melt down their metal objects
• September 1958- 14% of steel came from backyard furnaces and Oct- 49%
• A quarter of the population abandoned everyday activities to take part 
• Placed an unsustainable strain on food production
• Proved necessary to close schools and deploy peasant shock brigades to get the harvest
• Spring 1959 -realised that the only useful steel was being produced in the large smelting plants
• Furnace campaign was cult back not abandoned
• Peasants continued to melt down objects into worthless "steel" which was taken away by authorities and burried out of sight
• Economically damaging- reduced amounts of grain produced
• Ecologically damaging- vast amounts of trees cut down to supply fuel to the furnaces
• led to faster soil errosion, flooding and the increased need for water conservancy schemes

• Consolidation of the earlier move towards state owned enterprise
• The enterprises that initially remained in private hands were nationalised in 1956 and renamed State-owned enterprises (SOEs)
• Prices, output targets and wages set by the state
• No longer any bargaining for better working conditions
• Enjoyed guaranteed jobs and wages as well as medical and educational benefits
• Inefficient as it removed incentives to work harder
• Whether the SOE was efficiently run or not didn't matter to workers or managers as any surplus went straight to the state
• Mao saw the masses as China's main asset -sheer numbers could achieve the desired result without needing to access advanced machinery
• Three Gate Gorge Dam- designed to control the flow of the Yellow River and reduce the damage caused by silt deposits, within a year it was being rebuilt.
• Cost in term of lives lost and labour taken away from farming was colossal.
• Disruption of existing drainage patterns led to an increase in salinisation
• expert advice was welcomed but technical issues that would cause delays were ignored
• The success of a project was measure by the cubic tonnage of soil that had been shifted

• 1962- China was only producing half the amount of heavy industrial goods and 3/4 the amount of light industrial goods that were being made in 1958
• Khrushchev withdrew the soviet experts all together in 1960 when the Sino-Soviet split worsened
• Lack of clear planning
• Reliance on the massive deployment of manpower rather than direction from above
• While there were some successes: construction of Tiananmen Square and the development of nuclear weapons, the basis necessities were neglected
• Lack of technical and managerial expertise prevented movement forward
• Cutting of corners to fulfil targets on time (Quantity over quality)
• Cause major problems with export orders which frequently had to be replaced when complaints threatened to ruin China's reputation as a trading partner

• A party gathering officially called by Mao to assess the progress of the GLF
• Clearly expecting trouble as he brought his wife Jiang Qing who could control the Shanghai branch of the CCP
• Only Peng Dehuai stood up to Mao, criticising the Plan
• others failed to endorse his revelations of the famine
• Mao took it as an attack on his own authority 
• Any chance of Peng surviving was ruined by Khrushchev's secret speech which made similar points to those raised by Peng
• Peng was replaced by the leader of the PLA, Lin Biao
• Wasn't arrested until the Cultural revolution
• Liu Shaoqi and Deng Xiaoping developed convient illnesses that prevented them from attending, and Zhou Enlai drank himself into a stupor after his inability to help Peng
• Had been signs of moderating aspects of the GLF but afterwards China embarked on 'The second leap' as policies continued at full speed
• Before Lushan it was assumed that any leader could express their views freely but it had become clear that only Mao could criticise Mao 
• Allowed Mao to become even more dictatorial in his approach

• Liu and Deng were put in charge of the retreat from GLF
• Allowed the communes to be broken up, closed down inefficient projects and announced more realistic targets
• Relaxion of the persecution of Scientists and Intellectuals whose contribution was now regarded as desireable
• Decisive shift back to centralised control, targets reviewed annually
• Positive gains from across all sectors of the economy
• 1964- scientists pieced together the documents shredded by the Soviet experts and produced China's atomic bomb
• Mao admitted mistakes as Chairman of the Party but stopped short at taking any personal blame -afterwards withdrew from public life until mid-1962
• Ideological concessions to restore the economy
• Private trade reintroduced
• Mao attacked the revisionism of Liu and Deng, who outwardly agreed with him but continued to do things there own way
• Farmers owned private plots and sold food for profit
• Lui and Deng contiued until they were attacked during the Cultural Revolution