Economic Planning and it's results 1953-67

Economic Planning and it's results

Collectivisation of agriculture 1953-57

• Mao recognised that peasants have a "spontaneous tendancy towards capitalism" so mao would have to wait
• 1953 Mao said it would take 15 years to collectivise agriculture
• 1951 - mutual aid teams 
• 1952-3 - lower stage APCs (agricultural producers cooperative) of 30 to 50 families. 'land-share' bigger than 'labour-share'
• Between 1953 and 1955 Mao kept changing his mind on pace of change

-1953 he campaigned against 'rash advance' so capitalism reappeared

-1954 he campaigned against 'rash retreat' which met resistance among richer peasants. Poor harvests and requisitioning led to riots

-January 1955 he launched 'Stop, Contract, Develop' campaign which said no APC expansion for 18 months

-Summer 1955 he pushed for rapid collectivisation

• 1955 Higher Stage APC introduced of 2-300 households, peasants still owned the land and were allowed 5% private plots, 'labour-share' profit increased
• Wealthier peasants were pressured into APCs by withholding state loans by government banks
• July 1955 17 million households in APCs
• January 1956 75 million, 63% of peasants
• End of 1956 only 3% of households were not in APCs
• Mao could claim collectivisation was achieved 15 years ahead of schedule

Consequences of Collectivisation

• CCP control over rural areas increased
• caused debate in the party over the appropriate rate of change
• convinced Mao that material factors werent important in deciding the rate of change
• 1953-57 production grew by 3.8%
• In 1957 it grew 7%
• Spence said peasants were generally better fed 56/7
• Chang and Halliday said peasants starved and were eating tree bark

Industry and the 1st 5YP

• Mao wanted to be self-sufficient so he had to nationalised foreign business, trade was kept at a minimum, the balance of payment had to be kept positive to complete industrialisation
• Mao thought it would take 15 years to complete industrialisation
• 5YP was between 1953 and 57 but the targets weren't set until 1955
• focused on heavy goods such as iron steel, energy, transport, machinery and chemicals
• no consumer goods
• 'patriotic savings campaign' so people put extra money in the banks to help finance industrial investments
• Government procurement quotas took food from the peasant at low prices so wages in towns could also be kept low

Results of the 1st 5YP

• new workers were illiterate and untrained so expensive equipment was broken
• focus on quantity not quality
• state planners were ignorant of basic procedures which led to bottlenecks in the distribution process
• scarce resources led to competition between industries and also between state and private enterprises

Coal increased from 68.5 million tonnes in 1952 to 130 million tonnes in 1957 which was 115% of its target

Steel increased from 1.35 to 5.35, 130% of target

Machine tools, from 13,700 pieces to 28,000, 220% of the target

Consequences of Planning

• workers have stability but lose their personal freedom
• living standards rose in cities
• urban population grew from 57 million in 1949 to 100 million in 1957
• money was borrowed from the USSR which was paid back in grain with high interest
• …