CHINA TODAY
Item
- Title
- CHINA TODAY
- extracted text
-
,
_COIWMUN!TS
,-g f^L
..
>i>;-MLWP«-w
8BSg
..^
Z^?d
■^' ■■'*- '..«J
k*H-
Li
-
p
feate^
# 8 >1 »I
rw^
M.,
I "s
,.
” :?• '■
•*
■<
.
gt tlr®
•. i aa
MBS
?
f
fe':: '■’'
p -FW^r..
_£k ’MMmMI a
'■
^•' '
w < - wWI
k '.■
K
W''
B ■
liOl
fc '
■&•
•'-w E
■
.. ■
7$gg
v^l
.'' ■' ''-ifS
dC’-<;'
DOa^St/riTlO.V CENTMt
Past Bgx 4628
BANGALOtiiS - 560 046.
INTRODUCTION
What is happening in China today ? After yoars-Of
.
an ardent revolutionary zeal under the lo-adership of Mao that hag
galvanized large masses of people,both inside China and outside,
•
and filled up many desperate hearts with new hopes, is China today
falling back to the ’’capitalist path” of development, tired, unable
-to sustain cuiy longer its extraordinary revolutionary effort towards a
socialist society ?
Cr
is China j.st engaged in a panned process of
"readjustment" of its social system — readjustment that would be
dictated by "realism" and an aptitude to"learn from mistakes" . In such
a .case, what wo woujd then witness today would be the struggle of
Chinese society to find its own way towards a "Chinese socialism"
that keeps into account the long legacy of its own history and own
.
genius as well as the demands of a world environment marked by the
fast development of new technologies whose impact on
societies
both capitalist and socialist societies — remains still
On the good earths
of
—
very uncertain.
China there has emerged a reformist tide
which is the trend of history with an irresistible force", comments
the "People's Daily", The same
paper authoritatively observes :
"For a considerable period our socialist constructions have been
subject to the influence of a foreign model in both the ways of planning
and the administration and management systems.The models have been a
failure on many issues, and is unsuitable for our national conditions".
this, Tan Chung observes " This and many other pronouncements of the present Chinese leadership have made it clear that they
Commenting on
are leading the country away from the earlier apparently Maoist but
•substantially Soviet Pattern of Development with a conscientious effort
to awaken the individual wisdom and initiative which China was famous
for, but had hibernated in a number of chixiy wiritui’s+f. ( )
i*
■
Whether and how far China under Mao’s leadership followed the
Soviet pattern of development will be enquired into by some of the
included in this file.But certainly, a conscious and planned
departure from some of the basic policies of Mao is observable•
documents
is this departure more visible than in the process of
’’do-colloctivization" of the communes. In the last five years many
Nowhere
villages have partially or totally given up the ’’Danzhai ” model of
(1)
Quoted by Tang Chung, ’’Winds of Reforms in China”
Express, , 28/3/83, -n.
q. 8
(2) Tang Chung, Ibid.
in ’’Indian
ii
development — for several decades presented as "the" model to be ‘
*
emulated — in favour of the responsibility system;, which dlrect^y
links a peasant's income with his production. Under the 'responsible ’* I
mode of production, a Chinese farmer or his family now plays the master'
role in his or their productivity within the broad framework of
collective ownership of land and other immovable properties.Now,
xn a number of places,
each family is to be paid according to
its contribution to production. Though the farmers will have to
sell
a substantial part of their produce to the State at controlled prices,
t;
levy quota is clawed to have been reduced by about 20 per cent. But
trie.
cultivators can now sell their surplus produce in free markets
at profitable prices.Also more land has been diverted from collectives
individual farmers, raising production of private plots in the total
cultivated
area from ? to 15 per cent (1)
In Industry too,one witnesses far reaching "reforms". Heavy industry
in^China in the past suffered from outdated technology, lack of managers
extremely poor utilisation energy consuud.ng nearly three
times as much power as the average of other developing countries.
An estimated 2J per cent of China's state-owned factories have been
-a-
operating at « loss, Io rectify the situation a system of reward ^nd
punishment has been instituted, While increased output and energy efliJ||
will be rewarded by bonus and other benefits, failures will invite
economic penalties for the managements and workers alike,
n'
The present Chinese leadership
seems to have seen in the responsibility
systems a remedy for ” social parasitism”. This problem was not —
and
is not— easy to solve, It is complicated by the fact that within
the system/, so far,
every one working in a factory or a shop or a
!
public utility corporation or a government agency is essentially
an employee of the state which theoretically belongs
to all-people
ownership category.Whether the employee works or not,
performs or not,
produces or not, it is immoral for a socialist state to deny
means
of livelihood to
; member who is, in theory an ouner u-f
the state.The malady of this system has been
given ' : n-irknames
by the present Chinese leadership as ”"mess food” and ’’unbreakable bowl”,
As the people1s Daily
editorial of Jan.27,1983 describes, in every
state-owned enterprise there is
is aa "mess"
’’mess” which feeds individual parasites.
And the State itself is aa bigger
bigger-'mess"
”mess” which feeds "parasitic enterprises"
With the existence of these
two messes
messes there
there is
these two
is no hope for China to
achieve modernisation and prosperity.(2)
At the same time, iChina is resorting to large-scale plant purchases
from abroad in key areas like petrochemicals, steel, power and communi-
(1) Satyendra Tripathi, ’’China’s modernizing leap”, Indian Express
6/8.81 p. 8
(2)
See Ten Chung-, ’•vyinds of reforms” in Indian Express 28/3/83, p.8
iii '
cation equipment.
However, the main aim of the Chinese’ Industrial policy at present is
rapid increase in production of light engineering and consumer goods.
Substantially higher outlays, less political interference, decentrali
zation of decision making, a liberal policy for import of machinery have
created a favourable climate for expansion of tnese sectors. As a result
the output of light engineering goods increased by 18 per cciit compared
the 1.4 per cent in heavy industry (1)
From what has been said so far cue should not infers that China
has sold itself to the capitalist path of development. Market is allowed
to w rk but only at the margin of an almost totally socialised system.
At
the same time as Government pursues its policies of modernization
of
an "open door” to the West, it is tightening the clamps
over artistic and intellectual freedom.This
in the case of the workers of
once more
is evident, for instance,
Shenzhen, the largest of China’s "special
Economic Zone". For years, China tried to wall off its people from
the
social evils of H:.ng-Kong by stationing soldier along the fence that
separates the British Colony from Shenzhen. Now Beijing plans to spend
$ ?0 million to erect high barbed-wire fence around Shenzhen to prevent
Chinese living outside the special zone from entering the town.Actually,
Shenzhen's 160,000 residents are just becoming a privileged class with
higher salaries and greater personal liberty
than Chinese elsewhere.
However, out of concern for the social problems of Shezhen the Government
has established a special office for the cultivation of spritnal
civilization, which intends to inculcate socialist values through
educational programs and?a few rules.
China today wants to become a modern industrial country to achievo
higher standards of material prosperity and close the technological gap
with the West. At the same time, the present leadership wants to preserve
thight control for safeguarding the integrity of the Chinese
and the distinctively .
culture
Chinese version of socialism. This very process zx
raises a few questions Z Can one free an economy without at the same time
freeing a people ?
How can one open a country’s door without at the same
time opening its citizens’mind ? These, in fact, are not new questions
in the history of China
with its long tradition of mistrust of the
outsider, based, in modern times,on the painful experience of the destructi'v
invasion of the colonialist.
Speaking to a group of Indian Journalists, Premier Zhoo Ziyang admitte
that China made three mistakes in the nast - failure to shift in
(1)
Satyandra Tripathi "China’s modernization leap", in Indian
Express, 6/8/81 p. 8.
iv
good time
to economic construction, error
of being overonxiou
for quick results in ceconomic fields and
over emphasis on class 8trU«el '
He added - In the political/‘
focus of ou.
t
we failed to shift in good time the
focus of our work to socialist economic construction after sociaeconomic construction after
xst transformation ownership, was ousted in the main. We over
ownership was completed in the main. 1
emphasized class struggle
struggle which
led to frequent political
which led
movement
•••As regard the economic
field we once committed
economic field
the error of
being over-anxious
for quick
quick results. We often called
over-anxious for
fox- wit at;
■of ns
beyond our actual capacities,.This led to
economic imbalance and poor
results. ••...Consequently,
People benefited very little from their
work. We will continue to follow
■the pulivies Vf developing our natioa.nl
economy in a steady preacticul
and sure way ” (1)
Some have seexi all these problems in the light of what they have
called the ’’three endemic conflicts of yrinviplec m the
People’s
Republic of China :
the conflict between ideological and material
motivation ; the conflict between <
centralization and decentralization J
mid the conflict between the total self
---- reliance and borrowed technology
and capital” (2), According to this view
today’s China under the new
leadership has settled the
argument, for the time being, in favour
of material incentive,
decentralization and borrowed technology and
resources.
This , however,
is probably a very
simplified understanding of
events in today's China. One will find in
the present Tile analysis
that go beyond it. what takci3 placo in
China today is the expression
of a very complex process in which
■ many forces are at work. It is
an extraordinary creative process. :
It is a refusal to be emprisonned
within any ready teade ideology, imported from
outside. It is the
detoi’mination of a neonJe
people to engage moo a creative
process that builds
upon the past, sensitive to its own
history, and enters into the
new but still uncertain world of :
revolutionizing tel -^nologies.
Behind it there is a, all philosophy
/ of man and history, implied but not
yet fully oxplicited.
It is in order to explore this
new and complex process that we have brougl
out this file.This process is <
of critical importance for mankind. Out of i
ore emerging new concepts and new visions that are likely to exert
are
deep influence
xi
fU^hGr deVel°Pment Of societies, chiefly of socialist
of societies,
ixr-t
,1 ’ n + fect the third third
world world
oountrles
and more
oountrios
the Asian countries.
(1) Interview given by
specially
Zhao
Ziyang co G.K. Hoddi, from the ’’Hindu”
and .
reported also in the Indian Express 1/10/8? p.
8
(2) S.N. Chopra, "Work Wages and incentives,
, Indian Express 2/12.80 p. 8
V
For this exploration we have divided our documentation into six
sections.
In the first section we have given an overview of today’s trans
formations in China. The second section, by £ar the most important
in volume as well as
in content ,
deals with the economy of China,
the successive attempts at altering its direction, along with the
ideological thrusts
that have characterised each of those attmepts.
However, the new ortientation in the Economic? policy of China is
also and obviously linked with new political thrusts. This is the
object of the third section.
In order to sustain the new orientation at the economic and politic
levels, new tl.rUots at th^e^at^nal levels are also developing.
This has bc.en exaiined in the fourth section
China’s foreign policy is part of the overall thrust tbf
general policy. It is examined in
its
the fifth section
A concluding section (section vi) has been added that compares
the processes of development in India and in China
Among the documents that are reproduced, some have been
condensed
and edited. Major official documents however have been reproduced
integrally•
Some of the documents are of an analytical nature and they
represent different idological thrusts. It is for the reader to form
his own judgement. .
Other documents
are of a propaganda nature. They have been
reproduced to acquaint the reader with the general ’’ideological
atmosphere prevailing in China under the new leadership.
This filo grew in size as we proceeded in our work. It is presentee
in two volumes. At a later date we do not exclude the possibility of
adding a third volume .... that would look at China from the point
of view of the inner and theoretical crisis that affects the
Marxist world today.
As it is, with all its limitations, we hope that this documentatioi
taking
will be of use to all those who have at heart the development
place in socialist societies.
*
CHINA
TODAY
VOLUME
I * POST
MAO
I . SECTION
1
An
introduction to
An
overview of today’s transformation
in
China.
CHINA’S ECONOMIC POLICY
today’s China
Page
1.
AN INCENTIVE SOCIALISM
Private enterprise without capitalism
Source
Far Eastern Economic' Review, April 2’8/1983
1
pp. 40 - 44
2.
REMODELLING THE COOPERATIVE SOCIETY
From Commune to cooperative ...
By David Bonavia
Source = Far Eastern Economic Review, April 28/83
PP. 52-53
6
3. POPULATION PROBLEM
The result of a clear policy
By V.G. Kulkarni
Source = Far Esatern Economic Review, April 28/83
pp. 50 - 51
9
4. PLANNING TWENTY YEARS AHEAD
China in the year 2000
By V.G. Kulkarni
Source
Far Eastern Economic Review,April 28/83
pp. 44 -49
11
5.
CHINA’S NEW STATE LEADERSHIP
By Manorajan Mohanty
The 1978 amendments to the 1975 constitution.
The sixth National People's Congress,1983
The emerging leadership
Source = China Report, July - August 1983
. PP. 3 - 9
18
6. LATEST DEVELOPMENT IN THE CHINESE COMMUNIST PaRTY
A ”l go” going on ?
Source = "South”, December/1983
p. 20
22
II. SECTION 2ZA)Post Mao china’s Economic Policy
. Historical Background
• Official documents
• Some more specific aspects
1. DILEMMA
_______ OF SOCIALIST DEVELOPMENT
An analysis of strategic lines in China, 1949 -1981
By Peter Van Ness and Satish Raichur
Source = Bulletin of concerned Asian Scholars
Vol. XV, No 1, 1983 ,pp. 2 - 15
(Condensed and edited by our Centro)
24
>
i i
Page
2.
THE PRESENT ECONOMIC SITUATION AND THE PRINCIPLE
FOR FUTURE ECONOMIC CONSTRUCTION
‘
A report, presented by Zhao Zyahg, Premier of the State
Council, during the fifth national session of the National
People’s Congress, Nov 30/81
Source = Beijing Review, December 21/81
(Condensed and edited)
37
3* ADDENDUM TO CHINA’S SOCIALIST ECONOMY
A policy document. Clarification by Xue Muqiao, a leading
Chinese Economist, to his widely circulated book,"China’s
Socialist Economy".
Soui^ce
Beijing Review, Dec.7/81 pp. 14-16
50
4, REPORT OF THE READJUSTMENT OF. THE 1981
NATIONAL.‘ECONOMIC
PLAN AND "STATE PJ~£NUE AND EXPENDITURE
Presented by Yao Yilin, Vice Premier and Minister in charge
of the State Planning Commission, at the 17th meeting
of the Standing Committee of the fifth National People’s
Congress.
Source
Beijing Review, March 16/81, p. 14 to 27
58
5-
FURTHER ECONOMIC nREADJUSTMENT"
A break with ’’leftist" thinking -A special feat r
article in Beijing Review
Source = Beijing Review, March 23/81 pp. 23-29
61
6. CHINA'S 1982 ECONOMIC PLAN
China’s text of the communique on the fulfillment of
China’s 1982 plan for economic and social development
Source = China Report, May June 1983 PP* 43-55
Z2.....mA0 TSETUNG’S CRITIQUE OF SOVIET ECONOMY - A SUMMARY
retrespective view to understand the present changes
in economic policy
Source = James Peck : Introduction to Mao Tsetung’s
critique of Soviet ' Economy (Progressive Publishers
New Delhi, 1982) pp. 9 to 29
8. USSR FIVE YEAR PLAN IN TROUBLE
How Chinese today look at URSS Planning. A propaganda
type of article.
Source = Beijing Review, August 24/81, p. 13
9* SHANGHAI LEADS IN MODERNIZATION
Source
69
82
94
96
Beijing Review, January 4/81 p. 19
10. PAYING ATTEimcm TO IDEOLOGICAL EDUCATION
Educating the people about the plan
Source = Beijing Review, January 4/82>PP- 19-2?
11. WHY SPECIAL ECONOMIC ZONES
By Wang Dacheng, Economic Editor, Beijing Review
Source = Beijing Review, March 23/1981,
102
12. CHINA’S SPECIAL ECONOMIC ZONES
Source = Beijing Review
107
106
December 14/1981
13 * GROWTH OF THE MULTINATIONALS
“How Chinese look at multinationals
Source = Beijing Review, February 16/1981 p. 16-20
111
14. CHINA EXPANDS FOREIGN TRADE AND ECONOMIC RELATIONS
The "op: .-do"or" Policy"
Source = Beijing Review, February 23/1981 pp. 20-21
116
I
i i i
.B)
Post Mao Agricultural policy
15. GOOD BEGINNING FOR REFORM OF RURAL ECONOMIC SYSTEM
An historical survey of agricultural policy
Source = Beijing Review, N«vomb30/1981 pp. 15-20
16. CHINESE LEADERS PUT AGRICULTURE ON THE AGENDA
The responsibility system - Diversification
Source = Beijing Review, August 24/1981
The system of responsibility in Agricultural Production
Source = Beijing Review, March 16/1981 pp.3-4
1_7> BET gQME LOCALITIES AND PEASANTS PROSPER FIRST
Is this a Bourgeois economy ?
Source = Beijing Review, January 19/ 1981 pp.19-22
18,MOVING A MOUNTAIN OF POVERTY Z A CASE STUDY
The Xiaogang production team in Fengyang Country’s
Liyuan commune.
Source = Beijing Review, August 24/1981 pp,21-26
0) Concluding article
118
125
128
130
13^
of economic section
19* ECONOMIC REFORM IN POST-MAO CHINA : AN INSIDER’S VIEW
By^nEdmund^eej Political Economist from China now studying
The "Ten Year Plan” and its failure. Nature and limits
of Economic reforms. Future developments in China’s
Political Economy
141
SECTION I
AN INTRODUCTION TO TODAY’S CHINA
This section presents a general survey of some of the basic
issues confronting socialist China in its process of modernization.The words "adjustment" and ’’reforms” are occuring
again and again.What is at stake is a basic understanding of
the direction which Chinese society
should take.At stake
are the ’’reform” of China’s economy as well as the relations
of production. Some of the policies initiated by Mao are
being questionned and new policies are introduced that seem to
revert some of the processes set in motion under Mao’s
leadership.
Articles in this section therefore describe some of the
most significant new prodesses initiated in China after
Mao’s death by the new leadership.This material is mainly
taken from the Far.Eastern Economic Review, and this should
be kept in mind while reading through the pages of this section
C 0 N T ENTS
Page
1. AN INCENTIVE SOCIALISM
The problem of modernization and reform.
1
2. REMODELLING THE COOPERATIVE SOCIETY
Contractual Family Farming .
Cooperative system
3. POPULATION PROBLEM
The demographic studies and their problems in China
The success of the population-control programme
Differences between villages and cities.
4. PLANNING TWENTY YEARS AHEAD
The goals for the year 2000 expressed qunatatively
6
5. CHINA’S NEW STATE LEADERSHIP
Who are t 'ho s e ’who oc c upy higher offices ?
6. LATEST DEVELOPMENT IN THE CHINESE COMMUNIST PARTY
Is a ’’purge” going on ?
’’Along with a transformation of economic institutions,
Post Mao China, it would seem, is engaged in a radical
transformation of its political institutions in which
democratic participation is extended to various actions
of Chinese society” ( Our file, page 15)
9
11
18
22
POPULATION PROBLEM
(9)
Among many leftist circles it is customery to look at population
control as a gimmiek in the hands of capitalists to evade the
basic transformation of society that is needed to solve the
problem of massive poverty. This is certainly an oversimplified
view of the question. The Cninese have been more realistic and
family planning has been && integral part of the overall planning
of their society. This article explores the success of the
Chinese policy in this respect.
fhe United Nations recently gave an award to Quinn Xinzhing,
China s family planning minister, for outstanding services to his
country's population-control programme. Qian shared the award with
Indian Erime Minister Indira Gandhi, whose country also has a massive
over-population problem. However, this is one award on whose laurels
Qian - and for that matter Mrs.Gandhi — cannot afford to rest, for the
crucial battle to control China's bufeoning billion has only just
begun.
‘
d
4-k
is tolimit its population tp 1.2 billion by
tho end of the century, up only 2C$ from the slightly in excess of
billion recorded by last year’s census
■ ’ '
“
.An additional 200 millions people over the next 18 years traslates into an
annual growth rate of less than 9.5 per 1 ,000, compared with a 1981
growth rate of 14.55 per 1,000. In other wards, it amounts to almost
lalving China s birth rate. Whether the country can ach£ve this decided
ly ambitious goal is a natter of intense debate ancfl&ng the world's
demographic experts.
last year, the size of China’s population was only being guessed
at by demographers. The country had not conducted a census since 1 964;
selective statistics had been published for sone years, but had remain
ed incomplete, and disparate statenents by Chinese leaders, roundin^ off
figures in the hundreds of nil] ions, only added to the speculation over
frina s truepopulation. Last July’s census—results of which were publishin
Octob
ed the total population at 1.008 billion. However,
f^^
n4._22
t0bfr
?r"
*’'record
r?C0fded
thesxkHi
extremely
low
rate of error claimed
the census
census takers
takers - a
.
r. rx .
------ by i'ho
net error of 0.15 per 1,000- raised soae eyebrows amo&ng Western
denographers.
By wqy of conpariaon, the error ratea-due to non-declaration- in
the censuses of other countries are: Pakistan, 6J per 1,000; Malaysia
40; India, 17; the United States, 25; and Japan, nine for Urban areas
and five for the countryside. Disnissing the doubts raised by foreign
observers, Li Chengrui, director of the State statistical Bureau,
wrote in December that China's census had been through and that its
exceptionally low rate of error was justified. Li even claimed to foreign
visitors that estern demographers were welcome to check detailed
calculations. Whild the rate of error nay be of real intarrst only to
academics, it should be pointed out that, given the six© of China's
current population, even a tiny error translates into a huge number of
people.
°
prox,rfnQenofethnt1 970inaTh'ln c*aiElfsuc®ss f°r its population-control^
^oA4*55
years iater. The question is whether the performance°of She
1 70s can be repented for the next two decades or so. Here, one con
fronts the problem of the increase in absolute numbers^ even though the
growth rate declines. For instance, the rate of na«ral increase declined
by almost half from 20.32 per -1,000 in-1 955 to 11.7 in 1 979, but the
population still increased by 12.33 million and 12.83 million, respectively
for those years.
r
J
(10)
the conin- two decades nt 1
%
?
® P1,0^0121®
i? own children for
““
“““7. .«=. 13
,Jil1b“S)hh0'"dl”B
oillion
to 2000. E„„ lf o,oh of th °
year up
in the 1980s,.oe
‘ demographer
:
Hou Wenruo in the Beijing Review! And
even if family planning measures are v:
"fairly successful", 19 million
Can b® exPected annually for the rest of this decade, the
PEOPlb S DAILY predicted.
■o
of women InTlociet^depends maPly on the fertility pattern
survey - the largest of its kind i^the^o11? ’Carrlc'd out am^jor fertility
women. Ther-csilts of tho anv armd m the world - involving 1 million
the fertility rate of Oh• ' UrVey were heartening in that they suggested
1.197< i;
i» ?98f Mil/:;1"/™1”84 fron 5-a ci>iid»”
»'»»
it .houid be noled
c'Sn" re0“”al,y
"—endeble,
hood had barely bc^an -nd ifiv
i ^lnes'" emphasis on planned parent years of the fLst&“by bo
daughters of the early
rush of million? of voun,
a reaCh1^ ^rriagable age. With the onis doubtful i? the f^rtiiMtC
? W°'le? f°r the rre3t of th® ^ntury, it
the fertility rate.can be further significantly reduced.
the ciUes Steindl1 increase hwe b^'n ^ducod -
especially in
if m. Faur&.SJ’XiX"™
io- —"rt
“ areas,
_ . ’* 1*1*"
—
—
.
and there ore scant signs to the
^ntrary, the average Chinese family could be
nearer the present twochild norm than the one-child target.
Chinese leaders seen to be well aware of such
a possibii ity,
conceding that the task of population control ■
urgent
as it is - will
remain an uphill one. Linn- Jinin of the st. te ~
j
Family
Planning
Commission explained to the
the REVIEW:
REVIEW: " if we f.. ,■, fin
populbtiob oontr.!), cbim-s population
I.” ,h'
"
5 billion by the end
.nd
s™.th could last for sons 70
.3 years (from now)
-nd stabilise .1® 2050 at 1.8 billion”.
***********
SOURCE. Far Eastern Economic Review,
by V. G<nulkarn t.
nril 23 »
193J. pr). 50-51
Million
2;500.
2000
P^OBLfM
>
Projected total population
China under different
family size assumptions
1 ,500 1 ,000
i
500
ckil.d .T)Qr. j?...
1 child
Sq
(1)
private enterprise without capitalism
AN
INCENTIVE
SOCIALISM
The economic reforms which arc taking place in Post l-iao’s China
g very deep. The present article brings out the outlines of these
reforms. It should be remembered, however, that it is taken from
the
^satern Economic Review which represents the interests of
® international business and corresponding ideology.The
act remains that very significant changes in Chinese society
arc being promoted which arc a departure from Hao's line.
The Problems of Modernisation and Reform
Experimental economic reforms in industry and commerce are to be exten
ded throughout China this year and a new employment contract is being
introduced to replace the "iron ricebowl" of guaranteed lifetime em
ployment for statesector workers. Along with the successful implemen
tation of rural reforms over the past two years, these measures represent
the final dismantling of the
Soviet-model centralised "command" eco
nomy which has dominated Chinese policy for three decades.
The government’s new ..‘reform policies are being ushered in by a major
propaganda campaign that has followed Chinese Communist Party General
Secretary Hu Yaobang’s January speech on "the problems of modernisation
and reform."’ The word "reform" has since appeared regdarly in headlines
on almost every page of national and provincial nespapers. They describe
reform as a "powerful shockwave" which is "irresistibly surging over the
great land of China."
Reform is to take place on ’’all fronts, in all departments and units,”
said a recent PEOPLE’S DAILY editorial - in agriculture, industry, and
commerce, large and small enterprises, and in government as well.
Foreign affairs, personnel, propaganda, education, science and technology,
culture, news, publications and public health are also to be affected.
Some aspects of the campaf n now emerging are new, while other reforms
are being intens- "ied since their earlier introduction on an experimental
basis. But the major impetus for the entire programme is the success of
agricultural reforms implemented in rural areas over the past two years.
Record harvests in 1 982 are attributed to the agricultural responsibility
system which has given an unprecendented degree of economic freedom to
individual farming families. This has strengthened the hand of the cur
rent leadership in stepping up the p<ace of reforms in industry and
c ommerce.
Experimental programmes to introduce profit-based book-keeping on a tax
paying basis for enterprises, stricter standards of accountability for
management and performance-based employment contracts for workers are
now being extended to factories and commercial enterprises in every
province.
China’s sclerotic transport and distribution system is also to be re
vamped by allowing private and cooperative-run companies to operate along
side state-owned commerce and marketing enterprises. Individuals are now
allowed to purchase and operate their own trucks and vans in urban and in
inter-city transport
rketing, and mechanised plouging and harvesting
with their o’-n<
>
(2)
Urtan individual businessmen total 1.36 million, Ren said, less than 1%
f the urban population. By contrast, there were more than 8 million such
took their tolL
953’
anti-ri«htist
other campaigns
al^oier+n™™^9 I\ro''eeded int0 a second stage. Farming families are now
lowed to exchange labour and hire seasonal or casual Labour. They
purchase agricultural machinery,, tractors, boats and motor vehicles* may
’’Specialised households” are encouraged to engage in services such as
transport, marketing, and mechanised ploughing and harvesting with thwir
own equipment.
If successful., the specialised-household movement could eventually break
the age-old commitment to material self-sufficiency on the part of Chinese
farming famiiies, which has impeded commercial integration in rural areas
and limited agricultural productivity.
to1rXhSn»S^PSkare closely linked to simultaneous "structural reforms"
to reshape the bureaucracy into a leaner, younger and more efficient orga-
or wio
r +
J P.r*d Party rank3 of cadres unqualified for their pofts
,,
,
s. re ormist policies. The government shakeup is working down
through provincial and minicipal organs now and is scheduled to reach
country and township-level officials later this year.
fro^car SrihPTfSanda °ampa^n’ the official press has not shrunk
Irom calling the reform movement a “revolution.” This however, is a
revolution from the top.
nowcver, is a
Den?nionLr:ir'S 3ifthiParty congress supporters of elders tatesman
yer! able t0 consolidate, their control of the politburo
stft ~lfyt.b+S+? tencts °f th® reform programme into the new party and
thA r ! + \0DiS* NSW aPP°intesn,ts at the State Council laK autumn
posts have teeLfiaS’U? ia provinoial government and par? leadership
p sts have tendbd to elevate younger leaders committed to the reforms who
also have personal ties to Deng, Hu and Premier Zhao Ziyang!
seDondnhalJSoiaZh S°hed^ed 3 Partywide rectification movement for the
witMn
f,the year t0 eliminate vestiges of leftism and resistance
^978 When the D
Policies sinoe the third party plenum in December
mitt^e The L
group first gained control of the central comoj th:’rS^
f“t°r "> «“ int.nslfioatlon
Central to these reforms are two basic structural changes. The first iq
he conversion of state-owned enterprises into relatively independent
orVonSsfs^PrevIouZ^v^h0311
and apply then to iav^Lent
ur Donesses. Previously these enterprises remitted all profits - or
c urged losses - to the state. The second is to free the enterprises from
the lockstep of central planning and loosen price controls so that effi
ciency can be translated into profit performance.
i
I
(3)
Structural
Changes
Experiments in substituting tax payments for
profits in
state-ownedenterfor profits
in statc-ownedenterin Sirh^
k1 "
S?CG 198°’
aftor their introduction
m
? Sichuan province by Zhao (then provincial governor,..
—
in
In March, Finance
Minister
Wang
Bmgqian
announced
that
from
June
1
the
system
, , ,
------------ that from June 1 the system would would be
expanded to all stateowned enterprises in China with
with the
’of
the exception
exception
some semi-autonomous9 national-minority areas.
SXZ^d medium-0i^Gd enterprises will be assessed at a basic income tax
a Yarlable regulatory tax designed to adjust for the hi^ily
continue PtfhS th* 108
dafferent industrial sectors while price reforms
rerlaced'h^
! PriCe reforEls are dieted, this two-step tex isto be
replaced by a unitary progressive income tax on all enterprises.
The basis for price reform was laid with the adoption in 1982 of a three”1X3d econcW which retains fixed prices for certain primary commo
dities and consumer staples but allows floating prices for most LnuduttsreJh^°JS-andJre LriCeS f°r farm and rUral sideline-industry nroducts. This tripartite division parallels the new structural division of
the economy into three sectors: that under centralised planning, that
under non-mandatory guidance planning and the free market.
centrl^in^
MmPr°mise between the more aggressive reformists
centred in the Academy of Social Sciences, who have urged that centralised
p . mng be scrapped altogether, and more conservative party and military
thTIoX0 e
either °n doctrinal pounds or because they feared
rpb®
° 1 conse<luences of abruptly de-controlling China's economy,
there is well-grounded concern that Polish-style unrest could erupt if
price increases were too rapid.
F
1= poM-tloally sensitive In China, in large part because oi
Sir rSs
•xpanienoei in the late 1 940s „„Ser Juoll"
ang rule. Thi,. sensitivity made it necessary to delay the price-adiusttheir^olitic^b11101''3
3
Whil° the Deneist forces consolidated
to worr JnJ ? b+Se* ChangeS are needed not only to allow other reforms
trar government8”
"
Cri®linS subsidy
borne by the cen-
cottond ^eClal subsidleB t0 avort hardships. Prices of watches, TV sets,
cotton shoes and otner manufactured goods were also reduced.
Panic buying was repored in some areas after the cotton-price increase w-s
511^010anddf01i7ing rum0Urs that Prices of grain, sugar, kerosene,
salt, soap and matches would also be increased. This certainly, was one
measure of the sensitivity of the price question.
Cracking China's iron ricebowl system will be more difficult to enforce
• e centre than converting state-owned enterprises into taxpayers
or adjusting prices. The reformists consider the iron ricebowl to be the
Obstacle to proving worker productivity and overall economic
eiiiciency•
But almost everyone within the system has ia personal stake
' '
in preserving
it. Initial attempts to introduce bonus schemes or empower management to~
tended toehS^-S^anKafd/0rkCrS Were °nly ^^inally effective. Bonuses
thX / ?
n " ed?qUally impartially among all workers, stripping
hel lntended effect, and managers were reluctant to dismiss
workers for any offence short of outright sabotage.
In Sh^hlVth Pr°blr\the Ministry of Labour and Personnel announced
in March that the new "contract employment system" is to be extended to
stateowned and collective enterprises throughout China. So far it has
1
(4)
been applied only in selectee enterprises in less than hoif
nu •
»
io5PrbStC«fi?!tin7ri9S °°COrdine t0 industry°LdnaZuie of th^e^pjoyee'
s
«S«lnst lHn.33,
are most
“J-l»™»neo
XX/XttXLXX dIS crr“°‘“l
M. “eoonoolo
nnnn » lih 4th d^icate wording of one commentator, "will be infringed
refusal to re^w8^0^1101^ available to management include dismissal and
extreme Jptions cl^be°n\rac\Supa7--s • willingness to exercise such
tracts! P
an be enbanced suitable wording in the terms of their con-
In stressing that anybody can be dismissed, the
the Chinese press gave promit0 disciPlinary actions in September 1982
management personnel
---at the Shoudu Iron and Steel Co. in Peking. The ngainst
sintering plant failed to
meet quality specifications r
*
which
adversely affected pig-iro© output. The
company dismissed the deputy director of the plant and three other staff
were issued warnings.
The Shoudu steel plant has 1been the subject of numerous articles in the
Chinese press over the past six months.
---- * It is emerging as a showcase of
ref°ra’ auch as the Dzahai brigade in’shanxi
landscape.
*—
— -———was once holo, up as a
The slogan ’’Learn from Dashai” in bold red
was then a ubiquitous element in the Chinese
An
ironic footnote to the ACAW
reform movement was the news that on December 20
the Dazhai bridgade distributed
aO0,S?s fam...ly households and
contracted out its industrialtla
industrial and forestry activities to specialised households. Jia Chengrangt
follow the Dazhai
as saying:
Not ur&edictavly,
party theorists have been at some pains to justify the
current reforms in termsi of
of Marxist doctrine. A PEOPLE'S Daily article
late February, forinstance,
in
0^16^ !hat SOme P®0Pls consider the
revival of the private secto^tn
sector to be a retrogressive act. But the paper's
reply was that the r—
sucess of the agricultural reform demonstrates the
potential of
Socialist construction
-- ----- j with Chinese features”,
Tho reform are hold to be
a refutation, not of Socialis- ’ itself but rather
of an inferior version v
unsuited to Chimes national conditions,, f"
’ 77
Slavishly
copied fron fo„lg„
and further warped by
hyP.e-e ;,iit.rtnn ’’leftist praotlJ
---------- - Revolution.
The charge that the contract system constitute
•'age labour m similarly denied " wage labour" a return to the days of
Peking Fortnightly Discussion explainec.; » is’a a recent article in the Pek
manifestation of the
” -i-h
4. -i ,,‘h’’
of the means of
_ we contract labour system under socialist based
on public ownership of the
J means of production is totally different”.
(5 i
Resistance to the reforms, however, is significant amcoang party caders as
well as in the military. It is understandable that the leaders of the
reform movement given their base of power in the party’s central committee
should prefect to ks defend the reforms as a new but legitim-te form of
socialism rather than attempt to justify the abandonment of state ideology
on utilitarian grounds.
Many of the reported cases of obstruction are relatively petty. To the
individuals involved, however, the consequences can be tragic. Two peasants
in Henan province were recently sentenced to long prison terms after
running foul of Shenqiu country officials. Zhang Jintian and Chai Yun had
privately undertaken to transport a shipment of synthetic cloth. Their
goods were seis ed and they were charged and convicted with failure to ■
register properly as individuals traders with the country industrial and
Commercial Control Department. A newspaper in Zhengzhou, the provincial
capital, has criticised the case and callee! for a retrail. There have been
reports of boatings, extortion and other fortf of■persecution of individuls
who have prominently pushed for — or profited from— the reform.
In March the Ministry of Public Security was forced to issue a ”II Circular
on protecting households which have acquired wealth through labour”, and
numerous articles have appeared defending the newly rich in the country
side from blackmail, extortion and extra-legal exactions. Rural party
organisations in Sichuan and other areas have had to issue new regulations
forbidding production teams from imposing arbitrary and excessive fees on
wealthy peasants.
The problem, as an article in the GUANGZHOU NaNFANG RIBAO boldly put it,
is not that ” ordinary people” are jealous of newly prosperous households,
but that ” Cadres with certain powers are jealous? Over the years, the
writer claims, " These people have become used to poverty ... to them,
poverty is the badge of Socialism”, »
ooooooo^ooooo
SOURCE: Far Eastern Economic Review, April 28,1983. pp.4-0-44.
cooperative
SOCIETY
(6)
The process that had been going- on in China under Mao was
from Mutual Aid Team to Cooperative and from Cooperative to
Commune.hao, in fact had nusshed through his concept of commune
in the midst of much opposition.Today, in Post Mao’s China
the process is being reversed: from Commune to cooperative.
The present article, taken from the Far Esatern Economic Review
describes this radical change and explains the new concept of
’’socialist ownership” that is behind.
J
Contractual Fanily Farming
Tje Chinese leadership is workin- hard to dispel doubts about tbp
i‘s oh“®is “
“%hi011
olook book by 25 y«rb, and revert to the oooporetwe
The system of contractual
than four y--top agricultural
State Commission °n_ FEbL01Fy,RcSlrarch’ 74-years-old Du has had
long oxpeAsnce of agricultural administration,
^served
he
served from 11949-54
949-54 in the party's Central Born in Shanxi province
-South Bureau, and was
active m the Academy of Science.
XSbXrS SjtS S.rv’
« ‘»o state AgrtcXrel
have
“ld "some^comrades »«
’. doubts
i»tt»"”
MIL!i
- ---- e proved popular
amo-bb; the p ree.rta
‘
JSXSTiSSS L°
aroae, aoeordlns to Du. He .ord •"oooporetlvoe’.ltb^t^imrtiortio11’”’'*'
Srthert^ P01iCL?f “W '»“”»=« Part? In ?be Xd-1950 ?
nrt
COOPERATIVE SYSTEM
practice has been to ( _11
—j “the Collective”, while
usedmainly to desi^nato tho
„ u
wuj" Through the cooperative sy^to^the n?
cooperative
has been
QUtUral exPloit-ti°n, Du wrote:
according to the
mutuxal ben. fit,
ofSnroduc+iiVeS-lnt° th! system of Public ownership of and
the^EE
.
*
—
.~o means
01 production, improve their
economc status, and avoid the bitterness of
capitalist polarisation.”
/“
—
~
-
-
•
•
•
*
The virtues of the new system arc extolled on the -roum1 that it
state planning to .coexist with free decision ■inv-infl A
fc F
1
artas a tranadtlbua! st.lsa 1C5dl„e to
■ rt™'"?i.S12-.P“S“‘S “d
(7)
Another
main
advantage
of
the
j
■Pn-rt-f n-p „
-- system is what Du calls the "Transitional
form
of economy . . . sorvin
serving'as
He
citL®!
^'as a ii^ between the past and tho future^
—
—
i
as
his
.authority
-----noveien?
aUthorit^ on
advantages of the cooperative
movement. And —
m due
the cooporativies will serve as
—j course,
course. Du siys,
;
+h^
to mtrodueb.
socialism to the countryside—somethin^ which
the peasants, for all the starry-eyed admiration they have evoked PEioxin^
otartTttaL«*»*“•.*<> Chi“> O”"
rcBfrtod, tao’Se
rl*‘ “ Mra f"
■
°s “oh
°V(-r, expe?once showed that small cooperatives performed better than
J. i rge o ne s •
.taB
s: ssx “ rsx‘.
But within six months of
------ —allegedly a
Henan cooperative called (at that time) Sputnik (now back to its original
Ma°'S stateflent that" the
the People's
good"”
People’s communes
comnunes are
are good
b?vnner of aass implementation of the movement in most
of China—wita results, over a three, year period, which are now
seen as having been desastrous.
Qllly+hS
nnrt^
Socialisation^ ’ mist^kes/f the earlF stage’,’ Du says, ” We wanted total
* Pf1Vate P10ts and household sideline production were
Wished, Marxist econo-Bic "laws" were inappropriately followed, public
OMB halls B„a collootivisation of proport, int^ool.ol the p”ta J" -
to aEkrisgJ
tl“i “°“t a)'ud-“-tho-«»‘>i itairidtausta
a„rt+drtViKiOn
th? co^nunos iat0 throe tires - commune leadership, pro
duction-brigade management and production-team farming—was used to
^oll^fy the peasants and reduce the rigours of Ifeo'.s egalitarian dream.
Deng Xiaoping, now China.'s elder stateman and the power behind General
Secretary Hu Yaobang and Premier Zhao Ziyang - as well as tha late
former of state Liu Shaoqi - introduced the reforms know® as the "sixty
Articles .granting and guaranteeing substantial right of autonomy at
the production-team level — that is, the lowest.
Mao, while seeming to comply, soon counter-attacked with this promotion
of the expefence of Dazhai Production Brigade in Shanxi, where the product
ion brigade, accounting was carried out on that level, private plots
voluntarily"relinquished and the emphasis was put on attaining
seli-sufficieny through back-breaking toil and self-sacrifice.
Had the APC scheme gone .ahead in the late 195O's, the system of accouting at the team level would have been implemented then, without the
creation of communes as political and administrative units. ( They have
been stripped of these powers under the new state constitution promulgated in 1982).
Du puts his finger on the problem of public ownership of land by
pointing out that peasants will not take care of it as well as if they
had a sense of ownership. He proposes this should be overcome by
seeing thgt there is stable tenure, oven if the land is theoretically
owned by all, so that fs in the peasants’ long tern interest to husband
its resources.
(0)
d den
as a
misconception" the idea that the commune system was
Sd
ahun c°°P®ratgss>
new. Egalitarianism, in the philosophy of '
Deng and his leadership group, is different fromequity - which m§nS
recognising the existence in different parts of the country n
c
of inequalities of land tenure and crop yield and concentrating
on giving every one a chance to make the best of the resources at his or
her disposal.
The cooperatives system will also cut down on the need for large numbers
of non-productive cadges, a chronic f^rievance
'
amoang the peasants, who 1.
have to feed then and take’ their
order
--- --- w to boot. Du also stands up for
early 1960s policy, closely associated wtih Liu, of ’’three guarantees
and^dne
and ne reward
reward ” — under which peasants sold ;an agreed share of their
products to the state, and
and in
in turn
turn enjoyed
enjoyed certain
certain economic liberties,
it was, m other words, an early version of the responsibilities
system now in practice.
The article defends the right of peasant families ito devote themselves to
specialised work tasks not involving the production
_i of grain or other
basic crops (cotton, oilseeds and sweet potatoes), This mi.ght mean anything
from technical and mechanical :repair to rearing chickens, Specialisation
can also eliminate the unpopular• and time-wasting system of allocating
Various work task to different individuals
~
——> <or families
on a day—to—day basis,
Du’s proposals are certain to be controversial in the leadershipj and
bureaucracy, representing as they do <a virtual
' ' ‘ declaration
’
that vfhc
socialisation of agriculture has been. a failure.
SOURCE: Far Eastern Economic Review. April 28,1985. pp. 52-53
By David Bonavia.
I
Ek^^Irli=I^I^TX=X£'i2S_AHEAD
(11 )
China today is envisaging spectacular growth through planned
th?R ntSntlOn °f b°th itS industry and agriculture! What does
s planning consist in ? What are the chances of achieving
ambitious targets ?These two questions are examined in the
ni’nn010 WhlC! follows‘ it analyses the general lines of Chinese
planning in the post Mao period.
Despite their i_
for nothing less than a “
the end of the century.
’
nor a grand design as p
Hua Guofeng, when he called for
-- ---- a near doubling of the economy by 1985.
.ridl”e ‘■““-“umo
„d
ai.JSin;
successors were deriding his
liberal
otLS
Emboldened by the immediate if the tight Central
7 nid-1980 Deng began reffering tosuccesses ©f the
a possible per
from the less than
The state goals for the end of the century compared with 1980 are*
(
11
or an average annual increase of 7 P <
( lhe Chinese perfer to u^p airran
oj
,0
instead of cross nation^
a standard
measure t
^ause the
because
o
To nearly double C_
the output of energy - tn standard coal
equivalent-to 1.2 billion
----- i tonnes.
o
To nearly double the output of Steel to 70 million tonnes.
6
TTo raise /^°^
-------r^neration by "early four-and -a-half times
to 20 million Kws.
o
Io increase foodgrain production by 43.7 % to 4S0 million
to nnes.
o
6
o
To double output of cotton yarn to 5.75 million tonnes.
io stretch Chemical fibres
tonnes.
----- ----------- m°re than ^iye-/old to 2.5 million
To more than quadruple exports to US $30 billion.
not MSshedeSsSLt!n°frCeS/re (?OnsiderablG- Although Peking has
have inaintaine/that the cL°J Crude]"011 ^serves, Chinese publicatio®
that ist between Abu Snbi?
7
in Potroloua ^sources26.1' billion barrel f Sone
°f L9*5 billi°n barrel-s and ^’s
somewhere between 2o’and 40 billion barrels' Give^Ch0111^3^ P°te“tial
in the BZi
BehaicS
Gulf’:nr™L^ancf. the South
s
M^i-tP:5T
re
onv^rds
* 1S Set to 5row faster from the hate 1980s
$12)
production by the end of Ho
ns’ss.&j*’-8,bs“»?
*
• *-
lections of China’s primary energy
Ln:,“i°L‘thhe.C:”“y,’ rawt’,'98! b™d
«*’ '’®-78Sr
equivalent. The modest plans for Q-t- i
' ^?n tonnes of standard coal
In early I979, befo„ Pekin^s era-.atle"'^'^-'1 “'r
a sudy by the United States“cTAPnrofcnt»a
J S ”10™ had talM” 1,013
tonne. ,t .teel in the^rty 1 9?O.
ai“ ’w14 prOd"e 60
eon. US s 40 billion. Chinese pl™Zi r9°!Picult
„.
at a hard-currency
cost of
,
- — are also moderate,
m direct contrast to Hua
w-- •’s anb
’ itiona
-.^^tuiuurG
announcement in 1978 of nechanisatibh of the farm sector by 1980. -h
f?,;
OVIAO. Apiculture ‘So
materials - about 68% - inclnHm
sturr. r„ th.
'+4-
P001'10 «’• 1»
oouatrysil.,
P”™1"!: »0« 25,3^ or
ncius’fcry with most of its raw
X ° “hStTft “?"’tXd f°°d-
on about two-third of ho
. ^iiccr ib has a direct bearing
"Agricultural output influence-'^to S]Jh3 °ffdcial Beiiing Review putsit:
national economy and directlv - tnmi1
extenfl the development of the
ction". Bad harvests hnvJboL
y®3 the SCale and sP3ed cf construindusrial "output.
'
subsequent-years followed by a drop in
Rnb 53.7 billio^t^Rrib
b®tween 1957 and 1978 rose from
Economic Research reported‘th.^^th^n t 6 au*horitative journal
fell by 5.2 $ in the same neriod k Per.capitasupply of griin actually
tion of such a statemen1- criticisi n^11 fJascountln^ the political notivafunction of growth in popuStJi
P 1CieS
the deCreaSe is a
line farm products. " ChinJ<=
aS over-valuation of the sidea state oZseS-s^ficitnty "
yet been freed
policy of boosting high-value side
^vaew. Aspite the current
Vegetables, handicrafts—A-riculture is mlik^i°n7plf* Poultry. fruit,
iudubtry mpldly .uou* iuXXS
XT
uotlon.l iuooS «hllePth‘th°peSor’nguXrtUS1,J BOoT
5” T***
°n a projected population of 1 2 billion .
S \80° p1er head ls based
officials privately concede the possiWit? of J T? h n
Centur^ •ChineSe
100 million
i----- mouthsto feed In th of
--------- m more
+■ 4-u ’
^-Hion population
^7
!yent the per Capita availability
of foodgrain would barely
„ rise by 10% m the nest two decades.
boosting the
ia the continued Chinese°insistencf
on7idisposable
dthPOS+ble inC0Qe of the P°Ple
as a ratio of /ross
incomes)
Amu*
i**1' ra’tes
accumulation (Saving
for sone tine Jross
"duriL incomes).
the
more than 4<$>
spend their money on Jut h^ Z
»evolution when people had little to
the late 1970s aft^ St
W° in reCsnt ^ars’ >
such as Xue Muqiao and Xu Dixin t
f8 p°wei’’ eminent economists
not range above 20-25^ if people’stivJlihtd^
accuaulation should
last year the rate of 25-29$ has h t 4? d WCrG to be OQproved« Since
aiibitions-plan for the end of t
T
6
ratio in view of the
lation win provide Xt fot
“ Jhe high rate of Gccunuincentre' P^ova-de ^nds for investments,it will aiso act as n distor the people to produce more.
in
™™,ialOn p°f
1= .fflol«oy
last October, Premier Zhao ZivtJ
f^\onal science conference
construction investnent
reVealfd
1 of capital
to 80 fen (finb 0.8) in fixed assts^301
C°Uld be converted only
produced an outputttue of 96 fen "
wt Jot’
1 °f
aSSet^
level and econouic results, we will
ZJ douM
?resent technical
order to double our outnuf vni„Q»
. double our investment in
that the economy was to^mrovp »Zhao Pointed out. He went o n1 % c omne nt!
technology, whether such Significant°?i®iftntfv le“t
ad°Pt adv' ’-nCed
eficctud m a span ef two decades is tho question facinFchinese planners..
(13)
The Chinese are aware of such criticism of their path to uodernisation. Since last year the Chinese media have been full of explanations
of the new ipolicies
'
and goals. As this debate has also drought attention
abroad, Peking
“g’’s foreign language publications have also seen fit to carry
a series of articles
------ j on what is labelled Chinese-type modernisation. The
articles openly try to answer the question: can the goal for the year"
2000 be reached ?
At the outset, the articles try to show that the new policies will • '
not repeat the mistakes of the Great Leap Forward and the Cultural
Revolution. They also reflect a tendency of gradualism for the 1 980s.
China s sixth five-year plan calls for a 21.7$ rise in GVIzO. or an annual
increase of 4%. But economist Xue, who is als0 the Secretary-general of
the^ state Council s Econonic Research CGntref s.->id the country should
io£nVe f°r a
°r hi8her annual growth rate for the first half of the
1980s while the rate for the second half of the decade could be 6% or
higher. For the 1990s Xue foresaw an annual growth of 8% or higher
Despite the apparent gradualisn the rate for the two decades ending in
2000 works out to be ab aubitious 7.1$.
_ In justifying their end-of-the century targets, the Chinese draw upon
their econonic experience since the early 1950s. According to official
? fuiCS’ in the 31 yeflll81950-81 the GVIAO grew at a rate
of 9.2 $. In the first three years (1950-52) the economy grew at a
phenomenal rate because it was a periodo_f rehabilitation froia the no re
than a decade of war and civil chaos. However, even if these years are
excluded, the argument goes, the annual growth rate was in the order
of 8.1 $.
r-m
^in<T econ°“istf 51180 point. I out that in the 32 years of couuunist
rule
China’8s growth
growth rate
rate was
w^s above
above 7.2$
7.2$ in
in 22
22 years and below 7.2$ only
.
01X1111
in 10 years.* This nunbers gane
game can also be seen in another light. If
the first three years of rehabilitation, when there was hardly any plannmg of the economy, are ignored, and at least four years following the
period of negative growth in the W60ss are
are excluded,
excluded, only
only in
in 11 44 of
of the
the
29 years 1953-81 has the growth rate been above 7.2%.
The few successes of the planned economy in the past three decades
have arisen largely from multiple croppin. andadding on new industrial
Plant - enlarged reproduction by extension, in Marxist jargon. Now there is
prec ous little extra arable land available and the scope for additional
investment is also limited compared with the past.
e5+^nwhlle» SHPPiy of scientific and technological personnel in China
s still woefjilly inadequate, as the Chinese themselves admit. In'a piVlalon °f ’lore than 1 billion, a Here 5.71 million or barely above 0.5% are
/3:2SW?
Zi{ied
as /?
scientific
personnel.
wLa than half
^S
el. aS
10ntifiC P
01180111181- Even anoung these,
those, l
less
(43.7ZoJ attended colleges and only half of the teachers had any university education.
Despite the existence of the preconditions for the postvl 950s econonic
takeoff in the oountries held as
<examples
by China, jit
seems I^AX
fairly
’
JT —
. u OCCIWO
’IV
Obvious
that
such
growth
is
not
sustainable
i
X,
.
- .
—in the long
term. ’Nevertheless
—' 1bent
— on enulating
’ * •
•* _ _industriafsed
_
the Chinese r
seen
the
countries"and'technicnl
efficiency
has
becone
the
byzzword
in
China
™-aay.
meal
become
bgzzword
to-day. Last June an
article in the party theoretical journal RED
“ FLAG stated that none than
articic
half of industrial plant
20-40> years old
-' and much of it required
'
V
KZ ■<> M.
.•■■■Al
LX
X
J
I.
I" fc~» (J
<^l:1^u2?.Lf.eLla?eItente ^inenteconomist Sun Yefang wrote ^before
F^ruary thatctepreciation of fixed assets should be rised from the"
current 5*5$ to 1 0$ a year in the 1980s and
- -Jtoa still higher rate in the
1990s. Roughly speaking, all of China’si industrial plant will have to be
replaced nt least twice before the end of the century at the 1980s frate
reconnonded by stun. Chinese economists ■...,
ar.i?’ue that renovation of equip—
nent would double industrial output by the end of the century, v,
(14)
If China does succedd in its stated ^o^l Mr aonn *x n-rr-r
have risen from r_L
tot 82.7
to „ „s;lve
about 34 tines in 48
years.
hardly any Independent analysts ,0„ld
bet on that.
++4-+-H-+-H-+
O^CKE^SES=Ig=GVUoi=^95P-81
(Years with wore
than 7.2% increase over previous ye-.r)
Year
^increase
Year
%increuse
23.4
1 9.0
20.9
1 4.4
9.5
1 6.5
7.6
32.2
1 9.5
9.5
17.5
Iears_with_less_than_7.2_%_Increase
1965
1966
1 969
1970
1 971
1 973
1 975
1977
1 978
1979
1980
20.4
17.3
23.8
25.7
12.2
9.2
11.9
1 0.7
12.8
8.5
7.2
1 968
1 972
1 974
1976
1 981
4.2
4.5
1.4
1.7
__ 4.5_
1 950
1 951
1952
1953
1954
1956
1 957
1 958
1959
1963
_________ 1.964
1 955
1960
1 961
1962
___________ 1967
ing_Review
6.6
5.4
-30.9
-10.1
- 9.6
Main SOURCE: .BrJ^GJCulkan^uMer the tittle of 'P^+ i
,
grandiose conclisions
'.7Z------- «----- lots leap to
.pp.44 to5_0~----------SAons, Far r.astem Econonic.April28.1 983
CH DUJ S NEW ST ATE LEAgERSHJg-
mj
Along with a transformation of economic institutions. Post Mao
cninu is ongugod in a radical transformation of its political
institutions in which democratic participation is extended to
all various sections of Chinese society. This is why the oh-or-actor
of the present state has been defined in terms of people’s democra
tic dictatorship and not only as dictatorship of the proletariat.
The transformations aim at building China into an advanced social j^t
state with high degree of democracy and culture. In this article
these transformations arc analysed. Tho background of the leaders
who are promoting these transformations is also explained.
The decently concluded First Session of the Sixth National People's
Rina's superpariiament, was a major landmark in the
p cess of mstitution-buildmg in the People's Republic of China.
This was the culmination of sustained efforts for over four years to
huild a systen of political institutions which the post-Mao leaders
XiaS/0Uldaeutabll?h socialist democracyin China. According to Deng
tho r + and his coleagues, the movement politics of the period of
china®ntraA fievol^tlon had created anarchy and seriously hampered
toward^
deve1l0Pment- Therefor^b ^ey have worked assiduously
towards setting up a legal system to0-nlt>rC{! the rule of law. They
efficiencv^A^+h180^
strucute to ensure co-ordination and
to nanAr-n in
important job of the NPC was to elect a new leader
to manage the new government systen and carry forward the policy line.
The Process of rebuilding the state structure had statted in 1978 when
the 1975 Constitution was amended tp drop some if the practices of the
Cultural Revolution, Thereafter a Constitution Revision Commission'
was
appointed
(iv-4
xv to . work
a new draft. Even though Ye Jianying was its
of3 he^c ThehiMd thiS effOrt WaP' Psns Zhen' the Chairman
of the NPC. Incidentally
firJt
J
2
I? aS M;iyOr °f Bei3inS in 1 966, Peng was the
first major target of the Cultural Revolution. The Draft Constitution
was circulated for nationwide discussion in April 1982 and was finalized
and promulgated oy the NPC on 4 th Decemtier. Under the new Constitution
time in” v dCPUtir
t0°k plaCe S00n 3fter’ and f°r ^e first
time m every country the number of Candidates was more than the number
uo oe elected.
THE NPC SESSION
SiXth NPC began on Jubne and ended on 21 June
1963. A total of 2,977 deputies attended the session, seventysix per cent
the NPC to discuss draft laws, consider the Premier's report on rovernl^tW°rk and approve national budget. Its Standing Committee met at
least once every nonth to carry on day-to-day legislative businession
and tbntP
there was only one meeting of the Fourth NPC
and that was in January 1975. Thus the revitalized role of the NPC and
furlp+lndlng Committee reflects the new emphasis on institutional
*uncuioning.
PRBSIDENT LI XIANNIAN
Se Mc/lt^rL^L^tnr C0:maUn^t leader Li Xiannian as President of
■d i -xv
A
L1 18 still going strong and was last year elected to the
Politbureau of the CPC Central Committee at its Twelfth Congress^ ^e
antle of the head of state would have normally fallen on Ye Jianying,
healtrwhichtledr’totM?’Soratdine CfE1I3ittee’ but fQr his old age and ill
Huaim wnicn leu to his Voluntary retirement.
(16)
°f «» l°»e «»roh ™. a
“
wather.a the storJ Lrtod rf
a
“ E"1*1
"«» »1»
time in 1 967 Li w .s al-o
Cu^ural Revolution. For a brief
help he continued ?o steer^ho Oh 7
6
ffUards- But With Zhou’s
throughout theXhde' ^en Hl?So?Se e°°n0Iay?s Vice-Premier
in his team. After
s fallen ^QAO^-f^00^^ Zh°U’ 11 “^ed
not in favour of the tide oJ fh
W'!S believed that Li was
'
'
P^iculalvJioth
!
eCOnOQic reforms. Indeed other
1eaders, L .Lt . aiyanothGr ^teran, Chen Yun, theoretician Hu
Qiaomu, economists Sun Yefang (wh
Passed away) and Xue
Muqiao seem to be Deng’s ceconc&c 10
advisers who have charted the new
=owrse- However, Li has perhaps accepted
new line is popular in Chine and the new the honour seeing that the
leadership is in good command*
The position of president . . .
d»r
ing th.
during
the Culturak
The NBC standing Committee
Zhu De and after his
Used t0 perform the role of
the head of state on ceremonial occasions,
a
r
.„._
.
r
---* Now these offices have
been, differentiated, g
Zo
h
t
l
le
Vice-President of the Republic
has also been created. Liao
'
Chongzhi, Politbureau Members of the CPC
who was in charge of Overseas
slated for
this’position^ButT^® C“ssion for a l°ng
time, Twas
‘
-
The_ chnipVr
n
B 1 h® Passed aKay while the NPC
was in session.
.1.
-- — 7
The choice
fell on another old-time communist from
the minority Mongoliani uTl
”’
nationality,
Ulanhu. He had also faced Red
Gua'rd attacks briefly in 1 966
in ?leadership
’’
‘ ■
positionhhroughout.W3S qUlckly rehabilitated and continued
COMMITTEE
^IuES~Kti2’l»F
the ms has transferred much of Its a,,b_
fo%xtto„‘ra
t^borahlp the NPC performs
also pl.’Fth)" SmS*^J h"
idSflotion. It. deputies today
But as a rIl!J^?,r ®
* suPervising governmental activities,
role inhribtin^ iX^Ltlrnreti
!tanding Comnlitiee plays the key
Its new Chairman is the m
£nd enffflrcing the Constitution.
Mao China's l^l sSte® LT T
Zhen' the architect of post
structure. AmcJ&ng the twenty Vice-chtirmf^Ch^nT^ ‘
Stat®
precedence otoer others no tt
+■■
n”
Gllen ^lxlan has been given
ostsoeny «2^.’^‘h, eloal„e
industrialist Rong Yiren ahd Panchen tT h
T® T'0 a
Huan® Hua»
C'hairmahi
Panchen Lama have been elected as Vice-
As against ’96 members of the outgoing Standing Committee the r- -
new one
state council
State Council, the Chinese counterpart of India's Council of
Xs‘r"o’»e“ sx” r*r “r”
oTsxe^vier 7r'
in *-•
t«rXer.i “a:it5rc)“51:r.sic,,mn p,'‘,'ri“” ■*■
(17^
Both have achieved swift promotions under Deng Xiaoping’s plan of
encouraging younger and specialized people of ’’fine political
quality and with specialized knowledge’•
Out of the ten State Councillors, seven have been carried over from
the previous one and they include the only woman member Chen Muhua.
The three new State Councillors are: Wu Xueqian,Minister of Foreign
Affairs, Wang Bingqian, Minister of Finance, and Son- Ping, Minister
incharge of the state Planning Commission all concurrently. Amoving
the forty-five ministers who include two women besides Chen Muhua,
eight are new. Song Ping was Vice-Minister in the same Commission.
Liu Fuzhi has been shifted from Justice to Public Security. Zou Yu
has been promoted from Vice-Ministership to the post of Minister of
Justice. He Kang, Jiang Xiaxiong and Jiang Zemin, previously ViceMinisters, have been promoted to their own ministers of Animal Husbanw
dry and Fishery, Nuclear Industry and Electronics Industry respective
ly. Two new ministerses have been created, a ministry of State Security
to su^rvise counter-espionage work and the office of th; AuditorGeneral to keep a watch on public erebding.Former Vice-Minister of
public Security Ling Yun is the new intelligence boss and the Ex
governor of Shaanxi Province, Yu Mingtao, is in-charge of Auditing
Administration. It may be recalled that in the past there was a pie—
thore of oinisteries, many of whom were numerically identified. Zhao
Zyyang, who has consolidated his position as premier over the last
two years and more, seems to have personally given final shape tohis
State Council team and can confidently look forward V a stable functionging of this central executive body. His report on the work of
government was a sober stock taking of the last five years of recti
fication an various economic and political fronts. That this State
Council will fi.-rmuiiate the Seventh Five-Year plan while implementing
the sixth was the only noticeable theme in his report.Zhao has himself
kept the char.ge of the commision for Restructuring the Economic
System which show that the process is not yet over.
The NPC re-elected Deng Xiaoping as Chairman of the Cen tral Military
Commission of the PRC* This Commission has been created by the new
Constitution in order to provide the People’s Leberation Army ’an
appropriate position in the state system ’. Last December itself the
personnel of this Commission were finalised. The Vice-Chairman of
this commission have remained the same including the aging Ye Jianying
The session also elected Zheng Tianxiang President of the Supreme
People’s Court as Successor to Jiang Hun, who had conducted the great
trial of the Gang of Four and Mang Yichen Procurator-General of the
Supreme People’s Procuratorate in place of Huang Huoqing, both of
whom had long iningfs on the job.
PA'l’lIBTIC FRONT ORGAN
As usual, the National Committee of the Chinese People’s Political
Consultative Conference (CPPCC) had its meeting coinciding with the
NPC’s. As many as 2,039 members were present and also took part in
the NPC deliberations as bbservers. It shoul be noted that ever since
the Deng Xiaoping group came to the helm of affairs they have consis
tently tried to win over the non-communist forces in China , intellec
tuals and experts in various fields, on the plea that the moderniza
tion programme was a patriotic duty of all Chinese. In fact, they
have succeeded in securing the sympathy and support of overseas
Chinese to a very large degree, This is why the character of the present
state has been defined in terms of People’s Democratic Dictatorship
and not only as Dictatorship of the Proletariat. On the eve of the
NPC Session the Central Committee of the CPC invited many non—communist
parties and persons for informal consultation begore finalizing its
proposal for filling up the various posts.
The sixth National Committee of the CPPCC elected a Standing Committee
with 297 members and a chairman and 29 vice-chairmen. Deng Yingchao
(Madame Zhou Enlai) was elected Chfrperson. She has been on the fore
front of the post-Mao reforms right from the begining. me
•
(18)
b^” el0C‘ed-
the
anthropologist and°chaSan o? 2"Tt?
.^noxi^Athe noted
Shengatao and Ou Wuh ^tiOaallities Institute), Ye
The faaous novelist’fla Jin'is^lso ono^nh^r^
Guan'?yinS"
to an official analysis the represent nt J on of S06;'*'11™- According
Standing Committee has cono down form 70 to I?
ConQunlsts *n the
democratic parties have 1 23 members Je
9&V Cent* The ei’ht
as against 25
- Per cent previously. L
the to^
fqccs in the .Standing CoEimittn^
bribers are new
included
cilltural circles,•
Macao and Taiwan,
and writer Israel Epstein
are also sabers of the Staging Committee.
5X°iSa
demockacx
’ tuition first fron the
current phase since the Thir/n? f \P?aSe and theR to the
CPC in December 1978, the Sixth HPC^fnf th® Central Committee Of the
along x the already crystallized^the task of construction
ni Xianninan in his coneludinrr ■
u
‘development. President
work for building China into
^rtvCh Called uPon the deputies to
dsgreo of democracy and culture $7'lnc®d. soclalist state with high
facilitate bibth participation ,nd?!J!!!u/tr?ctuye is supposed to
to realize socialist democracy Coni'1 ership’ freedOEi and displine
breakdown during the Cultutral*Revoluti a*3 Q reaction to the institutional
stresses rules and procedures control
nUCh °f the neW stnte ^tem
lead towards institutionalization
d rcsP°nsibility. This my
themselves are already talking about kureaucracy» xn fact, the Chinese
was a campaign agafst bureaucracj launch!! f r!SUlt
of which there
also made a reference to the four card&l 1?st.y®ar* Li Xiannian
the socialist road, people's d-moenti! Principles of adherence to
tlf? Communist Party and Marxian r m • •
'^'tatorship, leadership by
have been usually hurled TSoS
T
&0 Zedon« thought- thich
rightist. The Ec'nomi pollcSs^helh
the preSGRt
of the leftist Policies of th! nas! 1! h 64
*ay- °f «atification ’ •
i.e. economic growth and to manage th!+
°nly °ne PreoccuPation,
structure has been effe&velv^r!J?!
the new state
new policies has been so positive tS’th
doa®stic response to the
ed
dead®rahip has proceeded with
with confidence
confidence along the new it S!
strategy may
generate
inequalities
!!„
351e
/
’
5
0wth
oriented economic
W generate inequalities?
while the excessive
stress
suaer*SQ -T.nd crude materialism
excessive
stress on
on institn-M
bureaucratism
and centmn
o*!td°ml Actioning ^fead to
----- 1 and centralization,
! Present Chinese leadership
seems to have decided to unv th7a
are conscious of this nd thot , TClf°r Sr°wth- Perhaps, they
spritual civilization
and XHst’XJS.^
SOURCE; CHINA REPORT, July-August 1983.
pp. 3-9; By lianoranjan
Mohanty .
“’-V1' 't—h«lr.on .fc.toen
Tnn <7h-;,r
, rx e*Lect0d w“° mcludo the former Guornindang renerals
Xiaoton^ r th
eng Zhaoxiang, leaders of democratic parties, Fei
anthropologist and Chairman of B the nationalilies institute), Ye Shencrtao nnd On Wn •
and Wang Guangying.
.
*
’ entrepreneurs Zhou Shutao
(19)
NAME LIST OF STATE LEADERS
President of the People's Rebublic of China
LI XIANNIAN
Vice - President
ULANHU
Chairman of the Sixth
PENG ZHEN
NIC Standing Coimittee
Vice - Chairmen
Chen Pixian, Wei Guoqing(zhuang nationality), Geng Biao, Hu Juewen,
Xu Deheng, Peng Chong. Wang Renzhong, Shi Liang(f), Zhu Xuefan, Ngapoi
Ngawang Jigme(Tibetan), Bainqen Eridini, Qoigyi Gyaincain(Tibetan),
Seyp.-1d.1n (Uygur), Zhou Gucheng, Yan Jici, Hu Yuzhi, Rong Yiren, Ye Bei,
Liao Hansheng, Han Xianchu, Huang Hua.
Premier of the State Council
ZHA ZIYANG
Vice - Premiers
NAN LI, YAO YILIN, LI PENG, TIAN JIYUN
State Councillors
FANG YI, GU MU, KANG SHIEN, CHEN MUHUA(f),
JI PENGFEI, ZHANG JING AIPING,
WU XUEQIAN, NANG BING QIAN, SONG PING.
Secretary - General
TIAN JIYUN (concurrently)
Chairman of the Central Military Commission of the PRC
DENG XIAOPING
Vice - Chairman
YE JIANYING, XU XIANGQIAU, NIE RONGXHEN, YANG SHANGKUN.
MINISTERS UNDER. THE STATE 0OUNCIL
Minister of Foreign Affairs
WU XUEQIAN (concurrently)
Minister of National Defence
ZHANG AIPING (concurrently)
Minister in—charge of the state Planning Commission
SONG PING (concurrently)
Minister in charge of the State Economic Commission
ZHANG JINGFU (concurrently)
Minister in charge of the State Commission fro Restructuring Economic
ZHAO ZIYANG (concurrently)
Minister in charge of the commission of
FANG YI (consurrently)
Science & Technology
Minister in charge of the state <commission of Science,Technology
and Industry for National Defence
CHEN BIN
Minister in charge of the ^tate Nationalities Affairs Commission
YANG JINGREN
Minister of FrbJic Security
LIU FU7HI
Minister of State Security
LING YUN
Minister of Civil Affairs
CUI NAIFU
Minister of Justice
ZOU YU
(20)
Minister of finance
Wang Bingqian (concurrently)
Auditor-General of the
YU MINGATO
auditing Administration
President of the People’s Bank of China
LU PEIJIAN
Minister of Comnerece
LIU YI
Minister of Foreign Economic Relations and Trade
CHEN MUHUA(f, concurrently)
Minister of Agricukture, Animal Husbandry and Fishery
HE KANG
Minister of Forestry
YANG ZHONG
Minister of Water Resources and Electric Power
QIAN ZHENGYING (f)
Minister of Unban and RuraQ: Construction and Environmental Protection
LI XIMING
Minister of Geology and Mineral Resources
SUN DAGUANG
Minister of
LI DOMGYE
rietallurgical Industry
Minister of Machine—Building Industry
ZHOU JIANNAN
Minister of Nuclear Industry
JIANG XINXIONG
Minister of Aeronautics Industry
MO WENXIANG
Minister of Electronics Industry
JIANG ZEMIN
Minister of Ordnance Industry
YU YI
Ministrer of Astronautic Industry
ZHANG JUN
Minister of Coal Industry
GAO YANGWEN
Minister of Petroleum Industry
TANG KE
Minister of Chemical Industry
QIN ZHANGDA
Minister of Textile Industry
WU WENYING (f)
Minister of Light Industry
YANG BO
Minister of Railways
CHEN PURU
Minister of Communication
LI QING
Minister of Posts and Telecommunications
WEN MINSHENG
Minister of Labour and Personnel
ZHAO SHOUYI
Minister of Culture
ZHU MUZHI
Director-General of XINHUA News Agency
MU QING
Minister of Radio and Television
WU LENGXI
i
Minister of Education
HE DONGCHANG
(21 )
Minister of Public Health
CUI YUELL
Minister in charge of the State Physical Culture and Sports
Commission
LI MENGHUA
Minister in charge of the State Family Planning Coianiission
QIAN XINZHONG
CPPCC LEADERS
Chirman
DENG YINGCHAO (f)
Vice-Chairmen
Yang Jingren, Liu Lantao,
Fei Xiaotong, Zhao Puchu, Ye Shengtao, Qu Wu, Ba Jin.
ISI DOCUiWTATION CENTRE
Post Box 4628
Bangalore -560 O46
oooooooooooooooboooooooo
WXOoGMWWOO
•==Il§X=2|VELDrME^T=IW = THE_CH£f\IESE
(22)
£S^^l§i=^six
lhe now policies envisaged by the Chinese Communist
Party Leadership cannot be carried out unless a purge
o± the contaminated elements take place.The present
W^1^e
ta^cn from the Review "South" gives an insight
into the latest developments taking place in the
Chinese Communist Party. It reveals that "
unlawful ”
activities ,as
aS well
W011 aS anti party grumblings
had begun
undenning the party.lt points out to the Efforts
made
to overcome the shortcomings.
ConnunisiSaityMSLs^Z Boiii^
n?Cr on
°h C
Officials Qnd
winter
as
Beijing
launches
While physical liquidations S Sot T+h
T rGctification ^ive,
is are not on the agenda
collaboratorsFhave1takentaOS?nSn’?DeinC' ^ia°r'inC» _anc- his closest
over the last two years and thev nrCk,at-th? Folitical establishnent
uncovered. Their solution is
& <.-1S012chan'fced with what they have
single party ueXr
1 \ 1
thG ^entials of every
party's rolls will be required to ro thr “J
currently on ^e
process. Undesirables cou-ht in the ^teoU£a a/>cnbership registration
ejected fron the party.
C & screening process will be
purge• Tho
"^one members turn a blind n/ +
a.- Pr°klens within the party,
and some even spread these ideas0"^^11^^
anti-’socialist ideas
report published in October
p ’
to a central committee
tf6 ,^4 SiXJXo u1 "“J!1
± “‘•jr
eliminated. Others abuse the-i^
Jye,t) t0 '9'6 have not been
gains for themselves and those close“to^h031?10118’ "Scokine Personal
the report continued. "They ignore the ?
7
p0SBitl° noans,"
and they even take a direct part in
i r i Pr°toc't ancl- shield criminals
selling smuggled goods, corruption
1 actlvities such as snuggling.
accepting
bribes
and profiterring. "
The central committee hascorruption,
r^?a ttb?
sobtlne?
ri^s ^d
s
run
a
pilot
scheme
to
i
nade
will not got out of hand or
n?
do.asure
^e its programme
or cone under the control
-- of extremists.
ton °ut of
2.5-nillion
• party units and branches,
bbO grassroots units for a <dummy run of the campaign. Beijing selected
has announced that this
The leadership
exercise
found "the overwhelning najority
party members neasurpc! iir»
4-n
J of
tution.”
U^sureci up to tho requirements set in the party const!to the eLpaign is neut^lls^d
"L'ad^
Potential opposition
careful to
ensure6 that
-.1 advance. ;
forces have produced sone of -Jh^ott^b
instanco, the armed
to the economic reforms espoused since 1978°ril4doological hostility
the Central Military Commission annnnn 1
b** th° Start o:f the PurSe,
°Ier 100’000 military
cadres had been posted 'to lower-lovel^its "I
V
.j army building while 00„dllctlas iXt^X^Xd^iT
‘
related
to
ffyr
?Urce has already aroused resistance.
. cnwU
Maoist era. Officials who believe
7 •Heilongjiang province,
Mass
the
their hardships^rthe^^d^of the
f°:>piiot sd““-
(25)
Maoist extremists up to 1976 give then the right to the good life now
onenlv
thelr pripleScs- por o^r a year, officials have
government's instructions to relinquish the lavish
houses and other perks that they have grabbed.
grabbed. Also, there are many
m the party and the bureaucracy who , ■ ’
■
o c arc many
are at loggerheads with the
current leadership either because of genuine ideological differences
of frustrated
political ambitions.
i .
--- - Deng Xiaoping and his col leagues
are taking pollteal gamble in lauching a Hajor purge.
Chinese officials sympathetic to the rectification campaign argue
io^ttc
f
San-1! iS
^ey insist that thc'ccSral
thnt 1
+uC C°™lst Party has been correct in admitting openlv
tSt f
n°r th° Qfficicncy of Party members can be “
ahen for granted. The public, these souces claim, is weary of the
abuse of ofuco and the incompetence of many party members.
Other Chinese sources say Deng 21^.,
Xiaoping and the present party
leadership had no choice but to
. - launch a purge. Over the last six
years there have been ja number of limited campaigns to weed out Maoist
extremists, the corrupt,
’ r ■the criminal and the unqualified. At the
same tine, m,there have . been attempts
to
-J carry out sweeping economic
reforms,
_C?npal?n? have.^t with only limited success and have
also revealed serious defects in the calibre of political leadership
at many levels.
The most dramatic examples have been in
in the economic sphere. The
party1s iscipline Inspection Connission has
—j uncovered 192,000 serious
cases in the 18 months ---since$ a crackdown
January 1982. 7Investigations on 131,000 on economic crime started in
cases have been completed.
According
to the------connission
t
1 over > 71,000 members of the party
’ were
economic
SZusFthAt The official ®
c°nonic connentary Jinji Ribao ostinated in
A Gust that ’’one-fifth of the enterprises which <ought
' ' ‘ to be payin- tax
have succeeded m evading
payment".
Tax
fraud
has
bccorie a way of
- - .
j
Tax fraud has become
life for many state and collectively owned factories
-------------j and commercial
units.
Sone party officials are afraio. the
L
purge is such an enormous
undertaking
that
it
will
divert
leader
camnaisviH
'Tho-.r
4.
' ----- ' shi]I’ resources from other crucial
campaigns. They note that a major
reorganisation of
industrial
najor reorganisation
of industrial
management which is supposed to be undeertaken in the largest enter
prises has made little progress this year.
largest entcrdanaeitff °Utsife ^e.Party say they are more concerned about the
off 7 the country's intellectuals. In previous ideological noveThiu’hout tdS i U
haS eencrally been
worst-hit.
nicallv aunUJi7
T 7
t0 °nd Pcrs^io* of techlivinJ J i t
People and to provide intellectuals with proper
SindardE £md working condition. But since the rectification
idellor^ fdQr-W^’ th<3 Party haS Paid incrcasing attention to
ideological deviation m cultural affairs. St this stage, the inpressJon.’itioX^0^331^ WiU bG treatGd better than in the plst on
J?
OU?S
Source:
P"tr “ rlC1“ t0 PO11“ t!”
SOUTH DECEMBER 1983. paf.:e
00000000000000
20.
94,
USSR
FIVE!-YE/OM TMLE
WINTETEEN eighty-one is the first year of the Soviet Union’s 11th
five-year
plan.* Figures recently published by the Soviet Central
Statistical Board reveal that the Soviet
is facing
faxing sone
-- Government
- ------ -J
knotty problems, with both industry and agriculture beset with troubles
in the first six_ months
---— of
— this
-- 5 year.
LOW ECONOMIC GROWTH RATE.
The Soviet economic growth is slowing down, a trend which has
I„1
steadily become more serious in recent years. Industrial
output value
in the first six months failed to reach the growth rate set for the
new 11th five-year plan, a rate which is lower than ever before. It was
replorted that the output value increased 3.4 per cent compared with
4.2 per cent for the s^me period last year. The planned annual increase
rate for this year was 4,1 per cent. The industrial labour productivity
27^?er cent, less than in the samo period of 1980 and the
target for 1981. T'
The outpur of 19 industrial products including coal,
rolled metal, generators,/ ca rs and equipment for the chemical industrial
was loss than that of the cor:, esponding period of 1980. The output of
sone items
itens has steadily dropped over the last two years.
some
Capital construction is still depressed, and the long
—standing
long-standing
proolems of scattered investments and far-flung capital construction
have not yet boon solved. The important projects which were put into
production in the first six months according to schedule only account
for half of those planned for the period and 13 per cent of those for
the whole year of 1981. Some projects scheduled for completion in 1980
have still not been finished, and the plans for putting projects into
production, housing, culture and the construction of residential and
other facilities wore unfulfilled in the first six months. Greatly
worries, the Communist Party of the Soviet Union has called special
meetings to seek solutions.
AGRICULTURE.
Agriculture has been a vulnerable spot in the Soviet economy. Farm
output targets set for the ninth and 10th five-year plans were unfulfill
ed, and this has had adverse effects on the whoje national economy.
Though the Soviet authorities were anxious to change the backward agri
cultural conditions in this new five-year plan, they are facing
troubles ahead.
*■
summer, the crops suffered from a hoat wave, similar to
19/2. In some areas, temperatures reached 40 degrees centigrade. The
grain, potato and beet harvests will certainly be affected. An edito
rial published in pravda therefore had to again call on people to
practise frugality, especially in food consumption.
The Soviet Union has imported more than 1 million tons of American
grain since President Reagan lifted the partial grain embargo four
months ago. It was reported that Moscow imported 53.5 million tons
of grain in the fiscal y. ar of 1980-81. Western agricultural experts
estimate that if the drought in the Soviet Union countinues, Moscow
will then have to import more grain than ever in fiscal year 1981-82.
SECTION II
POST MAO CHINA'S ECONOMIC POLICY
It is at the level of Economics that one can assess
the nature and the extent of the transformations that
are contemplated by the new leadership in Today’s China
and which are actually taking place.Explanations for
the new orientations in the economic policy of China
arc varied. Some see the victory of one group over
the other in the struggle for power.According to this
view, the ”expects” would have taken over from”the Reds".
However this seems to us a rather oversimplified view
of things. Are they other processes at work within China
today, of deeper significance ? Which are they ? This
section on ’’Post Ma© China’s economic policy” explores
these questions.
C ONTENTS
Page
24
x* DILEMNAS OF SOCIALISTDEVELOPMENT
An analysis' of strategic lines in China.
Three alternative lines of socialist development.
The three strategies within the context of Chinese history
of the past thrity years.
2. THE PRESENT ECONOMIC SITUATION AND THE PRINCIPLES FOR THE
FUTURE ECONOMIC CONSTRUCTION.
37
A report presented by Zhao Zyang, Premier of the State
Council, during the fifth national session of the National
People’s Congress, Nov. 30,1981.
A detailed review of the Economy for the year 1981.
50
3* ADDENDA- TO CHINA’S SOCIALIST ECONOMY
Clarification by Xue Muqiao, a leading Chinese economist,
to his widely circulated book ’’China’s socialist Economy”.
Socialist relations of production.
Planned economy and market.
4.REPORT OF THE READJUSTMENT OF THE 1981 NATIONAL ECONOMIC PLAN
AND STATE REVENUE AND EXPENDITURgr"
Presented by Yao Yillin, Vice Premier and Minister in charge
of the State Planning Commission, at the l?th meeting of the
standing Committee of the fifth National People’s Congress.
The concrete content and major measures of"readjustment” as
found in the 1981 plan. Mistakes of the past. Economic ■
"restructure”.Raise economic result.
3. FURTHER ECONOMIC ’’READJUSTMENT”
A break with ’’leftist thinking”, as seen
Beijing Review in a feature article
6. CHINA’S 1982 ECONOMIC PLAN
Official text of the plan. Extracts.
58
61
by the
(P.T.O.)
69
I
Page
7. MAO TSE-TUNG'S CRITIQUE OF SOVIET ECONOMY
82
A retrospective view which helps to understand what is
new and not so new in the present policies.
8. USSR FIVE YEAR PLAN IN TROUBLE
94.
In the early days of the revolution, China adopted
the Russian Model of planning. What kinds of problems
Planning in Russia runs into ? This may help to unders
tand better the Chinese economic policy.
9. SHANGHAI LEADS IN MODERNIZATION
96
103
10. PAYING ATTENTION TO IDEOLOGICAL EDUCATION
Role of ideological education as far as Shanghai is concerned
lie WHY SPECIAL ECONOMIC ZONES ?
Why does China want to set up special economic Zones?
Foreign firms will get profits from the investments they
make. Isn’t this exploitation on Chinese soil ?
106
12. CHINA’S SPECIAL ECONOMIC ZONES
Under which conditions are economic zones established
in China.
107
13. Growth of the
13. GROWTH OF THE MULTINATIONALS
How do Chinese look at multinationals
111
14. CHINA EXPANDS FOREIGN TRADE AND ECONOMIC RELATIONS
What is, in fact, the "open-door" policy ?
116
13. GOOD BEGINNING FOR REFORM OF RURAL ECONOMIC SYSTEM
An historical survey of agricultural policies
118
16. CHINESE LEADERS PUT AGRICULTURE ON THE AGENDA
125
Some basic concepts are explained I ’’Responsibility
system" . "Diversification."
17. LET SOME LOCALITIES AND PEASANTS PROSPER FIRST
Are the new measures adopted by the present leadership
bourgeois economy ?
134
18. MOVING A MOUNTAIN OF POVERTY- *(A case study).
1^
19.
ECONOMIC REFORM IN POST-MAO CHINA t AN INSIDER’S VIEW
A concluding article at the end of this economic section.
The "Ten Year Plan" and its failure. Nature and limits
of economic reforms. Future developments in China's
political economy.
141
dilemmas
AN
ANALYSIS
0 F
OF
SOCIAL 1ST
DEVELOPMENT
STRATEGIC LINES IN CHINA , 1949-1981-
HISTORICAL PERSPECTIVES
(24)
Jent^hrou-h^^1 °f NV^10Pment haS unacrSone changes as it
qa-M.h o
r PhaSGS ? The author of
article condensed below
Satish Hiachur, was an associate professor of economics at the ’
University of Denvers before he died in 198o. He tJies to
answer the above questions.
THREE ALTERNATIVE LINES OF SOCIALIST DEVELOPMENT
The purpose of this article is to Identify and to analyse the implications
h prTI12tPa\aVernatlVe strate£ic line® of socialist development which
have been attempted m China during the first thirty-two years of the
People.s Ropublic , fr
1949 tQ 1981> In Qur vieW)\hcr/hQs been t°ree
In our view,
such lines, each of thom
themadistincly differnnt approach to socialist
development conceived in terms of its own 7
particular logic and .. basic
theories, and^implemented
i
in China during a particular historical period.
We have labelled
K?llcf. them :
Strategy A ( the strategic design for the first
Five Year Plan ( 1953-57)
Strategy B( the great leap forward,1958-60)
Strategy C ( so far only partially implemented
under the four modernizations,1978-present)
Each strategic line is familiar to students of comparative socialist
development. Strategy A is the Stalinist model which emphasizes
m
v« •-» "1 * _
21
T_ r
~
~
centralized
jurcaucratic
planning and resource allocation,or what
Western
Economists
have
’
called
western
’’Command economy”~
~
B is a social mobilization approach, based on
p .
- dir ected^ niagmovements to create a communist ’’now man”
n
4- - - -.
C .or
socialism^
isTan effort to build
t(Tn'r nQ—i^tQ a socialis"F" planned economy in order
--- i?.crQaSG ProLLH£tj-_vi^y> to achieve greater ecznoniTc offiT.I'ency, and
o stimulate the initiative cof workers and m;„:agcrs through material
incentives.
Clearly there are a number of parallels between the Chinese experience
and that of other socialist countries. For example, the Soviet Union under
Stalin attempted to impose strategy A, the Stalinist model, on virtually
all socialist countries that Moscow could influence, and, therefore,
most socialist countries have had a significant experience with that
strategic line. Regarding strategy B , the social mobilization model,
there are some striking -oarallels, Eor example , between Cuban policy
during the period 1966-7o and China during the Great Leap Forward,
I950-6O.And finally, the present Chines Leadership has been studying
and emulating certain aspects of the strategy C, the market Socialism
model, drawing on experience of Yugoslavia and Hungary.
As an interpretation of China’s development history, our analysis
differs markedly from interpretation that have charaterized PRC history
in terms of "pendulum swings” alternating between radical and pragmatic
phases or from those who have interpreted PRC history as essentially
cyclical, involving little or no qualitative change.Our analysis
differs from those who intorrnrS5 the Cultural Revolution period
1966-76, as reflecting sa significant departure in development strategy.
Instead we argue that the cultural involution is better understood as a
struggle in the realm of so-called ’’superstructure”, an intra-party lea
dership conflict which became a mass movement in the year 1966-69 but
which did not involve important innovations in development strategy.
(25)
DEFINITION OF TE17MS
Wc use the term strategic line to mean a conceptual model of develop
ment. It is a systematic design which spell, out both the ends and the
means for purposeful action. Strategic lines, if adopted by a ruling
communist party, are implemented by specific development policies. If
the policies are tought to be successful and if they arc sustained Over
nf i^hG? croa'fcG a Particular social system, a social order and way
i wi1TCh faas lts own characteristic division of labour, culture and
social values, and form of political rule. Thus the strategy A line
was successfully implemented in terms of the policies of the first
FiV2 Year Plan, which in turn created a social system in Shina characerized by a centralized, bureaucratic command economy.Subsequently,
he mass mobilization line strategy B was attemtped curing 1958-60
under the policies of the Great Leap Forward and the Communes, but it
was never successfully implemented. In 1961-62, the basic policies were
cnanged in order to reverse the economic ..downturn of 1959-61. Finally
the third alternative strategy C, the market socialism line, to date
has only beer.1 partially implemented under the policies of the Four Moder
nizations, and the results so far are mixedBurx)oseCof
= ohaS b9e?.use'? in “any different ways. For the
purpose oi tiris analysis, socialism is understood to be a process of
basic societal transformation, an historical period of planned trans
formation from capitalism to communism, undertaken in. a society ruled
by a communist party. Vw assume that the.various communist party loaders
ano planners will often have very different notions about what socialism
in concrete means and what the central characteristics of socialism as
a process of transformation should be, but they all agree that communism
is the end and that all of them are trying to achieve it.
There is no definiti'onii(textbook definition) of Communism in the clas
sical Marxist literature. Hero, wo assume that the proponents of the various
strategies of socialist development would agree on a definition limited
o
reo characteristics : ownership of the means of production, the
process of proauction, and distribution — the less ambiguous charac
teristics of communist society. Hence we define a communist society as.
one in which : i) the means of production are owned by the whole people
ko.g., in Mao Zetong’s terms, the means of production have been distri
buted to all people), 2) the production process is fully socialized,
arid J) distribution of that which is produced is on the basis of
need” rather than an individual’s ’’work” -- commodities are no longer
produced for exchange but rather products are allocated on the basis of
need.We will limit ourselves to these characteristics. Communist
party loaders and planners might disagree about other difining charac
teristics of communism, for example, what level of social output in
production is essential to provide the material basis of support for
communist society, what the disappearance of social classes might mean
in concrete terms,or what procedures would replace the state and perform
the continuing necessary functions of organizing production, allocating
that which is produced and regulating social interaction in communist
society.
Finally, the debate - or more accurately, the struggle - among pro
ponents of the different strategic lines of socialist development is carried
out within the conceptual, context of Marxist economic theory- The advocates
of all
.throe different strat gies of socialist development similarly
conceive of the process of achieving communism, as one requiring the
concurrent development of both forces of production and relation of
production in order to create the material conditions required for a
transition from cocialist to communist society.They identify the main
contradictions in the socialist historical period as those between the
forces of production and the relations of production, and between the
superstructure and the economic base.The forces of production have been
defined as "the relation of s ociety to the forces of nature, in
contest witli which it secures the material values it heeds”, and relations
of production as ’’the relations of men to one another in the process of
production.
(26)
The forces of production include labor, the means of production (land,
ools, or machinery, and raw mateirals),and technology. Relations of
production
essentially comprise the ownership of the means -'.of
productiion, the social organisation or administration of production,
and_the distribution of that which is produced.
1N terms of Marxist theory, the two together (the forces of production
and the relations of production) constitute the economic base or material
foundation of any society. The superstructure of society, which include®
government and other oscial institutions, legal systems^, culture and
ideology, is usually conceived of as a reflection of the cononiic base
-- i-0*, the economic base of any society is thought of largely to deter
mine the structure of classes, government, and prevailing ideology.
THE
THriEE
—
—--- STRATEGIES
—
A, B,C, COMPARED WITHIN THE CONTEXT OF CHINESE HISTORY
OF THE PAST THIRTY YEAloT^
---------------------------- ------ -------------—- -----------------------The three stratrgies A,B,C, can be compared as follows (the pattern depicted
or each strategic line represents the logic of the strategic design,
not necessarily the actual performance of the strategy when it was imple
mented in China. ).
, implemented during the First Five Year Plan (1955-57)conceived
o a ailly linear relationship between the development of forces of
production and relations of production. An initial period of shaip changes
in relations of production (e.g. the takeover of state capitalist enter
prises, the establishment
of joint state-private enterprises, hnd the
collectivization of_ agriculture) would be foilowed by a_ consistent pattern
Ql,,planned incremental changes
— initially intended to cover three
five-year plans, 1953-67) — in both relations of production and forces of
Phk production moving toward communism.
By contrast I 5trategy B, Mao Zedong’s design for the Great Leap forward
(.195 -60), sought to achieve qualitative leaps in relations of production
as a part of a dialectical process leading to more rapid development of
both relations of production and forces of production. During 1958, for
example, the hope was often expressed that this approach could significantly
shorten the road to communism.
1 Strategy C, the present Four Modernizations development strategy,
places great emphasis on the .development of forces of pre duction or
economic capacity through retrenchment with respect to relations
^.■■.production _(^e_*g., by seoking to combine market ~^with plan, encour_aging foreign private investment in China, and emphasizing individualised
Material work incentives).
Although the characteristics of Strategy A and Strategy C are different,
the two strategic lines are similar in envisaging a continuous patterm of
incremental change rather than the dialectical pattern described by
Strategy B.
table i = periods in the people
__
MW
REPUBLIC OF CHINA ECONOMIC
STRATEGIES OF DEVELOPMENT
Policies
19^9-52
1953-57
1958-60
1961-65
1966-76
1976-77
1978- Present
HISTORY
Strategies
Rehabilitation of the economy
First- Five Year Plan
Strategy A
Great Leap Forward and Communes
Strategy B
Readjustment and Recovery
Great Proletarian Cultural Revolution
(CCP leadership transition: deaths of
Zhou Enlai, Zhu De, and Mao ZOdongj
defeat of the "Gang of Four").
Four Modernizations
• Strategy C
Table 1 (Cfr. above ) nlaces 1 he throe strategies within the thirty-two
years of the People’s ‘R^ubllG It is ^ur contention that the alternative
k approaches which v/c ba c leve~l1ed Strategies A,B,C1 are very different,
but were the princip/£0 strategic lines of socialist development attempted
during this time in China
67J,
iirs.t period
tially
Opium
■
n-",
in the economic history of the PRC, 1949-5?
Wno nC3C
F"
10?J r2j, China had experienced the agonies of fore-iem
invasions and domestic turmoil. Worst of all had boon the Japanese*in
vasion of China (1937-45) and tho subsequent four years of civil war
between the Guommdang
Guomindang government of President Chipnk Kai-Shckand
the revolutionary movement l.d by the Chinese Communist Party Once vic^rZe111^9 % tilC CCP'S
tasks were to ostablish^rder under
CCP rule to resume production in industry and agriculture, and to
carry out a basic land reform in the rural areas of China. As the
prominent Chinese economist XueMuqigo pointed out in a recent interP-tation 01 the PKC -s economic history , "By the end of 1952 the wS of “
Hnvino- f'ria*1gef-rm and economic recovery had been successfully cohpleted"
^d ^thoirregise and achieved a level of production comparahe
its £irst,,Jiajor effort ^hSchieveCadiScilJiip-rOTicructio'nPinGChiSalaU^h
^ne (Z
a~r Plan 1953-57.~S7^st^£A.
c™P^t01y copiFTVhb~StaTfct Strategic
iaXllnect 5
tO th° ^llectiviz^r of"agriculture),
———---- ------- r.gjsgy A were -borrowed from Soviet theory and the USSR's
live" fear Plan—xTo"
, •Tn thc dGslSn and success of the First
comments :
Xuo.uuqiao, m his review of Chinese Development,
impiminted^boifc? Year Plan we. emulated ..the Soviet Union and ' ’ ‘
industrv ■
f glVTng prlority t(?
dovelopmont of heavy
construction of
? °f
Union’ China Ca^ied out
the inirn? ? !56 key projects (mainly heavy industries) to lay
was colostvi n
n °r socialist industry, and the achievement ■
ofAtSrf5rsteeffort at^oci^f
“ Chjna . bearding many aspects
regarding many aspects
China's ton -p h i
, soclal:Lst development, it seems that all of
7 s t0P Pax by leaders agreed that it was the correct approach
r /
?S WC11 08 thG comrados with whom he would
Ster d^aLee
tL
““I’1; x™SXlnoplns, O1«,A56.
tne Strategy A approach at that time.
ii“ox:a
I13 sP°Gch "°n tj}0 Ion Major Kolat ionships", begap.
began.
andPtho
, a~ternatiVG approach. The . GrcGT...Loop ITorward
"
transition to
°miaUnes, constitutGd his design _for achieving a . faster
mmunism by employing an approach, Strategy B, built
the Ton ld0ClB..
.Pr0VGn to be successful during China's struggle against
dustrvPafe0S° ^ing the Yanan Period. Rejectin': reliance on heavy inimlu J’ ila<^-C-af--G_d_lor__simu1tane°us development of agriculture and
the--rYLjO-^g-mbino^fflltfr a_massivc social mobilization to release
orLnlz^io^^^T^ 110 ChinG~G PGGP1G. A 75^^-of social---thf co? r’+ Jie; pooplo s commune, would be the vehicle for resolving
X
n ?tWOen China's tw° ooonomies (the collective agric!lbasis for the trLsitio?f>n° WnCd •
• Ustf7) and SCrvG as tllc institutional
b-cunsition from socialism to communism. For Mao .
"The charecteristic of thc People's commune is that it is the basic
evol at which industry, agriculture, the military, education, and
is the bo?0.-?0 • °
lntegrated in our social structure... .The commune
frnn “ /oanisational form for carrying out thc two transitions,
socialist (the fresent) to all-embracing public, and from
all-emoracing public to communist ownership. In the future, when
the transitions have been completed, tho commune will be the basic
mechanism of communist society." (Mao, a critique of Soviet Economy).
12-great leap forwarj_failed^
failed. Publicly,
Publicly, three reasons were given:
1-4.u5tUran disasters, 2) the abrupt cutoff of Soviet aid.and the
withdrawal of all soviet technicians in the s.unim.ep of i960, and
2 a rather ambiguous category of ore-anization and-administrative
pro ems having to do with the implementation of. the Great Leap approach^
(28)
During 1959-61, China experienced a decline in output comparable in
magnitude to the American Great Denrossion of the 1930s — but in a
country having a material standard of life which was only a fraction
°
enjoyed in the United States. It has been estimated that China’s
agricu tural production dropped thirty-one per cent from the peak
year of 1950 to the bottom of the economic decline in i960. Industrial
production is estimated to have dropped forty-two per cent in just one
year,^ from i960 to. 1961. °uch sharp economic reverses caused great
hardsmp throughout China. Party policies sought to equalize food con
sumption among the population in order to avoid large-schle starvation.
The, party leaders^ip_Jivided over its interpretation of what went wrong and
what should be done. Most courageous among those who opposed Mao Zedong
was eng Dehuai, Defense Minister and long- time associate of Mao, who
circulated a '’letter of opinion” criticizing the Leap at the Lushan
plenum of the CCP Central Committee in July 1959. Mao subsequently
a4?^aCked PGn&’
bhe meeting passed a resolution dismissing him from
office.
By 1961-62,
agreed upon a number of expedient measures to readjust
the economic system in order”to halt the decline and to restore economic
growth. These measures consituted a substantial retreat in relations of
production from the surges in a.
’■-communist direction attempted
during the Great Leap Forward, For example, in agriculture, the 25,000
large-seal^ communes of 1958-59 were reorganised into 75,000 smaller
communes '(about the size of the ’xian£’ or administrative village)J
the production team (approximately
j the size of a small village) was made
the basic accounting unit * and the peasants in the collective economy
were once again permitted ’’private plots” on which to raise crops for
household consumption and even for sale, This structure of collectivized
production has remained largely the same _
7
since_ 1962,
in spite of efforts
at different times during the decade from 1966 to 1976.
The policies of x’eadjuctment during 1961-65 were successful, and economic
recovery and the beginning
of a general
g
‘ pattern
o____
of growth of output ensued.
However, thojeonsensus
the /consensus within the Party leadership that expedienFpoexpedient po
licies should bo undertaken
in the
short
run to
to deal
deal with
with the
the conomic
conomic
_ — —
-- -- j run
decline began to break down once a pattern of substantial economic
growth had again been restored. Many CCP leaders had opposed Mao’s
Strategy B concept of development as early as 1955-56 when he first
pressed for its implementation. After the collapse of the Grea Leap
and the extreme price that the Chines people paid for its failure,
presumably many others wore determined no# to permit another such
experiment in social change in China. But Mao would not remain content
with the status quo. Precisely at the time that the policies of economic
readjustment wore being fQrinally adopted as Party doctrine, Mao Zedong tt'u
sought to reverse the retreat fro# socialism in the relations of productio
and superstructure in China by lanching a Socialist Education Campaign.
By meanga of education and propaganda, the campaign was designed to
build on the poor and lower-middle peasants in the countryside, revitalize
the class struggle, and to press Chinese society once again in a
communist direction.
ferences about the correC.t road for China’s future came to a head in 1965
and 1966Tho great proletarian Cultural Fevolution became a struggle over
and power, eqch side convinced that its approach to socialist
construction was the best for China, and that the opposition’s strategy
woudl lead to disaster. In June 1966, Mao Zedong and Lin Biao, frustra
ted by Party obstruction and sabotage of their initiatives, turned the
Cultural Revolution into a mass movement to remove their opponents form
power. ’’Bombard the Headquarters” was their motto as student Red Guards
besieged government and party offices. Mao, Chairman ofl the Chinese
Communist Party had gone to the streets to recapture control of his own
Party organisation. Cadres at all levels were thrown out of ± office
between 1966 and 1969, and head-of-state Liu Shaoqi and CCP General
Secretary Dong Xiaoping were singled out as the most prominent ’’per
sons in authority taking the capitalist road”. The Cultural Revolution
focussed largely on superstructure, and it had surprisingly little effect
in reshaping the economic base of Chinese society. It was a struggle
(29)
which remained unresolved for ten years, 1966—76, and which resulted
in no fundamental and consistent new direction with respect to Chinese
development^ Hence for the purpose of this analysis, the Cultural Re
volution does not represent a separate strategic line of socialist
development.
The Ninth Party Congress in April 1969 seemed to signal at least
a limited victory for the cultural revolution, but it was followed by
furtuer struggles — especially between Mao and Lin Biao. Ultimately
Lin died under mysterious circumstances in a plane crash in September
1971, and was charged with having attempted a military coup d’etat.
Struggles within the Party over policy and power continued until Mao 's
death in September 1976.
Looking back over the period from the beginning of the Cultural Revolution in 1966 to Mao’s death in 1976, the present leadership tends to
lump over together the entire decade as ten years lost to Cultural Revolution. The inconsistency of the policies implemented during this ten
years is ceplained by some as due to virtually continuous struggles
within the top party leadership resulting in no agreement about a
clear.new strategy, and by others as reflecting popular resistance to
policies that did not make any sense i In Automn 1979, Ye Jianying, in
his speech celebrating the thirtieth anniversary of the founding of thepeople’s republic, analysed the impact of the so-called Gang of Four and
concluded. ”In everything they did they set themselves against the overwhel
ming majority of the people in the party and country”. The ten years, accor
Jianying, were ’’am appalling catastrophe suffered by our
ding to Ye Jianying,
S
people”.
.he traumatic year J.or China was 1976, F
irst, in January, came the death of
First
Premier Zh^ou^RnJai, and later, in April, the Tian An Men demostrations
(now usually called the April 5th Movement) in support of Premier Zhou
and against the policies and power of Jiang Quing (Mao’s wife), Zhang
Chunqiao (a Deputy Premier), and others in the group which would later
be called the Gang of Four. During the summer the old veteran and acting
head-of-state Zhu Do died, and one of the most destructive earthquakes in
history killed 240,000 people in Tangshan. Finally, in September,
Chairman Mao died,and the final stage in the process of leadership suc
cession began, in October , the Gang of Four was arrested, and during the
following year, a now leadership was formed around Hua Guofeng, suppsodly
chosen by Mao to succeed him ,’ Ye Jianying, a veteran cadre closely linked
to the military and Deng Xiaoping, once again rehabilitated to become the
mainstray of the new regime.
TJ
owevor, the cultural revolution did have some impact on the economic
base in some parts of China in the following ways : some factories were
sent to countryside, some collectives in the cities, especially in service
industries (e.g, restaurants and laundries), wore put under state owner
ship, in some rural areas, attempts were made to make the brigade rather
than the team the basic accounting unit J and the policies of ’’politics
in command” in both industry and agriculture sometimes reshaped the orga
nization of production and patters of distribution. For example. For
example, Parish and Vv’hyte in their study of rural Guangdong Province
tound signiiicant changes undertaken beginning in 1968-69 due to im
plementation of the Dazhai work-point system and a different system for
the. distribution of grain
(30)
After the novir leadership had consolidated its power in 1977 , a new strategy
socialist development began to take shape. The Four Modernizations ——
a plan to turn China into a powerful socialist country with modern agri
culture, industry, national defense, and science and technology by the
year 2000 -- had its roots in Premier Zhou’s report to the First Session
of the Thrid National People's Congress in 1964 (before the Cultural
Revolution) and the Fourth National People's Congress of January 1975. But
the Four Modernizations as an approach to socialist construction was
not duly adopted as policy until after the First and Second Sessions
of the Fifth National People's Congress and the Third Plenum of the
eleventh Central Committee of the CCP - mootings held in 1978 and 1979.
Even today, certain aspects of the strategy are still- being debated in
China, and much of what app<_rently had been decided has not yet been
implemented.
Nonetheless, the general patters of the new
now strategy are fully clear.
The Deng Xiaoping^leadership has proposed a combination of market mechanism ywith
”'1 . state plan, rautonomy
for production units, a strategy which
overwhelmingly emphasizes the development of productive forces, and an
appeal "to workers based on greater material rewards and consumer benefits.
In 1979, Zhao Ziyang, more recently elevated ho the Standing Committee
of the Party Politburo defined socialism as having two central principlesZ
1) public ownership of the means p of production, and 2) distribution
on the^basis of ” to each according to his work ”.”With these two
principles as the prerequisites”, Zhao Ziyang asserted,”we should adopt
whatever system, structure,policy and methods are most effective in
promoting the development of the productive forces”. In other words,
according to Zhao, if those two principles are kept inviolate, almost
anything else might be attempted in China in an effort to develop the
economy.
TABLE 2
STRATEGIES OF SOCIALIST DEVELOPMENT *. DIMENSIONS
Strategy A
Strategy B
Strategy C
1
Strategy focus
Social system (coun
try wide infrastr^ict ur e)
Individual
(’’new man”)
production unit
(management of
enterprises)
9
Structural point
cf policy initia
tive
Center
Intermo diate
level(Commune
in China)
relations of
production &
superstructure
Production unit
5
■I-
Economic base/super
structure empahsis
Relations of pro
duction & forces
of production
together
economic sector
•mphasis (assuming
hat ’’balance” and
‘.ntegration of sec
tors is always im
portant)
Strategy imple
mentation
heavy industry
simultaneously
agriculture and
development of
light industry
industry & agri- (consumption
culture
emphasis)
plan
social mobill. .
. in
-]
zation
with
plan
forces of production
plan-market
combination.
3
work incentive
empahsis
individual,material
incentives
moral plus mate
rial incentives
on group basis
Individual,ma
terial incen
tives .
7
.nternatioral
conomic relaions
integration with
Soviet Union and
socialist camp
economies
Self-reliance
integration
into the world
market economy
L•ole of the
communist party
centralized rule
from top down
social mobilizer
in process of
"continuous revolution"
contradiction
between decentra
lization and
Party political
'
'(31)
Table ,2 (previous
the throe
major strategies of*^focialisJ^V110 k°y differeilcos
■ socraHst development which have boon attempted
in China.
strategy
A
The Chinese never fullv
j,
Soviets during
the _ First
Fi^t ® YeaFpian°S^id°?S ?at Were Proffered by the
during the
was always a mixture of Soviet advice "nd tho
A “ ±tS WLemeStafi-n
a mixture of* Soviet
up to that point. Soviet inflm^
dynamic of the OCR experience
sector during the first ten years of "thc1?^0^ >
th° hGavy industry
as well in military organizationPeoPlo's Republic, and pervasive
m agriculture (from which
<. nd science and technology. However
the CCP kept its own counsel Vand^he"
°f °
Utput was
was derived
output
derived in 1949)
• of Chines agriculture between
and success of the CO11Gctivization
’
in nd
-advice but was rather the result of and
”d.1956
1^56 was ln
110 sense due to Soviet
was rather the :
and tested
r-o.i Prc
1949 and
pre.
-1949
reform
mentioned, -f
Plan „os
was orl
c ei„ally lntoad«a
tho
--- e fivea comprehonsivo programme of sovint ’ to beG implemented
TniplGmGJ'lfcod
connection with
to Chloo.sctot old'ocMthohtrior. economic
3"°t‘3{ and 1
ossistohCo
partL of a combination
i
security and assistance pacts negotiated
COI!lbll'lation of military
from December 1949 to F-.t.
“ by Chalrm
J
- Moscow
-----an1 hqo
himself~ in
when the cold war was ronch""7
Thoso negotiations ccame at
_■ a time
outbreak of the Korean War inS
and °nly ®hortly before the
October-November to help defend North K " ChlpGS lntGrvention came in
forces crossed the 38th parallel in h Kw;Ga aftGi- the United Nations
Already in June 1949, Mao Zetong Jad^ut fo^h^1^ r°llback operation,
one side", cooperating with the social St
5 hC P°liCy °f "tuning to
By the end of 1950, the CCP had^^F^^^^108 Q8ainst imperialism,
tion to the outbreak of the Korean m inc
M
« reacthe toerica
American
embargo on trade wii-h
n 7
r included efforts to clamp a global
tically. The CCP had no choiot afto^lSo^ t"t
isolato it diplomaEast European comrades.
95
Ut tO r°ly on tholr Soviet
- - - —« w and
as it affectcFhoav^indi^strv^r Cqin? Wa® an imPOsed system, c • ■
, especially
1.5 billion in credits to c’^F ^0Vlet ^lon provided
approximately
provided approximately
and East European worked in Si" d^ing the 1950s,, ;and thousands of Russians
Gal to China's economic modernJzat!on^S1"^ advisors
—’in positions
critif industrial
tKKtaijxjai and scientiff
t plannln8 concepts,) patterns
of technologies had important inf 1,
organization,
„a wide variety
Strategy A - a " commend
influences m China during and
these
-- d> -eloping
years.
contra/plannA ; “phaeconomy
SeTL"
t0
” — ^d
gaVe clear j
heavy F
industry
country-wide industrial infral-truct^e
dUstry in an o^ort to build a
which seemed to assure a roughly proportion^
stratGgy dosi8n
one
roughly proportional edosiSn
relations of production and forces of
F concurrent development of
and iorces
of production
production in
in the direction of
-- j of
communism.
Initially, xStrate^ A was tremendously successful as a design to
for ayoar^y^ri^
chieving 0 co norAg^g
mjo
11!;^ ^nduntTf°n-°XalaPlo~"' ^ring the
five ~
--128.6U% ana agricultural production
industrial
by^Ps rproduction
-F“UCtl0.n creased by
increased
per cent. Heavy industry
an
, and light industry by
avFi^'SC?
STRATEGY
% dUrlng th°SG -^s,
b
By the mid-1950s, tho international 1 "
situation had changed. Stalin had died
m March 1953, and
110 g0’1'iG G d Conclusion
rcached emnvn 4-U
soon thorciater.Gradually China had
imposed diplomatic
broken out of the Americanisolation, especially after the
.j successful Bandung
summit conference c_.
01 Afro-Asian states in 1955. u
domestically the First
had been
fJLtLlA2^p^.k2£JL^n£S'ossful
in laying1 tho ’
socialist <
—---■^nt_orial foundations for
shifting,
r
Soviet launch^ of thy^F^iO™
Mao Zedong put forward
a new interpretation of global politics’using the'’
of
J—
_
<1
thc
Koroa n
hQd
■beGn
(32)
metaphor of East Wind over tho West Wind.
1 ^S2-hoJ^K£ar_ently concluded that the time was ripe for buildinc^c^alism ^^ijglsKr-n-l Chinese design fitted 'To-THina^s concret.o
K
££nditipns - and that the Soviet-style First Five “fear Flan should not be
continued. Indeed high rates of economic growth and an immense development of heavy_industry had been achieved, but at the same time, differegeps between mental and manual labor, city and countryside, anTworker
~.lpeaSant WOr° fiT-9-w-inS greater. BUILMNG SOCIALISM FCh JAAO Vi AS A DYNAMK
^^T^IPnO lnpCESS^_NOT_S IMPLY THE IMPOSE ION bFrCEMiTALTzED-----SYSTEM WuICn GAV^ MICTION TO TEE POPULACE. It hbTb'eeb'Tbb’rkibFassumption among many American political scientists, especially since the
cultural revolution, that the state system in China is fundamentally
unstable. On the contrary, for Mao in the mid-1950s, the PRC state system
was seen to be too stable, too centralized, too rigid, and too given to
running the country by issuing commands from the Msim Center.
TLe..l.°gic of Strategy.,B. which in our view is best represented in the approach
a emp ed during the Great Leap forward, begins with a particular epistemology and _emfhasizes_ transforming individual citizcns' us both the rneanb
apd the end__qf'___socialist construction. For example, ‘compared with the logic
0 Strategy C or market socialism, Strategy B as a concept of socialist de
velopment is eifferent in many fundamental ways, especially regarding
epistemology or how one attempts to understand tho world, assumption
about human motivation, and theories about how societies change.
B apj-yoach, which is conoeptually founded on dialectical mate
rialism, begins,jhg proposition that contradictions exist in all
jhj-.n£,s aftd that life__should be understood as a dialocti.cal process. Th ere
are”laws” which govern the evolution of human affairs,but these laws
are different for the various countries because of the particularities
of the concrete conditions of each. Thus, a strategy for socialist
development.(like a struggle for national liberation or any other purpose
ful collective action) must be undertaken as a proc ess of discovery.
Bo one knows in advance what the objective laws are. Kence^ the correct
strategy must be discovered through experience. According to Mao :
”At the beginning no one has knowledge. Foreknowledge has never existed.
If you want to know tn^ objective laws of the development of things and
events you must go throug. the process of practice, adopt a Marxistand
’4-iCO^aEe SY??0?505 and failures, continually practicing
and studying, going through multiple xx successes and failuresj moreover
meticulous research must be performed.There is no other way to make one’s
own knowledge gradually conform to the laws. For those who see only vic
tory but not defeat it will ta not be possible to know these laws.”
(Mao, ’’Critique of Soviet Economics”, p. 72)
—^Human knowledge and the capability to transform nature has no limit”
Ulao, Critique of Soviet Economy, p. 137). We are limited only by our
capacity to understand. Therefore, those who aspire to achieve socialist
construction must work in the unknown to discover those laws of transfor
mation which apply in the particular conditions of any country. Socialist
transformation is not achieved by anyone’s imposing a system. Trnasformatio
by definition is anti-system.
In_ Mao’s^jyiew, tjip_ Chinese Communists would have to be as inventive and
j-maginative in designin^strategies for socialist"consli^C'bion in a non
industrialized country as, for example, Marx was original in his analysis
21..
of the 19th century" THEY WOULD HAVE TO FIND
WAYS OF DOING WHAT HAD NmVER BEEN DONE BEFORE.
~ ~
Bpople must liberate themselves, Mao insisted -- they must transform
themselves, for example, land was not given to peasants in China during
the period of land reform.Rather, under the leadership of the Party,
they waged a class struggle to take the land av/ay from tho landlords.
Mao argues tJl^lL^PPtradiction arc the motive force in the development of
“'DC:La~Lhom ?
P. 771jpurpughgoing_socialist revoTiPETon must advance•
lPree fronts of politics, economics, and ideology” ( Mao, ’’Critique
of Soviet Economics”, p. ^-b) . In his view, 'no line of development is
(33)
straight; it is wave or spiral shaped ...The development of all tiings
is characterised by imbalance" ( Mao, " critique of Soviet Economics"p.So)
According to Mao Zedong, in a process of socialist construction, changes
in relation of production, and the impact of superstructure is also
important in creating the ideological and political bases for initiatives
in the transformation of the economic base of the society" ( Ibid. p. 67-68)
fhe Great Leap Forward approach clearly draws on an analogy with the successful
~~ mass mobi11zaTion strategies of the Yanan Period during the war against
Japan. In socialist construction, as in waging revolutionary war, Mao
assumes that the key to success is a motivated population. Party-led
efforts to mobilize and to sustain support should be designed to tap the
basic unthusiasm of the people through the implementation of the "mass
line". It is not a matter of moral versus material incentives for Mao
Zedong, but rather political mobilization to achieve greater collective
efforts in which all will benefit. In terms of the logic of Strategy B,
those who " serve the people" also serve themselves as the collective
effort moves forward both relations-of production and forces of production
at an unprecedented rate. At a micro level, as has already been mentioned,
the commune was for Mao the basic social unit of socialist transformation,
and the creation of the "new man"- in China was in a sense both the means
and the ends of Strategy B. The kmxs success of the Maoist concept of socia
list development during the Groat Leap Forward depended on individual
Chinese making a commitment to work selflessly and energetically for the
collective good. If such mass attitudes could be inculcated and such beha
vior sustained, both the productive energies needed to develop productive
forces and the ideological and political prerequisites for communist society
could be attained simultaneously.
STRATEGY
c
Finally ,lot us turn to Strategy C, the market socialism approach
Although there arc a number of different thinkers contributing theory to
the Four Modernizations strategy of socialist Development (E.g. Chen Yun,
Hu qiaomu,Xuc Muqiao etc), and there are some disagreements among them.
It seems to us however that the strategy as a general line is fairly clear
and consls’’-'* nt. Moreover, Chinese economists confirm that the ideas
• underlying the Four Modernizations are largely in agreement with the
theoretical argument made in Ota Sik's ”Pxin
Plan
and Market Under Socialism”. Therefore, Sik can also be helpful in
illuminating this approach .
The
Strategy C concept seems to assume that the Taws for the development
of socialism are fairly well understood. Unlike Mao, who calls for '’disco
vering*’' laws of development, Hu Quiaomu has written an important article
calling upon the people of China to "observe” economic laws.
In the minds of.the theorists of Strategy C, these laws call for an over
whelming emphasis on the development of forces of produetion. They con
demn the policies of the Great Leap Forward as utopian and conceived on ±
the basis of idealism rather than concrete materialist analyses of the
potentialities of Chinese society. Unstated in their argument -- but
clearly implied — is the understanding that to reconsolidate Chinese
society after the ten lost years of Cultural Revolution (1966-76), Chinese
development strategy must make a short term retreat from socialism in
relation to production in order to get the economic system running
efficiently after such prolonged dislocations — attributed to the Gang
of Four ( and Mao Zedong)•
In order to increase efficiency and economic output, St rate gy C calls for
the combination of a market
mechanism wilh slaTe pTan \
the competition of production units within a given industry \ much
greater autonomy to be per mi 11 e d t o”ind ividual enterprises ;
and
appeals to~Trr-7ir7csc' workers to produce more a^mFTctter" quality products
in return for individual matorial rewards. The preduction unit is the
focus of this strategy, and improving enterprise management is one of its
principal tasks.
It should be noted that a number of Socialist countries arc ■presently
experimenting with varieties of the Strategy C model, including Vietnam.
*
(54)
—"’Elul11 ^1
envisaged fay Strategy C is continuous and incrementairyo^ wve-Tilo as in strategy B , on' the assumpH-n that after
certain levels in the development of productive forces are achieved
somehow changes in the relations of production moving sharply in a’more
communist direction would take place. One problem here is that there is
no theory as yet spelling out how or why that would take place. On the
contrary, Xue i.uquiao, for example, is theorizing about how the collective
economy should be expanded as one way of dealing with unemployment,
rather than designing ways to transform the collective economy into the
more socialist form of ownership by the whole people
Unjerlying Strategy C is the assumption that human beings arc basically
motivated^^ij^iyijual material interests, and that' the best, way' to
increase efficiency and productivity is to encourage competition
among workers and enterprises through promises that those which produce
most will bo rewarded most. This, it would Seem is the main intended
function of the market and the concept of distribution on the basis of
to each according to his work’.’®
9.ythe Four Modernizations approach as it is implemented in China
some of the central theoretical and empirical questions which should be
considered, wo think, are :
1 the role of ‘’law of value" in both circulation and production.
2 treating means of production as "commodities" and what implications
follow from that for the principle of public ownership of the means of
productionCespocially in light of Mao’s notion of the redistribution
oi the ownership of the means of production as one of the key elements
in a process of socialist transformation).
3) Greater enterprise autonomy combined with distribution based on "to
eaca according to his work" and their influences on worker income diffe
rentials, social stratification in Chinese society, and the politics
and socialist consciousness in a socialist society.
} with regard t_o international economic relations, strategy C calls
—2r...chj-na bo become integrated with the world market system for the purpose
oi gaining access to.foreign capital and technology — in a manner
parallel to international economic relations under Strategy A which
oa 1 for integration with the economies of the USSR, and the socialist
camp. Strategy A, "leaning to one side", is based on economic inteinteernf’ Strate8y c» leaning toward the other side, seeks
integration with the host. Both differ markedly in this regard from the
sell-reliance" policy of Strategy B. At year end 1981, international
economic policies that iwere anathema
*’
under Mao Zedong’s rule were being
pursued by .the Four Modernizations Leadership :• establishing joint
ventures9m China with multi-national corporations,joining
j the International Monetary Fund and the World Bank, t.
the two multilateral institutions linking the capitalist industrializedJ countries with the Third
World Jaccepting long-term foreign loans ; building
o a tourist industry?
importing foreign consumer goods for sale to Chinese citizens ,’’ and
sending thousands of Chinese students and scholars abroad for academic
training in capitalist countries.
w One Chinese economist, Huang Fanzhang, has suggested that the market
mechanism and "consumers’ soveriegnty" should be central elements in a
socialist economy in order to mediate the different economic interests
which inevitably would develop among different enterprises and indivieuals. The market, according to Hunag, would permit those who serve
Vhina’s consumers better to earn more, and those who serve badly to
•earn lessf Moreover each
a mechanism would encourage Chines pro
ducers in the aggregate to be more productive and efficient. (Huang
Fanzhang, "Comment on Consumers ’ Soveraignty ,"
'Jingi Guanli’(Economic
Management), 1979, ho 2 pp. 25-2?.
®©Beijin Review of April .5,1982 (p.ll) reports : "More than 1,000
joint ventures and co-operative and compensatory trade items with fo
reign business, totalling 2,900 million US dollars in investment, have
been approved by the Chinese Government since the adoption of the open
door policy and the promulgation in 1979 of the Law Governing Joint
Ventures with Cliinesc and Foreign Investments".
(35)
IMPLICATIONS Arm EVA-bUATlON ; DILEMMAS OF SOCIALIST DEVELOPMENT
Only one of the three approaches to socialist construction considered
here, Strategy A has ever been completely implemented in China in the
sense of a strategic line being translated into public policies which
ultimately transform the structure of society into a particular kind of
Social system. In fact, in terms of its fundamental characteristics, the
social system of China in 1982 was still that which was created during
the First Five Year Plan ,1953-57 : i.e., a centralized command economy,
under
nder the political regime of a ’’dictatorship of the proletariat”. Hence,
the evidence available is only- -sufficient for' an emperical evaluation of
Strategy A. With regard to Strategies B and C, we must rely more on the
of the coneptual design and on evidence from, the experiences
o .other socialist countries. For example, ’’MarPet socialism” straegies have been implmented for a number of years in both Yugoslavia
and Hungary. Evidence from the economic history of those two countries
can suggest implications for the implementation of the four Moderniza
tions . approach in China. To our knowledge,. Strategy B, the mass mobiliza- '
non inx line, has never been successfully implemented in any country.
We will return to this point.
EVALUATION:STRATEGY A
The successes of the Stalinist model in China were I
17 Establishing an infrastructure for industrial development,
2) Achieving high rate of economic growth, especially in heavy
industry.
3) Bringin about significant social change, principally the nationalization of Industry and the collectivization of agriculture•
With regard to the short comings of Strategy A, probably the most telling
criticisms are Tliosc ma^e by Mao Zedong and Ota SHT, botlT proponents of
^^^ZhLL^c.Jovol^^nent strategies
?• Critics find that,Economically,
— ..
Strategy A :
''
.
1) produces economic sector imbalances' and bottlenecks
through its
emphasis on heavy industry,
2) leads to irrational resources allocation and production priorities
.
^because of the inefficiencies of administered allocations,
5) stij.los.thc enthusiasm and initiative of workers and onter.x
n Prise managers; and, over the long ru
4)) leads
leads to
to low rates of capital and labor productivity.
critl5s say» the social system created by Strategy A
ruling communistypa rty in_the ’’new clHg?7
———2----. 1-QY^L._P.~|ilas or what some Poles during, the, strike of 1980-81'
——-- Sllung,—the—red^^j^episic^ . Applying Lenin’s ’’State and Revoa™ntlJt -H^ Malysis,°f s°cialist societies under Strategy A, one can
gue that the communist party having established a ’’dictatorship of the
proletariat” docs not own but comes to control the means of production
ano emepges as ajmw ruling class, enjoying tremendous power through their
-cra—direction of the economyTy.r,: r state planning,
and bheir lormaljoiiopoly of political power. As a result, the initial
process of social transformation toward communist society begun under a
latogy A-type social system stops, because of the vested interest deve
loped by the "now class” in the established order. In addition, it would
seem that such a system has a tendency to stratify into privileged and
les privileged groups, and to
rigidify under bureaucratic rules.
If socialism is understood as we have defined it in this paper — i.e.,
as a process of basic societal transformation and an historical period
of planned transition from capitalism to communism — then, under Strategy
A, the term"socialist state ” becomes a contradiction in terms. Socialism
calls for basic social transformation, but thes State stands for defense
of the established order. Emporically, in contemporary history ,it seems
(36)
SstibSshe^orfi1 IndCthosG°f
' ~ *)
^ate haS beon to‘ P^sor've'the'
re.olutionarios
.
ierXrinS7h^ °rdOr WhiCh SUStains th^
societies, XteXiciX
Powrie thie
]SUrprisinS to find that in socialist
socialist tr^fo^tion.
°f
for tho development
S Sre
f°rCGS "■
to achiovXalth
--a and power which
do not threaten the established order.
One
wonders,
therefore,
how under ax
Strategy A
social system there can
over
be
successful
socialist
state
m the sense oi those who hold es-t-ofo
power directing a process of basic
—* own power.
gyALUATION ;
STRATEGY^B
strntnheS°-i tOimS’ k°Wever’ Strategy
B is
the three
Strategy B
is an
an exception.
exception. Of
Of the
three
to achieveXlaXXSm°tT de
®±gn°d t0
designed
to produce
produce repeated
repeated attempts
attempts
Sii2?nifjenni-Itr +-in 1 ansf°^^tion toward
the
communist-society
ideal.
srd the communist-society ideal.
call for maSs’mbhiii™on stra2KiesdofSdWhOlWrit%Str4eSy B the°ry and
leaders of the strueX
plateSles of development are the original
apparently retain in Jhefr m
lik°
aDd ^tro/who
revolution ^as made in the Z Z pV1S1On of tile
^r which the
their party comrades nob• lrst PlaCG’ and f°r whom, unlike most of
with it are not enough?
P°WCr
the
that go
~~ ^d°nfi bol^-oA^a-L±he two objectives of social tram Oration (conti-
relations of proAuction) and econ^
objectives wh~~~could both°nioPf~—produc tive_iorr es) were congruent
of social mobilization
e
?17 ° achioVGd ~~gA strategic"
Of a~ trade-of?~r7i\i---‘n •
the theory of Strategy C which conceives
short run, Stratoev B°thnnP ketween the two objectives at least in the
is to achieve'hn-i-b7
theory argues that the key to socialist development
achieve both goals simultaneously by means of social mobilization?
1rne L-China> 1958-60, failed to
Tnstend, tho^r^XVZTT^F' 1
trransformagion_or_ economic moeernization,
widespread harlh-in f ?
rosultcd ln a sharp economic downturn and
zution ZZ
?
r th° Chineso People. Moreover, social mobiliover a sustaiXpZZZtimZ SUCCes^ul 111 achieving both objectives
axnec period of time in any other socialist country either.
IheoreSbal desi^Tof StrZg
HW WQS obv^ug1y that the
± was an
"EElist" notiX—nrroX^' _B was fundamentally
JyWr(?^'’ , umv it
to the0 ob
objective
conditions ((the
the present
stage of the dovelonmenZf
ZZ
3GctiVG conditions'
was a theory contrary to human°natiirpG At’^'le-At^n Cllina? or GVPn that it w
nature
CCP has conclude0 th'L
h 7 At
At ‘least
1
b ne sonl°r member of the
concept of mZ mobilLXZE®- ’’was
PS neV°r a ^rxist". Yet, Mao's
struggle for state oowor h ? did indeed succeed as a strategy during the
sociSist cXZtXL
:h:riaK
4?95Why
0sy?did
■
power b
before
1949.
did it fail aS a deBi^
""bXsunXZZ ’?hC Gr°at L°aP failed because thG Chinese people would
invoked EEtt bE+eXamP1C ’ SOmG argU° that tho Yanan analogy, which Mao
people were fShtins
•Durins the Yanan l^iod, the Chinese
later fie-hti nr-L
S n.
eTr 11VGS against invading Japanese, and
before it exterm °Z X & COrrupt and rapacious Guomindang government
pSC to ZCZna\°d X Eadical ^l^ions, they argue, were appro?•
-LcjClcal problems of the time. But by the late 1950s condi^X:Or4dyfCrent-Th° Pe°P1G °f China folt relatively soctXom
of in?? 0 X3110 had bocome concerned with the more prosaic problems
asnirinZZ ZE B,aterlal living standard, planning careers, and
XiX o brEht°rJUturG for the±r Mildren. Radical policies of ™
ZeisZ XT C°ntlnU°US demobilization failed, therefore, to gain xKe
uceessary popular support.
°
C 36^ )
Another way of trying to understand the contrast between Mao’s success during
the struggle for state power and his failure during the great leap
forward might be to compare the importance of the popular support for
the CCP leadership before and after 19^9.luring the struggle for state
power (both against the Japanese and the Guomindang government), the
Party’s survival was at stake. If the party’s mass mobilization policies
were not successful in winning the support of the Chinese people, the
CCP leadership as well as its followers would, be destroyed. However, after
gaining state power, the Maoist party, although it still needed the sup
port of the people it governed like any modern state leadership does,
no longer depended to such great extent on popular support for its own
survival. Popular support as the critical test of the success of Party
policies was no longer so important. Perhaps inevitably, Mao and the Party
leadership became less responsive to the desires and demands of the Chinese
people, and more likely to engage in ’’commandism1' — ordering things done,
rather than designing policies responsive to the people’s concerns and
requirements. In China today, people joke that Mao’s approach after the
mid-1950s, was not so much based on the ’’mass movement” ( Qunhong yundong) ,
as "moving masses " ( Yundong qunzhong) — i.e., Party leaders manipulating
the Chinese people for their own selfish purpose.
tbo—QC^ual reasons for the failure of the Great Leap and other Strategy B
attempts remain,^ in our view, an open qxiKKkxM omperical question
-- a question of critical significance for the hope of socialist trans
formation under any of the established socialist systems in the world
today. Emperical research in China and Cuba, for example, will have to
determine the reasons for the failure to implement successfully the Strategy
B approach to socialist development, we suggest however, that the answer
to this question should be sought not only in investigations of the
appropriateness of the theory to existing conditions and the willing
ness of citizens to support policies of radical transformation, but also
in research on the resistance and possible sabotage by a communist party
new class11 fearful of losing its privileges and power.
-EVALUATION : STRATEGY C
As w.c have seen, advocates
< ’
of the Strategy C approach criticize the
■ inefficiencies of centralized
j '
---------- state
planning and the emphasis placed by
the Stalinist model (Strategy. A- )) on achieving rigid output quotas ,
carguing that such a system does not produce what is needed and
desired
by consumers and that the system stifles ,both workers’ enthusiasm and
managerial initiative. By_
7 combining socialist planning with a competitive
market system, they say7~ a Strategy 0 approach can inspire unthusiasm
among workers zand managers, lumj
an-b rover
reverse the pattern jof Iww productivity
and' inefficiency.Enterprises"should bo2 required to compete agains"each
other within the market, and
2 Ihthey should earn material rcwards on the
basis of comparative7_.efficiency
---------- and profitability, workers, similarly ’
should bc'Jj" ~~
j_ /Qr the “quantity and quality of their work as
measured__by
the mar
112'211.
12.ket",'
iJlJ- thus directly linking production performance to
pKxtgKEixnEE met erial reward.
”
—Baj^ot is the heart of this design for socialist devclopmont. Moreover,
a market is not something that can Be turne d*“ on ‘to’cTay” an cl o±‘T'~tomorrow.
it is a structural phenomenon which must be permitted to function accor
ding to its own dynamic in order to produce the promised economic
benefits. The market mechanism is intended to reshape individual and
institutional expectations and behaviors, and ultimately, the success or
failure of Strategy C is dependent upon the implementation of a market
mechanism.
ALLff, it seems, especially from the experience in Yugoslavia, that
under Strategy C, there arises an almost inevitable contradiction between
the communist nartv’s ■for-mal monorolv of political power and the econo
mic power enjoyed by prnduc.tion units under this kind of decentralized
(36bJ
chTnT'iC TtCn1, HGnC0 the ^-Plement at ion of Strategy C would seem to
s
At
the
same
time, however,
]
Str-iteo-v r
-KT
proletariat .
strategy C may possibly provide the best <-' means to date of
available
democratizing the Stalinist Social System —
the economic power of
worker-managed enterprises increasingly cutting into the centralized
political power of the Party. The struggle over implementing market
nrlnS^J^T “ Chlna dUrin« 198° and ^Sl sJems to have been
-- the
a ®t3?Ug®le betwoon Strategy A and Strategy C adherents
threat to ZV0
Strategy A fearful, among other things, of the
StrntL^ r iPVCr
the Party and Stat0 CentGr represented by
gy C efforts to decentralize economic decision-making.
^upo^nnnT ;.fflarkot systems do seem, through competition, to force
we should ^VOctUnlfSJeqU1VmentS f°r 8r°ater efficiency, and therefore,
of Soductivi?v VUlly ^Plemented Strategy C to result in higher rates
socialist mnnVri H°wever the incorporation of a market mechanism in a
Plannerc: "
d.e°°nMy can also load to new problemsfor communist party
itT R” eSpenClaRy inflation and unemployment. For example, Yugossoc-ini-i
0 s°G:LaPlst coun'try having the longest experience with market
record h™! bLlustrates Eome of these problems. Yugoslavia registered a
record balance payment deficit in 198o , and was suffering from signifilSeZrPn98oCnt andfpGrenial. fo^±gn trade deficit .Furthermore , the
iqoq
0 cost-of-living in that country was 35.8 % higher than the
fS9naTerbSG* *GP°rts from China in e^lY 1981, where Strategy C has thus
ar only been partially implemented, indicate that Deng Xiaoping leaders ip is reevaluating China's economic reforms because of similar problems;
government budget deficits, inflation, overcommitment
in contracts for
major purchases of plant and equipment from abroad, and failure to
complete successfully foreign plants in China or to bring them into
production as designed. In fact, by the end of 1980, Strategy C reforms
ehfn^b- ™dVtaMn 111 6’02° enterprises in the state-owned economy in
C ina which together in 1980 accounted for sixty per cent of total
industrial output value and seventy per cent of profits turned over to
the state. However, because of problems arising from theefforts to implement
n
k a Strategy C
model, the Dong Xiaoping leadership decided at
a
V WOrk conference Of the COP Central Committee not to
n the reforms. Instead of "reform" it was decided that
"readjustment”
would be the central task of the Sixth Five Year Plan.
Ultimately
Itimately ,the central problem regarding Strategy
__ C as a- »’ approach
to socialist development, in our view, is that no matter how economically successful it may turn .out to be, market socialism inevitably
involves a serious reversal ia the relations
--- .s of production. It leads
away from development toward communistsociety without offering any
jjnmcdiate prospect that these trends will be changed.~To be blunttStrategy
Q in both---------its domestic
r---- >T. . -----------------—----------' and international characteristics amount ’’
to 'taking the capitalist road”.-------------------------------------- —
0^ce3^?1Ginonted by government policies, the strategio line of
market socialise creates its own particular kind of-^cial system, through
reshaping both the social structure and peoplers way of life.l
MAO ZEDONG AND MANY COMMUNISTS , THE HEART OF SOCIALIST CULTURE IS
1HE COLLECTIVE SPIRIT REPRESENTED IN THE SLOGAN "SERVE THE PEOPLE”. BY
gpyiRAST,THE CULTURE OF A MARKET SYSTEM ENJOINS EACH TO "SERVE THYSELF".
fJJLategy c
practical Tfiplications is not a design for socialist
CONSTRUCTION BUT RATHER A FORMULA FOE RESTORING THE CENTRAL STRUCTURAL
CHARACTERISTIC QF_A_ CAPITALIST ECONOMIC SYSTEM, THE "iiARKET .
S2Pg.CE
Nfss and Satish Riachur, "Dilemmas of Socialist
Development : An analysis of Strategic Lines in China,
1949-1981, in Bulletin of Concerned Asian Scholars,
Volume XV,. Number 1, 1983, p.2 to 15.
’
(Edited by our Centre. )
(36C)
>7
X
5
I
i/'
%
c ■
O
ov
r
s
P
O s
c
c?
c
O>
C
<x
£2
o
Z
c
c
a
a
Z
k
X
>
X
/
C
7
7
rr>
\
o
L
—0
j
cn
N
X.c
ZL
c
■“A
X
a
Z
5.
, t
\
T
o
i‘ z
A>
A
zZ. I\
Z-
J>
<
z
:
p
z.
kh
’■
O
/0
i’-;
7_
'•\O 'r
t
us
. I
\
\ 3 \
A
/>
TA
C
ST
r' \
©
r
\ - ->
JT
P
k%‘
z
o’-\
Z1
ih
"A £
r
if
?
a
>
z
G
J
/
? f
O'. .
A
>
(37)
Nnti/Orsb°r-,3?’ dUring the fourth session of the fifth
National People s Congress, Zhao
Ziyang, Premier of the
State Council, presented a report of the work of the Gover
nment. It is both, an evaluation of the previous years and
a statement of policy regarding the future.The report
S mb0” 21
±n ±tS t0tQlity in thG Beijing Review,
December 21, 1981. We are reproducing here large extracts
01 this report. Sub-titles and occasional summaries are ours.
-1. THE PRESENT ECONOMIC SITUATION
:=s==:
1.
TIE ...Ji.iQD__ 1979-80
ihhoai.te “L2Z “Fron
Zidentified
™
1979 on
political stability and’unity.
2.
" U ' '
,“?orCO111„S for
1)0651 Jlar<' to str0I1othen our
THE YEAR 1981
Control C°5°2o1of,tho11rartT:’rtrS.S f B 0“tr“1 c<™l*teo or tho
on tho runthon roX“™^2’lh“<’ SI“t0 ?0”cU "“’““'of.
report
Ing or
StnnJl^^oEttoe or ?ho £SSal°^°So?3
,7tt “?I‘
r~ “a
in tho nain,
Tho Sthhitas cSSo“t’tto
°O”"“V Ih-looo.
«»a npprovod thoso r^l^o^ h“tl0!’cl ^Plo's CowrohS oroninod
roool^ cSrL’f^ia ZL’/0”""”1" at ‘■11
Bon.nros for Curthor ro”S,tJ^ J> S"°7“
01 onoreonoy
or our nohlorouonto In tho pS?“lf ZttZI000"0™• “» «“ t“l»
to this session th^'t tho 1QA1
+•
’ 1 Can now confidently report
and our objecSve of sSbln'in" th
?COn°?iC Plan W±U bo
be realised. PcIpiVcXtX*
U'?tlOn^ ocono^ will essentially
this yonr.o
(53)
agriculture and industry in 1981 will not go down, but, on the contrary,
will increase by more than 3 per cent over that of 1980. The overall
economic situation is better than anticipated. Our national economy
has embarked on the path of steady growth.
SCONOMIC STABILITY
Economic stability is manifested, first of all, in the basic
balance between state revenues and expenditures and between credit
receipts and payments. Since the winter of 1980-81, through their
united and converted efforts, the State Council and governments at
all levels have .strenghthened centralized leadership, tightened
financial and price controls, rigorously curtailed capital construction
and administrative expenditures, economized on other spending and
explored new sources of revenue so as to ensure the implementation of
the 1981 budget. The financial deficit for the year is expected to
drop to 2.7 billion yuan, fron 17 billion yuan in 1979 and 12.7 billion
yuan in 1980. It is no easy natter for any country to eliminate largo
financial deficits and basically balance its budget in a short tine*
We have done it relatively smoothly, thanks to the hard work of all
our people and the full trust they have shown in the government. The
proves the complete correctness ;of the policy decisions of the Central
Committee of the Party and the ^tatc Council and the'great superiority
of our socialist system. On behalf of the Central Connittee of the
Party and the State Council I express thanks to the people of all
nationalities for their trust and support.
4.
NEW PROGRESS IN AQRICULTlJRAL OUTPUT
The steady development of the Chineso^economy depends on an over
all increase in agricultural production, 1though nany regions have
suffered serious floods and droughts in 1981, agricultural prospects
in the country as a whole are bright. It is estimated that total
grain output nay approach the 1979 level, which would make 1981 the
second peak year since the founding of the People’s cpublic. A new
r
breakthrough has occurred in cotton production following the previous
all-tine record of 1980. Output of oil-bearing crops has risen by
about 17 per cont following big successive increases in the three
previous years. Output of sugaryiclding crops should register an
increase of more than 10 per cent over 1980. New successes have been
scored in forestry, animal husbandry and fisheries. Enterprises run
by communes and production brigades and teams have continued to make
progress; household sideline occupations have grown oven faster. .
5.
NATURAL CAL;J41TIES
This year, nany regions in China suffered fron floods or droughts,
which were of a gravity rarely known in our history. With unstinted
help fron the other regions the ensuing difficulties were ovcrcono
through the concerted effort of the Party and governuent cadres, the
coriDanders and fighters of the People’s Liberation ftrny and the broad
masses in the affected areas, Production was rapidly resumed, great
care was taken of the people’s livelihood, and society is in good
order.
6.
LIGHT INDUSTRY
In light industry, production rose markedly thanks to the principle
of stressing the manufacture of goods for everyday consumption and to
the adoption of a series of detailed noasures. It is estimated that
the total output value of textile and other light industries for 1981
will show an increase of 12 per cont over 1980. The output of durable
consumer goods such as wrist watches, bicylos, sewing machines, TV sets,
washing machines and electric fans has increased by double-digit
percentages or in sone cases several-fold. Output of such major items
as cotton yearn and cloth, chemical fibres, sugar, paper and cigarettes
(39 )
will roach
«NrnS°avi“blo1S!,StJ“':1tS- ti,'ht
ana toztllo
products
of LaSnX
“d 1Mlltr “d “
variety, The
increased,
Great changes in
sitaSlal’? 0“l“r«d."lth PATOUS yeurs uru
apparent to all.
ouostantial increases m the- output of
-p
eoutluuluc „„ 0„oral
no.ds,of people m town and
and country
country, created a
market, reinvigorated the
thriving
certain rate of ^h^^^Sod^^
a
T'*’1 y“r8*hme
7.
heavy industry?
will •ItaooF’s^o^aw Zf^out ST i8tos5?0lii"s‘«a>
ro^r 1981
.!«. 1980. m0 M8“;oStS“‘0Z K S‘? “ “,-”t «»« “ “W’
nunbor of heavy Industrie 1 0,0+
t
SgXT*”*’*10” °f
eroaaly owrstOolM ite„ „hoso
t’XXao5
A
following circunstances:
?SXy
?r
eouiluraWo
*
engaged nainly in serving' cLt+ i
i enterprises, which have long
production dropping S ?f81 as
cona^tion, have found their
°
nent in capital cons true Son nd
°f tllC mch cu^ailcd investfor oquipnont and other production" "oX^Th^1*6 docrease ln orders
course of readjusting the sercico nr-i \’+.-TliiS 13 ^evitable in the
industry. Also, sone heavv indX
Gn'tay°n nnrt product nix of heavy
U.0 u.,1„faotaro’of,’“^x8“o?rr.?1 “■tor-"”oB “r°
thus causing a drop in the nredun+b^'' „tilan tIley should have boon,
boon, avoided. This happen-d becnX °f SOn° ltons» which could have
failing fully to undorstond'tho nX!
aonrados w°ro slow to act,
orientation and product nix of heovyXiX^XX*? 113
Sorvicc
to overcone this tendency. In fhn i nt-'
1,
Efiorts arc being nade
done in heavy industry to ch-n- 41 c' b?r half of 1981, nuch has beet
out UU on produrto L o-oSS3„X"1r?tl“ °f lto
Itouo nost noodoa
8.
cujort
C"tp"‘ °f
CX-rm CONSTRUCTION;
aspect of
a^car^a°f ?apital.construction is
an important
overextension of capital constructicXisX^3111'311^1 ‘ ■ The Problen of’
utilization of investnent in this fiX .'elne resolved ste. p, and
otal expenditures on capital con-trnnr ° nOre ra’fcional
before*
yu« in ^truury tMo y“£ JtaX Suo°“ar“ “t i’™ *° 30 Mlll»
plan was bciny revised*
Later, 8 billion
yuan were added, of which 3.5 billion
a have been used
in building norc housing projects
J and the production oi goods for every—
ln.developing the oil
; serrn^n^La.nuuber of ba(Uy needed •
projects
whose
equipnent
construction^re ;Ln'fcl'oduced fl,on abroad. The emphasis in
' — la capital
, 113 year has firs-t of all been
livS^and'^ttt haVG
important bearing cu on textile and other light
on people’s standard of
coixiunicationsT' Se^oSrtlons*1^ natcrials
aand
^d transport
transport anti
—
and ”
public health and urb^n utilities have b° °ducation’ science, culture
The first stage of the GezhS D™ S
0C°n/
alSod in varying degrees,
have been
raised
water-control
started several yQQrs ago was snt
cr“contro1 Project which had
to navigation in June 1981
and
the
f
ivl Up, so
the rivcr was 0?en
1981
and
the
first
set went into trial operation and h
*,170’00°“la-lowatt generator
operation
began to°
three big chenical fSre
SantsandLife
olGCtricity.
The
have basically boon conplotod and nut intone T1?n;jln mld Sichuan
cent, of the projects scheduled to’ gSiX fSl™10^ °Ver 90 Pcr
rn^- °
X
11 oPer^on
OOnplot.^ ac0OTaing t0'
for 1981 can be
J plan. This is a rate nnlmnwr
,r
QC-ny years*
(40)
9.
SCIENTIFIC^ REISE^CH:
j_i Scientific research is playing an important role, guidod as it is
y ne correct principle of the close integration of research with
econonic construction, The pace has been quickened and there has been
substantial progress in applying the latest results of scientific
research, in popularizing, new technology and in absorbing imported
auvancec.. technology in agriculture, industry, national defence and
other fields. In 1980, altogether nore than 2,600 major roaearch
projects wore successful, and there will bo still nore successes in
9 • About 50.per cent of the results have been applied to production,
The popularization of such improved strains as hybrid paddy rice and
Lunian” Cotton Seed No. 1 over large areas has greatly contributed to
tne increased output of grain and cotton, during 1981 industrial
departments have trial-produced or experinentod with about 10,000 new
products and technologies, half of which have been applied in regular
production. Extensive use of nevr techniques and materials has steadily
raised the technical level of industry. The successful launcheing of
throe satellites with one carrier rocket points to a new achievement
m our science and technology following the launching of a carrier
rocket to a prescribed area in the Pacific last year.
10.
DO;feTIC AND FOREIGN TRADEs
Donestic and foreign trade has expanded. More connodities are
now supplied to the hone market and consuner demand is being net
fairly well. The volune of retail sales for 1981. according to esti
mates, should register a 9 per cent increase over 1980. To achieve a
oa anco between the supply of connodities and social purchasing power,
it was originally planned to release several billion yuan’s worth of
connodity inventories. But as both purchases and sales .have grown
consiuorabley, instead of going down connodity inventories are expected
to increase oy nearly 10 billion yuan. There has been a fairly big
increase both in trade handled by urban and rural collectively owned
es aolishnonts and m trade run by individuals as a suplonent to statoanc- collective.cowerco. These forns have conplenontod stateowned stores, restaurants and so-rvicu trades with respect to the increase
in the nunoor oi^stores, variety of goods, scope of services and
business hours, thus providing nore conveniences for the people.
11.
jjroe-ross has been naclc in econonic and technical exchanges
1981 w-m1?1 C0Yni,r:Les’ ' nd 'fclle ‘total volunc of inports and exports in
9J w 11 have increased considerably over the previous year. More
solio and perceptibly successful work has boon done with regard to
joint ventures involving Chinese and foreign investment, compensatory
^e processing of materials for foreign businessmen, and the
import of advanced technology and key oquipnent.
12•
LIVING ST/JDARD OF THE PEOPLE:
w.i+v
llvlnC stanaards of the people have continued to improve.
With tne overall increase in agricultural production, rural income
has gone up noticeably following the fairly big rise in the two
previous years. There are more and more peasant families, production
teams, production ongades, communes and counties whoso income has
gone up oy a big margin. In 1979, there v.re 1,622 production brigades
whose members each received an average of over 300 yuan from the '
distribution of collective incone. ~
The nunber rose to 5,569 in 1980
and it will be even higher in 1981. Especially gratifying is the
fact that production and the peopled :living standards have gone up
considerably, and profound changes have taken placej in areas such
as western Shandong, eastern Henan, northern Jiangsu and the area
(41)
rnnr^ I
Hua^?.R1V01’ wher° production used to bo low because of
poor natural conditions, ui inportant indicator of the inprovenent in
peasant living conditions is the large-scale construction of housing
withTcurioo
aCCorcIins t0 incomplete statistics, new houses
in thn
111111011 s^uarc notres of floor space have boon addes
m the past three years. In the cities and towns, 4.77 nillipnpeople
Januar?to sopt°nw
to raioc the pay of primary and middle school teachers, of some medical
Dc-uit^t/f
culture workers as pf October this year.
finnnnTn \
deduction in capital construction expenditures, the
injdicing of housing projects for workers and staff has remained at
dentines- n
’
C1°Se t0 80 nillion
metres of new resiWl+J d++1'acenln cltlGS and towns will be completed by the end of 1981.
and nubli^t13 ‘?Jlnln? of auxlliary projects providing water, electricity
yeJr rcsulSnr8?,01, ’ aOr3,floor ^aCG wil1
commissioned than last
’ gsult11?® ln mproved urban housing conditions.
Bonk savings in
by 9.5 billion YoiYtX" “
Vral<£r
anuary and Octooer 1981, reaching 49.4 billion yuan. This is a striking
of "the neonl
° ^govement in the living standards of the masses
of the people ,s well as of their confidence in the development of the
econony.
13.
RE^JUSTING ECONOMIC POLICY:
The setting forth of the principle of readjusting, restructuring,
consolidating and inproving the national, ceonony narked a fundamental
turn in o^r^conomc
”“ • work under the guidance of the correct line fornulated
a,t
the
Third
Plenary Session
of the Party
^^6 11th Central Couiiittoe
14.
READJUSTING RURZL POLICY :
set about readjusting
ooc?^?*CSentn+a
f°rn °f ^^enent and distribution for our
side 1
at;ricaltu^ ln the specific conditions of China's countryandnerfoctin0 flr°?y ^SRed two important links: the establishment
ana per±acting of the responsibility system and the development of
in thrSrch^iT
„Moanwhil0» we have made significant increases
n the purchasing prices of farm and sideline products and decided to
* _ quantity of food grains every year. An this has
,inport
‘
'_a< cer’t’ aln
boon of great help in readjusting crop^patterns, developing a diversified
rural econony in accordance with actual
-- - conditions and rehabilitating
the rural areas.
15.
READJUSTMENT IN INDUSTRY:
Readjustment in industry is somewhat different from that in
agriculture. In industry, the main stress is on readjusting the
res true turin^^Is11
C^f^ront Ranches, coupled with the necessary
liSt °nd ho 4
^e readjustment of the ratio between
lifaht^and heavy industry, measures have been taken-since the policy
m late 1980 to further readjust the national econom^-to
give top priority to the development of light industry in the following
b£kriS: the.sup?ly of raw and semi-finished materials and energy;
and timisfornntion?
“d carrying out technical invovations
SporS tcZSo4
constPction’
use of foreign exchange and
n i. . ' '?.1?oloL>y’ a'nc1“ transport and communications. In 1981
eginning with key industrial cities, co-operation for specialized
.relation-S
been organizes for the mass production of certain items, with factories
producing brand-name and quality products as the foundation! It the
same time, arrangements have been made for such enterprises in the
(42)
to produce durable coJsSmr^ood^iSchVTl.h 110 ne°essa;Ey conditions
bigger section of heavy inS 4
Product by light industry. A
light industry and agriculture ^hus^u- ‘'° ^VG.diroct service to
our industry as a whole nore rational
ln^crnal s^ucturo of
have also gradually enhanced the erm* -p21/*11? last thrGC years, we
introduced the syston of ^conr.rri "
1 0± ^0Clsicn of enterprises,
principle of disLlb^tJon^ceoSLZto50113?111^’ CCrried °ut
Play the supplencntary role of rOgul5-iL°r+u
striven to being into
guidance of the state plan
£tion through the narket under the
invigorate our'industrial enterprises inltlal refOT^ have helped to
■ phenonenon of egalitarion-is^
+u
’ to OVQrcone the widespread
«« mc pot,»
their workers and staff.
16.
‘
fo“I fr“
nitiative of enterprises and of
"
Ogmjjf m
IShore :
“ thG distribution
national inconel ^i^incr^sj8^^611 •
of
line products and the reduction oft^T^' prices for
and sidestate revenue fell bv 52 h-iii-i
‘-undents in sone rural areas
inoono inoreasod aooXlX “Xjd ?“ 1979 to 19S’ »>"»
jobs for nore than 20 niliion people inT Perlod’ tho stat® provided
wages .and salaries of workers end stnfP TS T- Cities» i'aisc-d the
The consequent increase in state
aPj?liGcl 'tJle bonus syston.
revenues, taken togothort provide PTt
aM roduc*ion in state
increase in the incone of workers'and st-f-^ w*’5 bdlli?11for an
revenues in the countryside and the ni + • ' 1 \
roduction of state
yuan, or 54 per cent mCe thX tJ
t
thUS totallcd 92.5 billion
Moreover, price subsiS fro“ tL
of 60 ^^on yu^n.
used m agricultural product! h
coal for .iriilaa „o
-r
v
•mrtM to 23.4 muon yum! JijLks
c.iosol oil and electricity
Me’
t?*1” “? ■”«"
neasures for solvinp’ sone of f'i
■> i
a11S serics oi’ affective
and inproving urban’and rural livin°'31°ns piPed u?
the years
Ption in the national incone wont u? jSn
r’
Shar° °f Coasun'about 70 per cent in 1981 while th P f
°1’5 Per ccllt in 1978 to
36.5 to about 30 per cent
Tt
hG &har° °f hccunulation fell fron
the better has taken place in
®
chanS°d f°r
Ption and accumlation left over fSn the paXOPOm°n betwee11 consunS...£„’“ tXuSXtiX1?*
I10 Plf“1
People's Seeoad
that tho stete CtanSl rr““cJ t? 1 t C“,'£''r0S'' '“la “
W9.
consolidating and inprovinj the (
^Readjusting, restructin.-,
practice, wo\av3 sincereSV
W*thi? threG
As far. as readjustment is concerned
°f this principle
proportions between industry and —ricultwr°nly readjust the
industries and between accumulation
WGen li'"ht and hGavy
readjust the product nix, tte teXXo\ CoasuuPtlon; we should also
enterprises and the or/’anizaticLiI
" J*'1 IaakeuI'» the line-up of
the overall st „ructure'’of our nationt^UCturG 80 as to rational ize
readjustment covers a much wider JanS ^°nony- .Thorefore, economic
overall restructuring of the economic rA
W° first envisaged. The
even longer period. For this reason th ^Gndn c s^ton will take an
is necessary to carry on with the nrb? A
Council h°lds that it
cturmg, consolidation and imm-A 1 i P'lc of roadjustment, restru-
iitu.
>'«ei»»LXxs“”!il:i'1r:i‘h,,p fi”
»»
foothold and. to lay a solid founc’ntien f A
?
t0 ®ai11 a firu
future.
unc.ation.for sounder development in the
(43)
Fellow deputies,
The present economic situation in our country is good. Things
have beqn getting better and better quarter by quarter in 1981. Com
pared with the corresponding periods of 1980, the gross value of
industrial output dropped by 0.2 per cent in the first quarter but
increased by 1 .7 per <cent' in
* second and pby 3 per cent in the third,
while in October it went up by 10.6 per cent,
’ > Our economic prospects
for 1982 and, of course, for subsequent years are unquestionably better.
successes we have achieved in economic construction in the past
year are due to the common efforts all our people under the leadership
oi the Chinese Communist Party. The workers, peasants, intellectuals
and cadres on the economic front have been very diligent and hard
working. The cadres and masses in the fields of education, science
.culture, the.mass media, publishing, public health, politics and law,
foreign affairs, etc., have brought their initiative and creativeness
into lull play m their work and scored significant achievements in the
drive for socialsit modernization centred on economic construction,
in sports, good new has kept pouring in this year. Recently the
Chinese Women’s Volleyball Team won a world champoinship for the first
time. Their victory inspires the people of all our nationalities who
are worlcing hard for the modernization programme. On behalf of the
btate Council, I take this opportunity to extend our sincere .greetings
to comrades on the above fronts. The Chinese People’s Liberation
Army has firmly carried out the line, principles and policies laid down
°y y^e Central Cdnnitteo of the Party, strenghtened ideoldgial and
political work, intensified military training, enhanced its sense of
organization and its discipline, safeguarded and taken an active part
in socialist construction and continued to play its role of pillar of
the people s.democratic dictatorship. PLA units and militiamen in the
irontier regions and the heroes defending the Koulin and Faka Mountains
on the border between China and Viet Nam are on guard every minute against
provocations and incursio.ns by the imperialists and hegemonists, thus
defending the sacred frontiers of the motherland. Public security and
judical workers throughout the country have made outsanding contributions
to0 tl
the
order the struggle against criminals
10?SJ?
?G maintenance
n^tenance of public order,
and the education and remoulding of delinquents. On behalf of the
btate Council, I would like to take this opportunity to pay high
tribute to the P1A commanders and fighers, the militiamen and public
security workers.
17a
LHX^^Z^ES^FOR^FUTOR®. lECOTOtllC^CO.N.STRUCTJON
1.
Accelerate the development of agriculture by relying on correct
policies and ..n science.
2.
Give prominence to the development (
of” consumer goods and
further adjust the service orientation
-- of heavy industry.
3.
Raise the (energy utilisation r&tio and promote the building
of energy industry and transport.
4.
Carry our technical transformation step by stop in key units
and make the maximum use of existing enterprise.
5.
Carry out the all-round consolidation and necessary restru-
cturing of enterprise by groups.
6.
Raise more construction funds .and use them thriftly through
improved methods of acquisition, accumulation and spending.
7.
Persist in an open-door policy and enhance our capacity for
self-reliant action.
8.
Actiyoiy.and steadily reform economic system and realize the
initiative of all concerned to the full.
(44)
9.
Raise tliescientific and cultural level of all working people,
and organise strong forces to tackle key scientific projects.
Proceed fron the concept of
T vnl i hnnrl »
livelihood
18.
x
x
CHINA IS A DEVELOrlNG COUNTRY:
r ■■■-rW ‘
■■ *■' <M
,
|
J,,,
beinr0™iiiS
country> Our
resources are far fron
n
u ,
exploited anu utilized. Our ocononic level is still rather
h°ri^
na^-eerial* scientific and technological levels are still
eckward. Those are undoubtedly weaknesses we should face up to.
Noteonlv doVre b°Se
WGp'knesses roveal ow country's vast potential.
V
_TQ hav® our own positive and negative experience to dravz
on, wo can also refer to and euploy the advanced technological and
fro^riai GX?erlcncG of other counties. There is no need to start
SGratch
everything and risk following others' detours. Therefairly qXck pace"
dCVC1°P &t *
19.
CHINA IS_ A-SOCIALIST COUNTRY GIVING UP "LF.FT" ERRORS
count^rS JS uOt only.a developing country, it is also a socialst
country. We have achieved the public ownership of the noons of
Th°tUn^+n anc‘ akollshed i^e systen of exploitation of nan by nan.
+ A ?
1011 °+ ble social wealth forncrly appropriated by the exploi-f thl
Cd-W1°Uy t0 th° PC°P1G’ anrt thc ^GW«i anl distribuSon
O
eatlrG S0Glal wealth can therefore be effected rationally and in
systen
BWcoho nf11S
fundarlental superiority of the socialist
systen. B?cauoe of long-standing "Left" errors in the guideline for
our economic work m the past and or certain defects in econonic nanagenent, neither the intrinsic superiority of the socialist systen nor
ctuals1h1Gtl1Vt'1 and creativeness of the workers, peasants ^/intelle
ctuals have been given full scope. The overall restructuring of the
production thFsisttlOnf0f
SysteE1 °f responsibility in agricultural
neCsCres Cl/ ClCv C
OGonGmc responsibility in industry and ether
sXSCCiS of our Ct</P-rtan i°le “ fUlly rGalizing the intrinsic
productivo^forcesC
fUrthcr
the
20.
SSmjrc AGAINST TWO ER, QNEOUS SENDENCIES, EMPHASIS ON
regard1 to the prospects
prospects for
h-ve With
to PPriP
for our economic developnent, wo
,
o guard aoamsit two erroneous tendencies. One is possinisn
about the nodernization pprogranne, stemming fron failure to see the
favourable conditions and
■ 4.1
consO(l'L1-ent lack of confidence in the future,
fron failure to\Unreali^ic expectation of quick results sterling
and cfSStv ofC2ast,lns ^fficulties and the extreme arduousness
o? a ion
o?TtaS?' Strat^icaliy, wo nust think in terns
01 a loiici period of tine for construction. Wo nust se-k truth fron
TSS’ raduall
act aCCOrdilie
t0
ttt
T7 ln re£
°rd0r
y and systonatically
to
notional Lfonn1C^nt
Oi noderniziine our agriculture, industry,
national defence-and science and technology.
21.
1982 PLAN fS T/JtGET:
s11!16 P1?11 SGt for 1982 requires us to increase total agricultural
and industrial output value by 4 per cent instead of by 3 per cent
S/S8 7e" “a *<■ s‘™ “■
this rot. .SSh
inr/™
4130 Planned is an increase in the national
incone of about 4 per cent as conparod with this year. This requires
(45)
another substantial expansion in agriculture and the textile and other
light industries in 1982, and in ad ition an increase in heavy industrial
production as opposed to the decrease in 1981. With regard to the
distribution of the national income, our target is to increase consum
ption by 5«7 per cent and the total volume of retail sales by 0 per
cent, while accumulation is to increase by 5,2 per cent and direct
investments/under the state budget by' 5.7 per cent. Expenditures for
education, science, culture, public health and physical culture should
increase by 5»9 per cent. The collectively owned sector and necessary
individual economy of working people should be actively promoted, and
various means should be adopted to provide peoper employment for
persons in urban areas who are waiting for jobs. The standard of living
of both the urban and rural people should continue to improve. Stronous
efforts must be made to carry out the all-round consolidation of enter
prises^ next year. Tho.se which turn out low-quality products with high
energy consumption or have long been oporating at a loss must bo shut
down, or suspend operation, or be amalgamated with other enterprises
or switch to the manufacture of other products. In order to fulfil
the 1982 plan, we should do our utmost to gain better economic results
and strive for noteworthy achievements in all fields, such as agricul
tural and industrial production, transport, capital construction,
commodity circulation, finance and banking.
22.
SOCIMjIST WDEffllZATION ML7JTS HIGH LEVEL OF. MTERIAL JJTD
CULTTOLL DEVELOPMENT:
In the work of socialist modernization, we must strive for a
high level of both material and cultural development. The two arc
inseparable. Only by so doing can we ensure the.sustained growth of
the national economy and the socialist orientation of material develop
ment.
23.
CULTUPJJj DEVELOPMENT :
Cultural development covers a wide- area, but it must have as its
main content the following two aspects: one is the scope and level of
development of education, science, culture, art, public health and
physical culture. This is an indicator of a society^ level and degree
of civilization. Every society develops this aspect of culturel life
to suit its needs, but the socialist sysyem demands its wider and
faster development. We must tap our intellectual resources and
increase intellectual investment so that’ a correspondence is achieved
between such investment ind investment in production and construction,
and the requirements of economic development are consequently met. The
other aspect is the orientation and level' of the political, ideological
and moral development of society. This is determined by the nature of
the social system and, in turn, strongly reacts on the latter. Owing
to complex historical and practical reasons, this problem is becoming
more and more pronounced and requires immediate solution. Through
effective publicity and education, political and ideological work, and
work in other fields, and through promoting socialist democracy and
perfecting the socialist legal system, we must enable more and more
members of society to cherish the socialist and communist ideology,
morality and attitude towards labour, to cultivate noble thoughts and
feelings, a fine life style and aesthetic standard, a conscious lawabiding spirit and a high sense of organization and discipline, to
persist in the principle of subordinating personal and partial interests
to those of the whole and subordinating immediate to long-term inter
ests, of doing everything for socialist modernization and the. socialist
motherland, and to develop the lofty spirit of patriotism and to
internationalism. In handling relations among the people, including
relations between the people of different nationalities, between the
workers, peasants and intellectuals, between cadres and the masses,
betweenbetween soldiers and civilians, between the advanced and less
advanced, between the well-off and those in more difficult circumst
ances as well as between the different participants in economic
(46)
scm^s
thG SellCr’ th°Se Wh° Serve and those
^ceive
should be St■Pr°C-UCCr aad
consuner-all the nenbers of our society
should he able co respect, show concern for, unite with and heln oach
other. Thoy »uat ho able to toko Into aooomt tho tatoroote of the
whole, obo.rvo principles, act fairly end honestly, do' X lob nt
thoir posts, mj servo tho people o.nd to rosponsihie to t£^
Solr
elations with foroiGnorS, they nust be neither overbearing nor servile
In handlme the relations between tho ideal and the roalSy thev
onTtho™ r'S'rh0?!1".41” T""’1
»f .£ soo^X” B
w■
n“l‘o illusloX
'“‘«r«h.»f -onl nfo, „Lithor ohorlshlnd
society and OtLrZpioSSX sXKXs’oXX'Sr'1!^
osplrotlo’n »d°£°o? “sX'XS
S SXmyXoS
citizens•
have scoreu rcnarkable achievements in raising the level
of our cultural life in the past year. Tho emergence of large numbers
of advanced workers, pace-setters
,
m the new Long March 8 r.pd banner
winners and other heroes
—s and model workers on all fronts bears living
testimony to this.
24.
ond
THS FIVE_STRESSES AND FOUR POINTS OF BEUATY:
lx"?
wc nust coniinuo to advocate a high ethical
^intj o?.
and overcome the c
and other ideologies :
as
and capitalist
crack down ideology
on lui£wfu?‘’orUoV''’”'1?'>Ii J“’' 1>“ro“uor“tiBn. and oppose
our
snalaust
1Y1‘“S
25«
SfiMI-FEUDiiLISM /UTO SEMI-C0L0.CTI4LISM STILL PRESENT
ICT OUR SOCIETY
China was a scni-foudal and c
semi-colonial society for moro than
a century. Capitalist and slavish
-i
boon eradicated from the minds of ; colonial ideology have not yot
a part of the people. In recent
years,
our international
contacts 1 0
of
corrosion
by
the
corrunUilrnlnZ
^ncreasod« 4s a result
of corrosion by the corrupt ideology and lifo“stvlo
to»?00isio, Xt£o£*sxxo°x^
r^^r^’simfZ^s^
di^ha-
■ ■ ■ *
7" state of affairs merits our earnest
attention.
On the l
. of
eve
nationwide victory in our revolution,
Comrade Mao Zedong gav
gave a timely warning against the bourgeoisie’s
"sugarcoated bullets.”
-Now we are facing a similar situation. It is
necessary to remind
our government functionaries at all levels, and
particularly those engaged m economic work, of the necessity of
maintaining t R ' ? st^lcl. and keeping a level head so as not to be
corrupted by tho decadent ccapitalist ideology and way of life. It
is of particular importance! ?° stoongthen the work of education the
young people so that they will bo bettor able to resist various types
of erroneous ideas.
26.
ZimXCLCQRROSIVE INFLUENCES
the 10Wyears0ofthInVrnriO
tO
finC traditi^s inflicted by
sc m such obnoxious practices as giving lavish dinner
t
'(47)
parties and presents,
- trying to
to establish underhand connections for the
sake of personal £ain demanding
J (commissions, securing advantages
through pull or influence and going in for
- # 7
-- * extravagance and waste. A
few economic units, <economic administrative
organs- and their leading
cadres not only turn a7 blind
“
“
7
‘
^
oye
to
such
Practices
but oven go alon/^
with tern. 7The
’ corrosive influence of these practices
oh our cadr.T'
ana functionaries has been '*■
S.oi5iern' ®r-Ze’AaUSil-e er°at dissa^sfaction anong
the masses. This
This problen nonts the serious attention of leadin.organs at all levelsJ aand of all our cadres. Effective neasures nust
be adopted to plug all loopholes and check unhealthy tendencies in
our economic work.
27.
m®2E?LQTliS.»
ROLE OF LEGISLATION:
the
“? ^lotlonp oovorlns
syston, mny ,eak 1^3 ■Sn“1g^r-''r“t^ “ »
functionaries connive at
aotivun,, tta
CConong.unite
A A
sone government
“ :r“
to tl1o1“orltsCofr““hnoZ*o'‘10 S!k"“ “k™11; “a ' •' '-o:.-y oeeorlns
tteoUS11 ralti01£„a sob"
ideological education, Those who have nade serious mistakes in viola
tion of -administrative regulations and refuse to nond their ways nust
hd^1SCiP1^ed\ T110SC Wil° hav.° violatod crininal
--------- law must be dealt
with according to law, and cases of
a, grave nature must be dealt with
severely. Heavy punishment must be meted out to all government functionaries who take part in criminal
T recent
activities, and no.criminality is to
be tolerated. In
a recent years,
years, >our country has been quite active in
the sphere of cp_
and regulations pertaining
r°”“?3o?1:la“0" “»\ ;ood aa4
00^3 toy.
“ t“
still need to bo
submit criminal
because they think that -t io against their interests to do so.^ This
Ms jiot only harmful to :nornal econonic activities and hinders an
effective crackdown
legality, This st-tAoA-A1^18 bUVk0 C°CS dircctly against socialist
Whil71
affairs nust therefore be changed quickly and
resolutely,
members in all
a ..AB “F
all public security units,
““o^sr^X’S’“S00*’
must co-ordinate their
at criminals A
in the stdte?*0
accordance with the lawsAndAa-uletAA
and regulations of the
28.
BUREAC^ATIC TETOENCI-fe
to econonic devolopncnt and th- An +•
tacle 'fco our new approach,
prosranne. -t thr TmAA
realization of our nodemization
Conies L>
"C
was discussed, its
o-. n • l"
eliminating bureaucratism
present adonistratSo sUon
^ifostations in our
proposed. Over the nast^vc^r
cUI‘"1^Sg‘Cl
solutions wore
P-- ycor or so, many successes have been achieved
(48)
"“iSoS.'S
setisraetory:
*»
'«•
kC’NooStiy« ° P"1 N* F^Uralarly
resulting
□ensures to alter the intolerably low efficiency
of
the State Council itself and in ’
with the departments under
time limit. The res Sc turit’ of^h”0 aCCOnpliS“ ^thin a specified
a powerru! inp,^
roSSu.‘ta™tO^"^‘t£tar“f S^hol01 18’aer'hif “d t8 *»■>
S?
t.«k of aSSiX
During tho restrudturln“
in or nergings of St-itPp
29.
^Seth:TtX <®.£Sr
‘N 1,11 1"ols “ Phrtorulho tho
rat1011 and raising working efficiency.
J111 b° rclatively important reductions
PROMOTING RESPONSIBILITY IND YOTTWG ThLWTS:
Sovernnents at all levels and X° +C
Council and the local
on then ema their
O»a poMllzlnc remctlehorlee, should he osUushoel “mrSN’T*'^
mg responsibility and tskina- « d-ii + osl:‘-jJ-lsnecl • me habit of shirktowards work nust bo mcoi,
dllatory and irresponsible attitude
uiJCL^aCSrSriS
‘LSiCT
le”? ’ ""“‘“XeTX^r
who are qualified id colonic-11 v e p?^GnGG anc a talent for leadership
the ranks of our leadi^-°functi nnnrCa^y? and prof^ssionally, so that
educated, professionally uore competent"^ youngerT01^0111^’
50.
_BJE WITH THE MASSES :
??
™a» ih.
th, nasse. set a itlw wxd^tenu^ J%°a2“,= Oo?°l?fJ"°S
lo»or“o“ls‘:i,“°’
°°1''° “‘"“i Probloa,'at
and autononous regions will honcl™?1*
th^ provincGS> municipalities
central and local authJ^H J
?arS? mnbers of cadrGS
both
then with their all-round
6°/‘Own to the enterprises and help
particularly the higher leaders ^nus^set
?11 lcVGls’ and
carrying forward the fine traditions of
.exanpl° ln restoring and
□asses and of plain livinr- and bond
n?-r:LnG weal and woe with the
of the period of thn -mr V +•
c
which were characteristic
pla'a C tfe
,'"8 “? «“
»f t»o J onodernization.
7
G nCW contributionS to socialist
(49)
.1W_^E4L. UNITY OF THE WHOLE CHINESE PROPT,P
STRENGTHEN THE UNITED ErTtn?;------- --- •
51 *
» - --“-“-Si”0"
stability, unity and livelL^^cI^v^loP the political situation of
of the whole Chinese reoplo. ^h^unltod^front1'^1^'^t'00 thT CrGat unity
pp^”‘= 2°si5"SiS
'
the course of“ra rovolutS0 0°-0.Dor«t“”“h ““ Co™nlst forty In
S«.“a W£Sdeep
in ‘^^“"or^Voo^ho1 ’’ ’
at an early dots
™ ..
!■
P™i»to the unification of our country
Theconuanders and fighters
-------- their state of
Step up military and political training and make r
newsocialist
contributions in
ctiont
°Ur nati0nal rtefence ^d safeguardine
--------- j constru*. n., -
32.
OPPOSE HEGEMONISM :
just Strur-rles of the nPnni'e'- worjd peace, support the
cause of
proXs Pmaer SPr“<1 ’’’“"‘o ««
zoZ^:it”„r“ oTf*tiw ‘-rs”s-«»in“r«apo"tr
5SuS’Grtu1’
SOURCE: Boijing Review, jIo 51 f Decenber 21
Pase No• 6 to 36.
We have given only extracts*
aro ours.
ooooooooooooooo
1gQ
The subtitles
(50)
ADDENDUM TO "CHINA'S SO- HIST ECONOMY"
^'Chinese edition
China's Socialist Economy" have been sold
since
■ R it
"-■'^was first published two years ago.
MufnP bR°nt
Pina's noted economists Xue
Muqiao, this book has also been translated and
published in English, French_ Japanese and
Spanish.
r,Beijinb Review" printed Chapter 7 if
this book in issue No. 45, 1979 and- Chapter
8
in Nos. 5, 12 and 14, 1980.
Foreign press has reviewed this book and
many
to the author.
,, . readers have written
-------- -In
i,lpLS adden(^UTrl
the forthcoming new printing
of the book, the author observes that this
oook, which he calls a "draft," has "failed to
raise its summary of prac tical experiences to
the level of theoretical analysis and some of
the viewpoints are premature." Moreover, the
author acknowledges that this book leaves much
to be desired in clarifying the "Left" mistakes
that existed within our Party for so long.
In the first and second sections of the ad
dendum, Xue Muqiao amends and clarifies some
of his .viewpoints in the book. Following is
an abridged translation of these two sections. -ED
socialist relations of production
'T"'
-
.1-wn —im, ■
Practice shows that r,_l
socialism is not necessarily based on a unified
public ownershi; by the whole
"xS‘S g
’ f°™3 °f
u»a« the t«o kinds of
srs^TeU6 «iriy. e"i,hrir ’u"’ «*•
In-ur n-p -n-o-K,
j
■0±e PeoPle>
he underestimated the role of thp
state^ag^nt XZ^nl^^SnSttr
the rnr!i
Part of the economy owned by the whole pelple. As to
mitted
ThS d?
e°°nomy, only the agricultural artel ^orm w§s
r- perfo„s rf XZ"
“1 heiootS
I other
China also establiched two
'
•kinds
- - of public ownership after the
owners’ii^of^h1116 main’ of the socialist transformation < ~
or swueiion. a,,
emerged. This
" after a hlSher level of public ownership
~ -» This
went
produetton
hX tendency
l-o
the law that the relations of
Therefore, the growth
^61 of
°f
°2rof^he^roducSve
i!S??nS With the 1
level
productive forees«
3 forces was retarded,
includ^advancp^Zna 1-01,0!8 111 present-day
COBIX‘"-day China
onma are
multifarious. They
are multifarious.
the 194^ and
larSe“scalQ Production, mechanized production
smalSslSe
semi_,amiai production and
also differs"vastlv frofc nfd entirely on manual labour,. The situation
is imSacKcal to
?
Q ? P?CS* Under t;?ese conditions, it
where nor is it antroSn ? f st°V0^eA fo^
Public ownership everywnere nor is it appropriate to adopt a single form of management.
(51)
rj^e socialist public ownership of the means of production holds the
dominant position in China with the state—owned economy and the collective
economy constituting the two basic forms. Given this predominance, the
existence of a small number of other forms of ownership, for example,
private ownership, should be allowed. It is also advisable to permit
foreign countries to make investments and help run joint ventures in
China and to encourage overseas Chinese to invest in out countfy^
In the socialist public economy diversified and flexible forms of
management should be adopted. A single form is not even appropriate
for the part of the economy owned by the whole people. Dissimilar
trades and enterprises should have different forms of management. For
example, some enterprises can be managed according to the demand of the
market. Some can be managed individually; some,conjointly; some managed
m co-operation.with their counterparts in other provinces and regions;
some together with collectively owned enterprises.
In.tne collective.economy, the forms of management and the sizes of
enterprises and of basic accounting units should not be uniform.
For a long time, we regarded the transition of ownership form the
production teams to the production brigades and then to the commnes as
the only was to promote the transition of agriculture to a higher stage
of socialism. Now this should be reconsidered. With the growth of a
diversified economy,.a commune or brigade will put some of its productive
Helds unaer specialized management. There will be co-operative manage
ment. among several households, joint management between the collective
and individuals, and between brigades or communes. Some commune-and
brigacie-run enterprises will develop co-operation with state-owned
industrial and commercial enterprises. In thisway boundaries between
brigades and between communes as well as between collective and state. owned enterprises will disappear in this respect. On the basis of
specialization and joint management, rural commodity production and
exchange will develop further, and socialized mass production will
gradually increase. Therefore, the collective ownership of the means of
production in some rural areas may pass from small units to larver ones.
But that form of transition may not be follwed in other places.
. Is it contrary to the Marxist-Leninist theory concerning scientific
socialism to allow some economies not publicly owned to exist during the
period.of socialism? No, it is not. According to dialectical and
Historical materialism, everything in its development contains the remant
o the old and the embryo of the new. Ever since the primitive society,
iere has never been such a thing as a pure social form. Slave society
a .many freemen; feudal society embraced mumerous peasants who tilled
their.own land.. In capitalist society, even in the highly developed ca
pitalist countries of today, there are numerous small producers. People
nevex* refute that they are capitalist countries just because they are
impure.
Why, then, should the criterion of gpurity” be applied to
socialist countries? To uphold Marxism-Leninism and Mao Zodong Thought,
we must establish China-type socialist relations of production by adhering
o diaiectical-and historical materialism and in the light of the specific
Chinese conuitions.
AND JURKET REGULATING
Some economists call socialist economies planned economies and
, ■ “ 9
a socialist country, tne planned economy, instead of negating
the market, makes wide use of market mechanisms under the guidance of
state plan.
COM.'W’A’t I y H£4L Ttf QTt »
lo^o
Floor; St. Marks A'ad
BrngaTore - fOO 001.
(52)
Over tne last two years, while searching for ways to improve the
systems of management of the national economy, the phrase "combining
regulation by -che plan and by the market" has often been used (l used
it myself J Tais is an example of our failure to find better terms to
describecertain economic phenomena. This phrase is not very accurate.
Comrade Chen Yun
-i was more precise when he said: "Planned production is
the mainstayn , of industrial and agricultural production, and it is
supplemented by free production which operates within the framework of
1 f1
takine int0 consideration changes in the market."
We should not mechanically place planned managomnet in opposition to
reguiation by the market. Planned
must consciously
consciously make
Planned production
production must
make use
o
me law of value and within a determined scop utilize the market's
regulating role. In this way the state plan can be kept in line with
uiie market's demand.
In planning the national ceconomy, it is important to correctly
handle the relationship between
between various sectors of the national
]
economy and the proportions of
the various departments within each
<
sector.
i
+he state Plan should ensure that investments in capital construction
be rationally distributed among the different sectors of the national
economy so as to bring about harmomious economic development between
S®otor® a)?d wlthin each sector. For a long time, owing to our
one-sice d emphasis on developing heavy industry, the development of
agriculture, light industry, transport and communications, and commerce
the Xionr/
+S W!S held baCk’ In heavy industrVr the ratio between
htk
deP^tments was not adjusted well and the development of the
enclgy induscry clearly lagged behing. Hence a serious imbalance between
the various sectors of the national economy, A lesson should be drawn
from this.
In order to give full scope to the market's regulating role, the
Scludf- °f SO,OdS mUSt firSt bS cnlivened
enlivened-. The measures to be adopted
Cllalls®
system under which certain products were sold and
dities lik°ay 7
? ttate* ¥ith th° Q3rCGPtion
a few major commo
dities like gram, cloth, complete sets of machinery and equipment and
« xn -taal « materials, the demand of which outstrips S2r’s^Ply
accordin"- tltl- t-103 sh°uld be Purchased by the commercial departments
SS X^outXl
oub ™ the basis of market demand. Factories
jxouid work out their oto production plans in the light of commercial
department's purchasing plans and market demand.
onmerciai
(2)
Increase the channels for exchange of commodities and simplify
a?®
°f exchangc- 111 Edition to state-owned commercial establi<
T nUm0°rS °f coll^tive retail stores and some private ones
of urbanSmlrkets for 2O“petlbio11 s^ouid be allowed among them. The number
-inn-r-n
to f
f
and Sldellne Products must be enormously
j-ncreaseu.
looni-Jt? aGradua11^ 102Sen Price control within a certain extent. Various
localities and even enterprises should have sone say in readjusting
pn1C0T’ + '?r pr?-Ce? ,Hay bo all°wod to float within certain limits. Many
commodities should have seasonal price fluctuations, and appropriate roto suLlv1^ £iff°re?ces should be Permitted to encourage localities
to supply each other’s needs.
To guve full scope to regulating by the market, it is necessary to
The4^houldeb
read^sting tas rates and bank loans,
iiiese should be worked out through practice.
SOW®!
Beijing Review, Bo.49, Beccnber
December 7,
P.14-16.
7, 1981,
1981, P.
14-16.
EEPO_RT_(^N__THE_READJUSTMENT OF THE 1981
(53)
x)(4.T.L^dA^^E(^N0I^IC PLAN AND STATE
4,ND expenditure
( Excerpts)
On ebruarg 25, (at' the 17th Meeting uof the
b
standing committee of the^Fifth^National
k^-l.
geo ““
pies Congress, 2^
Yao Ytlin9. Vi c e-Premier and
ST-on, delivered a three-rar t report on the fulJelment of the 1980 national economic plan, and the
a+ Wel1 aS
-nd measures f0r
nt ifljustment
mdl national economic plan,
lhe following are excerpts of the report.
FULFILMENT OF THE 1980 MTIOWhL ECONOMIC PL/Ji
“tl“al oooWnlo
Flan °e5'»rit.rP*h2°Sh»t11haa'£?
of the Fifth NaUaaa! r60Ile,s
S l^tX^tT S°““°
hprovemnrS’oohdlUote 2°°Chl»^r‘’°°?iC ai,t"atlo“ ls
and the arousing of enthusiasn of rurpl 01?° °f
Par’fcy and Sovernre nt
producitien, wo reaped another ™
1
°0“e neWrs for
despite a skious fLod i^Zhe scS ZZ“ 1980
north, fairly unconnon phononena ZiS the l^d
th° ‘
'
gram output is estimated to heve reached 31 Li
*■ Th° total
only
to
that
of
1979
win
’
oh
im4
1
1
•
1
?
°
million
tons,
second
n, .
- ^7 which WaS
was
- • ■
Wiest
China. Cotton
output WxllCh
is ostinatod to
have ■ since the founding of New
h“-j reached 2,6 million tons,
tonr^PO1?! 111 t?Q hist®y °f New China- and
-nd an increase of 400,000
tons or 20 per Cont 0Wer the previous
year.
The output of oil-bearing
1Cr°PS b0th showcd increases of l
than 10
per cent over
1979, which was also a bunher harvester more rneso.
crops.
-- these, crops. The
diversification of
develop and the rural ocoCnon7band 3id01ine oceu^™s continued to
G
liVely* In 1979
1980.
the peasants increased thc^ Tn
ieir
mcones
frori
the
growth
of
agriculturalproduction and the rise in the state1
s
purchasing
prices
of
najor
agricul'
ural and sideline productse 2"
liie-increase
in
the
state's
purchasing
prices alone brought an additional income
‘ of 25,800 niliion yuan to the
peasants in- those two years.
inspiring
or ^o years,particularly
PXtyCpcvoXnstSckfniarthatb “ %Sh°rt poriod of on°
change, no
no 'longer
longer depending
depending con
“ grain
71Z resold t^th^f™danGHtal
for production and
and relief
relief subsidies.
subsidies
Th
h° Stato’ loans
individual peasants has shown a n^kr<n
^cone of tho colloctive and
l annrl
mr.hkcd
Cl_ social order in
the vast countryside is statin
+/ ' increase.
crcase. The
The relationship between the a and
caLo^and^S
the peasants
n feel
haPPy* '
cadres
and the prestige of the Par tv a nnrl
-rt and
' ' the
4-° r*nassGS ^as greatly inproved
1 government
the peasants has risen!
7
Covernuent among
anonC the
tho broad masses of
■HSiS SRSrbeg'inninrof^^re?deli°G of tlle improved ccononic
within the industrial structure,
deVel°PHeilt
in the objective of having light ir^nc.L • \ bh G,yas further development
heavy industry. Light induct™
“austrnal growth surpass that of
have increased by 17^ Z cent oZ" Z
Z0 13 -^^ed to
cent increase, while the conparativelv V lnStead of' the planned 8 per
heavy industry, conpared wSh tho LS
^0Wth °f 1’6 per
nparect with the past yQarS, was coriplenented by an
(54)
inprovenent of the quality, variety and specifications of heavy industrial
products. While energy production dropped by 2.9 per cent fron the
previous year, total industrial output value for 1980 is estimated to
have increased 8.4 per cent, topping the planned increase of 6 per cent.
The development of production has continuously improved the living
standards of the workers and staff • The average annual wage of the
workers and staff in state-owned enterprises or units in 1980 is estima
ted to have risen by nearly 80 yuan compar d with 1979. Nine million
people in cities and towns wore given employment in 1979, and another
7 million in 1980-. The speed of urban housing construction was further
accelerated. It is estimated that over 78 million square metros of
floor space wore completed in 1980, an increase ofno loss than 15 million
square metres over the previous year.
LIVELIHOOD OF THE PEOPLE. Owing to the development of industrial and
agricultural production and the increase of income of the workers and
peasants, the total amount of urban and rural purchasing power in 1980
registered an increase of more than 30,000 million yuan over 1979. The
total volume of retail sales is estimated to have reached 207,100 million
yuan, an increase of some 11 per cent over the previous year if the price
rises are taken into account. Rural fairs and urban agricultural and
sideline produce markets are brisk. They have played a fairly good role
in supplementing the defects of state and collective commerce. The
excellent situation of market supply in the cities in 1980 has not been
witnessed in years.
The total volume of exports in 1980 went up by 32 per cont, and
imports by 19.8 per cent (14.3 por cent and 2.1 per cent respectively
if the price rises are taken into account). The foreign trade deficit
dropped from 1,870 million U.S. trade dollars in 1979 to 570 million
dollars in 1980.
The development of the national economy in 1980 is further proof
of the correctness of the principles and policies formulated since the
Third Plenary Session of the 11th Party Central Committee and the policy
of readjustment, restructuring, conslidation and improvement. The
economic situation is excellent, a situation rarely seen since the
founding of the Peopled Republic.
RIDDING THE, ECONOMY OF ITS POTENTIAL DANGERS; In such an excellent
sitation, why do wo say that there are still potential dangers and
it is necessary to carry out further readjustment? Because the fulfilment of the 1980
'
national economic plan has revealed several problems
that call for our serious consideration.. The major trouble spots arc
the successive big financial deficits, the over—issuance of currency
and the price rises for many commodities.
In 1980, state revenues (not including foreign loans) exceeded
the budget figure by 700 million yuan, whereas state expenditures
wore 4,800 million yuan above the budget figure, As a result,f the deficit
"*
wa s12,100 million yuan instead of the originally budgetary deficit
of 8,000 million yuan. The larger deficit led to an increase in the
overdraft from the bank. Originally, the bank had planned to issue
3,000 million yuan of currency in 1980, but it issued 7,600 million
yuan, surpassing the planned figure by 4,600 million yuan. Because of
the increased amount of currency in circulation on the market and the
failure of the supply of commodities to correspondigly rise, the annual
avoraco TAtail nrices in 1980 went vp "by about 6 per cent over the
previous year. Among them, the.retail prices for foodstuffs increased
by 13.8 per cent.
These problems in state finances and commodity prices show that
still better work must be done with regard to economic readjustment.
(55)
ideology ^hotL^1’'1'3
tno past, under the guidance of a "Left"
ovIr-Sg tar.otT^e
—tended and
and the\an.- of four --bot °; Tlldus^lal Production, /nd Lin Biao
was that sone najo^ sJcXs of T ^l03?0^for 10 ^ars. The result
of proportion, and the liv-1-' v
y 3onal econony were seriously out
countryside did not Jup^C7SouU
“ CiWeS
the
and 1980, we carried out the o^nciX
°? nanyyears- In. 1979
the purchasing prices of agriculturalec°n°nic neadjustnent, raised
margin, found'nore jobs5^ p’eopS raSL th
"
by a
staff and instituted a bonuslvsten
Al l +7
CeS °f workGrs and'
which played an important rnln'iii ’
t^1eSG Were necessary measures
rural laboured for Reduction “ af°US1^
enthusiasm of urban and
industrial and ag2cv7urn77 ? 7 Pr°^tmg the developnent of
the excellent economic sik'aJLn"ouS’no^^St
nea^S’
were ^“inS^sed^^at"
livelihood of the people
for capitate ons?Z&nir?ho0sT7
and the Vestment
but not enought. The problem is +7+ budeot.^as brought d ora a littlw,
of administrative orpeStures 7 ?7
thGSe conditi°ns a number
and for state org^s ± Sbl7
thos« f°r national d of ence
China is developing country whi 071
ac;Lnep continued to increase,
of chaos. It is ?acod w7h Zi
rGCGntly onergodfronl0 years
many things in LeoXLe JitT the
°£
t0 undG^G
to limited strength, cannot wndor-f- 73n'ta“oys of the populace but, due
pay enough attention to the latter3 total
OneCG*
we dia not
construction and consumption purposes sSno^ H cxpondlturGS f°n capital
this situation tocontinuo 7 Sfr 77 P
revenues. If we allow
consequences. Wo must stadvo tn’11 * °UUCG sorious and multifaceted
in a hidden Itage.
aV°ld SUCh adanser, though it is still
The innedLro
policy of further
< to solvo
P^blZsl^^t.^a^T:^^
iated just
problems and extricate the
and extricate the oconony fron its notonti-11 °C0 0,7 fr°a itS potential
oconony fron its potentialdangers. It will has
= posit™
iUwhole
h“ “ f«
-.1 significance. It will enable "
our
shoT;“t’S
clisencumbered, from the j " "
-1 on actual conditions in China.
and steady development.
i proper improvements in people’
the socialist modernization
dy steady and healthy advance of
projramne.
v
II. MR CONTENT ^^^ms_B0RjrHE READJUSTMENT OF THE 1981
ECONO me PLJW:
--------------------- —
<979 o^K“iS12aar“aJ"Sta“t " tta Potlonal
o4. . .
n
-------- - economy adopted in
that, inyiew of the serious inbalances in the
eoonony, the task of the
roaojustnent was to readjust the dispropordevelopnent beteeen^griculture^^
0^ a °
0HParatively co-ordinated
as to achieve
conparatively
'
light industry
and’ heavy industry
rationtl^nJf^^
Var°US ^^trial
br
no4--v»-? «•> T "u
_ anches,
..i
"
n
4.
•
—
’
reach a
ational ratio between accumulation
and
consumption.
accumulation and
BALANCING
MB
•
readjustnent of the disproportionate The primary task in the continued
relationships in the c?
economy this
year is to achieve, firs.t of all
an
_-i revenues a
and expenditures, and on this basis overall "balance between
? to achieve a credit balance, to
stop the issuance of . currency for financial
purposes and to stabilize
prices in the main.
State revenues for 1981 were < ' ‘
?7
yuan ((not including foreign loans').originally targeted at '
107^400
nillion
»
They
wore
readjusted
to
million
97,600
-i yuan because of the readjusted cut in the
--J output of oil’and
( 56)
Stet. slp(,naituros,
ah^xSJuSsT1 t0 97,600 5illi0n
SuSS
•
werc
balanceing- revenues
y GONCREIE comm MB WOE MEASURES O? tots YEilt'S RBUJJUSTIWT
axe as loJLlows;
■',L
——8— •• • 11
■ ■
is1
originaily planned 55,000 nillion yuan to 30,000 nillion yuan. We uust
pr°Je°ts.w1110h la<* suitable conditions for construction, or
’ Fincl^dln^ ’ t
W<Td la0k the coitions for production
compete with0501ProJects), as well as overlapping projects which
C?nitn? Tgth ex;l^TnS. enterprises for raw material, fuel and energy,
which L-^-^-/-estments should be concentrated on projects
opeiti?? cuiX7Sen production ne°ds, can.be completed and put into
staff and ™
™1Tary Projects, on housing for workers and
sraii and on urban public utilities.
-Reduce expenditures
<
on national defence, public undertakings and
administration,
r_. h ery item must be carefully calculated and strictly
budgeted. it must be below, not above, the planned sun.
-Run agricultural and industrial production well. It is necessary
to make continued efforts to
carry out rural economic policies and
perfect and sta,bilize various systems of responsibility in agriculutural
Tlle
ural areas
arcas should strive to increase
increase" their
their' harvests
lhe V
rural
raisin? So ^t?S
“Tld dcvel
^nent of their diversified
economy while
an all-rould
development
<’’
exieS'in
fh
roductian ™st
civen first
Axce-nt
in
Zt,
- Grain ?
production
must be
be given
first place
the ^nJnaS
husbandry and forestry
rnc dominant place -and m areas of industrial crops.
fl,+T.„ye ™St attain at least an 8 per cent increase in light industrial
prises Iho?ld e5 should strive for more. All light industrial enter± ises should endeavour to reduce consumption, raise product ounlitv
•M
out „„„ product, uhdoh cell „£1 ou'tko X”.
’
7
nilliouetous8eisfbr.Sttii1 Tr°au°tion thie year, originally set .at 55
XX XX XXXXhXXy XSX «... .
planned wav
Mot it’ 1VQ ?aI"fc in nanufacting consumer goods in a
way.out
must carry
CkeDlcal and machine-building industries
reduce the production
^t*3 r^Ct acc0I,dance with the social demands,
the production 'of ? A h° S
SUPPly cxcceds denand and increase
e production of goods whose supply falls short of rloriand,
betwe2^sS?es'°?ndnS C°nSUnp^On- In OTd^ to gain a proper ratio
originally nlnnn t d axtractlon and ensure safe production, the
reduced to Si it
P
°f 106 nillion tons for
has been
reduced to 100 million tons and the originally planned coal output
by nines whose products are distributed by the state has been loweredfron 359 nilliontons to
millions tons. Therefore, it is nece. ssary
to step up efforts to c
,SfLG energy in order to ensure increases in
industrial production with decreased
----- energy output.
must wnrknhn'l'iCL+te-and roor£anizG existing enterprises.
< s “xeS
All' enterprises
.
(57)
must be corrected. Enterprises whose products $re of poor quality
and do not sell well on the market and which have high consumpiton and
incur big. losses must be closed down,.stopped, integrated with other
enterprises or changed to turn out other proucts. So should backward
enterprises which compete with -advanced enterprises for raw material,
fuel, power and transport facility, especially backward small enter
prises. Priority should be given to integration and shifiting
production to other items.
-Ensure basic stabilization of prices. For this purpose, in
addition to strictly controlling the issuance of currency and striving
to produce more consumer goods, the state will ask the commercial,
foreign trade and natetials departments to put part of their commodities
in stock on the market and, at.the sane tine, contiune to withdraw the
currency not i ssued for trading purposes.
-Improve prople’s living standards. Various steips will be taken
to find work for urban yovth who are waiting for jons. The state will
gradually provide for appropriate increases in the wages of the workers
nenbers who work in scientific reaearch cultural, educational
and staff members
and health institution's and government departments and Co not receive
bonuses and whose living standards5 are affected by the price rises.
The state will pay basic wages to workers and staff members working on
projects which are (ordered to stop or postpone construction, and those
in state enterprises which are instructed to
close--down
c_ stop produ------a or
ction. Every effort will be made to continue the construction of urban
public utilities and residential housing.
—Strengthen the centralization and unification of nan age Lie nt.
Since econonic a readjustment is extremely complicated,. unified
measures and direction are required
_
in the country as
_ a whole
__
to solve
ruany
--- inp.ortant problens, especially that of keeping the whole nation’s
finances and credit in balance. (For details see box.)
-Issue treasury bonds and borrow fron the surpluses of local
govornnents. The State Council has decided to issue 4,000 to 5,000
nillion yuan in treasury bonds in 1981 to conpensatc for part of the
central government deficit of 1980. The bonds will primarily be
issued to state-owned enterprises, collectively owned enterprises,
departments, organizations, army units, public undertakings and
prosperous rural communes and brigades. They may also be bought by
individuals out of their own will. Although revenues and expenditures
m 1981 will be balanced in the,country as a whole, the central govern
ment will still have a deficit of around 8,000 million yuan while quite
a number of.local governments will have financial surpluses. Therefore,
these localities will be required to lend a total sum of about 8,000
nillion yuan of their surpluses to the central government. The necessary
concentration of financial power, material and other resources by the
central government might cause difficulties to various localities. But
this is the only way at present to keep the country’s whole economic
situation stable and prevent overall economic instability which.might
inflict heavierlosses on the various lovalities.
■A_r-P8ITIVE POLICY.:
^readjusting the national economy is a positive
policy. To carry out this policy requires a certain amount of retrogression in some fields and full implementation. The temporary and
partial retrogression will ensure all-round, stable and long-term
development of the national economy. Other fields where progress is
required .can still go forward. Carrying but the policy of readjustment
in an all-round way and fully practising the measures of this retrogress
ion and progress where they are necessary will promote rather than delay
the modernization of the country in the long run.
(58)
MAINLY RELYING _QN OUR OWN EFFORTS BUT NOT CLOSING THE COUNTRY
. TO THE HORLD,. *
~
In a populous, large country like ours, nodern construction nust iaainly
0Wn eff°rts’ that is» mainly rely on our own industrial
oundatxon, on our technical strength and donestic narket. This basic
principle is inalterable. Byt this does not nean we will close our
ln1:ernational exchanges. It is also our inalterable principle
to develop econonic and technical co-operation and exchanges with foreign
briS °f thS PrinCiple °f eqUality and
During the period of econonic readjustment,
readjustnent, we will adequately reduce
the scale of importing equipment; and will coriespindingly rearrange.certain joint projects with other-* countries. But this is not a, signal of
a change of policy. With the progress of our economic readjustment
and the development of our national
--- - economy, the scope of our economy
co-operation and technical ex changes with foreign countries will become
increasingly larger.
III.
RAISE ECOCTOmC RESULTS, PRO MO IE THE STEADY PROGRESS
OF THE NATIONAL ECOlTOJg
The ccononic readjustnent requires a cutback in capital constru■n1°n ^n^esteents. At present, the key to ensuring a steady advance
pro£uctlon at a certain speed lies in raising the econonic
results by a big nargm in all fields while diing a good job of carry
ing out the readjustnent.
J
y
on the basis of expanded production. In order to develop our country's
^th°Scalculations
strict budgeting are ne^essarJ aSg
inis notw f
^ise economic results and reduce the funds and mater
ials Reeded for creating.nore social wealth. Hence, a huge change nust
bo effected in our principle of economic development.
■that
®er:L0US nisy-ke we cade in directing the econinic work was
that we always attached importance to capital construction the neglect
ThiS -ad^tnent nust resolutely Ze
™
!
•
affa^snust not hinge our economic development
and-increisitCaP
instruction projects, sotting up new enterprises
ln°roasing energy and raw material consumption in large quantities.
Through’this^3
Play t0 the r°le °f °Ur exisi:inG enterprises.
AXnn!
readjustment, we will set right the guiding principles
itself on0ChSC'WOrk,T+e W111 enable our econonic construction"to base
bSS subsJ
i roaiity and ability, advance in a systematic way and
bring substantial results. We will also blaze a new road of steady
development which is based on increased economic results.
|£9„NOMIC RESTRUCTURING TO CONTINUE; Another necessary way to markedly
raise econonic results is to continue to restructure the country's
economy m a manner which is beneficial to the readjustnent.
and
cc°?onio returns in production, construction
and circulation, and the irrational structure of the national economy
It^is innossibiatfd fr°n th° Drawbacks of our current economic setup.
nJ LJ P
h f°r US.t0 f^anontally improve management and raise
economic activities if this setup is not reformed.
z
Thirdrestructuring our economy since the
_fy_ GSS1<m of the 11tH Party Central Committee are correct
in their orientation and have
--- 1 gained good results. Now, the rural
'
'Alt.
(59)
economy is prospering and industrial < ' ‘ '
enterprises are being
revitalized. One of the major reasonsandis mining
the structural
wo1T?dfured pcople's enthusiasm. Without these reforms" reforms which
today'ssituation
during ^XsTof^sE^t
-^P-bleus
emerged
solve then one by one
We wilir™bl-alld
ar° n°W adoptTn® measures to
th!,
S.SJ”*1”0 t0
»» .0„0W,
encouEged^relultiE
period that have proved effective should be
and new reforml shoSd bo nor3
consolidaeed and developed,
proper leaders^EX^^Xer813 8t0P
.
Und-
-Ensuring the rights of rural ccnmuncs, brigades and teams to
decide their production
-------- 1 schedules under the state plan;
whi
■'Collt111uing the experimental work in the i
cJlL ar lnvolved in enlarging their rights tomore than 6,000 enterprises
3 make thier own decisions,
o s y sum up their experiences so as
to
gradually
perfect the various
measures adopted by then;
syste^oEtakinf XSiMlitiefTerPTiSe fUnd Systen*
enterprises which
or the
™ not
-Continuing the practice of
cities engaging in the experiment a small number of enterprisesi and
of paying taxes rather than ihanding
over profits to the state, practising
independent business.accounting
and taking responsibility for their
’ own profits and losses. Sunning
up their experiences;
Responsible depfrtnentsEhoulEstron-ti3
Undor thc statG
and adopt necessary XnEEatEe
°f aarkQt Precast
a y administrative measures so as to avoid anarchy;
ownorship°Wonbthe0cordtioneth0tG1°hi1Gllt °f
element.
Urban G°onorjy of individual
condtion that public ownership remains the predominant
A good job done in the above reforms will j
’ ’ '
not hinder but benefit
stoud”.1"!,0'
e'“luc
p"“d °f readjustfron a long-term view
^looted to theisreadjustment. Judged
but contradict the presentSrondiusfS W1?1C?1 aifG rational and indispensable
more appropriate tine
t/h°uld be Postponed until a
restructuring can heln the 1 a
s'teadyin® the pace of the
attention on the readjustment ondShlP
I^°US leVels concentrate their
procedd smoothly. Good conditiotT^6
structuring will
ErfiSnoXcEw sr re
and supply Ld aemand ^rk^Xr^rSn^uXEES.
600110137
in the market
Jus trient, fStW^poiitioal^SbiliK
0^11 advanco of our ecoiionio readTo
to the interests of the Lol
political situation, which E
S
7 13 re^lred-
«0„ti„unlly =0„.0i?ht5 L a„X‘;‘a"“a bJ
“
fundamental
that our present
“a
»»
the people',
(the socialist road,
proletariat, the leadership o-F i-J^P,. that is, dictatorship of the
host!!, to ..0^,^“.^^^
the socialist economy and seriously endanger public security.
_ To ensure the smooth inplenenatttion of the econonic readjustment,
it is necessary to strengthen ideological and political work so as to
revitalize the revolutionary spirit of the broad nasses of workers,
peasants and intellectuals. It is important to enhance their sense of
responsibility, and bring forth their enthusiasm and initiativeness to
work hard and do their professional work well. With a spirit of being
responsible to the people’s cause, government cadres at all levels,
particularly leading cadres, should go to the grass-roors levels, share
weal and woe with the masses, work hard and seriously and responsibly
handle various complicated problems.
Wo nust revive and carry forward the Yanan spirit, the revolutionary
spirit in the early post-liberation days and the spirit of overconinr
hardships m the early 1960s. The present econonic situation is obviously
afferent fron that in the early 1960s, in the Yanan period and in the
years of the People’s Republic. However, the militant spirit evinced
m those tines of being the first to bear hardship and the last to
enjoy conforts and of fearing neither hardship nor death will never
e given up and will renain a valuable weapon for us in overcoing
all difficulties and achieving victory.
* Under this system, a state-owned enterprise can revolve a fund which
is equivalent to a certain proportion of the total wages of its workers
and staff members,
e
. if it fulfils the four state targets of output,
quality, profit and contracts for supplying products. The fund is
used for expanding production, developing collective welfare and
issuing bonuses. This systeu has been adopted since 1978.
**
Since I960, the state has inplenented a system of overall financial
responsibility m governuent adninisttativo organs and public undertakings.
Their expenses are fixed by the state according to their personnel and
the amount of work. If they spend less, they nay retain the surplus
part. If their spending surpasses the fixed amount, they must make
up for the difference thenselves.
000000000000
SOURCE:Beijing Review, No.11 March 16, 1981
V"\ t-r
■\
I
(61)
A Further readjustment will be madetn
China's national economy beginning from
this year*
This move^ which follows upon
the initial readjustment made in 1979-80
has been described as "soberminded and
healthy.” Why? What exactly does this
read jus tment mean and what effects will
it produce? This special feature provides
some background information^PArt three
deals with a principle put forward by
Chen Yun, Vice-Chairman of the Central
Committee of the Chinese Communist Party
and a prominent leader of economic work
in our country.
This principle concerns
the relationship between t/ie scale of
economic construction and national capa
bilities, and is a significant guideline
both for the economic readjustment and
for our future economic work.
**********
ECONOMIC PROGRESS WITH HI.WN D./JJG-EHS.
As decided at the working conference of the Party Central Committee
held last December, there will be a further readjustment in the national
economy beginning in 1981. This means, first of all, drastically sacling
down capital construction, making administrative spending cuts, bringing
about a balance of re venue and expenditure and stabilizing prices, to
remedy disproportions in some major economic departments and to being the
econoky back to the track of steady, sould development. In order to
effectively carry out this major decision, it is being studed and
discussed throughout the nation#
A major economic readjustment of this kind, as naj? be recalled,
took place before in the early 1960s. But then it was forced on us
because of serious economic setbacks, the nosediving of industrial and
agricultural production and the fact that people were having a real hard
time making their liveli-hood. This time the situation is different.
The present major readjustment has been decided, on at our own initiative,
at a time when the economic situation is quite good and when people’s
lives are improving year by year. So it has been asked if the present
readjustment is necessary at all. If so, why? How should it be done?
What about the prospects of economic development? These questions have
aroused the interest of many both at home and abroad.
ACHIEVE!iENTS IN THE, LAST W YgARg.
Tlie decision to effect a further economic readjustment came after
the Party Central Committee’s overall appraisal of the economic sitation
for the four ySars beginning with the downfall of the gang of four,
particularly the situation in the two years since the convocation of
th© Third Plenary Session of the 11th Party Central Committee at the
end of 1978. In the period 1979-80 China’s achievements can be summed
up.roughJy as follows:
Record good harvests two years in a row. Total grain output in
1979 reached 33.12 million tons. In 1980, due to drought in the north
and flooding in the south, there was an estimated 5 per cent decrease
in grain output, although it was another record harvest year; the output
of cash crops like cotton, oil-and sugar-braring crops registered a
10 to 20 percent incr ase over the previous year to reach an all time h
high.
(62)
In the last two years, total industrial output value increased at
the rate of 8.5 and 8.4 percent rospocrively, with the output value of
light industry growing much faster than that of heavy industry, The
share of light industry in the total industrial output value went up
from 45.1 per cent in 1979 to 46.7 per cent in 1980.
The total volune of retail commodity sales registered an increase
of 14.7 and 18.2 percent respectively in the last two years, reaching
207,100 million yuan in 1980, and unprecedented increase in the 51 years
of the People’s Republic.
Over 6,000 enterprises (which contribute 45 per cent of the nation's
total industrial output value) effected reforms in their economic struct
ures . These reforms, which mainly consited of expanding the right of
autonomy on an experimantal basis and introducing market regulating
under the guidance of state planning, have activated the economy.
Jobs have been found for 26.6 million people in the four years
between 1977 and 1980.
A narked inprovennet in peopled livelihood.
In -une
the case ox
of peasants under collective ownership; Net pdreapita
xn
income is estimated to top 170 yuan in 1980 as against 117 in 1977, an
acerage annual increase of 17.7 for the period, (in the 20 years between
1956 ahd 1976 the annual average increase was only 2 yuan.) The balance
of peasants’ bank deposits at the end of 1980 stood at 12,060 million
yuan as against 4,650 million at the end of 1877, an average annual
increase of 2,470 million yuan in the period. (The average annual
increase in 20 years between 1956 and 1976 was 165 million yuan.)
In the case of workers and staff members under the ownership by the
whole people: Average wage earnings jumped from 602 , an average annual
increase of 60 yuan in 1977 to 781 vuan in 1980, The average per-fapita
income of a worker’s stall Member’s) family went up from 186 yuan in
1857 to 595 yuan (price hikes which affect the real income have not
been deducted.)
Urban housing projects built in the-two years had a floor space
of 140 million square metres, about one-fifth of the total floor space
of city housing projects built in the previous 29 years.
CAUSES
JlhANCIAL DEFICITS
Despite the excellent economic
<
j
situation, there
are hidden troubles
ahead. The 1979 final state accounts showed 17,000 millionl yuan in the
rod; the deficit in 1980 was 12,100 million, ha excessive issuance of
currency inevitably gives rise to inflation. .*1
„ the prices for
Although
essential commodities have always been under control, those of many
consumer goods are going up in one way or another. Compared with the
previous year, retail prices in 1980 went up on an average 6 per cent
thos© for non-stapie food, 15.8 per cent. If this situation is not
altered soon, the gains of workers and peasants made in the past few
years will be forfaited.
While these difficulties have
v in the past
come to the fore only
two ;yearsj the iactors that caused then have been in existence
long tine.
For many jiears our economic construction has been under the sway
of. Leftist” thinking —overanxious to make achievements and going after
things beyond our capabilities. Wo have failed to understand that in a
big, poor country like ours where peasants make up 80 per cent of the
population, prolonged, strenous efforts are needed in raising the back
ward productive forces to an advanced level.
Wo have instead, onesidedly gone after unrealistic, high targets, an excessively high rate
of accumulation and blindly expanded the scale of capital construction.
( 63)
Accunulation in the Second
years since
since 1970,
1970, ffor in-tnuh0" °ar ’hlan l^ri°d ('*958-62) and in the
years
income.
Enormous
incone. Enormous amounts
amounts of rm™10 ovor >0_per cent of the national
into industrial construction on nn X J;iatcrial resources were chnnolled
the construction of heavy induX-iG1 er“°xpa2dln£ scale, especially into
damage done in the 10 y X of tX • i X3* Th°n there was
imbalance in the the n-ti nhAXX ?-X? CaUS®d an eVen Eoro serious
and consumption* between cgr'icuJZ7 1("I*alan00
accumulation
between the base structure and the productioXstiuctS)^^
UPS ZJTD DOWS OF SOM MAJOR ECONOMIC TARGETS
Period
1st 5—Year
Plan (1953-57) 24.2
2nd 5—Year
Plan(1958-62)
30.8
Period of Re
adjustment
(1963-65)
22.7
3rd 5-Year
Plan(l966-70)
26.3
4th. 5-Year
Plan(l971-75)
33.
5th 5-Yoar
Plan 1976
31.1
1977
32.3
1978
36.5
1979
33.6
/.
U 953-79 j
Per cent ago
——
average
rate
Average rate
Rate of
of accumula- of growth of
of growth of increase
tion in natg- industrials
national in- of findonal income
agricultural
cone,f. v
ncial reprod^cljion
(%)
v^^e
10.9
Rato of
increase
of labour
productiv
ity in en
terprises
owned by
the whole
people(%J
8.9
11
8.7
0.6
-3.1-
0.2
-5.4
15.7
14.5
14.7
23.1
9.6
8.4
7
2.5
7.8
5.6
4.2
-0.3
1.7
10.7
12.3
8.5
-2.3
• 8.3
12.3
6.9
-4.8
-8.6
8.1
12.6
28.2
-7. 9
B^hin the first 1:wo yGars following the fall < ~
(1977-78)
■12.3
6.4
'
of the gang of four
.,
---of the
guiding our thought.
.-part from more overanbitious slogans mistakes
and ■
—1 is,
targets, we continued to expand
XSth 6 OhCaBttal co^uctionf There
n-F
4-*
/Of
course, nothing wrong
with -uhe policy decision
• •
f
Of
importing
advanced
technology
and using
foreign funds, but due to t ’ ’
t0 8“
te «
tta3
! ^Ck,.°he2?erienc°! thcs« Worts were on too
to
---- - our financial and economic
These "Leftist" mistakes T--
. • --
Session of tho 1 ?th
Third Plenary
Soon afterwards the
nut X nTX3e hsld at t116 end of ^78.
national economy and demanded a rZeduction^S^th151readJustin« the
construction. But thiq
,i
'
tn ln t110 oGale of capital
as sone cadres still lacked a pronor° lll(Ver fopow®d in real earnest,
-LacKoct
a pionor understanding of it. The measures
adopted in 1979 to^aise
”
pSrori>c priF8 °r 18 r“” "a
products and the wages of a
part of the workers and staff members were
correct as they helped arouse the
tanecus with uplifting the public's c~trouble
consumption level, we failed to
scale down the excessively large capital
in finaniiaiXScite^011 inVc3tneilts
other spendings, 7*resulting
** ' •
(64)
The aim of the ongoing major readjustment is to free our economic
work further from the influence of "Leftist” thinking, to resolutely
bring down the excessively high rate of accumulation and reduce the
scale whithin the national capabilities, to got out of the red as
quickly as possible and remove the latent troubles in our economic
development. In other words, to underpin our economic'position before
making further major advances.
'FOR'.J ART) ATJD
ABT)
A RETREAT is a difficult matter, especially for revolutionaries
who are. accustomed to advance•'T (Political eport of the Central
Committee of the R.C.F. (b), 1922.) This waS what Lenin had said
on many occasions at the tine when Russia was retreating from war comm
unism to a now economic policy. Presently wo are in the same difficulty.
For more than 20 years the ’’Leftist” thinking and the ’’Lftist”
line have remained unchallenged, influencing many people from top to
bottom, and becoing an obstinate force of habit. To get rid of it,
patient persuasion and education are needed.
RETHE4TING FOR THE SAKE OF ADVANCING
“
■
■
■
•
■
■
>• !■
*11 ■
«'■«■> ■
|| -W-
mi
ii.
. ....
Just as there are advances and retreats in a revolutionary process,
there arc also advances and retreats in the course of construction. Ehen
there is the need to shift from a certain revolutionary pglicjr or to
a rreformist policy or to replace certain radical measures with modest
ones because of a mistake of hasty a.dvanco in directing the work, or
because of a change in the objedtive situation and conditions,.a retreat
is made out of tactical needs and, to revolutionaries, is merely for the
sake of propelling history forward in a more successful way.
It is true that our socialist economic construction has gone
through a number of difficulties, but our economic situation today
is nonetheless much bettor than it was some 20 years ago. Accordingly,
unlike the forced all-round retreat in the early 1969s, there will be •
both advances and retreats in the ongoing major readjustment. In other
words, the present readjustment consists of backtracking in some fields
to make way for advances in others.
In which areas are wo to retreat?
Wo will lower the rats of accumulation bit by bit from over 50 per
cent at present to about 25. per
cent, This rate has been proved to bo
_
appropriate in our previous experience.
-A xu
retrenclimoUt
uneximdiu will
wij.jL also
a.i.so bo
Do ciioxt
cffcxtod
;ccl in
m tiie
the Hold,
field oi
of capital cons
truction, the scalo of which is to be reduced with a firn hand until
it falls within the means of the state. Facilities and personnel belong
ing to projects whose construction is to be called off or suspended
shall be properly handled. Sono people will bo diverted to service trades,
commerce, repair serci cos or gtrades requiring a concentrated work
force; others will be transfer^d to projects for environmental protection
or municipal construction; still others and their facilities will be
used to found regular and technical a schools as a kind of intellectual
investment.
—Existing enterprises which have no adequate conditions of produ
ction, which have incurred losses for years, which consume too much
raw material and whose products are not wanted on the market, shall
' close down, change their line of production or merge with advanced
enterprises.
-There will be cuts in administrative spending, defence spending,
in the management spending of all government offices, enterprises and
undertakings. Efforts shall be made to increase revenues and save
funds in every way, to got out of the rod and to curb inflation and
(65)
stabilize prices.
AREAS OF JlDV/JiCg
During the readjustment the following areas will bo reinforced and
developed.
tbs
x
a readjustment of the inner structure -of agriculture.
While developing
sideline production and fishery. CGreater
-- J- - efforts
n — -be made to
will
modernize the key grain producing and cash crops5 areas.
f
-Light industry. Priority
‘
will bo given to the development of
light industry. Heavy industry shouldI servo the
Lh development of agrucultur
c
and light industry; a part of the equipment and
.1 personnel in heavy
industry will‘be shifted to the production of consumer.goods needsd in
evoryda y life.
-Energy and coanunications and transport.
Our odlicv is to ntinoh
sources which should include the technical transfornation of industrEl
cquipncnt using large amounts of energy.
ornarion oi industrial
-Science, education,
< '
culture and public health. They must be
developed as much
-i as possible and there will be sone increases in
spending in these areas.
and b"ttorhXn?f?r\S-W\111 bo,nad<? t0 find jobs for the new labour force
and Debtor propio s livelihood as much as possible.
THE SCALE^OF CONSTRUCTION.
nont
^adjustoGatearly 1960s, the present readjust
ment is being made by resolutely rectifying the "Leftist" mistakes in
ction in°the 50^* If
taCk
thc C0UrSC> °f socialist constru
ct JcSi vs <
aft°r.tlle
of the People's Republic, we
_an readily sec that economic construction, be it an advance or a r-treat
nets'11}in1ChinafrmE1nflrSt h° laft Ly th<3 country's^terial and financial
Buti/Xtt ’vnanp°WGLh£ls always been abounant and is no problem).
disoovorea this „a =„ to th/eonclJLn
AJI, IMPORTANT PRINICIPLE
+
in ^xle Ya,najl da-ys Chen Yun made bu wc-i shang not lust to liq+nn
to the hlghotup) b„ „cl ahu (not juot to tolloo
taoto)
-aj yau wei shi |pay attention to reality) his principles in giving
principles °ULt°rk’h
h® hinSGlf has always strictly followedthose
in chaSe of Chfttt C0undnlng f the People's Republic, when he was
cnarge oi Cmna's financial and economic affairs, he and his non m
gucs succeeded first in curbing the runaway inflation in 1950s and earlv
60= oauood by °„ booty adtobooo in ooonot.lo oonst™ot“n
1° “L“
aXTt’ST problems, bo is «l„ys ocol-hoUsd
fnlorix\t<4'xkCS only appropriate measures, recealihg great
talent m giving leadership to economic work. The regretful thins- is
(66)
The principle discussed hero, that is, the principle that the scale
of economic construction must be commonsurate with the nation’s capabili
ties, was first advanced by Chon Yun in a speech he made in early 1957,
the last year of China’s First Five-Year Plan. With financial deficits
in the previous year, 1956, and the country running somewhat short of
goods and materials, he made the speech in the light of this situation.
’’The scale of construction," ho said, ’’must be commensurate with the
financial and material resources of a country: Yus or no—this is tho
line of demarcation between a stable economy and a non-stable one. In
a big country like ours witji a population of 600 million, economic
stability is a matter of utmost importance. When the scale of construction
is larger than what the country’s financial and material resources can
afford, it moans something rash that is sure to lead to economic chaos;
economic stability can bo achieved only when the two fit together
perfectly. Of course, conservatism is just as had because it holds
back the right speed for construction. But conservatism can be rem
edied much more easily than a hasty advance can be remedied. In the
case of the former, more items of construction can be added easily
when there is plentiful of materials on hand; but in tho case of tho
latter, it will not bo that easy to reduce the scale of construction
which has grown larger than what tho financial and material resources
can afford and, besides, a tig waste will have resulted in process.”
THE WAYS OF .RESTRICTION
Chen Yun also listed ways for avoiding a connstruction programme
larger in scale than what the nation is capable of. His main points are:
Undertake construction only when tho livelihood of the people has
been well arranged. Seeing that the aim of construction is to better
the people’s livelihood, he thinks' that making good arrangements for
the people’s livelihood and working for the welfare of the people should
be the major policy in a socialist state. Care must be taken of both
construction and the people’s livelihood; in China, only a strained
equilibrium between the two can be achieved in the main because it is
impossible to engage in very largescalo construction and ensure a good
livelihood at the same time.
While increasing the production and supply of the moans of produ
ction and supply of the moans of production, it is necessary to increase
correspondingly the production and supply of the moans of subsistence
and maintain a balance between the two.
Agriculture is a very powerful restricting force on the magnitude
of economic construction. The pace of agricultural development conditions
the pace of the growth of consumer goods production, the pace of the
growth of the nation’s financial strength, and the pace of the growth of
industrial and urban.population.
Production first, then captial construction. When raw materials
are in short supply, their distribution should be made in the following
order: first ensure the production of people’s daily necessities, then
ensure the production of the necessary moans of production. -All that
is loft should go to capital construction.
A balance, a slightly facourable one, must be struck between bank
loans and repayments. Only thus can there bo an overall balance between
social purchasing power and material supplies.
The public purchasing power must bo on a par with the cons-umor
goods available
- ■■ > —
purchasing power which growo
uno increase of the total wage panents and higher'prices for farm
produce should be properly controlled, the purchasing power which
grows with an increased output of farm products is to be welcomed, the
higher the bettor.
(67)
There must be an overall balance in planning. Ehen Yun believes
that only when the economy develops in a proportionate way can there be
a real high speed of development. Accordingly, a proper ratio should
be maintained between the national income and accumulation, between the
national income and state budgetary revenue, between the statofs bud
getary expenditure and capital construction investments. In other words
there is the need to achieve the four major balances between financial
revenues and expenditures, between bank loans and repayments, between
the supply and demand of materials and between foregin exchange earnings
and spendings.
Planned targets must be feasible and be given a range of variation;
productive capacity should be calculated, in terns of a ’’short-line”
balance rather than in terms of a “long-line” balance as “the biggest
lesson to learn” from a ’’long-line” balance is imbalance. (These are
special Chinese.. economic-terms; a short-line means the weak link and
a long-line the strong link in'production in a factory or in an industry.
~Tr J
From tliis it can. be scon that Chen Yun’s economic principle is
based on the Marxist theory of social reproduction and is. Therefore
in accord with the basic economic law under socialism. Our experiences,
both positive and negative, have borne out the correctness of this
* economic principle.
BLAZING L NEW TRAIL
This major readjustment will eventually do away with the great
discord which has long been in existence in the national economy. But,
apart from resolutely effecting reforms in the economic structure,
we must search for a new way to boost the productive forces if the
economy is to be kept on a track of steady, sound development. We must
first of all, have a perfect knowledge of our national conditions and
capabilities, free ourselves from the old habit of pressing ahead in
a rash manner, always keep in mind that we should do only what is within,
our mc-ans-in a word, see to it that both production a nd construction
make steady progress in an orderly way with an eye on the practical
results. This, of course, does not preclude a leap forward after some
steady progress is made and when conditions permit. But such a leap
can only be the outcome of a steady progress in an orderly way, certainly
not a thing based on wishful thinking to be achieved in a happazard way.
HOW THE ECONOm SHOULD DEVELOP
In developing the economy, we have in the past actually paid more
attention to capital construction than to production and have had high
accumulation with low efficiency. Our experiences are characterzod by
the following phenomena: Keen on buklding new factories using huge
amounts of funds, materials and manpower, especially heavy industrial
plants which absory large investments and take a long tine to build.
In the case of many construction projects, preparatory work beforehand
is often inadequate; in sone cases, construction gets stated in a hurry
even before there is an overall picutre of the resources and geological
conditions. Sometimes, construction thus drags on gnd is never completed
(known as the ’’beard-growing” projects): those completed cannot be com
missioned for production on schedule, causing tremendous waste and
yielding poor results. Compared with the First Five-Year period, the
return on investments now made in our big and medium-sized projects
are only half as much as before while the time of construction is
twice as long. Little attention is paid to improving management and to
the renovation of equipment and technical transformation in existing
plants so that about one-fifth of the enterprises have long been suffering
losses and only manage to keep things going with government help.
(68)
As some economists have •
XSXT’XXX
• • pointed
out, txieso phenomena rserve to show
. “b“‘! what is meant by expanded
Win ch is one-dided and harmful, old
production lies £ Slding^or^ne^fectoJl^
way to expand re
in actual fact, less_TOti0,
of
while bringing about
still needed^to build^e^e^f££r£s°£dh0•four ^dornizations, wc'
industrial and oomunicutions Jh-*0370-Dtat}sfactory way the existing
This neans expaxS^oducS n n ^r?8/01030 t0 400’000 in nui^)
existing enterprises, carrying out ration
the Potentials of these
lowering the anount f
National technical transformation,
produts and raisSg g^od^Svc^ff ‘
iSiXy!
°f
£p*X:nindu^^^
Tkey include.
production and ri.-id labour
SeLt^ne UP a nornal order of
business accounting systen for enterp^is^f lntroducin&' an independent
Reorganizing industrial enterprises
< '
according to the princiiDle
of specialization and coordinatio^LP^oduchon"
types of economic complexes;
f, and developing various
Renovationg equipment and <
in .existing
ent^p^i^^tep
,
* --- » step by stop and in
empiasis on technical transfer rm-hi mi o "i
transforaati°n
planned T ’ ; w * “
at saving energy;
Strenghtening scientific
research and technological development,
rail-manufacturing and developing
the market;
& new products which are needed on
transforpation ofbs^tin^ent3^ i“du3tyy serve aaialy the technical
construction as bofS?; &
lnstt.ad of sorving nainly
Importing loss c
v^
complete
sets of (equipment, buying ‘ f
technology and software
instead nainly
_._e so as to combine the import of technology with
the transformation of the old
enterprises;
members to gradually"elevate^^tho^^lfystGL1 for wor^s and staff
personnel on the payroll
"
and ^^^ical level of all
PROSPECTS
••■■■■II
«|
*
■Ulfc. .m. !»■
What arc the prospects for
our econonic development after the
readjustment?
The pace of development may not be
naihly rely on existing
existing'enterpriseZ in
1’eCaU3G wc hav« to
econonic results will be enterprises
-^ood1 w-M-b
developing production. But the
be good, with
»..!»»
a“1*1
oo^
and (XunftlX SwXXveloplnsXoauotX’
"°w”iatio»
people's'living standards. Zjid^thi/£ +?d 1E1^0VlnS the
steady growth of the ocononv in n n
T '1C Way to achieve a sustained,
foundation. In short XTis mb-with a
economic
nort, this is China's only path towards modernization.
**********
CHINA'S 1982 ECONOMIC PLAN
(69)
in®tr^ent through which Socialist Societies
entifically guide their own transformation. A study® of
he economic plan, — its failures and successes -- in a
socialist society indicates the direction of its transformation.
™ ny.thcs° Perspectives, the document reproduced below is of
of TodayWh° attemI>ts to stW
evolution
Today s China. This document is the full text of the commusocial°d
? ulfilment of China's 1982 plan for economic and
i PnlCnt' It WQS issued on 29 April 1982 by the State
StatisLica1 bureau, Beijing. The text has appeared in "China
Report , iiay-June 1983, from where it has been taken.
The People of all nationalitie’s in China, under the leadership of
the CCP and the people
people's
’s government, continued to implement the policy
J...
---------- J -• J---- J_._
ofreadijustment , restructuring, consolidation and improvement in 1982
and achieved new progress
]
in economic and social development through
a year’s hard efforts, Total product of society reached 989,400 million
yuan, up 9% from 1981• Total^output value of industry and agruculture
was 829,100 million yuan, 8.7^ higher than. 1981.
~ •’ in production
— .j CGrowth
brought a brisk market and prices were basically stable, ^tato revenue
and expenditure were in basic balance, The living standards of the
people continued to improve, New progress was made in building spiritual
civilization. The major problems in development of the national
economy were an excessive increase in investment in fixed assets and use
of funds was not well concentrated; there was no marked improvement in
economic results in production, construction and circulation; many
places suffered shortages in energy supply and transportation.*
1. AGRICULTURE
The rural areas continued in 1982 to institute and improve the job
responsibility system which links output with economic benefits,thus
continuing to mobilize the initiative of the vast number of peasants.
The weather in most places was fairly good. All this contributed to the
good harvest. Annual total output value of agriculture was 278,500
million yuan, up 11% from 1981, far exceeding the planned target of 4%
After deducting the industrial output value of 30,400 million yuan for
enterprises run by production brigades and teams, the total value of
agricultural output was 248,100 million yuan, up 11.2% from 1981.
Of this, farm crops brought 174,700 million yuan, 101% over 1981;
the corresponding figure for forestry was 11,000 million yuan, up 8.5%
for animal husbandry, 45,600 million yuan, up 13.2%; for fishery, 5,100
millionjyuan, up 12.1%; and for sideline production, 42.100 million yuan,
up 12.8%.
The output of nearly all major farm products hit all-time hights
reaching or surpassing- planned
figures.
”
- » Total grain output was
353,430,000' t, topping
'
the state plan bjr 6% or 8.7% more than the previous
year and 6.4% over the previous peak figure of 352,120,000 t in 1979.
• j *Total product of society is the sum of the total output value of
in ustry, agriculture, the building trade, communications and transport
and commerce, including the supply and marketing of materials and
equipment and public catering trade. National income is the sum of the
net output value of the five above-mentioned material producing depart
ments. All figures for gross national product, total industrial output
value, total agricultural output value and national income cited in the
communique are calculated in terms of 1982 prices and the rate of growth
over the previous year is calculated with the comparable prices.
(70)
Total output of cotton was 5,598,000 t; topping the state plan by 19.9%
or 21.5% more than in 1981. Total output of oil-bearing seeds was
11,817,000 t topping the state plan by 28.6% or 15.8% over 1981. Among
grain and oil-bearing seeds, output of soyabeans and sesame decreased
somewhat due to natural disasters in major producing areas. The output
of jute and ambary hemp was also less than in 1981 because the acreage
of these crops was cut due to overstocking.
Out put of major farm products follows:
1982 output (t)
Grain
of which:
Paddy
foe at
Tubers (counted on •"
the hases of 5kg
of tubers equivalent to 1kg of
grainSoyabeans
Cotton
Oil bearing seeds
of which:
Peanuts
Rapeseed
Sesame
Sugar bearing crops
Sugar cane
Beetroot
Jute, ambary hemp
Silkworm cocoons
Tea
Increase
over
1981 (%)
553,459,000
8.7
161,240,000
.68,420,000
12.0
26,680,000
9,030,000
3,598,000
11,817,000
14.7
-3.2
21.3
15.8
3,916,000
5,656,000
342,000
43,594,000
36,882,000
6,712,000
1,060,000
314,000
397,000
2.4
39.2
-32.9
21.0
24.3
5.5
-15.9
1 .0
1 6.0
The nation-wide afforestation campaign developed vigorously.
In all, 4,500,000 hawere afforested in 1982, a 9.4% increase over 1981.
The survival rate of saplings improved. The output of most forestry
products showed increases to varying degrees, ^mong them, the output
oi rubber increased 19*5% and chestnuts rose 7.2%. The output of tung
production. The output of aquatic products in 1982 was 5,155,000 t,
topping the state plan by 18.8% or 11.9% more than in 1981. The total
catch of marine products increased 11.2% while fresh water products
rose 15.6%.
State farms built on reclaimed wasteland reported increases for
output of most major farm ploducts. Grain output rose 12%; Cotton 19,%
sugar-bearing crops 28%; and milk 12%, But the output of oil-bearing
seeds and pork, beef and mutton dropped State farms produced profits"
m excess of 700,000,000 yuan.
The number of farm machines in use contined to increased, especially
of economical and practical small and medkum-sized farm machines.
Total power capacity of farm machines reached 226,000,000,
■ horsepower
by the end of 1982, 6% more than at the end of 1981. , The nunber-of
medium-sized and large tractors was 812,000,up 2.5%. The number of
small-capacity and walking tractors was 2,290,000, up 12.5%. The
corresponding figure for heavy-duty trucks was 206,000, up 17.7%; for
irrigation and drainage power equipment, 76,700,000 horsepower, up
•j/^. A total of 15,150,000 t of chemical fertilizer was applied
during the year, an increase of !15.4%< Of‘this figure, a iol^6
increase was registered for nitrogenous fertilizer, 16.6% for phosophatefertilizer, 59.6% for potash and 21% for confound fertilizers.
Tne totai consumption of electricity in the rural areas was 59,700
nalj-ion kilowatt-hours < cm inere-w? of 7.^.
■78'!.
(71 )
1982
Output of pork, beef and mutton
of which:
Pork
Beef
Multon
Milk
Sheep wool and goal hair
of which:
Sheep wool
Hogs slughtered
Hogs in stock at year end
Barge animals at year end
of which:
Cattle
Sheep and goats at year end
Increase
over
1981' (%)
13,508,OOOt
711
12,718,0001
266,0001
524,0001
1,618,0001
215,0001
7.0
6.9
10.1
25 .4
6. 4
202,0001
200,630,000 head
300,780,000 head
101,1j)0,000 head
6.8
2.9
2.4
3.6
76,070,000 head
3.8
-3.2
181 ,790,000 head
thened, contributing to the effort^h^nWGatller senvices were strongdepartments to t.ke advJtal of f
7 1 agricultural and other
"d
prevent
II. INDUSTRY
i° riso “the
menl in 1982. T*
an increase of 7.7% over 1981
was 550,600 million yuan,
Output value of industry which i^^f
Plamied annual ■ gorwth of 4%
winch includes rural industry run by nroduction brigades
- and teams was 7.8% over 1981.
y -prociuThe output of 91 Gof lhe 100j ‘
•
raajor industrial
products met or
■topped the state plans •
> They included colton
machine-made Paper and paper boards, bicycles1 yarn, cloth, sugar,
coal n-rndl
,9 sewing
machines,
vision sets, suSbn
crude
oil,
0 n
a ' electricity,
e^ctriciV,---v-J
steel,
rolled
steel telecement,
steel,
:
plate glass, ulphuric acid, soda ash, caustic soda, chemical fertilizer
' , caustic soda,
poer generating equipment,
locomotives. JTine'p^oducts^f-ileFt1010^ W?lkine factors and
beer, household washin- mo chin
Jo.Ia®c'l fanned quotas, including
grew at an aVerag SaJ Se of
which
to rise in 1982 Total tin, 2
J4/ between 1979 and 1981 continued
million yuan,
over 1981
oS™/' ^V^^y was 276,600
industry increased 9
1- +-i ■
vnlue of tne food processing
chemical fabrics was’restricted^
since the production of
increased 7.2^. Many
™ \ t
°f aaily necessities
attention to o^ganiX- J dlt
industrial enterprises paid .
Aza
H
.21
• 1
"It
Quality of products improved and varStritcX X X?3 °f society‘
industrial products follows:
ariety increased.
Out of major light
(72)
1982
Cotton yearn
Cloth
Increase
over
1981 (^)
3,354,000 t
5.8
15,350 million metres 7.8
(14,920 million sq.m* (9.4)
517,000 t
-1.9
Chemical fibres
of which:
Synthetic fibres
375,000 t
Woolen piece goods
127,000 ,000 m
Silk
37,100 t
Silk textiles
914,000,000 m
Gunny sacks
500,000,000 t
Machine-made paper and paper boards- 5,890,000 t
Sugar
3,384,000 t
Beer
1,170,000 t
Salt
16,530,000 t
Chemical pharmaceuticals
42,200 t
Detergents
569,000 t
Bicycles
24,200,000
Sewing machines
12,860,000
Watches
33,010,000
Television sets
of which:
5,92#,900
Colour tv sets
288,000
Radio sets
17,240,000
Cassette recorders
3,471,000
Cameras
742,000
Household washing machines
2,533,000
Household refrigerators
99,900
Light bulbs
1,070 million
»2.6
12.4
-0.8
9.5
16.6
9.1
6.9
28.6
-IOtO
13.1
19.0
38.0
23.8
14.9
9.8
89.5
-57.5
124.5
19.1
97.7
79.7
10.3
Hea vy industry total output value in 1982 was 274,000 million yuan,
9.9% over 1981. The upward turn in heavy industry production after
two years of stagnation and decline was caused mainly by increased
investment in fixed assets and a greater demand for the means of
production in agriculture# Compared with 1981, output value of the
machine-building industry increased 15.2%, that of the building materials
industry rose 14.1%, and chemical fertilizer and insecticides 8.4%.
Thanks to the restructuring of the previous two years, heavy industry
was able to increase the scope of its services, provide more energy
saving products andmore products for export and to serve the needs of
agriculture and light industry.
Primary energy produced in 1982 was equivalent to 668,000,000 t
of standard coal, 5.7% higher than the 1981 figure. Despite the
increase, energy production still could not meet the needs for the
development of the national economy.
Output of major heavy industrial products follows:
( 73)
1982
Increase
over
1981 (^)
Coal
Crude oil
Natural gas
Electricity
of wliioh:
Hydroelectricity
Pigiron
Steel
Rolled steel
Coke (Machine-made)
Timber
Cement
Plate glass
Sulphuric acid
Soda ash
Caustic soda
Chemical fertilizer
of which:
Nitrogenous fertilizer
Riosp.iate
. Potash
Chemical insecticides
Ethylene
Plastics
Calcium carbide
Outer rubber tyres
Mining equipment
Power generating equipment
Machine tools
Motor vehicles
Tractors
Walking tractors
Internal combustion engines
(sold as commodities)
Locomotives
Railway passenger coaches
Railway freight cars
Steel ships for civilian use
■
666,000,000 t
7^
102,120,000 t
0*9
11,930 million
-6.4
cubic metres
327,700 million kWh 5.9
74,400 million
kWh
35,550,000 t
37,160,000 t
29,020,000 t
33,110,000 t
50,410,000 cu.m.
95,200,000 t
35,460,000 standard
cases
8,170,000 t
1,735,000 t
2,073,000 t
12,781,000 t
15.5
3.9
4.4
8.7
4.4
2.0
14.8
15.7
4.6
5.0
7.8
5,2
10,219,000 t
2,537,000 t
25,000 t
457,000 t
560,000 t
1,003,000 t
1,670,000 t
8,640,000
158,000 t
1,645,000 KW
100,000
196,000
40,000
298,000
12.0
9.5
10.6
18.5
37.4
17.9
-2.9
11.4
-24.5
49.7
22,960,000 hp
486
1,153
10,561
1,025, 000 t
14.6
22.1
-0.5
20.3
11.9
3,7
1.2
-3.8
-5.6
a#Wllole industrial economic results were relativelv Door
lmproYensnts were made in some aspects. Per capitaproductivitv
lr" dose’s™",”
dMienated ,0 ’-aertak, IMop.M.nt accounting
rose
2*3%
over
1981.
2.4 davs
+ 9®1, Turnover period for working funds averaged
2 o.4 days less Twenty-two
products rose
<iuality indices for industrial
?5 dinuZa
p’ ! -2° mainca:Lr-ed the 1981 level,, while the remaining
of materials fon’ S®6
99 major indices for unit consumption
rose
FoSv Jiv ’ J^^ntarned the 1981 level and the remaining 30
of which
r theSe “d-10®8 are for unit consumption of energy,
rose
LSl
SeVen maintained the 1981 level and the 13 other
lose. Total cost of comparable products dropped only 0.04^, far from
“ Sc?lt
»'
T«™o1or in
f“«
droled from Ph ?
< ° yUan °f industrial output value
which totalled^rpOO311!'?-24’6 yUan• SomQ enterprises suffered losses,
ISSt and LSil:
i
?
Warehouse overstocking of some
continued K Si
e00dS increa8®d. Many enterprises
X u
°neSlded emS1IaSiS °n
neglect of
1+ln
(74)
III. INVESTMENT IN FIXED ASSETS
Total investment in fixed assets of stateowned units came to 84,500
million yuan in 1982, and of urban and rural collectivelyowned units
17,400 million yuan. Individual housing construction investment was
18,100 million yuan.
Of the total investment in fixed assets of state-owned units,
investment in capital construction accounted for 55,500 milliony yuan
11,200 millionyuan more than in 1981, a 25.4/° increase. This outstripped
the readjusted planned figure of 44,500 million yuan by 11,000 million
yuan. Of this, the investment in capital construction from funds raised
by localities topped the planned figure by 5,200 million yuan; and that
from domestic loans, by 3,700 million yuan. Investment cove©d by the
state budget was 27,700 million yuan accounting for 49»S$ of all invest
ment in capital construction compared with 56.8^ for 1981.
Of the investment in capital construction 54*5^ or 30,300 million
yuan was for productive projects, and 45or 25,200 million jman for
housing, schools, hospitals urban public facilities and other non
productive projects. Investment in housing amounted to 14,100 million
yuan, 25.4/° of the total.
This capital construction investment helped add the
following
major industrial capacities: 8,200,000 t of coal, 3,170,000 t of oil,
2,940,000 kW of power generating capacities, 510,000 cotton spindless,
29,000 t of chemical fibres, 346,000 t of sugar, 306,000 t of salt,
59,000 t of machine-made 1 paper and'’paper-board, 3,1004000 t of iron ore,
180,000 t of of steel, 725,000 ‘t of synthetic ammonia, 653,000 t of
chemical fertilizer, 33J,OOO cum of logs, 2,370,000 t of cement,1 ,200,000
standard cases'of plate glass, 1,680,000 kinescopes, and 751 km of
highway. Annual cargo handling capacity addos at ports was 21,820,000 t.
A total of 116 large and medium-sized projects and 145 single items
of large and medium-sized projects were completed and put into operation.
Completed energy projects that were put into operation included
the Wujiangdu hydroelectric power station in Guizhou with a combined
generating capacity of 630,000 kW, and the third stage project of
the Suixi power plant in Hubei, Aahui province, wit|r a generating
capacity of 400,000 kW* Single items that were completed and put into
operation included three p8;. er generating units each with a capacity of
125,000 kW at the Gezhouba hydroelectric power station in Hubei
province, the No.1 power generating unit of 350,000 kN at the Baoshan
genera 1 iron and steel plant, the No.1 Peer generating unit of 200,000
kN at the Qinling power plant in Shaanxi province, the Gencun inclined
shaft with an annual production capacity of 1,200,000 t at the Yima
coalfield in Henan province, as well as three other coal projects each
with a designed annual production capacity of 900,000 t the Taozhuang
No. 2 vertical shaft at the Handan coal mining area and the Xiandewang
inclined shaft at the Xingtai coal mining area in Hebei province, and
Shihao shaft in 'the Songzao coal mining are a in Sichuan province.
Complete projects and single items undertaken by transport and
communications departments that went into operation included: electri
fication of the 116-km railway from Yangquan to the northern station of
Taiyuan, 258km of double-track sections of eight railways including
Jinan-Qingdao, Longhai, Beijing-Baotou and Shijiazhuang-Pczhou, and an
added annual capacity of 20,000,000 t of ore at a deep-water wharf at
Beilun port, Zhejiang province.
Complete imported plants that went into operation included: the
Pingdingshan cord fabric plant in Henan designed to produce 13,000 t of
nylon cord fabrics a year, the Anqing petrochemical works in -Anhui
and the Guangzhou general pertrochemical works in designed each to
produce an annual average of 240,000 t of synthetic ammonia and 420,000 t
of urea, and a colour kinescope factory with a designed annual capacity
of 960,000 tubes in Xianyang, Shaanxi province-«
(75/)
Financial resources for capital construction were not used in
a concentrated way.
Control of funds not covered by the national budget
was inadequate and construction funds for some key departments were not
guaranteed.
Investment in agriculture was 3,400 million yuan, 500,000,000
yuan more than the 1981 figure, but the proportion of sutih investment
in the nation’s total capital construction investment dropped from 6.6%
to 6*1.
Investment in the energy industry was 10,100 million yuan,
1,000 million yuan more than in 1981, but the proportion dropped from
20.6% to 18.3%. Investment in transport and posts and -telecommunications
was 5,700 million yuan, 1,700 million yuan more, and the proportion rose
from 9.1% to 10.3%. Incestment in education was 2,500 millionuyuan,
300,000,000 yuan more but the proportion dropped from 5% to 4.5%.
Investment in scientific research was 1,000 million yuan, 100,000,000 yuan
more, but the proportion dropped from 2.1% to 1.^. Investment in
heavy industry, excluding the energy industry, commerce and foreign
trade registered varying increases.
The scale of capital construction was over-extended and investment
excessive, and there were cases of projects not covered by the national
budget that were undertaken at the expense of projects covered. A total
of 71,000 projects were under construction, 11,000 more than the previous
year.
Of this 34,000 were newly-started projects, including some dupli
cates.
Of the 80 large and medium-sized projects that were to be
completed and put into operation in 1982, thirty-three remained
unfinished at the end of the year.
Twenty-four of the 80 single items
planned for completion and operation in.1982 were not completed on
schedule.
Thus capital construction investment yielded less than
satisfactory results. Fixed assets worth 41,300 million yuan were added
in 1982, but only 74.4% of the assets went into operation as against
86.6% in 1981. The year 1982 saw the completion of 143,570,000 sq.m,
and the proportion of housing completed to the "otal under construction
dropped to 50.5% from 52% in 1981.
Efforts were stepped up to revamp existing enterprises. A total
of 29,000 million yuan was inv' sted for renewal of equipment, technical
transformation and other measures in state-owned units, 6,500 million
yuan more than in 1981, a 29% increase. As regards break-down figures
for investment by major economic departments, light industry accounted
for 22.1%, compared to 23.1% in 1981 the energy industry rose from
23.^ to 24.7%; other branches of heavy industry dropped from 26.2% to
24.6%; transport, posts and telecommunications dropped from 11.2% to
10.9^6; and commerce and foreign trade rose from 3.8% to 4.7%.
A total of 90,000 projects involving renewal of equipment and
other techinical transformation mea,sures each requiring a total
investment of no less than 50,000 yuan were undertaken in 1982, 24,000
more than in 1981. Forty-eight thousand were completed, 13,000
more than the previous year. These projects played a positiverole
for increasing production, practising economy, upgrading techniques
and improving transportation. Nevertheless, a fairly large part of
this investment was not used for technical transformation, improved
quality of products -'re eonserva"-'on of energy and raw materials.
(76)
Geological work was intensified in 1982. A number of oil and gas
lields and >00 mineral-bearing areas were discovered and assessed. The
known area of oilfields in the eastern regions grew as a result, and
progress was made m general surveying and prospecting for oil and gas
m the western regions, Fairly good results were achieved in oil
prospecting on the continental shelf in the Beibu gulf and the Bohai
sea. Newly-verified reserves of 14 minerals including coal, petroleum
iron, copper, aluminium, gold, phosphorus and pyrites outstripped the
iron^re l‘e480Sm-inf
aniounted to 71 ’160 million tons, and
.
million tons. New reserves were verified also for 54
si?vhmllieru1S “cl^dtne chromi™» tungsten, tin, molybdenum, bismuth,
-nd naturebluG as Festos, gypsum, graphite, kaolinite
9 30? So m
v11Q“S ?^erials- The total drilling footage was
y,200,000 m, exceeding the 1981 figure by 458,000 m.
IV. TRANSPORIJ ROSTS AND TELECOffiiOTICATIONS
wcs I^OA^nn1 VhUIne °f/1g00ds transported by all means of transportation
was 1,304,900 million t/km, up 7.5% from 1981. Of this, the volume of
rai way freight was 612,000 million t/km, an increase of 7.1%; that
of road goods was 94,900 million t/km, up 21.7%; that of waterway
200S000a0OO4t/i°0 milP°ht/km’ up 6«^; and that of air freight was
.0,000,000 t/km, up 17.6%. The volume of oil and gas carried through
pipelines> ■was 50,100 million t/km, up 0.4%, The volume of cargo
handled at major sea ports was 237,64,000 t, 8.4% more than the previous
year •
was 274e4001m?iei?hPaSSCneOhbaVel handled
a11 ^ans of transportation
7h40° ”llllon Person-kilometres, a
increase over 1981. Of
metres uoV6V/e S ra\1Hay carriage was 157,500 million person-kilo, up 6.9A the volume of road passengers was 96,400 million
kll°netr<<’
increas® of 14.9%; the volume of waterway
volum118^8 WaS 4',5O° mlllion Person-kilometres, up 5.1%; and the
a Seincreale!neerS Y
6,00° milli°n P®^on-kilometres,
Posts and telecommunications ■transactions throughout China amounted
2,°4o million yuan in 1982, topping 1981 by 4?6%.'
. j Letters increased
telohnm^ xned circulation of newspapers and magazines, 8,1% more
nuih
? O’^° and lonS-<3-lstance telephone calls, 6.9% more. r"
The
end
in-^ -e increased by 7.9% her tha£
the
’
real eff°f transpo:r'tatioll> posts and telecommunications made
for rSZvPT6 rOn°mic resultscapita productivity
daily volume or<0r
registered a 3.3% increase. The
in 1981
Oil
haul®d by locomotives averaged 0.3% more than
frpi.o^+-* i
o^sumption by aiesel locomotives per 10,000 t/km of
freight volume dropped by 2.9%. But consumption of coal by steam
Si: ™ nT” t/la
rrel81“
°-^
““Lina" .ad-
the entire
Tnysase was achieved in the annual profit made by
portation enternr? SySte“*
caPiia productivity of waterway transThe annual voJX of
^.Ministry of Communications rose 3.8%.
g10.4
r:wTst
s:ei:fpS?s?orSr2gn\3r; perin"toa
of loadine capacity
days on the average in 1981 to 8.8 daysshipping
1982.was shortened from
Posts and telecommunications enterprises yielded 31.1% more profit than in 1981.
Railway transportation, cargo-,handling capacity at ports and costs
S
:tui c“m°t
de?Sop"«t
the national economy. Serious accidents happened in railway, water
ivil air transport, indicating that safety was inadequate.
V. DOMESTIC TRADE
The total value of i..
PurcMsod by state-owned commercial
departments reached 262,250 millibn yuan
in 1982, topping 1981 by 6.2%.
(77)
This included 85,560 million
over '
'
million yuan .worth of manufactured goods, up 5.6%. Purchases of the
major Commodities
1981.
o’ them> the purchases of grain
renohed
72 nPR ana surpassed
+ *
■'
' /AmonS
reached 72,085,000 t,, a ’14/°
i4% increase; cotton, 3,415,000 t ujb 18.9%edible plant oil,? 2>939
- ’?S°
--- t■ ’ up 10.4%; hogs, up 5.7%; eggs, up 5^3%;
aquatic products, up 16*2%;
cured tobacco, up 40.8%; sugar, up 10.5%;
cloth, up 1
Jknitted ^underwear, up 4.4%; soring machines, up 23.8%;
television sets, up 32.7%; and cassette recorders 100%.
1981 (or 9:a ■Ir-SrjJTX £12“ “orSS): Sa“:;62?
o Q /°/he total ValUe Of re*ail sales
sales in
in 1982
1982 was 257,000
_______
ini 11 ionyuan
Ji4/° TT33™0x°Ver 1981 (or 7-3?° if the rise
retail prices
J is
o.xCluaed.). Total value of retail sales by state
—owned commercial
units was 196,860 million yuan, up 4.7%; ■”
the corresponding figure for
thatPforttZ7C0™erial LmitS WaS 41,44° “iHionyuan, up 21 .3%;' and
_ 1
that for individual commercial units, 7,460
‘
----millionyuan,
up 99^5%.
The total value of retail sales by peasants to the
..n.
-7
~ non-agricultural
population was +n ---- lnlll
nlonyuan> topping the 1981 figure by 23.9%,
The value of retail
i.„_
-az.- sales by state-owned commercial departments accounted
fetJl6’?’-|Of
nation1 sa total,
l'ol'a-L} compared
compared to
to 80^
8Q^ in
in 1981.
1981 . The value of
------^etail sales by co-operative units,, however,
rose
from
14.5% to 16.1%however,
that by individual
CG™1^Ch1_™itS' 7°m
to 2’9^’ a™1 that by ’
peasants to the non-agricultural population
v * • _ly from 3.^ to 4.3%-.
The volume of retail sales for the majority of the major consumer
goods went up in 1982.
over 1981 for grain was 10.2%; for
edible begetable oil,, 28.4/°; lncrease
for pork, 6%; for eggs, 9.9%; or aquatic
products, 13.1%; for sugar, 8.9%/f or "knitted
----- 1 underwear, 8.3%; for
woollen fabrics, 5.9%; for cameras,
cameras 17.5%; for radio sets, 17.9%; for
television sets, 18.3%;
77 z 7__
for sewing machines,j 23.9%; for bicycles, 39.9%
and for cassette recorders, 65.
Retail sales of cloth were 1.7% below
1981.
the end of 1982, the state-owned commercial units had
more
goods in' stock than at the
—) end of 1981.
The domestic
market
had a fairly1 am?le suPPly of goods and gfeater
But ow-i™
-bn
variety. 7 ‘ . .
changes m market demand and consumers’ demand
for greater choice^ .
r .
, some aig^-priced goods of inferior quality and
other goods that- could
---- - not find a ready market, were overstocked.
market prices remained
re“ed basically
^sically stable. The purchasing ■
P ices oi farm and side-line
produce by
large remained the same-'
-line produce
by and
and large
as in 1981. But as :moxe farm and side-line produce was purchased at
negotiated prices or at
a higher-than-normal prices for produce purchasing
price index for farm a^dxs^e-line produce went up 2.27° over 1981. The
1982 overall level (of” retail prices went up 1.9%.
The index for the
cost of living of the .
non-agricultural population rose 2% over 1981 .
Retail prices of daily consumer goods rose by 2.1%, and the prices'of
services 1.4%.
111
?rlces roae 2-1^ in the Cities and 1.7% in the rural
areas. Among the retail pricess for various consumer goods, the price
of foodstuff wont up 2.8% (the
price for tobcco, alcoholic drinks and
teaA no?
of goods for
cultural and recreational purposes,
up 0.2/o, pharmaceuticals, up 1,3/^, fuel, up 0.8^, but the price of
clothing dropped 2.1% jand’ goods of dauly use, 1^. There was a 1.9%
increase in the retail prife
prmfe of
of m
means of farm production. There were
still cases of disguised price hikes
---- j and of commodity and. service prices
raised at will.
iror than
c^gt^iSKv—^
Of Supply and ttohetin^Sn11 Grpr+®0S
the A11-Chin- federation
in 1981 7 Tho Marketing So-operativcs rose to 10.5% in 1982 to 9.9%
™ «v.
(78)
price of some manufactured goods, Sales of most of the means of production
under state control rose in 1982. Rolled steel rise 13.3%, coal 7.4%,
caustic soda
soda ash 6.4%, timber 10.9% and cement 13.1%.. Department
in charge of- distributing state-controlled materials and equipment improved
economic results-. Costs for distributing such materials and equipment
dropped to 8.2% of their cost in 1982 from 8.9% in 1981 and the turnover
period for circulating funds Has 31 days less. But some materials and
equipment were over-stocked and the problem of slow turnover remains to
be solved.
VI. FOREIGN TRADE, TOURISM
Customs statistics show that the 1982 total value of imports and
exports came to 77,200 million yuan, a 5% increase over 1981, or a 3.4%
increase if price and foreign exchange rate fluctuations are excluded.
Total value of exports in 1982 was 41,430 million yuan, a 12.7% increase
over 1981, or a 6.5% increase if price and foreign exchange rate fluct
uations are excluded; total value of imports in 1982 came to 35,770 mi
llion yuan, a 2.7% decrease from the 1981 figure, or a 0.3% increase if
price and foreign exchange rage fluctuations are excluded. The value of
exports was 5,660 million yuan more than imports.
The proportion of manufactured goods imported dropped to 60.4% in
1982 from 63.4% in 1981; and the proportion of primary products rose
to 39.6% in 1982 from 36*6% in 1981.
A total of 7,924,000 people from 164 countries and regions came to
China in 1982 on tours and visits and for trade, sports, scientific
and cultural exchanges. There were 764,000 foreigners, a 13.2% increase
over 1981; and 7,160,000 overseas Chinese and Chinese compa troits from
Hongkong and Macao, up 1%. The foreign exchange income from these
sources was valued at 1,570 million yuan RMB, a 14% increase over 1981.
VII. SCIENCE, TECHNOLOGY, EDUCATION AND CULTURE
In 1982, 6,264,000 scientists and technicians were working in state
owned units, 9.6% more than in 1981• The number of major research
results in science and technology camo to 4,100 items, 32% more than
in 1981. This included 149 inventions and discoveries approved by the
state, a 24% increase over 1981. The national defence scientific
researen departments successfully conducted tests in launching carrier
rockets from submarines. Industrial and transport departments conducted
research, manufacture or development of new products, now technologies
and techniques. Agricultural departments succeeded in breeding and
popularizing a number of goods trains of crops. All this illustrated
the new progress in China’s science and technolog y. Research work in
social sciences also made...headway and contributed to socialist
modernization.
Institutions of higher learning enrolled 315,000 students in 1982,
or 36,000 more than in 1981; 457,000 students graduated from these
institutions, 317,000 more than the previous year. Those institutions
had a total enrolment in 1982 of 1, 154,000 students, 125,000 fewer
than in 1981. This was because the students who entered college in the
spring and autumn of 1978 all completed their four—uca r courses in
1982. Work was done to improve higher educational programmes for adults
(including TV college courses, correspondence schools, evening
schools and colleges for workers and peasants), A total of 291,000
now students were enrolled in such institutions in 1982 and 204,000
graduated. These institutions had 644,000 students in 1982, or 108,000
more than in 1981.
Readjustment and restructuring were continued in secondary schools.
The level of the teachers and educational quality as a whole improved,
but the number of students in sone schools decreased. Middle schools,
secondary technical schools and apprentice schools had 46,844, 000
students, 3,500,000 less than 1981. .Agricultural middle schoolsand
vocational middle schools had 704,000 students, 223,000 more- than in
1981.
(79)
S5S:000’
curtailment of regular middle schools while secondary vocational and
inC^tCnnnedUCatiOn did n0't.devel°P fast enough to fill the gap. Some
1 , 4,000.people were receiving adult secondary education 2,597,000
more than in 1981. This was because more training courses were arranged
xor workers and staff members in enterprises.
In 1982, there were 139,720,000 pupils in primary schools, 3,608,000
ip’rer than tae previous year. The reduction was due mainly to a drop
the number of school-age children because of birth control. The
less th^
prinary education whs 7,566,000 in 1982,2,170,000
Hew achievements were made in the building of socialist spiritual '
civilization by cultural undertairings including literature, the arts,
ina , thu Pre“s’ rad:L0, television, cultural relics and publications,
and a number of good works well received by readers and audiences e
appeared. One hundred and twelve feature films were produced in 1982,
seven more tnan the previous year. One hundred and fifty-five fullWere distributed > 12 more than in 1981.“
The country
had 140,000 cinemas and other film projecting units, 3,460 performing
art troupes, 2,925 cultural centres, 1,889 public libraries and 409 °
museums. There were 118 radio stations throughout the country. 506
transmibLing and relay stations, 47 TV centres and 328 TV transmitting
Rations each with a capacity above 1 ,000W. A total of
. ^Hion copies of national and procincial newspapers, 1,510
i10n °op;!-e® of magazines of all kinds and 5,880 million copies of
books and pictures were publiched in 1982.
VIII. PUBLIC HEALTH AIID SPORTS
•h
pr°S,:ress was made in public health undertaking after the
rue end of 1982, and increase of 1.8% compared with the end of 1981.
he number of profesaonal health workers totalled 3,145,000, a 4.4%
ThlS Tncluded 1,307,000 doctors, an increase of 5.1/S and
5M,000 nurses, an increase of 7.4^. The patriotic health campaign
prevention and treatment of diseases were strenghtened.
News of victory with important break throughs kept pouring in from
the sports field in 1982. C
Chinese contestants at the ninth Asian games
won 61 gold medals and China
——came first in the number of gold medals
and in the total score, Chinese womenrs volleyball team and sportsmen
in gymnastics, diving, table
uaoi tennis and badminton won honour for the
motnerland in international competitions,
A tota 1 of 15 world
championships were won during the year,
Chinese sportsmen broke II
world records and 120 national records, A total of 26,000 sports
meets were held at the country level and above.
As many as 8,450,000
people reached the 1’state standards for physical training’•
> Mass sports
activities were extensive.
IX. PEOPLE'S LIVELIHOOD
*S82 saw a continued
<
’ '_ __ improvement in the peopled living standards in
both cities and countryside.
Mn. “ 589
tsg counties of 28 provinces, municipalities 'ind'autononaus
regions showed <— S
----__
2. not‘ income
"
GraSG ^nual
per capita of 270 yuan,
an increase of 15.2%n over
the
previous
.
- --3 year after deducting incompara—
Joie factors.*
calculated at 1982 state purchasing prices. The factor of price
fluctuations has boon excluded in the above listed rates of growth.
( 80)
Of those surveyed, the percentage of households with an overage 500 vnn-n
of net income per capita rose to 6,7% from 3 2^ in th„ w <
5 °
sampie survey of 9,020 households of workers and stof? in 4?Scities
of 29 provinces, municipalities and autonomous regions showed an
iaISeexaZ:esim70°^ P°r °apita °f 500
S^Sd^or ’
yu2
Deducting Zh
“crsas® over
previous year which was 463
Jose by 5^.
“
C°St °f living indGX’
^come
school. nXpPr:n£‘7 xsrs;j?"1”1
SJS --h s r^r
being 3,410,000 more than at the end of
oT?hese Ss’SinO
™ »”s
“a to”s ''“o!wd
1 ,470,000, 340,000
□“hS1i°0T“ of 8-,%' Of
tot“1 —”«Us’or
work sbovo q™t2 toteUoa^o^oO^V1'11 b°""MS "*a Pay««»ts for
over th. prorhS y„r“
’’
°
the cSntX0Jase7QRnUal n0n0tary We for workers and staff
members in
■cne country was 798 yuan, an increase of 3.4% over 1981
Of
this the
units20
monetcV waSe fOT workers and .staff
members
in
stateowned
nits was 836 yuan, 3% above above the previous v^nr
; that for workers
and staff members of collective units ij
cities and towns was 671
yuan, up 4.5%.
Labour safety work, was
was strenghtened
strenghtened in
in 1982
1982. The number of deaths
Of workers and staff members on duty decreased 4.1%*f;om79^
— I and the
number of seriously injuredi workers and staff members
dropped 3.5%.
The total amount <Of,
" savings deposits in the urban and rural ar
and rural areas
was 6/,540 million yuan by the end of 1982?
------- or 29% noro than at the
—j end
oi tne previous year. Aoout
”
half of the total savings deposists
was long-term deposits oi three years and more.
In 1982, housing projects <
- ■ - totalled’117,900”,000
600d000>000sq.m., the same .
____
,
a lack of overall planning and strict
control of housing construction there
---j was still serious excessive
use of cultivated land.
With the development
ened to support the <nn, , °f \hG na'tional economy, work was strenghQ13a°1Gd; widowed and orphaned whose livelihood were not assured^ rk
lhe number of those supported by rural collective
economy
reached
2,688,000
n-p
____
it
_
7
f
Of 4-v
these,
old
peoplo
’inlomcs
;X>hCreaS!
the Pre™s
2C%
fof 20
I9kp aC-te S
an increase
institutrs and
, taking care of
The main problems for people
■
- -’s living standards arc: spme enterprises still issued
c
---- 1 excessive bonuses and
low income still have a rather difficult subsidios; some people with
life; housing for part of
the workers and staff members is still fairly
crowded.
(81)
X. POPULATION
more tho/p/°n by.the snd °f 1982 was 1,015,410,000 which was 14,690,000
more than the previous year’s figure of 1,000,720,000.*
According to a sample survey of 556,188 'eople drawn at random
from 5,505 production teams (residence groups z in 1,057 people’s
communes (streets) of 7
Pl* 22 counties (cities) of 29 produces, municipalities
and autonomous regions, the birth rate
- ----------- was 21 .09/1,000, the mortality
rate was 6.60/1,000 jand' the
natural growth rate 14,49/l ,000^:
sSvic“L/r the population of 1981
1982 include that for
+None of the figufes in the communique include those for Taiwan province.
SOURCE: CHINA REPORT ,Vol.XIX No. 3, May-June 1983, pp.43 to55
-Oa ncc
Ou Q
MAO
±__
TSETUNG’ S CRITIQUE OF SOVIET ECONOMICS
A
(82)
S U M M A R Y
The writings of Mao Tsetung brought together under the title
” A
of Soviet Economics” , date from the period during
and immediately after the Great Leap Forward, a time when the
Chinese Revolution began to break decisively with the Soviet
Union and its model of development.With the Great- Leap, a
distinctive Chinese road to socialism emerged.But it was a
road paved with a decade of controversy over the course of
China’s socialist development. At the heart of many of those
disputes within the Chinese Communist Party was the question of
the applicability of the Russian experience to building Socia
lism in China.
”A critique of Soviet Economics” reveals the insights of Mao
on the path which China should follow. These texts of Mao
are most crucial documents without which one cannot grasp
the basic issues at stake in the new developments taking
place in today’s China as well as in the controversies and
debates that are going on.
We reproduce here a summary of Mao’s critique of Soviet
Economics by James Peck, an acznolwdge competence on the
subject.This summary had been written as an introduction
to Mao’s critique of Soviet Economics published by the Monthly
Review Press and reproduced in the Indian Edition brought
out by the Progressive Publications , New Delhi.'
THE SOVIET MODEL
Throughout most of the history of the Chinese Communist Party, controversy
over how to deal with the experience of the Russian Revolution has been
at the heart of what the Chinese call the ”two-line struggle”. From its
founding in 1921, conflicts within the party have in one way or other
been linked to individuals who favored the orthodox Russian conception
of revolution. The defeat of Li Li-san in the 1950s, Wang Ming in the
19^0s, Kao Kang (Gau Gang) and P’eng Teh-huai (Pong Deh-huai) in the
1950s, and Liu Shao-Ch’i (Liu Shau-qi) in the 1960s have all entailed
controversies over the nature and applicability of the Soviet model.
Until 19h-9j these disputes in China focussed on the appropriate strategy
and tactics of the revolutionary struggle for powerr the nature of the
mass line, and the correct way to apply Marxism-Leninism to the concrete
conditions of China. Stalin only reluctantly tolerated the methods and
innovations associr.ted with Mao and his followers, especially as they
were worked out during the years in Yenan (1957-192+5) • In the 19^0s, he
even opposed the successful struggle for liberation.”The Chinese revolution won victory”, Mao later said, ”by acting contrary to Stalin’s will...
If we had followed Wang Ming’s, or in other words, Stalin’s method, the
Chinese revolution couldn’t have succeeded” (1) .
8
With Liberation however, the Chinese saw the Soviet Union as the model
for socialist development. Mao had warned his colleagues in 1949 that
"our past work is only the first step in a long march of 10,000 li” —
”a brief prologue to a long drama”.(2)
d)
Mao Tsetung, ’’Tlaks at the ChengtiU Conference. T* Ik of March lo,
1958”, in Ch'airman' Mao Talks to the People. Tlaks and' letters,
1956«rl971, Ed . Stuart Schram (new York, Patheon, 197^) ? p.102
(2)
Mao Tsetung, ’’Selected works of Mao Tsetung, Vol.IV (Peking
Foreign Languages Press 1nn. 4?? and 574.
(83)
Yet in those early days, there was no model of socialist development
other than the Russian, with its reliance on elite-planned and bureau
cratically administered programs of economic development which unduly subor
dinate the hoods of the countryside to the demands of heavy industry.'
The Soviett Union, despite all, was a society which had achieved industria
lization and collectivization, key goals of all the leaders of the Chinese
Communist Party. The Soviet victory over fascism in the Second WlDrld
War was to many Chinese leaders proff of the success of that society. And
at a time of intense American Government hostility, a U.S.-backed blockade
and bombing of its coast, and later a world-wide edonomic embargo, it was
quite natural that China leaned toward the Soviet Union in its defense and
economic.policies.
”In the early stages of Liberation ”, Mao writes,’” wo had no experience
of managing the economy of the entire nation. So in the period of the
first five-year plan we could do no more than copy the Soviet Union*s
methods, although we never felt altogether satisfied about it” (1)
This growing dissatisfaction focussed around three main aspects of the
Soviet model *
1) ’’primitive socialist accumulation”(2) at the expense of the
peasantry;
2) a theory of productive forces and the dictatorship of the
poletariat ?
a
conception of the Communist Party in China.
3)
PRIMITIVE SOCIALIST ACCUMULATION AT THE EXPENSE OF THE PEASANTRY
A Chinese slogan of the early 1950s, ’’the Soviet Union today is our
tomorrow” captures the spirit with which many Chinese underxtook to
copy Soviet methods . China’s first five year plan was notable for its
almost exclusive reliance on heavy industry, highly centralized,bureau
cratic methods of planning; and little emphasis on light industry and
the production of consumer goods. The peasantry was considered largely
as a source of savings. Powerful centralized economic ministries were
established in Peking.They introduced rigid hierarchical systems of control
and ” one-man management” in the factories, and relied
relied°Highly
0Righly paid spe
cialists alone to direct them. To stimulate productive activity and moni
tor enterprise performance, material incentive were widely promoted.
The Soviet union actively encouraged such developments . And China’s
relations with th& socialist world after 19^9 quite naturally entailed
giving a priority to those areas where cooperation was easiest and msi
most meaningful I heavy industry, an educational system designed to
train professionals and technicians to administer the Soviet-style
Five Year Plan ; the spread of professionalization in the armed forces.
Indeed, what was happening in the people’s Liberation Army symbolizes
what was happening throughout the urban areas of China- With the
adoption in February 1955 of* the "Regulations on the Service of
officers”, the Chinese officer corps acquired the trappings of a regular
army.And in introducing a system of ranks, titles and widely divergent
pay scales for officers and enlisted personel, the PLA was turning its
back on the informal,egalitarian ,and democratic character which had been
molded in years of revolutionary warfare.
Opposition to this rapid ’’Sovietization” was not far below the surface
oven in these early days after Liberation.Many cadres wore uneasy about
the party’s turning its back on the egalitarian traditions of Yenan.
Others, including such leading members as Liu Shao-ch’i, came to oppose
the concentration of economic power in the ministries in Peking, and the
(1) Mao Tsetung, Selected works of Mao Tse Tung, Vol. IV (Peking
Foreign languages Press, 1965) pp» ^+22 and 57^
(2) Mao Tsetung, A critique of Soviet Economy, p. 122
(84)
highly centralized planning apparatus which they saw as threatening
their conception of the role and authority of the Chinese Communist Party.
In subsequent years, as some of the ministries wea^o made less’bureaucratic
and planning less centralized after the mid 1950sm the party did expand
its role. One-man management systems were to give way to greater party
involvement in the running of the factories. With the Great Leap Forward,
the party also greatly increased its role in the rural areas.
Many party leaders, therefore, were not opposed to some of the criticisms
which Mao feegan to raise about the dangers of copying the Soviet mo d'cl.
Yet for Mao, their criticisms did not go to tho heart of the problem.
In evaluating the application of the soviet model in the early 1950s
Mao began to wqrn of the dangers it posed to the revolutionary transforr
mation of the countryside. The growing gap between town and country, he
argued, was reinforcing ingrained habits of looking down on those engaged
in manual labor, especially peasants, an attitude that in turn nurtured
bureaucratic and elitist methods of leadership. And Mao feared that the
growing reliance on industrial and technical develp^ient concentrated
in the cities at the expense of pushing the social revolution in the
country side would exarcerbate the very contradictions that had to be
overcome to transform China into an industrialized socialist society.
In July 1955, Mao insisted that development in the cities and rural
areas were intricately interrelated: ” We must on no accouht regard
industry and agriculture , socialist industrialization and the socialist
transformation of agriculture as two separate and isolated things and
on no account must we emphasize the one and play down the other”.' q )
But not until April of 1956, in his speech "On the ten Major Relatiohships" did Mao directly challenge the Soviet Model’s reliance on primitive
accumulation at the expense of the peasantry.
Mao sharply criticises the Soviet’s "lopsided stress
on heavy industry to the neglect of agriculture and light industry"(2).
Calling for a reduction in the absolute priority given to heavy industry,
he argued that increased investment in light industry and agriculture
serves the daily needs of the people while actually speeding up the
accumulation of "capital" for heavy industry. To implement this proposal
Mao urged local authorities to take greater initiative,criticizing the
Soviet Union for " concentrating everything in the hands of the central
authorities, shackling the local authorities and denying them the xxg
right of independent action" (3)• Administrative costs had to be cut, the
staff of the national bureaucracies slashed by two-thirds. Unified
planning and discipline under a strong center were still essential, he
insisted, but this was not the same as the domination of ministries
administering a Soviet-style centralization ' .
In this way ,Mao went on to challenge the very basis of the Soviet
method of accumulation from the peasantry.The Russians had made n"grave
mistakes" in handling the peasants and taken measures which "squeeze
the peasants very hard". Their methods of accumulation "had seriously
dampened the peasants’enthusiasm for production. You want the hen to
lay more eggs and yet you don’t feed it, you wcuht the horse
to run
fast and yet you don’t let it graze.What kind of logic is this ?
On no account, Mao was saying, would the Chinese follow a development
strategy for which the peasants had to pay the cost. Nor could China sim
ply drain tho surplus from the rural areas, as Stalin had done in the
1930s. Unlike what both Soviet orthodoxy and bourgeois economists then
claimed, the "capital” could not come from any preexisting source of
surplus in the rural areas. For precious little "capital" existed. Instead
of taking tho surplus from the rural areas, therefore, Mao afguod that
the Chinese labor force, agricultural and industrial alike, had to
significantly increase its productivity. In this way, a truly industria-
Mao Tsotung "On the question of agricultural co-operation"
in Selected Readings from the works of Mao Tsetung (Peking foreign
language Press, 1971) p. ^06
(2) Mao Tsetung "on the ten Major Relationships", Peking Review 20,no 1
(January 1, 1977) • Althoug
’ i various unofficial versions of this spec
have long been available, this version is the first officially released On
(1)
(3) Ibid. p. 16
(4) Ibid* p. 15*
■
(85)
lized socialist society could develop. The worker-peasant alliance would
be strengthened rather than torn apart by a sharp clash between rural and
urban interests. And by avoiding the imposition of a special burden on the
peasants a powerful repressive state apparatus would not bo needed to
extract surplus production.
ten
With his speech ”0n the major relationships” , as Mao later said, wo
made a start in proposing our own line for construction” (1). Mao for
the first time clearly rejected the idea of development rhrough a privi
leged sector (heavy industry, and only later the other sectors) and
distinct phases (first in material progress and only later in social
relations and ideology). The entire nation, he insisted, must undertake a
massive commitment to social,political, and economic unification that,
like in the methods used in the years in Yenan, would laave none behind
and not benefit a few at the expense of the many. In this pathbreaking
analysis on the contradictions in China, Mao firmly opposed any plans that
would create new divisions in a nation already severely torn by imbalances
between the various regions, between various social classes and groups,
between the center and the regions, between the political and social
spheres.
THEORY OF PRODUCTIVE FORCES AND THE DICTATORSHIP OF THE PROLETARIAT
While pointing out the dangers of blindly copying the Soviet model
of accumulation, Mao was also criticizing another, closely associated
aspedt of that model, its theory of productive forces. Essentially,
this theory, as it was formulated in the Soviet Union during the years
of Stalin’s leadership, maitained that state ownership of the means of
production, together with a rapide growth of the forces of production,
opens up the socialist road to communism. The dictatorship of the pro
letariat guides the development of the forces of production, while
repressing the old ruling classes and defeating their inevitable counter
revolutionary attackes on the new order.
For the peasants and the workers, the dictarotship of the proletariat
is held to bo a genuine democracy.The abolition of private property
and other forms of class society is argued to have ended all exploitation.
Since exploitation is argued to be impossible under such new conditions,
the hierarchy,subordination, and disciplining of the workforce, even when
it appears to resemble sophisticated capitalist methods, is seen as merely
the adaptation of rational patterns of work.
With the dying of the old bourgoisie and feudal ruling classes, the
development of the forces of production and the continuous elevation
of the standard of living of the masses, class struggle will diminish in
intensity and eventually disappear.Were it not for the international
struggle wkiEkx with capitalism, the state itself would”eithier away”.Even
though the state does remain as an apparatus to fight external enemies,
the transition to communism can bn worked out internally, dependent only
on the development of the■forces of production.
In essence the Stalinist theory of productive forces reduced the
concept of
the
capitalist mode of production to little more than
the system of private ownership of the means of production. And conse
quently, once political power is seized^ and a system of public ownership
of the means of production instituted, no thought need be given to a
thorough going socialist revolution on the political and ideological
fronts. The creative role of the masses and mass campaigns are viewed
as hnachornistic, the struggle to refashion one ’s world
is ignored.
Mao’s attack pn this theory of productive forces grew out of the
lessons he had learnt about revolutionary transformation during the years
of guerilla warfare. The distinctive features of the Yenan model are well
(1)
Mao Tsetung, ’’Talks at the Chengtu Conference” p. 101
(2) John G.Gurley, ’’China’s economy and the Maoist Strategy,(New York ,
Monthly Review Press, 1976) provides a valuable analysis of the
formation, of Mao’s economic strategy from 192? to 1949-
(86)
* se^ reliance, decentralization, antagonism to bureaucratism and
elitism, collective aims and discipline, nonmaterial incentives, and the
participation of the masses in all aspects of social and economic acti
vity. Development was comprehensive, designed to bring up all sectors, not
just a chosen part.
struggles for revolutionary land reform, Mao argued ,the
peasants political consciousness had been raised through the mass line
and the development of new cooperative work relationship. By changing
the relations of production and encouraging the growth of new attitudes
and ideas, rural productivity was increased.The party itself was only
a part of the process, not, its master. For like the peasants, its members
were molded through a process of continuous, step-by-step trainsfor,ation.
Mao-s strong advocacy of rapid collectivization in the years after
liberation was predicated upon this experience of developing the productive
iorces through a step-by-step transformation of every aspect of rural life.
Thus.he criticized the idea of "mechanization first,cooperative later in",
arguing instead that collectivization could and should precede mechanization
of agriculture. Social transformation, followed and increasingly sup
ported by technological changes, would release the productive forces
while decreasing polarization in the countryside.
t-k
Joading Party officials, influeced by the Soviet model’s reliance
on the theory of primitive accumulation, opposed Mao’s call for deepening
the rural revolution in the early 1950s. Liu Sho-Ch-i reportedly criti
cized as "utopian agrarian socialism" the attempt to promote dooperativization before there was an adequate supply of agricultural tools and
sufficient mechanization. Nor was Liu alone in his doubts. Remembering
what had happened in the Soviet Union, many party leaders feared the
that accelerating collectivization in China would lose them peasant
support and disrupt their economic plans. As Mao commented in July 1955:
"Some comrades have found in the history of the Communist Party of the
Soviet Union grounds for criticizing what they call impetuosity and
rashness in our present work of agricultural cooperation...but on
no account should we allow these comrades to use the Soviet expe
rience as a cover for their idea of moving at a snail’s pace " (1)
over the pace of collectivization, However ,
ao percieved that behind the opposition to his policies was a more
undamental opposition to continuing class struggle and revolutionary
methods of social transformation. In june 1953 he warned party leaders
that the transition period to socialism was "filled with contradictions
and struggle. Our.present revolutionary struggle is even more severe than
past army revolutionary struggle. This is a revolution to bury one and
for all capitalism and all exploitative systems" (2)
Yet lather than domostrating an ability to lead such revolutonary strug
gle, Mao saw numerous party leaders lagging behind the mass upsurge in
the countryside.
"Some of our comrades are tottering along like a woman with bound
feet and constantly complaining,' You’re going too fast’. Excessive
criticism,inappropriate complaints, endless anxiety, and the erection of
countless taboos -- they believe this is the proper way to guide the
social movement in the rural areas " ( 3)
If Mao saw the campaign for accelerating collectivization as a
testament to the mass l?_ne and the need for revolutionary struggle
many party officials argued that successful collectivization Set the stage
for a- new era in which such methods were no longer necessary.
(1) Mao Tsetung "On the question of Agricultural Co-operation" p.4o?
(2) Mao Tsetung, "Refute Right Deviationist views that depart from the
genral line" , "Selected Works of Mao Tsetung, Vol. V (Peking
Chinese language Press, 1977) Translated from the Chinese.
(3) Mao Tsetung, " On the question of Agricultural Co-operation" p. 589
(97)
Thus even as ithey
‘
began to support Mao’s position
on primitive accumulatioi
as expressed m
in
On the ten r*--- ■ •
major relationships
” , Liu Shao-Ch’i and
other L
Party Leaders concludedJ tthat China’s collectivization had p
--- -__J progressed
t o <-a point
’ ‘ where the development
; of the productive forces requiredI that
struggle” could no longer bo
be ”to leno
lead the
otruBslo"
tire
in SSb°r
“-Ch"
With Port, Congr.nn
•Sa Liu Sh
Shao-Ch
’i siad at
h •.wcv’cr,
been set up and the aim of
lopmient "ofLjj1®0'3 ^nt° one of safeguarding the successful developiment of tho productive forces of society, and thus
a corresponding change in the methods of struggle will consequently
have to .follow..(2)
°f agriculture and the public ownership of
the means of production basically accomplished by 1956, Liu ownership
and othersof
lorc^rThJ^tZidJd f°CUS aU On°rSieS °n emoting the productive
Hnvm
f thej, did m a way deeply marked by the Soviet model of
stated that Se e 1Ualntai“inS
the Eighth Party Congress resolution
stated that the essence of contradiction in socialist society is a con
VfnHL°n ^etwecn the advanced social system and the backward social
and iVtrreSedSsoteLtfrn°d tGlr baCkS On th° n°Cd f°r a simultaneous
ana interrelated socialist revolution on the political and ideologic al
fronts. Revolutionary struggle, they believed,
-g
would not unleash the
productive forces, but would only undermine the
needed stability for their
rapid growth. Periods of acute
class struggle
were no longer essential
to create the nee cooperative organisations and
attitudes favorable to
economic growth.The "advanced social system" already
„Jr existed and needed
only to be consolidated.
In 1956 and 1957, Mao had himself
argued
that tho
turbulent
cVmeTanhendCtButSV\C-v°f
—
™^y
periods
had inclass
the main
revolutionary periods had in tho
?Qrty ?-eadGrs’ hG insisted that ”
struggie between the dif f L^rpoS^a^oVc^,
class struggle
Continue 10^0 1^
between the proletariat and and
the tho
bourgeoisie
wSl in
ThuV he Won
f
tortuous and
and at
at times
times will
even become
will even
become very acute"(4)
C°ngrCSS -solution that the ( ?
/ Congress resolution that the
advanced social system2
cXV ictiW rsXST thG
and the-bXid
Vel-rHons C°ntra^c^ions in
society are
still between
in socialist
socialist society
are still
between the
superstructure1°df^on and the productive
Productive forces , and between the
superstructure and the economic base ....survivals
of bourgeois
..
•
dcology, bureaucratic ways
of
doing
things
in
our
state
ways of doing things in our state organs, and
to theWcWo a±n■hllnkL°
Ur statc
off °
our
state institutions stand in contrast
to tne economic base of socialism
. -.
—
(5)
whichehisWtS°bohstruSlodSn^^n?SS?S
tho "advanced social system"
eont-in
?
snuggled against. In essence, Mao insisted that only
and burner r^elC C
combat the powerful hold of bourgeois ideology
the nubile
uayS
d°ine thin8s* The seizure of the state power and
the public ownership of. the means of production, therefore, were
insufficient for the building of socialism. By themselves, they
could not sonsolidate the ^ains made. The mere growth of the economic
base sould not
automatically engender the fery attitudes and
organizational terms necessary .
- both to drive the revolution forward
and unleash the productive forces of the masses.
(1) Liu Chao-Ch’i "The political report of the Central Committee of the
Communist Party of China
a 1to tho Eighth National Congress of the Party”
in ’’Eighth National Congress
“ 3 of the Communist Party of China” Vol.I
Documents ( Peking, Foreign Languages Press 1966) p. 82
(2) Ibid.
05 "chZnS^i” °JiSth8ih/ati?nal Congress of thQ Communist Party of
Congress of the Communist Party
’
S1
ational Congress of the Communist Party, p. 116
(4) the peonle"’ fl’int-l^
contradictions among
On
’
,
in
p? 463P1
’
’’SelGctGd
Selected Readings from the Works of Mao Tsetung
(5) Ibid. p. 443-44
(88)
critique, Mao spells out for his party collogues what he saw
as the long term consequences of such an exclusive emphasis on building
up the conomic base. As Mao notes ' ”in many ways (mainly production) the
Soviets continue to progress®, but with respect to the production relations
fundamentally^they have ceased to progress »»(!) .By resisting revo
lutionary social changes and not working to transform the basic relations
ssurai? is
SoTlete
pi eduction were all but frozen.By excluding the creativity and initiative
01 the masses, the Soviets could not develop the new attitudes and
tPcommSniiSP ---xxxS
fOrmS necessary
nocessary for a socialist society and the transition
Indeed, at the heart of the Soviet Theory of productive forces, Mao
argued, was a profound fear and distrust of the masses and mass struggle.
is wr.
t :
the Soviet Political Economy test and Stalin's
■conomic Problems of Socialism" revealed in their preoccupation with
e base at the expense of the superstructure. For Mao, a
a host
host of
of closely
related Soviet position flowed from this preoccupation !
disregard for
the masses ias the creators of history and a reliance on planners ;
preoccupation with technology and expertise;/ confidence in hierarchy and
one-man management , reliance
: ’ ’
.on material incentives, and a total lack
of interest in the transformation
----- 1 of an individual’s worldview. The end
result was the growth of a powerful
‘
bureaucracy and bureaucratic apparatus
completely alienated from the
le masses.
" -CONCPETION OF TxiE COMMUNIST PARTY
Mao’s.denunciation of such bureaucratic ways
73 ran throughout his entire
revolutionary career.But with the seizure of state power Mao faced the
questions for which he found no answers
i
in Soviet revolutionary experience.
How, for example, was the party to retain its intimate
-------- ties
-- j with the
masses when the tendency toward bureaucratic imethods
'1
and lelite privilege
was so powerful ? How iwas the revolution to be continued after state
power was seized and the moans of production brought under public ownership ?
Khruschev’s’ attack on.S
’
Stalin
in February 1956 pointedly raised such
questions for Mao and other party leaders. Although the Chinese Communist
Party sharply criticised P
’
Khrusohchev
’s lack of a cogent theoretical
perspective for evaluating Stalin1, at the same time the dangers of
Stalinism were not dismissed. In the first official Chinese Communist
Party response in April 1956, the party strongly reaffirmed the mass line
and warnedwarned of the danger
dangers of its neglect when a communist party was in
power ’
’’the personnel of the Party and the state, beset by bureaucratism
rom many sides, face the great danger of using the machinery of
state to take arbitrary action, alienating themselves from the
masses and collective leadership, resorting to commandism and vio
lating Party and State democracy.” (2)
As Mao argued in ”on the correct handling of the Contradictions among
the people” there are ’’contradictions between the government and the
people in socialist countries.”(3).By always talking about unity and
consolidation, the Soviet Union was actually blocking the correct re
solution of the various contradictions in society, impeding the develop
ment of socialism.The real problems facing society remained hidden. And
a convenient ideological cover for bureaucratic ddomination was created.
(1) Mao Tsetung,
A Critique of Soviet Economics p. 101
(2) Chinese Communist Party, ’’The historical experience of the Bictafcorship of the Proletariat ” ( Peking , Foreign Languages Press, 1959)
(3) Mao Tsetung ”0n the correct handling of Contraaictions among the
People”, p. 434
(89)
But while various party leaders warned of the dangers of bureuauracy
and spoke o± the mass line, there were very pronounded differences in
ow hey understood them and the role of the Communist Party.
waE.oft9n labeled in ihe Chinese Press during the cultural
Revolution
the main i
.j ideological critic of Mao's view on the
ass Line. It so, he assuredely had significant supprt for his views’
his position in many ways followed the conception of the Communist Party
as it was enshrined in offical Soviet doctrine. For Liu, the party, and
only the party, could see what was necessary and could see to these
necessary changes. To the masses, it would appear as a united selflessly
dedicated organization. Purity of devotion and ideological orthodoxy were
the ultimate safeguards for the ability of the party to act correctly
on behalf oi the masses. Only after its members had been thaught 2”how to
be good communists” could the patfty effectively help the masses to solve
their problems. A selfless party elite should thus be above external
supervision, its mistakes could be satisfactorily rectified through intra
party .channels. As Mao said in thb fall of 1957, fiSome seem to think that
once in the Communist Party, people all become saints with no differences
or misunderstandings, and that, the Party is not subject to analysis, that
is to say, it is monolithic and uniform ...” (1)
tao's disagreement with Liu’s orthodox conception of
tne Communist Party was his insistence that the party itself is only an
instrument involved in, but not dominating, the dialectical process of
continuous revolution, knowledge, he points out in the critique, is not
ifst the exclusive domain of the party elite. The party does not stand
outside the revolutionary process with foreknowle^e
of its lnwc? h For
,
.-of its laws.
people to know the laws they must go through ~- '
a process.The
vanguard is no exception” (2).* COnly through practice can knowledge develop , only by immersing itself among
- the masses
--- J can the party ixxk
lead the revolution.
,„h^hh0^h°U^ thG l\lscory of the Chinese Revolution, Mao criticized those
believed exactly what had to be done and relied on Marxism-Leninism
as an abstract docrine filled with ready-made answers. Revolution, Mao
insisted, is an extraordinary painful and difficult process.There
are no easy answers , no laws which can be simply applied.As he argues
in the critique, years of arduous struggle had been necessary before the
correct methods emerged to enable the Chinese revolutionaries to win the
rougeois-democratic phase of the revolution.The building of socialism
and communism would require an equally arduous struggle.
Mao saw the masses as the real creators of history, those from whom
e Communisb Party had to learn. Mistakes and setbacks would emerge in
any mass struggle J
revolution is sometimes brutal and violent.But the
rea ive breakthroughs which lead to new cooperative methods and attitudes
only come out of rovolutionnary struggle.This was how the soviets had
emerged in the Russian Revolution, Mao maintained, and how the
communes developed in China. Nor should one fear failures. n People must go
through practice to gain results, meet with failures as problems arise J
only through such process can knowledge gradually advance” (3). Failures
C+
analysed, are often illuminating as much as successes. By
s u ying those which occured in the Great Leap Forward, for example,
Hao sought to uncover the guidelines with shich consolidation of the communes
could, be accomplished.
No leadership, in short, can create the new social forms and political
and economic innovations out of its own heads, then apply them through
a ministrative decree. New forms and methods will emerge, Mao insisted, if
cadres and the masses are allowed to experiment, if they are mobilized and
encouraged by a party leadership willing to learn from their potential
breakthroughs and capable of both shaping and being shaped in the process.
TS?t^nS’m A dlalectical
in Selected
dialectical approach to Inner-Party Unity",
Unity
Works of hao Tsetung, Vol V (Peking Foreign Languages Press,1977)p.515
(P)Mao Tsetung, A critique of Soviet Economics, p. 73
(3) Ibid.
p.72.
(90)
As Mao said during the period of accelerating collectivization in 1955t
"Both camdres and peasants nill remold themselves in the course of the
struggles they themselves experience-Lot them go into action and learn while
doing, -and they will become more capable." (1)
Suliko Liu Shao-Ch'i, therefore, Mao never saw ideological devotion and
intraparty rectification movements as sufficient to maintain the revo
lutionary role of the party. Only by being immersed in the masses, sub
ject to their criticism, and sensitive to their needs'could the party truly
combat bureaucracy, privilege, and elitism. And since for him the party
did not stand above society. Mao came to sec the contradictions within
the party as f
' intrincally interwoven with those in the
society at large. In his editing of "Socialist upsurge in China's country
side" in 1955«Mao first■mentioned the theme which he was to raise in the
critique and elaborate further in later years. There is a practice, he then
warned,"prevalent almost to the point of being universal: right opportunists
m the party ,working hand in glove with the forces of capitalism in
society, are preventing the brad masses of poor and middle peasants from
taking the road to the formation of cooperatives"(2). The emphasis on
rights in the party linked to social forces was to undercut further
the orthodox Soviet conception of the party and was used in the coming
years as another reason for deepening the mass-line conception of politics.
THE GREAT LEAP FORWARD
Mao's writings in this
critique of soviet economics can also be
read as an analysis of the Great Leap Forward. Here for the first time
m his known writings, Mao is extensively exploring the process of
uninterrupted revolution and the nature of the transition to socialist
and communist society (3).In so doing he defends the Great Leap against
unfounded attacks both from within and outside the party. At the same time
he is seeking to elaborate the context within which the Great Leap's
negative features can bo corrected and its positive aspects preserved.
These writing can be road for the fine insights they give in the way
Mao understood his own methods of study. He does not stlrt from rules^
principles, Marxist laws or assumed definitions, ” a methodology MarxismLeninism has always opposed1' (4). Only through concrete investigation can
new principles be discovered. Indeed, one of his strongest criticism of
Stalin and the Soviet political economy text is that "it does not pro
ceed from concrete analysis of the contradictions between the xeconomic.base and the superstructure. It always proceeds from general defi
nitions and general conceptions. It gives definition without giving
reasoned explanations. (5)
Thus, Mao studies Stalinjs’;Economic Problems of Socialism"in order
think through specific practical and theoretical problems facing China,
in this case the creation of the communes.With their creation as a new
unit
in society, analysis of how production and exchange should be
carried out within and between communes and other units was a pressing
necessity. Therefore, Mao’s comments arc largely focussed on the first
three sections of Economic Problems of Socialism, those concerned with
the character of economic laws,
.commodity production, and the law
of.value under socialism.What Mad finds useful in Stalin’s writings
is carefully separated from what he concludes is unclear or inaccurate.
(1) Mao Tsetung, "On question of Agricultural Co-operation", p. 390'
(2) Mao Tsetung "Socialist upsurge in China's Countryside"(Peking
Foreign languages Press 1957) p. 159
(3) For a development of the theme of uninterrupted revolution see
Victor Neo and James Peck', "China’s Uninterrupted Revolution",
(New York Pantheon, 1975)•
(4) Mao Tsetung, " A critique of Soviet Economics" pp. 73-7^
(5) Ibid p. 108
(91)
rond°qtmos£ use?ul reasons for having the cadres
read Stalin s Economic Problems of Socialism" is to enable them to
understand the ultra left current (the "communist wind") which had quickly
appeared over China with the beginning of the commune movement. As Mao
later said at the Lushan Conference in July 1959, the cadres
"had not studied political economy.They had not clearly understood
the laws o± tfalue, exchange of equal values and remuneration according
to work done... If they hav&°5nderstood the textbooks, let them study 1
them some more. If the top cadres in the communes do not understand
a little political economy, this won’t do ." (1)
To Mao a bettor understending of the economics of socialism and
the nature of the transition period would allow the cadres to cope with
the problems arising in the Great Leap. In some areas, both cadres and pea
sants had been swept away by a desire to leap directly to the stage of
communism rather than going through the many stages that Mao argued
were necessary to get ther. The "strong tendency to do away with commo
dity production” had to be countered and its role in socialist society
correctly understood. ” People get upset the minute they sec commodity
production”,, Mao writes in his critique, "talcing it for capitalism.
But it looks as if commodity production will have to be greatly deve
loped and the money supply increased". And explaining this "poses a
problem for the ideology of several hundred thousand cadres as well as
for the solidarity of several hundred million peasants" (2)
In some areas of China, the cadres, in their impassioned desire to
leap to communism, had simply seized the property of the production
brigades and the teams.Were such practices to go uncheked, Mao warned,
the peasants wouJ d rise up and turn their wrath on the Communist Party
itself.Study of Stalin’s"Economic problems of Socialism", because it
defends the survival of the commodity form into the socialist
period and discusses the principle of exchange of equal value, could
help provide theoretical guidance against this dangerous ultra-left
current•
In his critique of the Soviet Political Economy Text, Mao further
examined the lessons to be drawn from the Great Leap . He studied the
relationships that exist between the two kinds of ownership of the
moans of production (socialist ownership by the whole people and
collective ownership, largely by the peasants) and compared them with
those which existed in the Soviet Union. The abortive attempt to
immediately make the commune rather than the production team the basic
accounting unit is examined.Questions of distribution of Consumer goods
are probed in terms of why the principle of "from each according to
his ability ,to each according to his work" is still necessary during the
stages of socialism. Mao, in brief, is working out the consequences of
the use of the commodity system, exchange through money, and bourgeois
right
,
, particularly
as they are reflected in the three major differences
• between workers and peasants, between town and country, and between
mental and manual labour.
Running through all his comments is the argument that Soviet
experience is in the final analysis utterly inadequate as a positive
model for China’s drive to build Socialism. The political economy
text, Mao concludes, does not satisfactorily cope with the ’’whole new
series of problems” that have appeared with the period of socialism. It
does not suggest how to move from one stage of the revolution to
another, or the special characteristics of each stage. For example, he
argues, it fails to consider how to advance the process of transformation
of the small producers, what giinds of contradictions may be found in
(1) Mao Tsetung ’’Speech at the Lushan Conference”, in Schram, Chairman
Mao talks pp.
(2) Mao Tsetung, ”A critique of Soviet Economics?, p. 140
)
(92)
each stage of the transformation, and how they can be solved. Indeed, the
text speaks of ’’consolidating fully" each and every stage.Rather than
becoming a transient goal which is to be surpassed once it is partially
achieved^ and thus truly consolidated), the stage becomes an end in
itself, in this way, Mao concludes, the Russians simply repressed all
consideration of a continuing revolutionary process on the conomic and
political and ideological fronts.
Mao’s writings in this critique are transitional documents I they stand
midway.on the path to the Great Proletarian Cultural Revolution. As Mao’s
ctiticims of the Soviet Model of socialism deepened during the Groat Leap
so did his conviction that the transition to socialism was an arduous ,
’
proctracted.struggle that migh take an entire historical epoch. Like Lenin,
Mao became increasingly concerned with the obstacles and difficulties in this
ransition.The drive toward socialism requires that every aspect of society
undergo tremendous change. In his critique, Mao writes of those forces •
ughting tenaciously to resist such cange, calling them "conservative
forces and rightists”. But Mao is still working out the nature of such
'anVtS-relati°nShiP t0 th° Communist party; he is not stating
it precisely. Nor is he saying precisely what is meant by class struggle
urmg the period of socialist transition. Old bourgeois and feudal elements
remain in Chinese society, but it is the hold of old values, ideas, and
a its of thought which increasingly concerns him. Those writings also
omonstratc his efforts to challenge those in the party in position of
ltyu thG manaS'Grs, technicians, administrators, and other assorted
pci s who, compared to the workers and peasants, occupy positions of
financial reward and power. Hi finds the children of the cadres disap
pointing, too protected and with too many political airs. But the .dangers
° hG rcv°lution are still seen in terms of spreading bureaucratism
rather than a question of class.This is particularly evident in Mao’s
cautious explanation of the bureaucratic nature of the Soviet Union and
xk.in his lack of a complete study of the material base of the bureaucracy’s
privileged role. Not until July 1964, in "On Kruschchev ’s Phoney Commu
nism and its Historical Lessons for the World", did Mao state that "the
contradiction between the Soviet people and: this privileged stratum is
now the principal contradiction inside the Soviet Union and it is an
irreconciliable and antagonistic class contradiction" (1)
forenfl
with those in China who opposed the Groat
Great Leap
Leap Forward
orced Mao to deepen the analysis of his critics. Out of this attack on
inG^r°afc L°aP Forword, &ed first by P-eng Tch-hui and continued by others
in the coming years, J^ao was to elaborate his conception of "continuing
he revolution under the dictatorship of the proletariat".Not until 1962,
owever, would rightists within the party be labeled revisionists. And
not until the Cultural Revolution would the conception of the "capita
list readers” be developed.
£ ILIN AND THE RUSSIAN REVOLUTION
A Critique oi Soviet Economics is quite suggestive for reevaluating the
Russian Revolution and the role of Stalin. Although these pieces can
usexully be road from this perspective they were not written by Mao as a
historical study or even as a critical evaluation of the historic contnbution of Stalin. Mao’s real purpose was to think through problems
facing the Chinese Revolution interms of the perspective offered by a
careful examination of aspects of the Soviet experience.
o
Although those writings were circulated for inner party discussion in
Ciina during the Cultural Revolution, they have never been made officially
available. TheChincse preface to these materials warns that they may not
be fully accurate and complete. Yet even so, they are on the whole quite
accurate and provide a remarkably valuable and detailed analysis of Stalin
and the Soviet experience, the like of which have never been publicly
available in China.
(1) "On IKhruschchev’s Phoney Communism and its Historical lessons
for the vj or Id * Comment on the Open Letter of the Central Committee
of thn
in Peking Review 7, No 29 ( July 17,1964)
(
(93)
Officially ,the Chinese have for most part defended Stalin since
Khruscchev’s attack on him.”When Stalin was criticized in 1956”, Mao
said,”we were on the one hand happy, but on the other hand apprehensive.
It -was completely necessary to remove the lid, to break down blind faith,
to release the pressure and to amancipate thought.But we did not agree
with demolishing him at one blow” (1)
Publicly Stalin is seen as a ’’great Marxist-Leninist” who inherited the
cause of Lenin, led the Soviet people in achieving socialist industriali
zation, agricultural collectivization, .and victory in the struggle against
fascism. But hi;is acknowledged to have made serious mistakes. Over the
last two decades these have been said to incldo the following : departing
from Marxist Leninist dialectics in his understanding of the laws of
class struggle and the contradiction between socialist xxm and capitalist
roads would continue ; failing to —‘
rely upon the working
'class
and the masses in the struggle against the forces of capitalism and redu
cing the threat of capitalist restoration to one of armed attack from inter
national imperialism; seriously neglecting agriculture and peasant living
standards and lopsidedly stressing heavy industry ,* lacking vigilance
before the German attack on the Soviet Union J excessively widening
the scope of suppression of counter-revolutionaries in the purges of the
1930s.
Mao’s criticisms of Stalin in khis book. A critique of Soviet Econo
mics look to the very heart of the methods used to industrialize the
Soviet Union. Because of this, they provide an important Marxist analysis
of the Soviet Union which in the futrue may well be integrated into
official Chinese views, even as they should now contribute to a Marxist
understanding of the Soviet Union.
SOURCE
Introduction by James Peck to ”Mao Tsetung : a Critique
of Soviet Economics”, Progressive Publications, New Delhi
1982 (Indian Edition) ( English Edition by Month ly
Review Press, 1977)•
(1) Mao Tsctung, ’’Tlaks at Chcngu : On the Problem of Stalin”,
in Schram, Chairman Mao Talks, p. 101.
I
USSR
.PLAN IN TROUBLE
NINTETEEN eighty-one is the first year of the Soviet Union's 11th
five-year plan. Figures recently published by the Soviet Central
Statistical Board
Imo tty prob lens, iwith^oo+b^i111? SoviGt Government is facing sone
in the first six jmonths of thSSyXrd agriCUlture beset with troubles
L2£_EC0NQMIC growth rate.
steadSy b^ofe Zf
™’ a tecnd ^ch has
econonic growth iS
is S10Wing
slowing do
down,
serious
years.* Industrial output value
in the first si- riore
months
fn-n ^in
n.recent
recen^ years
nonths failed to reach the g
roping thnZtho
“ ever
°V“ W
°“- It was
a rate which is lower “
than
before.
per cent conpared with
4.2 per cent for the s^ne period last year.
The planned annual increase
---- .• productivity
,
less than in the f—
sane period of 1980 and the
—— products including coal,
rolled metal, generators, ca :
rs
and
cquipnont
for the chemical industrial
was less than that of the cor: s
csponding period of 1980. Hie output of
some items has steadily dropped
over txie last two years.
no. nth
X «i°l ;z°,
'Z3”"th Mto “* f“«»
i^oX “s s’;™ 4zssp8ihc“rt- ..**•
wos
98'- Ihe °'“I” M 19 i«iS
‘SKd
problems .of scattered^investnffti
ft°pJGSSad’ a.
and
long-standing
is still1 depressed,
investments
and
far-flung
have not yet been solved
Th<= if
■t2r“flYne capital construction
-Projects which were put into
production in the first six The
nonimportant
xhs°r
'half
- of thoaj p^med for
ac?°rding to schedule
»»
B01'ed"10 only account
year'rf
the.Pef10d and 13 per cent of those for
havo’^U?^
°“ projects scheduled for completion in 1980
year Z
oi 981 . S
Some
-h ffnx.h.a
T for puttlllg
. . V “ g»
production !
Oen
flnlshed’ „
andd the p!
plans
p oauction, housing, culture ;and’ the
■' construction of residential and
.“rloZ'tiZZ”
“ «'« first-,"
« .----- six months. Greatly
-called special
ttXTS1S!r of i,w s"let 0”i°<
AGRICULTURE.
0^tPu*StargetrsetaforetheanStherSieiothtfK
S°Viet eConony* Parn
, . .has had
and. 10th five-year plans were unfulfillcd, and jthis
luthoX8:/"6^3 °n the Who^
econoS;
Though the Soviet a° 2 SS n- ?e *n™S t0 Change the backward agricultural conditions :in this new five-year plan, they are facing
troubles ahead.
1972/1: shakes: Ze^aS?^ "TZ
grain, potato and beet harvests
rial published in pravda therefore J
Piaotia.
WaVe’ Siail-
' 4? d®grCQS centigrade. The
be affected. An edito-
eraln slaoe F?osl°mt b"oZZtot’°°h“
Binion tons of Anorloan
norths ago. It was repgrtfd Sft m
Partial grain enbargo four
of groin in tta fZoE’ZS ojTiJS" i°Pt
‘
estimate that if the drou°’ht -in -Hn
’• J es’ter11 agricultural experts
will then have to inport nore f-rS °viot Dnl°n countinues, Moscow
aporr nore gram than ever in fiscal year 1981-82.
f
(95)
The Soviet press has acknowledged that the failure to neet the
production targets has caused shortages of manufactured goods and a
decrease in supply.
It is obvious that Moscow has not done well in the first year of
its new five-year plan. Its doep-seatod economic ills hace not been
cured and the economic policy set by the 26th Congress of the CPSU is
beset with difficulties. Therefore, the trend is that the decline in
the Soviet economic growth rate will not be checked.
SOURCE: Beijing Review, Ro.34 August 24,1981. Page 13.
£J\
7-
> ''t 1
—-<•X
vjO C.
°lcxo cc
J
(96)
M^rch
Shanghai, which has undergone numerous
vicissitudes, is a model to emulate, to
catch up and to seek economic co-operation
with in China's modernisation drive. This
is not only because, as China's largest
industrial centre, it plays a decisive role
in the national economy, but also beca-use
it has accumulated rich experences in the
development and management of a modern socialist
economy. Futhermore, its economic results
are superior to other parts of China. Recently,
Premier. Zhao Ziyang called for biasing a new
trail in economic development. Central to this
task is t .e need to improve economic results.
In t'le new his to riaal period, Shanghai has
a twofold economic missions Modernise itself
and help localities in the interior advance,
tfhat is Shanghai doing to fulfil this mission?
In China’s economic life, C
’
‘ ‘rs existence has never been
Shanghai
so widely known and strongly felt as it.is today,
„ > Even the elderly
and children living in the remote and mountainous areas know and like
Shanghai commodities.
in nnn
besll“ln« of this devade, Shanghai has annually slripped
shipped
10,00° million yuan (about 7,000 million U.S. dollars) worth of industrial
goMs to other parts, of China, still supplies fall short of demand.
After increasing their selling of surplus grain to the state, some
peasants have expressed the wish to buy certain fanous brand Shanghai
products which.are in short supply, such as Yongjiu (Forever) bicycles
Ox Feiren ( Ijring Man) sewing machines.
Last spring the State council called on the nation to learn from
onanghai, the coasta 1 provinces and the advanced." Responding to
this call, an increasing number of people have visited Shanghai On
study tours, seeking technical assistance and proposing economic co
operation. Also a special radio series on enterprise management in
anghai was broadcast, and the magazine Shanghai Enterprises began
publication.
tions.emoodied in policies and this is particularly true in China,
lewed from the angle of policy, what strong points does Shanghai
nave which are worth popularizing?
THE TEST OF HISTORY
SHANGHAI'S modern industries have aa hisimy
xv of 140 years. But
from the Opium War in 1840 to liberation in 1949,? besides its light and
industries were practically non-existent.
a result of imperialist
wSron^th
thS *evadence of the 01d regime, national industries
were on the verge of extinction by 1949.
(97)
Shanghai, the birthplace of the Communist Party of China, has a
fine revolutionary tradition. During the new-democratic revolution, it
was a seed-bed for the revolution. In the period of socialist revolution
and construction, it was- the focus of major political and economic
struggles. The Party and people there were tested and tempered in
struggle.
Revolution and constructidn over the last 52 years have fundamen
tally altered tnis city and ushered in a new epoch of Vigorous development
During socialist transformation 1950-56 Shanghai stood on the front
line in struggle between the proletariat and the bourgeoisie. After
repeated testa of strength between the classes, corruption and attacks by
lawless capitalists were overcome and socialist transformation of
capitalist^industry and commerce, handicrafts and suburban agriculture
was accomplished. Shanghai, which had been overrun like a colony
^^1^** and
divided into concessions by foreign powers, was transformed into> a new
socialist city.
Shanghai demonstrated its dynamism during the 10 years (1957-66)
of all-out socialist construction. By relying on a small amount of
investment and its existing industrial base through readjustment, reor
ganization and construction, Shanghai established most of its 145
inaustrial branches during this period. As an old industrial base, it
assisted the nation’s socialist construction with equipment, funds and
technology. Since the founding of New China (mostly in these 10 years),
Shanghai has moved 500 factories to localities in the interior and
provided on million technicians and workers.
During the ’’cultural revolution” (1966-76), the gang of four, which
had risen to power from Shanghai, kept the city under their control.
They tries hard to turn it into a counter revolutionary base for the
usurpation of supreme power in the Party and the state, and thus
brought disaster to Shanghai. • The Shanghai people reisted in various
ways and struggled against the gang of four and its remanant forces
and substantially reduced the losses.
Since the d owi^fall of the gang of four in October 1976$ the Party
Central Committee has made the strategic decision to shift the fofus
of work to the four modernizations and adopted the policy of readjusting
the economy. Shanghai shoulders two important tasks in this effort:
modernizing itself and helping the underdeveloped areas in the interior
to develop and -catch up.
TABLE 1
SHANGHAI^ BASIC STATISTICS (198O)
Total are a:
Urban area:
Total population:
Urban population:
Worders# staff members
total:
Number of enterprises:
Retail shops:
Industrial output
value total:
Light industry:
Heavy industry:
National income:
Handling capacity
of port:
Value of exporsts:
6,185 square krn
158 square kn
11.46 million
6.01 million
4*47 million
(including 550,000
scientists & technicians)
7,149
54,000
62,616 million yuan
32,957 million yuan
29,679 million yuan
28,500 million yuan
84.4 million tons
6,500 million yuan
(93)
Over the last 52 years, Shanghai has built up a comprehensive
industrial base which integrates big, medium and small enterprises.
It has most types of industry, a, high lev el of specialization in
production and a certain level of science and technology (see Table 1 ).
Tog.ay, Shanghai is one of China’s largest economic centres, Its
economic strength has gtown tremendously, Its industrial output value
was 26 fold higher than that of 1949. Production of some major industrial
goods has increased even faster ( see Table 2).
TABLE 2
Products
OUTPUT OF MAJOR INDUSTRIAL ITEMS
1980 Output
Steel
Steel products
Metal-cutting machines
Cotton yearn
Cotton cloth
Sewing-machines
Bicycles
5*21 million tons
4.15 million tons
16,900
2.12 million bales
1,600 million metres
2,26 million
5.76 million
Compared
With 1949 (fold)
1 ,002
275
24,5
2,9
502
854
ShanghajL^plays a vital role in the nation’s total economy, In 1980
the value of hanghai’s industrial fix d assets accounted for only 5 per
cent of the national total; industrial output value, one-eighth; value
of exports, one.seventh; revenue, one.sixth; the volume of industrual
goods distributed to outside markets, 45 per cent. Percapita national
income amounted to 2,486 yuan (about 1,500 US dollars), 6 times the
national average.
From these figures it can be deduced that Shanghails management of
technology and industry is effective for it has achieved these economic
results. (Poor economic results remain a common failing of China’s
economic w rk. ) The Party and. government have called on enterprises
to blaze a new trial in economic development through readjustment and
reform? the heart of the call is the need to improco economic returns.
Shanghai’s experience is of significance to others because it has
obtained results.
ADVANCE AMIDST READJUSTMENT
No model is perfect and Shanghai also has its deficiencies.
Enfluences of many years of ’’Left” ideology, imbalance between some
major economic sectors, stress on economic construction to the neglect
of people’s livelihood, unwieldy structure a nd industrial pollutionall these ..affected Shanghai to some extent.
Since 1979 when the readjustment of the national economy began,
Shanghai has carried out concrete work in order to gradually solve
these problems and has achieved some su cesses.
READJUST THE ECONOMIC STRUCURE? INCREASE THE rRODUCTION OF
CONSUMER GOODS, IMPROVE TEE PEOPLE'S LIVELIHOOD AND SERVE ECONOMIC
CONSTRUCTION.
A c^n'oe has taken place in the situation in which the developement
of light industry for many years lagged behind that of heavy industry,
in Shanghai s total industrial output value, the portion of light
industry has increased from 49.5 per centin 1981; the portion of heavy
industry has dropped from 50.7 per cent in 1978 to 44.4 per cent in
1981. In 1980, total industrial output value was 62,616 million yuan
an increase of 17,666 million yuan over 1976, of which 68 per cent of
the increase is from light industry.
(99)
servi-i^nXT'^'^^7 1S n°W aUustinS i*3 orientation,
changing from
e ving mainly its own capital construction to 1
serving the development
econoS^rk0^:0118^ TdS> th6 ^-hnologicali^n
--- 1 of the
economy and. the expansion of exports. For
■
a
time
in
early
1981. this
change caused a decline in production but .
an
upswing
1
is
reported
for
the fourth quarter.
production '4dusi?:i7 is developing in the direction of
increasing the
is ^PorivingAfosi^s^and^arl^ies^e^asS “in^o’ th^S'
on1“peSSSoi^4l“Lti±iS'1 30,000
-U the quality of 596 kinds
COnsidefed the
270 divisions,
of products, “hnnnhul orocIM
In addition, 154 £ds o?
Were JUC'^ed
be
world levels.
“"“X
be equal with advanced
hhl 1» lino
‘
with
sty 7; ;r,rrBid,!’ bo‘’”'‘
have been signed and progress is bi P
300 eepnomic agreements
economic integrations!
“ the SecUn® up of these
beneficial to rational utili^tioriofC,01 J111®36 lntegrated operations is
work force and to the tanuiii- nf
la°to:ry buildings, equipment and
have ro.p.a
Potential, initial ohangea
The question of how Shanghai’
under study. Since Shanghai has s economy should be developed is now
industrial foundation and a
substantial scientific nnd
. i
' +tocxinical
• -1 -a
force, but is located a considerable distance from most natual the tasks of producing ordinary resources,
products some experts rocormend that
interior, f
11 • ------ then
SMSW
''^■^4.1. v/tzriutjxib
top-quality and tachnology-intonsivo preoicion
instruments
meters, quality steel^Soducts,
EX
h" machines, “
■tafenta and nhejj;
synthetic fibres and large ships.
READJUST THE ORIEMTZTION OF lEVESTMENT, SPEED UP URB/Jf
CONSTRUCTION.
problems in ?he area S Shn,’
faced with a mountain of
Acuteshortage of housing poor 000™™°
the citizens' livelihood,
utilities and pollution-111 these orob?^10^ Service inadequate public
hampered Shanghai's utilizations of it^nd
SUr:f'aced a'ld hav®
base.
'
a'd-va^tages as an old industrial
cancelled or postponed th!
+
* S1?ce 1979’ tlle ciV has
thus eliminated 2,000 million vit^t!011
industrial proje'is and
million
productive projects such
n '
' ln exPenditures. Incestment in nonas housing
public PtilSrS.'S^-aad
Mnt in 1979 to to 2O-5
‘
P“ cent of the total investin 1980. Housing units with fln^ 198°+
total Partially completed
metres were finished, 40.9 per cent'more thS^??^*04 ailli°n SqUare
polluti^cSrol hasUb-e2atigl°tened!n 60S
®inCe 1980
chimneys have been
F -h d*.,.60 per cent of the city’s
pollutants like mercury'and endnium12^ 1Ca^T01'1 docices and poisonous
exeiu.y ana cadmium have been controlled.
REFORM THE WAGEWl SYSTEM, STIMULATE THE ECONOW.
experiSal^nlts’Ind
^terpil?es h*ve
designated
anc. mvuoted witn greater decision making power.
♦
( 100)
Initial results show that the rate of increase in their production and
profits is higher than before they became experimental units and also
higher
nighor than that of other enterprises. Of the profits thej^ obtained,
92 per cent were handed over to the state, 8 p er cent were retained
ior reinvestment and bonuses for workers and staff members.
Under the guidance of the state plan, importance has been attached
to the regulation of production by market mechanism and the law of
va ue. In 1980, the city set up 500 dales and service outlets and 60
rural fairs in order to facilitate the circulation of commodities.
n a ddition, markets for transaction involving some means of production
have been opened. They have established ties with 14,000 units and
signed agreements with 103 companies for sale of their products.
Of the 195 kinds of materials which are distributed according to
the plans of materials departments, their sales volume outside the
o^-fourth of the total volume. The purchasing volume
outsice the plans of commercial and supply-and-marketing departments
made up about one-third of the total ppurchasing volume.
...pEy4™
TRADE# SHIP MORE PRODUCTS TO INTERNATIONAL
I’UULxdilD .
rnn«+?!S+WewA the
N°W’ textile
industrial products
nroducS^Io° Per CS+t °n the t0tal QXPort volume; machinery and chemical
products, 19 per cent. Exports not only go to third world countries,
but are .beginning to penetrate the markets in the first and second
wor id..
?? 0^der t° eo?ble their products to meet the international
Burket s demands, Shanghai's enterprises have devoted particular
®n,irt++t°+^nCr2aS:!’l:ie varieties and improving quality of products and
paid attention to imports of technology. In recent years, they have
dlverse methods of trade such as compensatory trade, manufactudS-tCCnfdllie 1:0 retirements set by foreign businessmen, joint
and fororsn investment, and sales service networks
et up abroad. All this has created favourable conditions for a
further expansion of Shanghai's foreign trgde.
” LEARNING FROM SHANGHAI"
q+ + -^GQRDING to incomplete statistics, between April 1981 when the
tri
and arofldfi.r’s ? P®0?1® ) ied by loading menbors froa provinces, cities
and prefectures have taken study tours of Shanghai’s enterprises.
Sianghai has signed 122 contracts for integrated economic projects with
?thn7XnCeS
<dti°S °f C0^ens^ trade, joint enterprises and
ShiX^'C0T°Pera
• ThlS iS the initial staS® of "learning from
What is to be learnt from Shanghai?!
A brief account follows.
SPECIALIZATION AND CO-OPERATION
its
Jr?VvdeS an exanP1G °f socialzod mass
production. As
mass production.
its division of labour iscoming increasingly elaborate, its level of
the
Production is getting higher and higher, reflecting
ie general trend of modern economic development.
PL.the_laaCh^le-b^ildills industry, the division of labour is made
in accordance with n different
~”7 — ° categories of products and similarity of
technology. borne
F
factories produce complete machines; others specially
manufacure castings,, spare
<parts, forogings, accesssories, or components;
ci J. ow just do a, certain
------ process like clectrioplating. This presents
r
J
J *■’
4
I
(101)
Mtiikmg contrast, to the autarkic practice commonly seen in other
ocalities of tne whole profess from tho manufacturing of components
to assembly of the whole machine being undertaken by one enterprise.
nf
?an Zheyi Pointe(l out that since the accomplishment
of oocialist transformation in 1956, Shanghai's industry has undergone
ur large-scale readjustments and reorganizations. These restruct
urings have been carried out in lino with the principle‘of specializationand co-operation and m accordance with the needs of national constru
ction and the new market conditions. Now, Shanghai has 71 specialized
^ustrial companies ruling 2,25 6 enterprises. They total ono-third
. the industrial enterprises and produce two thirds of the city's
industrial output value.
J
f110 colabyation of specialized production in enterprises with
foZ
entca-prises has created favourable conditions
for adopting now technology, simplifying enterprise management and
reseSVand^rk1?’
alS°
facilitatGd specialized scientific
•lesear^n ano. marlcct surveys.
EXPANDED REPRODUCTION
buiSTn^r11
that tkC deT61°PE1ent.of production requires the
uildmg of planes, recruitment of more personnel and p urchaso of
In contrastntSh In, fact1’
is a Gcanon practice in other localities.
Zna
t’ ^lanfxla1’ by relying naibly on the existing enterprises
rphm
^provlne technology and management, has raised productivity,
inis is the example Shanghai has set.
t^b^u^on,+ ^ystnal investment was 14,100 million yuan; deducting
and in nJ
“ 10 °O]?struction °f the Baoshan Iron and Steel Complex
ment ?n thrX1^8-^ S+t°ity ProP°r’ the actual national invostT? b+ +th+-? 17
industries amounted to only 9,600 million yuan. In
lorin’ ??
6
handicraft industrial bureaus, the accumulative
total of taxes and profits turned over to the state in the last 31
fro^t^^qt I 00 nill^on 3aian while capital construction investment
from tne state was only 1,200 million yuan.’
Since,Shanghai's liberation, the increase of output value derived
from investment in capital. construction accounts for about one-fourth
the total while that from tapping the potential of old enterprises makes
up three-fourtlis • To accomplish this,
Shanghai relied on technological
renovations.
The Shanghai No. 12 Cotton Mill still usesi a spinning frane which
was produced in 1921; it turns at high speeds .Beputy chief engineer
WeiZhanmo explained that through repeated technical renovations of
their key
kev parts,
rarta. such
SUch as spindless, this type’of spinning'fr^ios has
been transformed into a machine using new spinning* techniqueTf"high
rpm and medium package with a Chinese character. The adoption of this
- “°h
« i" r»4i»
third Mgher end
J ® per-unit
by
spindle is onee
tSs sX Ji6 COnS^tlon of electricity per bale is one-third
Short
b x%
conditions of China where funds and fuel are in
short supply but labour is in abundance.
Although the number of spindles has been reduced fron 2.45 nillion
in the early post—liberation
,
-- years to 2 million at present, the auunal
cotton yarn output has increased from 740,000 bales to 2,12 million bales
and the average denier has been raised from 23 to 28.
J Ht*L TH
(F.U. Floor) St. Mtrlcs R<,ad
"angafore . 560 001
(102)
pa: YING ATTENTION
TO IDEOLOGICAL EDUCATION
Zhou Bi, chairnan of the nunicipal economic commission, retorated
that China aims not only to build a socialist material civilization
but a Iso to develop a socialist spiritual civilea tion. As the number
of young workers and staff members is increasing, it is particulary
important to educate them and to foster in then lofty revolutionary
ideals and high morality♦ They must not consder everything in terms
of noney or. indulge in seeking material enjoyment without any thought
of making contributions.
In a Shanghai hacycle plantf some
representative from
sone peasant representatives
Yuncheng country
of Huboi -province cane
4
— to- visit
--- the
-— workers» Ono of
then, Yang Xiaoyuan, had sold five tons of surplus grain to the state
from the last harvest. He wrote to Rennin ^ibao expressing his desire
to buy a Yongjiu (For Ever) bicycle. The paper published this letter;
this evoked discussionin the bicycle plant. Nhat should be done?
The factory Party committee organized a meeting for the workers. After
discussion they unanimously decided to meet the peasants’ demands
through increased production. Yang Xiaoyun’s wish was fulfilled and
these peasants’ representatives had cone to express thanks to the workers
and discuss with then problems in launching an emulation drive. As a
result of this discussion, the plant for the third tine raised its
production target.
In the Shanghai Machine Tool plant which produces precision
grinding machines, the equipment used is quite sophisticated. In a
large constant temperature workshop, there is first-rate equipment
while the cadres still worked in old, dark rooms. In recent years,
when there was extra money derived from economic reforms, the cadres
prcxerred to use the noney first in developing production. They
maintained a correct attitude in handling the relationship between
the overall interests and their partial interests.
When visitors praise Shanghai for its great contributions, the
Shanghai people often say: ’Shanghai’s development is inseqapable
from the whole country”. As amattcr,.of fact, most of Shanghai’s
industrial raw materials cone from other parts of the country, and
without the support of those localities, Shanghai could not advance.
4-T
Vlsitors express their determination to learn from Shanghai,
the Shanghai people often say: ”We still lag behind other localities
m many fields.” This is not merely modesty. In fact, Shanghai’s
manufactured goods are not only subjected to stiff competition on
international markets but are challenged by many latecomers in the
domestic market.
Ithough 45 per cent of Shanghai’s products were the
best in the nationwide evaluation of the quality of the sane kihd of
products, gold medal” did pass to new hands sometimes. Many of its
products still lag behind those of other localities. Leading cadres
ofuen remind Shanghai workers and staff of the above facs and their
wealmesses in other aspects, so that they will not become complacent
but will keep forging ahead.
1W MISSION OF AN OLD INDUSTRIAL BASE
What are tlte tasks * special features and prospects of the cityrs findustris during the current
economic readjustment? 'These questions were
addressed when our correspondent recently interviewed Zhou Bis the chairman of the Shanghai
Economic Commission.-Ed.
China's current economic readjustment is scheduled
o ast at least until 1985*
In this readjustment al^i necessary m Shanghai? What is its aim?
/
( 10^)
Alhih-hh.
The goal is to solvo the serious inbalance in our nationnl
inSS
£Xy
^Snjh
°f
icioiOtsy. Shanghai is no exception.
°f
torist?^11^ ±a an °ld iaclustrial dty and has its
oto special characrich ChXbiSffv
Having a good iharbour
larbour and
advantageous location on thf
1+ b„o anbJiang (Yangtze) River Delta,
and
central to
to China's
Delta,
and central
China’s costline
Jas bo?
tOn£ V0011 3 co™od
W distribution
centre?
Sduftrv
commodity distribution centre.
SaXes?
y dGVG1°Ped
» Its
Its econony, houevor, Z soj
Before liberation, shanghai had some light industries
X? ”aZ? “a“BtT It0 pr°S“‘
but
+■
oonpZ ’,,Zh‘S t_
iZ(-r "X“’nbtiioi£° se’ s1 ato
r^f10public
” ”‘itafacilities
inadequate
and
housing are LrX
j™1 te StoTO1“1;
.tw ,iM it.
conditZsXtXXl8 r3ad?US“ is b°i*g carried out under the
and the rate of increas? affcl°“al econ°ny is undergoing readjustnent
Thiq
ncrcase of industrial production should be stable
o»814°SS™
“< 0Jai<S ““ p"t“1 “d *»« °«»»U mtoroBte
a”" "“‘i“ th» »<»»"■».» ability of the country 1. still“Sk
theo interests
I
interests of
of the
che wole country.
prenier Zhao Ziyang said: During
the period of readjustment, • langhai must breathe while swimningji not
pant on the shore 8
I thiS^haSai
?ChieTe
1985 thr0Ueh this ^cadjustnent?
oiuipuout oui »»ih-.«“?or”S:.o“aZiYt^rz;yZr;‘Z
Q. Industries aro^over-concentrated in the city
proper,
to novo sone of then to the outskirts?
Is it possible
A: It’s not■ (easy to change the location of factories, only a snail
number, of then
n can be noved out of the city or stop operation. £
August 1980
ened the safety o? S!
T Lia°
Chenl^l Plant threat-
nove it out of the ci tv
hu+
flrst we Plann-'d
^x&nda£
second accident.
° ltS nana2'enont so as to prevent a
♦
(104)
Readjustnont of the disproportionate sectors of ShanghaSs
econony can only be carried out on the condition that the overall
nterests are not inpaired. It takes tine and patience to find solutions.
Q:
What is the primary task in the current readjustnent of the city?
we° “
oust make
rational use
use of
< ~ th
” e existing industries
and First of all, W
T2 rational
and co our best
-- to
_o carry out technical renovations so as to imrrovp
econonic results, increase the variety of products, upgrade quality
ana increase the incone of the enterprises,
■uno sane tine, we
At the
nust gradually change the location of sone industries and tackle
questions of cnvironnental protection.
,
■
-
While it is required to noet domestic needs for its products,
Shanghai should also do j_bw
uesi to
its best
to develop
develop foreign
foreign trade
trade so that
more Chinese industrial products3 enter
enter the
the world
narkot.
world narkot. There‘should
produced5:
YPeS °f 0XP
°
rtcd
g00ds
"
exported goods.- Li^ industr^l
products ^LucS rl
fUrthQr su™lenente(i
heavy industrial
nnrket hJ
D?chlnory- ^ere is a recession in the world
recoil’d it tlVSl no* slack°*
efforts; Our products are wellneeds
In the
yoeld countries, because these products suit their
1 the past, Shanghai had close trade relations with nany
long 33
tradX SX.
PrOdUCtS ar° C0E1Petitive, export
'
Q: In 1981 the investment in capital construction and orders
for heavy
industrial products were drastically cut. Do you think this will
cause a cutback in production?
A. Only temporary. It is inportant to
grasp the essentials in order
to nove ahead. The primary problem in 1981
S?! was to stabilize the
economy. Curtailment of capital construction,. reduction of expenditures,
increased production ofc:
consumer goods, withdrawal of banknotes from
circulatioh, and reduction
■on of financial deficits were all aimed at
solving this problem..
hesu.its arc already apparent.
problems ofa^fcHorities had already taken notice of some resulting
Construction of
of =«»C onsInsoplS
-1 been postponed
oriented to serve, the technological renovation Heavy industry will be
existing enterprises,
Therefore, mworking out the 1982 plan, wo will oftake
into account both
capital construction and technological
renovation.
Production
task for
heavy Industry will be increased to some extent.
^at iS to Say, weiiidiii::^
Qo The Central Government has called on Shanghai to pass its experi—
oncos on to the interior and to support others’ econonic construction,
What do you think of this proposal?
provincesaSdCcitios
to haVe economic co-operation with other
cities. In this regard wo have sone positive and
negative experiences to learn from.
Jianjfau
ssfr
nothnrl n-f 4--^^
1 3jlaIlellai sot UP jointly operated factories with
parviOo,
of them were handed over to the locli ties.
i//e aid not aaopt a
♦
(105)
er>
Bos“ning ^Offl 1979, wo decided to utilze the nothod of economic
co-operation. Shanghai dispatched technicians, skilled workers and
uanagenal personnel to other provinces and cities to help the loSi
exponsesSofXsC'CW<1UeS
iaPr0Ve Qana^ent and efficiency. The
heln
The .1+ personnel wore covered by factories which received
Help. The results were satisfactory#
prises^ith^Shon^Z1?008
c^tios hoP° to set up igiintly owned entcrP^iseo with Shanghai or turn their factories into branch factories
of Shanghai oonpanies, using Shanghai’s trade narks. This creates son
1
cy Proolens such, as the co-ordination of finances and fair distri
uXSO X £ ■ i9 srPp U 10“ily ™
Suoi. jotat
have to loS of Er th
UP
by SteP bGCaUS0 Sh^ai enterprises
SerXEE
0TO tcctooloSical transformation first,
hevertheloss, economic co-operation is correct and we are roinr to
improve work with other provinces and cities.
&
6
SOURCE:
Beijing Review, Uo. 1 January 4, 1982. Rase ITo. 19-2?.
*************
(For Ih-ivate Circulation)
WHY
SPECIAL
ECONOMIC
ZONES ?
Why does China want to sot-up special econonic zones'?
nX^Isn^^his11
the investnents theyma c. isn t this exploitation on Chinese Soil ?
forthrr°LiZti°^of°thrfoiT^x
haz°-be!n ‘,takcn
by the
tation of special policies and adoption^f ^f
?h°SG includc
^t.,
implomenGuangdong and Fujian provings in ccononic
“ COastal
The sotting up of special ocohonic -one- a "a n?S
Foreign countries,
the use- of foreign capital and irroort of
ado-?l°n of an opon-docr policy,
experience as well as the trainin- of
Van,Cod techliology and managerial
ing the pace of the uodo^StoU!
“
at ^icken-
Shoizheny Shuha^and sCatou^rSn^^^^H
in.four P^-ces, i.c.,
areas will be designated for the nurnoso"
*lanen ln
where special
econonic zone is in the Shnknn a?
4-’ ^°r lnSbancc> tlle Shenzhen special
?ilcs fron.Xian^aS S^SS). SndJn/ff^^ Cit?’ *b0Ut 20 nautical
August 1979,and will cover 527 6 soua3 Ml
SP10Cial ZOn° beffan in
square kilometres when completed.
In those special economic zones forei/m firns onn
+1 •
(ling facto ries
in joint ventures
participate
the necessary
provided mth
nt
accorded, preferential treatment bv thn
government. Whn«
I»;
” 1. 4-T.
tho chxne.e G0vo„nent p„to=ts tbdr Xts, So plocal
t()flt3
and other legitimate rights
and interests, theyihavo to abide by the la«s
and decrees of the
-j country.
“ir?”2
°“°y “ uil-
£a“th“
zir“')b-,
"u"b8
Regulations governing the setting up
of special economic zones were promulgatod by the Gucn^dong provincial people's
government last ■
ample scope for the foreign businessmen's activities, withyear. They give a
and stable locations
>
^™teede Preferential treatment j necessary conditions
with regard to the
will bo given them
addition, their “inport of goods an^the entiy^d
currency control and income tax. In
"-”3 departure of personnel
nutual bZofi^Si^followed1’^ a°*ivities’ *ho principle'of
businessnen making invcsSnts
tho.casc of special economic equality and
zones. Foreign
allowed to get a^ea^^bS^o^t^tr^f S'3
“
tation. But with the socialist economy holdin- the T lndC+d 3
°f oxPloieconony m the special econonic
- 13 th doninant Position, the
is only a very j ‘
the kind of exploitation involvedzones
is nothi^td
8UPP1Gnent’ and
1 is nothing to be afraid
bpoaking of joint ventures i * “
with foreign capitalists fin 1921
:;_,7, when economic
construction in the Sovoit Union
even 150 pe/c^nt IT--—3 Carly stas°’ I^in“said:
not grudge him c __
"we shall
profits, provided the condition of our
workers is improved.'’
The preferential ■troatrient
’
given to foreign businessmen in the special econonic zones is based
—J on an overall ccunsidoration of the economic situation at
hone and abroad, It accords with the
- interests of China's socialist
construction.
SOURCE :
ISI DOCUMENTATION
—
-Econonic Editor
WZJTG DACHENG
Beijmg
Review No. 50.. March 25, 1981.
o—
CEA' TRE,P. BOX 4628s
BANGALORE-560 O46.
4
CHINA’S SPECIAL
(7O7Z:
ECONOMIC
ZONES
- Xu Dixin
The Chinese Government has set up four special
ee<,no„ic
e
neu are
f sh.en2fleni Zhuhai and Shantou at Suangdona
utncfCe
tke City af^dt.en of Fujian Pro-
Politically <» the special economic
basee on assurance of China's state sones are
and governing authority is"entirely' sovereignty
in China's
hands. Economically
Economically, they are as senttally
based on state
— -j c ap i t al i sm»
c Zones
tZSiTS »“ Stop's ZtTS lhave
hm been
ism •established
’tabldsw in about
about 75
some processing-exporting zones
h
^S0Ele
ro called
—s a
are
called free
free trading
trading zones,
vary between counSes Leeinl
tradinS ZOnes)’ Practices
delimits a special a-nn Secial economic zones arc set up when a country
lates various pre^entia^coX5°*®
GXemPtio“ °f ^sterns duty, it formu-
attract foreign invoqfnrQ +
4- °n^
?rovidGS Public facilities so as to
mainly for export' Insofar ° SG U+ ^ac^ories wilosc finished products are
problems
ari^o for those
S°Cial SystGE1S arG concerned, few
problems
ause
the arise
characteristics oJ such^on
UP !PeCial GConomic zoncs Re
ause the characteristics
development
of capitalism^
h
sssentially compatible with the
Some people wonder why China
a socialist country, has set up special zonoS
which permit the manoeuvre of*
capital. They ask: Concessions were
eliminated a long time ago, why xoreign
are <
" -3 ~ofe™ areas with foreign investment being
operated in the manner of concessions?
also want to know whether the*
four special economic sones represent a liiey
revival of the former conlesslcns!
situation10™^’
C°ncerns arc ovor-sinplified and s
superficial.. The
J nation's
poured into China. This was a result nf -i
/th contur^’ foreign capital
used'gunboat diplomacy* to innn^
imperialist powers which
upon 4ts state sovereLnU X f nr
011 China and infringed
China is not based on "unequal treaties
pf°SGntly bGinS invested in
state sovereignty. The specif nrn *
’ bUt °n th° assurance of China's
former concessions because authnrix°n;LC ZOT?aS d? n°i represent the revival of
Be they joint ventures with Chinos
°Ie^ then 1S en'tirely in China's hands,
special zones or enterprises ™ XX:
invosteentaup in the
capital, they must observe the ChinnioV013" by {°rei®n or ovcrsoas Chinese
Pay business and income taros
Government's decrees and regulations,
labour laws.
° according to provisions and abide by China's
NgjLigJ'QPgiig't with China's Socialist Econonic Sys ten
^'^8)
Although they represent a ninor change in state econonic policy, the special
econonic zones are not in basic conflict with China's socialist econonic systhe'eon e°onony m the special zones enconpasses the socialist state econony
the collective oconony and the individual econony, but state capitalisn has Z
the lion's share. Processing naterials for foreigA countries, conpensa^orv
trade, co-operative enterprises and joint ventures are all state capitalist
econonic activities. Strictly speaking, the enterprise run by foreign or
overseas Chinese capital constitute a kind of capitalist econony, but the
activities of such enterprises are subject to control and regulation by the
governnents of the special gones. As a result, they are special kinds of
capitalist enterprises. Lenin clearly said: "State capitAlisn is capitalisn
which we shall be able to restrict, the Units of which we shall bd able to
fix." This provides us with a theoretical explanation of tho nature of the
enterprises financed individually in tho special zones.
Sone people worry that the capitalists will exploit the surplus value of the
labourers. It should be adnitted that sone exploitation doeA exist in tho
AccordSg^oeChiL'sdridrlly finanCGd enterprises in the special zones,
financed bv fo±!n re^latlOns’ Joint ventures or enterprises individually
of Sofits“abroad
7 0Vcrseas 011111(330 capital can renit their share
provisions 2d wth ST
7
7
thcir inC°ne tax a0001^ to relevant
provisions and with the approval of the authorities concerned. The profits
renittod abroad and the profits retained for reinvostnent in the special
foreign 7°7ly repr^ent 1110 ^Plus value of the labourers. But allowing
of rodent’ 777 O^-uese capital to gain profits is, in a sense, a policy
Eieansdnf
a 7^
a SenS<3’ & ^olicy of gradually nationalizing the7
means of production of the exploiting classes at a certain price).
Shortly after the founding of the People's Republic the government adopted
a redenption policy towards the national bourgeoisie in order to win its
77P7a7°n: K°W W? arC enPloyinS a redenption policy to win the co-opera
tion of foreign and overseas Chinese capital. This is necessary for the
dcvelopnent of the econonies of the special zones.
One ox tne characteristics of special zone econonies is the fact that they
open the door to foreign countries. Take Shenzhen and Zhuhai for osanple,
their econonic ties with Xianggang (Hongkong) and Aonen (Macao) are nuch
closer.than with the interior.This situation nay result in the close rela
tionship and nutual-effeet between the role of regulating production accord
ing to narket denands and the narket fluctuations of Xianggang and Aonen.
Within the special zones, it cannot be said that the regulation of production
by state planning does not exist does not function. However, if regulation of
production by planning is nade to cover too large an area, if it becones the
nam body of the oconony of the special zones, then it will be disadvanta
geous to aosorbing foreign capital and developing the econonies of the
special zones.
Special Zones’ Functions
Because the special econonic zones in Guangdong and Fujian Provinces have only
been established for a short periodcf tine, their role has not been brought
inro luily play. The following points address the concerns nost freauentlv
expressed regarding their operation.
H
\ I
< 109)
*They serve as bridges for introducing foreia-n
+
i
and oquipnent and as -c-laggnAo
j£
in the joint ventures i '
~
zones, we can learn the latest
management.
techniques and scientific nethods of
o^ign capital, advanced technology
and nanasonont, it is inporativo“o
'
‘
ween- trades
and -Ithin a oantam ti™ to
e“t“’1'ls0 Pfoanctlon ar’
J'-*™’ b“‘-
of the special
coTition
it is possible "vtoto
to
regarding the rosutotion i
the quality of goods/
■ , davatop .a, p„toci.
a"'*0
*It is possible to absorb
.
.also possible to transfer CpartdoTS° fJOmrtS °f foroi^ exchange
_ , It is
ment through the r
’ ■technology and equip
enterprises there.
od and set up now
*The country’s
XXEK ?“ f0"0 “ aaportoantal units '
tural reform and
economic strucaeoo“to° t
J0’'”1”8 11,0 1”' of
andin ths
of production according to market demands.
- -—J nogcutation
By developing the economies of
■many young people Waiting fof
^®2i®J2^2_of^up£l®o5t_to_the
•
t
“ iS
possible to employ
^voioprent
o^Qiing^ SoeialijtJEconoigr
Devcloptent
of China'
ing o^'the^ZoSe'sXublic^to^s^'rjp^p
necessary none0 cS
than ec<
JO years
£°Un<i~
up spe cial econonic
zones signify that China is s
understandable,
but unwarranted,
Since its establishment, New China
s^r^akle, but.
SSiSrx^o:^ —
fields of work, including
•
'1 rG<^ Brilliant achievements in manv
tortuous poth/ciXed X“ho Xr?v
“ has “1“ t'aroXT
°f production is stm rath^ tw iK p
^tionS’ 0111110 ’ level
with the requirements of modern! J/fi rn i^3
technology are incompatible
its policy of self-reliance in nrnn
driVG• Furthermore, while implennnting
co-operation with capitalise FootQ°nl?i construction, China does not exclude
econonies of the special zones \
that throuSh developing the
overseas Chinese capital as well
able to nake use of foreign and
socialist econony. Economic cSruUSt?r,C^italie; ’ *° ^elop China's
become a special forn nf
i
n tne special zones will possibly
economy. The total econonios^f“tht0.
deVcloPncnt of Nina's socialist
snail portion of the national <
SPG?ta11 zones wil1 only constitute a very
continue to doninate, the role of S’J
T*1 the sociali^ economy will
C, The 4.olc of the special zones nust not bo overlocked.
A_Plgnned_EconoSy_:_Policies_and_Mcasures
Xetoto‘T"t-°f?lle SP<SCli‘1
zones :
requires enphasis on the word
special . For instance, in openinp- the
door
to foreign countries, it is
XC??orsy S !inplify P^codurcs for entry (
and exmt and make things easy for
visitors.m tax rate, it is essential to give
preferential treatment to
(110)
iuported goods in custons duties. Tax exienptions for- sone goods are needed.
A portion of the profits gained by foreign financed enterprisesds allowed"
to be renitted abroad.
The -.essence of developing the special economic zones lies in the inport of
foreign capital; naking foreign capital servo China's socialist nodernization drive. Given tnis, the lives of the people residing in the special
zones are bound to change. Capitalist ideology is bound to increase. This
will require us to devote special attention to the ideological education of
people in the special zones. Of course, education and training in science
and. technology should not be neglected, cither.
The currency used in the special econonic zones is nainly Renninbi (people's
currency;, the use of foreign currencies is United to designated areas.
Renninbi represents the currency of the People's Republic of China, but in
view of the characteristics of special econonic zones, it nay prove necess
ary to issue different currency for then. This is a very complicated problem
which calls for further study.
It would be inpossible for the special zones
zones to
to develop
develop without
without the
the support
support
of China s interior regions. Only when they operate in co-operation with
the interior can the special zones gain necessary naterials. Of course
such co-operation is based on nutual benefit. And it can be successful only
wnen the special zones produce connd&Lties needed by interior. This co-opera
tion must be carried out in a planned way.
SOURCE: Beijing Review, No. 50
December 14, 1981
(for private circulation only)
ISI DOCUMENTATION CENTRE,
P •BOX - 4628,
BANGALORE - 560 046.
(111)
GRO VTH^OFTHjt IWLTINATI01ULS
by Teng Woiza o and Jiang Zheshi
Economists in China look
10°k at
at the
thG
economy ?
multinationals, the
Institute of Economics at Nankai University and Jiang Zheshi,
lecturer m the same institute
gives some answer to this
institute'gives
questions
lhe article has appeared in ’’Beijing Review” ,No 7, February 16,
1981, P*
p. 16 to 20.
TRANSMATIOMLL, Multinational, or international corporations-these
are all different names for the same thing, Generally speaking, they
are a form of Internationa monopoly organization with branches and aff
iliates in many countries and regions established through direct
investments by an enterprise owned or controlled by certain financial
groups of one of the major capitalist countries0 Multinational corpor
ations produce, sell and engage in other business operations on an
international scale, and practise a "global strategy" to grab super
profits through monopolies they have created for themselves.
Multinationals are a product of nomopoly capitalism developed
to a high degree. Zfter World War II, multinationals, especially
those of the ^nited'States,,grow rapidly. To an incroasing degree,
they have dominated.production, distribution, trade, and finance in
the capitalist world and become a, powerful force internationally.
Tliis world1 s two biggest multinationals, Exxon and General Motors,
are said to have in 1979 a turnover of 79,100 million and 66,500 million
U.S..dollars respectively and net profits of 4,300 million and 2,900
million U.S. dollars and employ 159,000 and 853,000 and people. Although
domestic investments fell off on many occasions in major capitalist
countries, the foreign investments of transnationals rose steadily.
While vhe multinationals invest chofly in the developed countries,
the developing countries are their main source of super profits. The
rate of profit from direct investments by the multinationals in the
developed countries was 11 per cent in 1977, while in developing coun
tries it was 23 per cent.
In the last defiade some new trends have been observed with regard
to the multinationals, chiefly as below:
* The uneven political and economic development of capitalism in
different countries is reflected in the uneven external expansion of
their respective multinationals. In recent years, overseas expansion
on multinationals based in the United States, Britain and France
have slowed.down, while those of West Germany and Japan have speeded
up. .More significantly, West European and Japanese capital has been
flowing into the United States and the differential in direct invest
ments in each other between the former two and the latter has narrowed.
(112)
0 The proportion of investments by the multinationals in the
developing countries has dropped from some one-third to less than onefourth. Investments also tend to be concentrated in the oil-vproducing
count ries, the politically more stable and.economically better-off
developing countries, as well as certain tax havens such as the Bahama,
Barbados, Bermuda, Cayman islands, the Jutch Antilles and Panama.
o
Multinationals now operate more flexibly in the developing countries * To retain control of the enterprises in the developing countries
to reap big profits as before, some no longer rely on their majority
shares but go through other channels, such as management, technology and
sales.
0
In order to hedge ri^ks and improve their competitiveness in
a world of ever-changing techniques, multinationals frequently bring
together enterprises in various countries producting different products
or offering different services to form international conglomerates
and diversify production.
BEHIND RAPID RISE OF WLTIMTIO^
There are political and economic causes behind the rapid and
extensive development of the multinationals after World War II.
I
I
I
I
I
<
<»
1. Fundamentally, it is the result of an acceleration of capital
accumulation and concentration, a greater degree of nomipoly and growing
’’surplus” capital. The big monopolies possessing advanced technology
and management skills and tremendous amounts of capital are exporting
capital to seek monopoly profits. The United States is illustrative.
After World War II, the big monopolies grew steadily bigger and their
domination of major industrial sectors and the national economy as a
whole was vastly strenghened. Nov; a few companies control practically
the whole U.S, market for motor vehicles, computers, aeroplanes, iron
and steel, oil, elect ricity and chemicals. Since the market is
dominated by a few equally powerful oligarchies, it becomes increasingly
more difficult for one oligarchy to capture a larger share of the market.
In a word, as production more and more overtakes consumer ability to
pay in a particular sector, the area for profitable investments inside
the country shrinks. This leads to a relative surplus of capital which
leaves the monopolies no way out but to export their capital. Consequen
tly, countries and regions with cheap raw materials and cheap labour
and large potential markets become the nautural and chief targets of
investments for the multinationals.
Furthermore, to maintain their dominance, the industrial oligarchies
adopt the strategy of ’’investing to stop others from investing” which
in turn accelerates their expansion abroad. According to a Ha rvard
University study, this is the way the monopolies operate: When a now
product appears, they manufacture it at homo to seize control of the
home market and export it to open up foreign markets. When the new
product gradually becomes perfect and the market abroad grows largdr
and the technology becomes more widely known, they start building
factories in other countries where the income and technical levels and
comparatively high, the labour costs are fairly low and there is demand,
for a similar product, so as to prevent overseas competitors from copy
ing then and to maintain control of the foreign market. Then, when the
now product reaches the stage of standardization and competition is
manifested mainly in prices, its production is shifted to areas of
aboundant cheap labour.
2. The technical revolution has swiftly developed the productive
forces, bringing about a greater degree of socialization of production
and calling for the internationalization of production and capital.
While automation demands rigid quality of products, it also turns out
a greater diversity of products• This requires the nomopoly enterprises
to specialize production, to research and introduce various special
<»
o
(113)
equipment and technologies,
S?rry °Ut “rcater specialization and coordination anonr _on13_ "
cheir aopartments and oven to go outside their countries
to organize large-scale co ordination of production between their
branches and affiliates,
■ Oaly it7 thiS Way can they imporve productivity
and lower costs, rpKn-o
!
nal specialization S
and XXnatXltl“tl°”“1" ha” tCt“ t0 Ihtoaati-
roaniS’teXoX^SX’Xo^X10??10"! “‘a bm.port to vastly
countries to create f acourabJ n rn
of production and oaplte”
y shortend distances between
*>«> mtornationallcation
3.
‘ •
assistance
fron state monopoly capitalism.
After World Wa rll,
the developed capitalist> c.
countries encouraged and urged- their multinationals to expand abroad by various
various ways and moans
These govompents
XS•ViXS’J?. ‘J0.,0*”1”8 “* otLXXXr;;;
“qtit- ■nri^+'i)
°
i-ors and set up "stateexpanded eteoad.
abroad. They funded
the prlrate“> nononolv * ' c?nipfJ1^GS."which
h1'^
Of ’*»“,aGa
-™nt to become nJre
competitive in the international j
invested heavily in^c^Z^rZd the
T Sh^ld°reti th°
and
and the development
j *
logy on behalf of theresearch
nultSagonSs.
°of SCienC
°
teChJ10“
They granted them preferential
financial aid and encouraged tjen to
•nor
4
4-+
•
i.
rG
-tovest
in foreign countries by
dofornng, reducing or remitting tax on their ovo-seas
profits. They also
passed legislation to guarantee foreign investments ofthe multinationals.
They supported them in their business c
j operations abroad through diplomacy
fnnoT +lle State
capital*abroad
—.._d as aici to other countries
Gdid forcing the recipient ccountry to accept
all sorts of conditions.
which, created a, f scour able
M
vif
1
t
U0Sp
^
Gre
f
or
the multinationals to invest
there. They also set up
, P various mtomational co-oporation, created
conditions for the- multinationals
‘ n+'."-^.'to 0XPand abroad. These measures
have greatly spurred +in
tne multinationals of the developed capitalist
countries to expand into
--j other countries.
Zfrican^and^I
of.vieorious uationaj.-liberation movements in Asian
independent one after^X^SerSoSd^r/g dependencies became ’
capitalist countries have maintained their nolitfon7S^ devel°Pcd
ence in these countries through tSir XiSi^ ^,
economic influ
sone countries and regions thr.
1
investments. In
nents of neocolonialist policies ’ iVXt2?13- actua^ly decane instruby the multinationals in the drirnin ■
? pointed out that investment
nature fron their invosUmet
S
°ountrios is. different in
investments are usually one-way whil^in0?^ °°“-trles- In tho former
two-way. The nultinafinmic
i.? ln the lai;'fcGr investments aro
mios of these newly indor ? ^ocwentiy exercise control over the odonocf their pressing deX
Ly takinS advantage
and t heir lack ^f fund2^^°P?hclr industries and agriculture
and using the recipients! chodirect investments
to undermine recipient countri^1aoour a\d securing cheap raw materials
variety. 0„o ctX ZS teTS
aud political So
to change this situation and Pi -h+ a
intomatlonal ooomSXS.
+ '■“’■" I'!-!’..-.- countries today is
<■* « ■>«
jESm ,R0.yL.S. TEE WORLD EC0W7Y
management and in their^^n^o^exn
their flexible strategy in
duction, sales and technologies"’ nultinnt?’
theTr aonoPoly of P^oimportant role today ir
A \ multinational corporations play an
loan., as JoUo,,s:
iovolopnont of tho uorld ooonony. SprclT1?q pr ocess of
of capifal
capital is spoodocl "
of
Phoduotloa aal the aooUEUlatlon
operations and btdnX’jXoSon ?n tX®
MT capital
«Mor the control of a onail „ml>„ ‘f bj, XgSlinaS!
darlos, they nood^rsaton^oontt-’l11'3
cross national bouata ho w Xr XX. capitr.i.
TX arT^d"”11’3 «tcrprls.. to
(114)
In establishing organizations abroad, sone multinationals sot up branches,
but most of them take over existing enterprises, swallowing up the
production, sales and research facilities of the host countries, and
then reorganizing, expanding and developing them. The larger the
multinationals, the more they resort to this form of expansion. After
the Second World War, the big U.S, monopolies made inroads into Europe
mainly on the strengh of their aboundr-nt capital, now technology and
the strength of the U-S. dollar. U.S. dollars wore used to buy up
enterprises in Europe to swiftly establish their own networks and
intensify the dominance of U.S. monopols’ capital in the world. This
inva sion11 of the U.S. multinational corporations roused the opposition
of the monopoly capitalists of Western Europe. When they gradually
recovered their economic strength they formed merger, which were sup
ported if not organized by their national governments. Many formed
corporations with branches abroad, amalgamated or combined to improve
their position to challenge the U.S. multinationals.
2. In a certain period and to a ceitain degree, multinational
operations promoted the development of productive forces in certain
regions of the capitalist world. In the early post-war period, when
the economies of Western Europe and Japan were revovering, investments
by U.S, multinational corporations in these areas objectively played
an important role. Hew industries in Western Europe, such as the petro
chemical, synthetic fibre, synthetic rubber industry and so on, wore
ail.first sot up with American capital. Over the past devado, the
activities of the multinationals have had a lot to do w ith the economic
development of Brazil, Mexico, and ca pitalist countries in the Far
East, including members of the Association of Southeast Asian nations.
The experience of many developing countries proces that so long as a
policy of independence is maintained and the right stops and measures
are taken, the import of transnationalca pital and technology in a
planned way, step by step, selectively and within limits, can play
a positive role in the economic growth of developing countries.
However, the activities of the transnationals bring in their wake
a rash of problems. In Western Europe, some of the most advanced
branches of industry such as the electronic computer industry such as
the electronic computer industry arc controlled by U.S. captial, which
gravely affects the development of these industries in that part of the
world. And since the U!,S, multinational corporations occup y a
dominant position in the economies of West European countiies, the
economic developments in the United States and changes in management
strategy of its corporations directly influency economic developments
in Western EQropee
developing countries, the operations of the mul
tinationals have made them more economically dependent. Certain coun
tries (particularly the smaller countries), whose enterprises rely on
export processing zones, become merely the processing workshops of
foregin multinational corporations, places suppluing cheap labour and
resources. If an independent policy cannot bo maintained and no
proper management measures taken, the direction of economic development
of $hese countries can be manipulated by the multinational corporations.
3. The growth of the multinationals had an immense impact on
international trade.
Post-war capitalist international trade developed very rapidly
and its speed overtood industry and agriculture. The volume in trade
if inuustrial products to be processed between the developed countries
increased much more rapidly. One major reason was the greater siae of
the multinationals, As they built now plants, enlarged facilities and
merged and reorganized, they sent out machinery and various kinds of
production equipment to their subsidiaries and affiliates. Sometimes
they oven export certain raw materials’ and semi -finished goods to
boost exports from the homo country. It is the common practice of the
multinationals to divide work among their subsidiaries and affiliates
and assemble the parts and orientate sales and this requires moving parts
and components, semi—finished and finished products around thd different
(115)
countries, thus enlarging the volune of trade of the capitalist world.
The result is that the domestic and foreign trade of the multinational
corporations occupy a very large segment of both the total world trade
and the total import—export t±ade of any one country®
Their dominance of world tra.de has allowed the multinationals a
role in spurring the growth of international commodity exchange and,
at the sane tine, influenced changes in the strudturc and flow of world
trade, particularly influencing the economy and trade of the countries
in which the subsidiaries of the multinationals arc based. Here is
an illustration. As the multinational corporations plan their import
export trade according to their own global strategy and the countries
where these corporations are based cannot intervene in theirtrade
orientation and quantity of product, not oven subjecting to the regula
tory measures of the exchange rate of those countries, they frequently
directly hurt the interests of the countries where they arc based. To
evade taxes, pull out capital and adjust the rate of profits of their
subsisdiaries as well as to avoid fluctuations of remittance rates and
othe risks, the multinationals artificially, manipulate prices in their
internal trade to the loss of the government of the host countries.
4. With plenty of capital and an immense flow of funds they
influence the stability of the international money market.
d
■3
J
)
4
J
4
D
d)
■i
?
D
1
=1
□
2
The multinationals, especially U.S. multinationals and U.S. .multi
national banks in Europe, always have in hand huge sums of bank deposits
and liquid assets. In the early 1970s, short-term liquid assets,
hold, by the multinationals all over the world came to more than 260,000
million U.S, dollars, witji the U.S.mulJins^ionals holding the most.
They are a primary source of the Eurodollar. A huge amount of capital
is constantly oeing transferred between the head offices and their
subsidiaries and also among the subsidiaries themselves because of
business operations. This internal flow of funds among tho subsidiaries
and is directed and adjusted by the head offices in pursuit of profits
around the world, and state governments have no way to control this.
This internal constant flow of short-term funds between countries is
the main source of funds international spocultave a ctivities frequently
disrupting the international balance of revenue and expenditure, the
stability of the exchange rate and effectiveness of the credit policy
of the host countries. In recent years, the multinationals have used
txie instability of the capitalist monetary system and thd many crises
of the U.S, dollar to engage in large-scale currency speculation and to
avoid losses because of rate fluctuations through exploiting changes in
the exchange rate and the interest rate and the different methods of
monetary control of the various countries. This has caused grave making
state governments devaluate or revaluate their currency or clamping down
tighter foreign exchange controls.
In a word the operations of the multinational corporations have brou
ght the degree of socialization of production beyond national borders
to the stage of internationalization of production. But the means of
production are still provately owned and the trend to concentrate
continues unabated. This will inevitably aggravate the basic contra
dictions of the capitalist world. The struggle to control and against
control among the developed capitalist countries grows more acute.
While utilizing the funds and technology of tho multinational corpor
ations to develop production, the developing countries are also doing
their best to safeguard state soverignty, adopting planned controls over
the activities of these multinationals and struggling to establish a new
international economic order based, on equality and mutual benefit.
Today, the scope of exploitation of the multinational corporations is
of an unprecedented scale; not only are the workers and labouring
people of the developing countries and of their own countries being
directly exploited, but those of other .developed industrial countries
as well.. The sharpening of the labour capital contradiction causedby
the multinationals and the proliferation of multinational trade unions
within the respective corporations will ha ve a profound effect on the
development of the international workup movement.
CHILU EXPANDS FOREIGN TRADE AND
ECO NOMIO RELATIONS
(116)
China will continue to follow an "open-door”
policy and expand economic^ trade and technical co-operation with other countries on
the principle of equality and mutural
bene fi t.
A Spokesman of the Administrative Commission on Import and Export
Affairs earlier this month spoke about China’s trade and economic relations
witxi other countries during th.e period of economic readjustment. He
pointed out that there was a healthy development in trade relations and
economic co-operation with other countries in 1980.
Foreign trade and economic relations will grow in general
the on-going economic readjustment. Trading in the world market and
economic and technical co-operation with other countries will improve
China’s production capacity, enliven the home market, strenthen weak
links in the national economy and thus improve the -country’s decree of
self reliance.
TECHNICAL CO-OPEAATION:
-------------------------------------- i-s
Economic and technical co-operation last year focused on the development
oi energy resources such as coal, petroleum and power, the modernization
oi rail transport and port construction and the revamping* of existing
enterprises.
Contracts woxe
We_.e signea
oerween China and
signed between
anc French and Japanese oil corpora
tions for joint exploration of off-shore oil in the Bohai Sea and the
Beiou Wan Gulf. Drilling has already started.
Technical imports were concentrated on indroducin:, key technology in
the future will be coordinated with revamping of old enterprises. This
will be a long-term policy.
FOREIGN LOAN ABE JOINT VENTURES:
In economic co-operation, C*
‘
China
last year accepted both government and nongovernmental foreign loans, based on the ability to repay. Included
were a low-interest loan from the government of Japan and a long-term
interest-free loan from the government of Belgium.
Both the International Monetary Fund and the World Bank last year restored
hina’s representation and later sent delegations to China to discuss the ;
prospects of economic and technical co-operation. More delegations are
coming this year for futher tcchinic .1 studies with the view of brincing
about early results.
*
Joint jentures, which have attracted .-rcat intrest in international trade
and financial ci.cles, continued to build up momentum in the latter half of
980^ More than >00 joint venture agreements with foreign firms were
ratiiied by Chinese central and local governments. These include joint
enterprises and items of Co-operative producxtien, mainly in light industry,
bextifes, electronics and machine building, as well as hotels. Twenty joint
ventures will be set up abroad.
-■m
(117)
tan i„ aoneenmns Joi nt T„tra>
o” i1 «”*■’ t°». tor the dnoo.e tan
la-, ..e BeUinf
appear in Beiiinp'i
relevant regulations will
be formulated to defmo more cle/i*6/regulat:Lons and measures will
foreign esrchange control.
'
G laWS Of taxations» loans and
^STRUCTURING JOREIQN TRADE
The'current restructuring of China's ■"
foreign trade is intended to spur
°r ahl“'’ f0”1s» trade- and
<
1 economic
relations underr .a
eosulaUoL. 7 ’
o»er-oent„llted
---- 1 management and outdated
Readjustment last year focused mainly c
On^v^-nS local departments and
■ fOreign
^change
—cAv/xxcixi^e ,
including the establishment
trade ccZpeSitL/Jn/SjL/ZS/nih^Vb8 f°Unding °f
opening more channels to Xeing/rade,
—
Fujian Provences Snecini
’ Shanghal and Guangdong and
004.14! d«4do“s «»d SL P^L",aT"
be8" •aop‘ea 1»
are being set up.
ludian Provinces where special economic Zones
was less thnn^i Sh°W^d “
r’fJhed 54 600 «??"“ pl““a-
'
increase and the trade J f/
ol™ « Import
p anne . Tot .I ’
value
of import and export in 1980
l yuan, an increase of 20.7 per cent over 1 979.
Cent‘ Last year the '
proportion of indust^ialX"^//??0/??
2 a”a“t_r“1
i» ‘»‘oi roi™; of export continued to
-- 1 a corresponding drop in farm and sideline products.
More goods from remote areas and areas futher
inland
----—L were exported,too.
inland area?
opened to handle foreign trade/
' ’
° th
ChangJlanS River were
China had.trade relations with more than 1 70 <
and
regions last
y ar and import and export commodities exceededcountries
50,000 in
variety.
to
of export
and improve packaging to meet world market
transportation, port’Sh;- a^st^raT "
SSSXXSIJSL““i"?™'??"* ”ih b«
* * *
* *
**********
*
SOURCE: Beijing Review, NO 8, February 2J
, 1981. pp. 20-21.
I
ISBOBSIgg-gOR^FOM^^RURA^ECOHOMIC
( 118)
SYSTEM
Historical experence proves that the
collective economy in Chinese villaaes is
basically successful, but problems remain.
At present several forms of the production
responsibility system have been implemented
all over China and are being developed into
an all-round direction of the reform process
zs
^1'nvesiiCa,te and experiment with diverse
methods so as to find socialist production
forms and to formulate systems of socialist
economic management best suited to Chinese
villages.
- Du Runsheng
The Party Central Comittee's ■
policies, pursued for the past
-^iSS^d^TS^as^Xe S 1Cd t0 " better ^al si^tion-th^
-i we
not
the better.
-iffaculties, the peasants' livelihood is turning for
systeLTantan-roi°d1refornPofnthtati0ni°f
Production responsibility
naterial interests in order to sS^lX their^^hXsn f±7^ ’
enthusiasn for work.
the^oSonSSSity^ysS^whn^olving^he
6^
.Oi^r task SobJl^oFc^od^v^^
at the nonent is
tli° o°’"b!)'’ia'1 “>a«»^uo^p
socio-^o™™?
1?ave to ■tacklo the problem of perfecting the overall
nomic structure and superstructure in the rural areas.
HISTORICAL AND PRESENT SITUATION
19r?
- .
?h°
transformation of agriculture in
In 1958, rural people's communes were set up all over the country.
liW OhV*
beC0E1G necossary to reconsider: In a vast country
like China is success possible if we allow only one form of rural
formyls
are thG advantaScs “d disadvantages of this economic
form? Is reform necessary? How should reform be carried out?
ou^ approaches when we first introduced the production
shed i^th^SO^3^ ^ricuitura! producers' co-operatives wore eetabli-
(119)
t
The transition period for transforming elementary co-ops into
ac-vancod agricultural producers’ co-oporations was expected to last 15-20
years. But, within throe years the transition was completed and the advanced
form was adopted all over China.
advanced
Only one year after the advanced co-ops
<
x wore formed
2____ 2 and, prior to their
consolidation, they wore reorganized into people’s communes,
------ 4 X. ’’communist
■wind was stirred up.
^hyeforo’ t]p party Central Cmnnittoc and Comrade Mao Zedong resolutely
gurded the peasants to retrat to a system of "three level ownershop with the
£lOC}U^tlOn/ear\aS, .che basxs» "
ownership at the commune, production
ngade and production team levels, with the production team as the basic
accounting unit.
h review of
our experience over the past 30 years reveals that:
• hj. ■E!ro“ a national perspective, it is correct and successful for China's
agriculture to take the path of socialism, to have public land ownership and
C3?0PS
c°-°Pyativo ^asis. We have basically solved the^protelon
?-a P?Pulatyn of 1 ,000 mllion, and have provided the basis for
industrialization. More
Moro significantly, we ended the plunder of land by the
of^'vninhot?™
e
°ne °on
n f
°r Wnsands
gone
for
thousands of years, and abolished the system
C -L
JL JJ J. O JL v cl p 1011 <
Currently, about one-third of the production teams are well-run.
At present-^price levels, a peasant needs an annual income of 120 yuan to
m some places they earn 400-500 yuan or even 1 ,000 yuan.
thr Liuzhu“s Production Brigade of Qiliying Commune in Honan
I™ ™ f°r
coa^ne member’s annual income from the collective
cone tn
clpGncs ’Gr welfare facilities and recreational entertainment
come to 6? yuan per capita, and other subsidies add 50 yuan per person.
aec.ing up to a total of 58? yuan per year.
->f a private courtyard.
Some even have TV sots, electric fans and.Sther
2* p _P J-1 £1X1C O S #
Production 'brigades or toans like this have worked collectively and
have already acquired or developed machinary, chenical fertilizers, insect
icide and irrigation systems. In addition to farn production, they engage in
sideline occupations and industry, which forra the enteryo of a conprchensive
new strucure for the rural economy. An individual eononony is certainly incapable of such large-scale projects.
3. .
.......third of the production teams are not as wealthy as those
/mother
in Qiliying, but if they work hard,r fit is within
’7
their capability to catch
up.
Those teams have not.yet diversified
-1 production, but they possess
certain fixed assets which provide the basis
-- 5 for farm modernization, such
as farm machinery and irrigation systems as well as some industry.
The ^Q^go^annual
average annual pcr-capita income for peasants in the remaing;
4-v
tijirc. of cho prodiction teams is under 60 yuan, not enough to support
themselves.
They, must rely on {sideline
* ’ " ‘
occupations, on government relief or on
frugality to make ends moot. That i_~
means they are free from exploitation
but have not yet shaken off poverty, So the superiority of the collective
economy has not been fully displayed.
• Returns from peasants’ private plots have always been comparatively
nigh. Investigations show that in parts of Guangdong Province, the
private plots can produce six crops a year. The return on private plots is
several times higher than on collective ones.
(120)
Tliis leads people tl wonder if pea;.nts can possibly give equal
consideration to collective and private production. The present system
of assigning output quotas for individual labourers on collective tasks
has, to a certain extent, resulted in their equal attention to both Idmds
of production.
Thus, as wo said earlier, the collective economy is for the most
part successful but still has sone problems.
The trouble lies in the incorrect integration of collective and
individual interests, such that individual interests arc- often neglected.
There is no longer exploitation under the system of public owner
ship. However, if the moans of production and the fruits of labour
are not fully at the disposal of the labourers, they will feel that
they are not working for themselves.
Therefore, to stimulate the workers1 incentive to produce, vie
we need
a form of management which puts the labourers in charge of the means of
production and the fruits of labour, provided it also adheres to the
collective economy.
PRODUCTION RESPONSIBILITY SYSTEM
Marxism teaches us that no new relations of production can be
successfully established unless the productive forces suited to them
have developed to their fullest extent. Therefore it is necessary to
choose relations of produc tion that suit the current productive forces
in the light of the differences in the economic development in various
regions.
This is a ’task
*
that should be tackled consistently and earnestly.
Pursuing the form ofI ""large in size and collective in nature" while
neglecting the level of development of productive forces would only
obstruct their development.
In Yunnan Province, there is a national minority still in the
stage of primitive communalism, in which private ownership has not
yet come into being. A tribal chef leads his people to work together
to perform simple tasks and cultivate the land, Crops are divided
equally among all.
Soon afterliberation, it was decided to give the tribe and pernit
them to work according to their own primitive practices for several
years, and to work towards a mutual-aid organizational form.
But when co-ops and then people’s communes wore sot up throughout
China, this primitive commune was net exempt. Even though the changes
were too sudden and were inappropriate for them, the tribal people
accepted the people’s commune. Why? Because they were used to working
together and distributingcrops in a unified way.
When the co-op and subsequently the commune were formed, the tribe’s
organization remained the same, with the tribal chief assuming the title
cf production team leader.
To this day their economy is virtually unchanged. I visited
them and found, that with the exception of a pot and a knife which they
bought from the market, all of their daily srticles wore home-made,
including cooking ladles, bamboo water pails and cotton cloth.
Since they have no commodities, exchange is undeveloped and comm
odity exchange is considered shameful. The present form of organization
has postponed the disintegration of the tribe’s natural economy.
(121)
actunntSh!Xt?PleiSl'0WS that clevelopaent of predictive forces can
to then
.
talvObvUSD°Wd-lf thci^°latienc of Production are not suited
Only ?y speeding up uho growth of productive forces and
developing comidity production can socialism be buiP X
much higher
In such areas it is
-j correspond to the level of
"nd
” tl“‘
orUiMl
--- j forces will expand
and. develop, and tae natural
economy will eventually be transformed
into a commodity economy.
In this way production can <
develop along specialized lines but
nonetheless on a socialized basis,
with thGiconf^a’biVC t0 ensuro that individual interests
are guaranteed.
on the basis of developing individual
i +u“’J 3,11(1 the inciividual are responsible for
commodity exchange, both are rewarded
iorces m economic
and a°™io^1oo”por«tlOf™P
■»«>
OCtlve
a commodity economy as i.
Throughout the country the
?at ls P„d„„sr
percentage of grajn that can be sold r- --- ■
tnat is produced) is only 15 per gent. ""
be^sJab^hed^o 31
^13371? 10W
^ relations"
sxuxlarly
low.* .ociali
ocialist
relations of
of production cannot
--- j a cSmmoditv
commodity economy is fully developed.
no y unless
~ T,firuiy
«“■
Ulltx ixta. Mi .ot. to inpj”o oolloofirtS“n°f ““
fnT.„QT11f +?C°nt rural economic reforms have
engendered the following
torus of the responsibility system:
remunerations
economy, pro
task, such as
-- crop,
jobs or performing sercices^ 10103’ bulldlns houses, doing processing
Everyone works under i
ax.Unihcd nanaSenent, and each specialized task
is performed by a group, a family or l 1
an inaividual• Remuneration is
based on work accomplished-more work more
-- a pay, less work less pay,
In poorer areas wh^re commodity production is still rare, the form
of bao chan dao hu, or
quotas based on the household" has
been instituted. That is,Lxing
underoutput
the unified
---- 1 °fmanagement
production
team, each household is
th° taSks ofof adeduction
on a certain amount of
and, including rhe costs of production. The
produce is distributed centrally, with surplus produce retained by the
producer.
In some cases, un
”
undertho
unified nabagenent of the
production team,
each household retains
—J everything produced c„
* ’ land assigned to it
on
the
af ber paying taxes and contributing its share t lh
-o to the accumulation and
public welfare funds as a member of the collective,
----- r"
This form, known
as BZD JJ4N DAO HU, allows the households
5
greater
autonomy
and indepencence m management.
(122)
I found that in areas whore the two forms have been instituted,
production has increased by an average of .30 per cent. A few production
figures have doubled or even tripled.
Production teams in an intermediate state of development are expected
to assign output quotas to individual able-bodied labourers under the
unified administration of the production teams.
The difference between this form and BAO GAN DAO HU is that produ
ction team planning and management is under unified leadership, and
the portion of income from industry and sideline occupations is distri
buted in a unified way, as is income from agriculture.
^ll the above-mentioned forms together could be called ’’the contract
system according to production.” Besides, the peasants make other choices
with regard to the prodution responsibility system.
In short, diversified forms should be adopted while unified patterns
should be opposed. Our goal is to attain an economic co-operation which
displays the superiority of unified Management, can inspire the enthusi
asm of the individual, and combine unified leadership with the workers’
right to manage and distribute the fruits of their labour. This will
provide perpetual renewal of motivation for the forces developing the
rural economy.
SOCIALIST PATH UPHELD
Some say the form of BAO GAN DAO HU is good, and sone say it is
terrible. What arc the facts?
Do those peasants who favour this form tend to degiate from the
collective economy? In sone cases, yes. Once their initiative for
individual production is roused, there is a tendency to pull away from
the collective.
However, peasants of present-day China are no longer like the
peasants prior to liberation, not are they like the peasants of the 50s.
The majority of today’s peasants want to get rid of not the
socialist road, but rather the heavy burden of intolerable equalitaranism, undemocratic orders and the arbitrariness of a few, problems
left untacklod for many years.
In the poor districts, BAO GAN DAO HU has helped the peasants
eliminate these practices, which ife one reason it has been so wellreceived.
This form differs from the individual economy of the post-land
reform era, because the situation and conditions have changed. Obje
ctively there are more factors binding today’s economic forms to the
socialist path.
irst of all the leadership of the Party and the people’s demo
cratic dictatorship are actively guiding the peasants along the'path of
socialism.
Secondly, in the 50s the capitalist class was abolished as a class
so that now both our industry and commerce are socialist, as are our
banks which privide credit. In the countryside, the socialist economy
is in an absolutolydominant position, with a system of collective or
state-owned property that cannot be transferred or divided, like water
conservancy facilities and large-scale agricultural machinery.
Furthermore, the law stipulates that buying or selling of land is
forbidden, in order to restrict concentration of land as well as
polarization between rich and poor.
(
(123)
As a result, the
■
forn of ’’fixing output quotas for households” and
the forn of BAO GAM DAO KU resemble- neither
snail
. -- the
— —
- --- private econony
before liberation! nor that of the period after land reform and before
co-operation. Therefore these Uzo ferns are consistent with socialism
and remain a component part of the rural socialist structure.
Then what are the prospects for the development of these two forms?
After the problem of livelihood has been solved, peasants will ask for
further economic iiaprovenent. They will need new means of production:
chemical fertilizers, pesticides, machinery and irrigation facilities.
Contradictions will arise between production growth on the one
Hand and lack of capital and. individual nabagenont on the other. The
only way out will bo to pool capital and labour.
This can alrea,dy bo scon in villages in Anhui, Henan and Shandong,
where peasants have developed collective sideline occupations.
An advanced iforn of association will only appear when the commodity
econony has developed and conditions for specialization of labour have
matured.
By then, the associations will need to extend their work to specia
specia-
lized production and sercices, such as the associated production of
fruits, silk and tobacco, as well as pig-raising and chicken-breeding.
Techniques, supplies, marketing•and services will bo handled in a unified
way.
Eventually, such.organizations will evolve into a kind of associated
economic entity covering farming, manufacturing and connerce embracing
several regions.
In short, with the growth of productive forces, development of
commodity econony and the introduction of now technical equipnent, snail
production that is currently carried out under the system of BAO G-AN DAO
HU will be transformed into associated big production.
The transformation will be possible because of material conditions,
rather than the people’s will.
Sone hold that BAO DAO HU is the sole forn of the production
responsibility system and that it should be inplonented uniformly
in all areas.
•This is wrong, ^ly form of the xproduction
\ 11 responsibility system
will go through a process of initiation, growth and improvement, The
system of BAO G-AN’ DAO HU is no exception.
In the course of development, sone
e
peasants will increase their
incomes, sone will become ruch quickly,
■- while
while ssong, households short
of labour will make economic gains more slowly,►
ssistance must be
given to the latter.
t would be wrong to expect that everyone will achieve prosperity
at the sane pace, but taat does not moan wo will forgot the principle
of general prosper-ity in the long run.
While looking after the interests of the individual, we must
also consider the interests of the state and the collective.
hhile guaranteeing the state’s interests, we should turn to
economic measures and the law, such as the contracting system, to
solve.the problems of economic association between collective and
individals, and the sharing of rights and obligations.
(124)
The livelihood of the poorer fanilies who arc short of labour will
be improved by moans of taxation and through the social welfare
pension systems.
In the meantime, it is essential to educate the peasants that the
the
purpose of "fixing output quotas for households" is to develop production, increase income and strengthen the collective economy.
therefore, ;public^ resources and wealth such as trees and water
conservancy
projects should be- well-protected
and not
•n
n
---------- x'---------- nv u iu.j. vxuuvi
UP*divided up.
Powerdnven wells and tractors should
r ' ' bo
’ used collectively as usual.
4nd every peasant should fool obligated to do a certain amount of
voluntary laoour, such as planting trees or working on public projects.
The growth of the production responsibility system signals
i
the
desire for reform among the peasants who have been mobilized, This is
a social current which cannot bo held back.
(Title and sub-titles are ours.- Ed.)
SOURCE:, Beijing Review, no.48. November JO, 1981, Page No.15-29
**********
t
(125)
ON
THE
AGENDA
Fairly large developments have occurred in
Chinars rural economy in the last two years
as a result of the new agricultural policies*
This report deals with how these policies
were formulated ard what problems th&y have
solved*
China s leaders began to seriously grapple with the situation in agricul
ture at the Third Plenary Session of the 11th Party Central Committee, a
meeting of historic significance held in December 1978.
Since%then.the Party has adopted flexible rural economic policies,raised
he purchasing prices of agricultural and sideline products, relegated •
decision-making, power for agriculture to the grass-roots level and re
affirmed the principle of ”to each according to his work” so as to
overcome absolute equalitarianism.
GUIDANCE GIVEN ACCORDING TO SPECIFIC CONDITIONS
To seek better methods of agricultural mamgement, many places have begun
to adopt different forms of responsibility system in production. Sime introduced the system of fixing output quotas based on groups (each comprises several peasant households) and isome adopted the system of fixing
output quotas bsed on househods or on individuals . But there are still
a few cadres who do not understand or support this practice, thinking that
it deviates from a correct orientation.
During the spring-summer season of 1 980, faui
ue Party Central Committee
some
leaders
made
separate
trips
to
nine
provinces
, , ,
--- -------- i to carry out investigation
and study. That September, the Secretariat invited provincial Party lea-
a feting in Beijing where the responsibility system was discussed,
oyifchenpawtreipaphsssed a nd reports were given on the local
Leading cadres from Gansu Province in the northwest reported that over
95 per cent of the production teams in their province had adopted some
form of responsibility system, with 59 per cent having introduced the
system of fixing output quotas based cn households. This development
reflects the cimmon desire of the peasants in the poor and backward areas
of the province.
Participants from Guizhou province in the southwest, where the situation
is similar to that of Gansu Province, declared: With enlarged power of
decision for production teams as a tremendous impetus, Guizhou has a
bright future.
Leaders from Henan Province in central China affirmed that the adoption of
the responsibility system had yielded remarkable results. In places which
had depended on state relief over the years, people are now getting more
food and clothes through their own efforts and thereby lightening the
burden of the state.
(126)
Leading cadres from Jilin Province in the northeast confirmed that the
introduction of the responsibility system had helped consolidate the col
lective economy. Since mechanization is fairly widespread iim Jilin, most
places did not adopt the system of fixing responsibility for output on
households. But no measures are being taken against those places which
have instituted this system.
THE RESPONSIBILITY SYSTEM
About 10 million people in Yunnan
(40 per cent of the province!s
population) were adversely affected
by severe calamities in 1979,accor The system of responsibility in
ding to a report by leading members agricultural production is a form
of management adopted for the col
from Yunnan Province in southwest
lective economy. Offering a
China. The system of fixing output
diverse and flexible organization
quotas based on households was
adopted, prompting a turn for the of labour and remuneration methods
better in 1980. Food supplies in- which are popular among the pea
sants, this system was widely
creased and food prices at the
rural fairs either remained stable’;
China’ s rural areas
•after 1979.
or declined somewhat.
The general practice is to reduce
There is no need for the rural
the size of the labour groups in
areas around the suburbs of Shan
the production team, which is cur
ghai, said leading members from the
rently the basic accounting unit
city, to adopt the system of fixing,'
in the countryside and which is in
output quotas on the basis of house;charge of 20 to 30 households. A
hods.The level of collective econo
group formed voluntarily by seve
mic development is high and the
ral
peasant households, individual
tasks confronting agriculture are ;peasant households or peasants
to continue to develop production I regularly make a contract to underand better serve the city.
itake a certain proHurtion task with
the production team. According to
~
. w-— w,
the con —
Leaders in the Party Central Commi-.f ’the terms of
the contract,
ttee stated that these various opi-P tractor has certain rights and
nions reflect the uneven economic : pon sibili
u
~ ti ~es~ . He“ is
~~ pail for his
development throughout the country factual work and will be awarded for
Therefore, different methods, and overfulfilling production, so as to
not on]y one, should be adopted to 'ensure more pay for more work. The
guide our work according to speci peasant is bound to honour the time
set in the contract but is free to
fic local conditions.
arrange his farm work. This repre
sents a change from the customary
After holding this discussion, the
practice of the past in which the
Party Central Committee issued a
document on the policies relating I team leader directed daily produc
tion and the system of payment by
to agricultural production, which
io day without regard to work
affirmed the various forms of resefficiency
was adopted.
ponsibility system, including the
fixing of output quotas based on
households, under the leadership of Even though the system of fixing
output quotas based on households
the production teams.
or individuals has been adopted,the
public ownership of the means of
After making an inspection tour of
production will not change. The
the rural areas early this year.
peasants only have the right to
Premier Zhao Ziyang pointed out
that different forms of the respon use, not to buy, sell or transfer,
the land, farm machinery and farm
sibility system should be adopted
to suit different levels of econo tools, and irrigation facilities,
owned by the production team. The
mic development.
production team can retain a certain
amount of the accumulation funds and
- Advanced regions (where the col
welfare funds and use them to deve
lective economy is relatively con
lop production, improve public wel- .
solidated, production develops
fare and help those families with
year by year and peasants1 lives
financial
difficulties.
improve annually) should mainly
adopt the system of responsibility
for a special line of production under a contract. The peasants should
voluntarily organise themselves into groups based on a division of labour
i
4" nr* q r*n 4" m nr*
l-\ *-i m
r—\ -v* 4-
4
kn 4* m
|
g g
I
( 127)
and specialization and undertake tasks given by the production teams.
- Regions in ;an intermediate
* '
‘‘ ' state should adopt the system of assigning
output quotas to individual
,-J
-n—n able-bodied
,, 1
labourers under the unified
administration of the production teams, (More or less similar to the
piece-work wage system in factories)
- Poor and backward regions should introduce the system of fixing output
quotas based on households.
The results have been encouraging. The Liaocheng Prefecture in Shandong
roymce, one of the nation’s 10 areas of dire poverty, achieved a rich
gram and cotton harvest in 1980. Its. per-capita income was 126 yuan, 3.3
times that of 1 979.
Chuxian County of Anhui Province known for its numerous beggars in the
past, was hit by a tserious drought in 1 978 and a flood in 1980.
__ ----- . Grain output last year reached half a ton
--a per person and cotton output set a new
record.
According to the nation's statistics, although one-third of the farmlands
was stricken by calamity in 1 980 the total grain output was just slightly
befow the record level of 1 979; (cotton output, pork supplies and the
floor space involved in the new construction of rural housing were the
largest in the last 30 years.
DIVERSIFIED ECONOMY
The Secretariat also dealt with the important problem of diversifying the
rural economy. Under the influence of the "left" ideology, the idea of a
Ai1^rSVled ®conoEly was condemned as "capitalist" and rejected accordingly.
Although a stop was put to this ridiculous labelling, the di’ersified economy
did not experience a vigorous recovery.
The
IJ-cl-L kzll
Secretariat discussed this problem at its 88th regular meeting on
C.
I
I
•
At the meeting, Zhao Ziayang said that it is necessary to proceed from
ina s actual conditions to develop agriculture. The general principle is
o completely and rationally use our agricultural resources. As an example
he listed a number of places which had yielded better results in grwoing
non-staple crops.
s
Hu Yaobang, General Secretary of the Secretariat and currently Chairman of
e Central Committee of the Chinese Communist Parrty, said: We should not
accen our e or s in grain production and at the same time we must pay
special attention to diversifying the economy. Although China has limited
-rable lands on the plains, it possesses vast mountainous, hilly and water
areas where about 30,000 kinds of plants and crops can be grown.
Since the founding of the Secretariat a little over a year ago, Hu Yaobang
has conducted investigations in the rural areas of a dozen or more provin,CeI.a?d ^'to^^ous jregions. Based on his field notes, he summed up that there
were 50 kinds of diversified
------------ 1 economies which he grouped into five categories.
about_his investigation in the rural areas, Hu stressed that diver
sified economies are essential to developing the rural economy.
Wan
Renqiong
and Yu
Qiuli and other members of the Sec
4. Li,\ Fang Yi, Song nenc
llong and.
Xu Oiuli
retariat also commented on this question. They pointed out? Developing
diversified economies makes it possible to absorb the surplus labour
force in the country side. The steps we have taken in readjusting the strucure °f agriculture should be firm and steady. They also suggested that
small plots of land for the peasants’ private use should be appropriately
expanded, more organic fertilizers should be used and power and energy
economized.
\ /
After this regular meeting, the Party Central Committee and the State Council
jointly issued at'
circular to the nation about actively diversifying the rural
economy. This circular now serves as a guideline for mobilizing hundreds of
millions of peasants to open up more avenues for production and bring about
prosperous rurul economy.
CONTINUATION OF CORRECT POLICIES
A responsible member working at the Secretariat said that the question of_
peasants and agriculture has always been a question of paramount importance
lo the Chinese Communist Party in carrying out revolution and construction.
DIVERSIFIED ECONOMIES
There are about 50 kinds of diversified economies in
China’s rural areas, which can be roughly divided i-nto five categories:
1. Cropping: includes, in addition to staple crops,
plant fib re, oil-and sugar-bearing crops, fruit, vege
tables, Chinese medicinal herbs, spices and melons.
2. Fish breeding and poultry farming: includes livesstock, poultry, fresh-water fish, bee-keeping and rare
birds and animals.
3. Handicrafts: includes spinning and weaving, emb roidery, brewing, pottery, furniture, sculpture, stationary and handicraft products;
i
Extracting and collecting: includes □re-mining,
quarry, and collecting various kinds □f wild animals
□nd wild plants with economic value.
I
5. Service trades: includes catering,
uuz j. a. 11 y , sewing, repair,
hotel, medical, hair-cut, laundry and dyeing services.
He recalled that Comrade Mao PZedong
'
' ' ‘ out in his report to the
pointed
Second Plenary Session of the Seventh*Party Central Committee held on the
eve of liberation: In China's national economy, industry accounted for
about 10 per cent and agriculture and handicrafts 90 per cent. This con
stituted the basic point of departure for considering every issue during
the considerably long period of the Chinese revolution arid after its vic
tory.
Since the founding of New China, the proportion of industry in the national
economy has been greatly increased (?5 per cent in 1980). But the rural
people still make up 80 per cent of the ration’s population. Farm work is
done mostly by hand and the peasants’ lives are stil’’ quite difficult. Since
this situation has remained fundamentally unchanged, we still must consider
this basic point in tackling every question.
In 1954, Mao Zedong suggested that the emphasis of work in various provinces
be placed on agriculture. Then in 1 957 he again pointed out:: "The whole Party
should attach great importance to agriculture. Agriculture has a vital bear
ing on the nation’,s livelihood." He stressed that agriculture is the founda
tion of the national economy and it is necessary to arrange the national
economic plan in the order of agriculture, light industry and heavy industry.
Unfortunately, these guidelines w tere not’ implemented
’
1 ‘ conscientiously for a
long period of time. But since the Third Plenary Session, the responsible
member stressed, policies have been adopted which are precisely-a continua
tion and development of Mao Zedong’s theories and principles that have been
proved correct in practice.
SOURCE /
I
\
Beijing Review No,
Angus t 249 1981.
54.
.JtL
I
SYSTSlil (PF RESPOliSJJILITYJlf
I
^12Q)
The system of fixing farm output quotas on
the household basis is now being followed in
Chitina s rural areas. Is this a restoration
of capitalism ?
This system is carried out in some
< ~
rural areas. They are mainly poor and
backward areas where the collective •economy has not been well developed and
and hilly areas where the cultivated. plots are scattered and the
inhabitants live far apart.
Under this system, with the production team as the accounting unit
(each
households'), the
leach team
team has
has generally
generally over a dozen to 20 or so households^,
il_
plots
of
lands
plots of lands are.put under the management of the individual hous
households
n a long term basis. After harvesting, the peasants have to hand over
a f^'ed amount of their output to the production teams for unified
is nbution, but are allowed to remain whatever surplus
I
surplus they
they may
may have,
this is. one of the form of responsibility
farm mnnn^Tn^n-fo +■
responsibility in
in farm
management that
takes
output in to accounts.
A flexble rural policy has been adopted in the past two years. Proceeding
om their own actual conditions, the people's communes in different
places have through experanent established various forms of responsibility
in production management. After the implementation of the system of
fixing output quotas on the household basis, production in the afore
mentioned areas has developed apd the livelihood of the peasants has
improved. These notable economic results have been widely acknowledged.
The system of fixing output quotas on the household basis has the
ioilowing advantages:
* The principle of " To each according to his work" is effectively
implemented. Under this system the commune members not only o-et their
siare of the fixed amount of output handed over to the production team
nrr+^1S^lb?tlOnI bUt Can alS° keep that Part of the output in excess
e ixe quo as. The result is : the better the management, the greater
tne amount of output in excess of the fixed quota, and the more the
income of the peasants. All this has enhanced the enthusiasm of the
commune members for production-.
As the commune members are directly responsible for production and
are given certain powers to make their own decisions, they can thus give
scope to their special skills and improve management, thereby averting
losses resulting from poor management of the collective economy and a
arbitrary sirectives not suited to local conditions.
* r
_of_rGsp,0E:3iblity. is simple and convenient and therefore
P°P
u
parize
make
«
.
, ,* rj-1he peasants
- - - can
-- -- the best use of their time
for farm work and household side — occupations so as to increase their
income.
The system of fixin; output quotas on the households basis, however,
is not practised everywhere in the country, In those places where the
development of production is noemal and whore the commune members get
increasing benefits from the collective economy year after year, with
their living standbed steadily raised, other measures than the system
discussed above are taken to improve further the management of agri
cultural production. Inshort, the question if what kind of responsiblity
sy aamm farm production should be adopted hinges on local conditions
and the peasants wishes. Any system that is conducive to on increase
m putput and improvement of livelihood is welcomed by the commune
members.
LET SOME LOCALITIES AND PEASANTS PROSPER FIRST
Is This a Bourgeois Policy
( 150)
Since the end of 1978^, China has adopted a less
rigid rural policy by granting production teams
more right of autonomy with a view to arousing
the peasant's labour enthusiasm and bringing
prosperity to China's socialist countryside.
idea underlying the policy is to allow some
localities and an advanced section of the
peasantry to become better off first.
yhy this policy? will the result be good? In this
special feature>"Beijing fteview" commentator
gives an explanation of the Party Policy toioards
these quostions. MShat the Peasants Say” sums up
some of their current views? and the article
"Back to the Bight Track” is a report on the
vicissitudes of a production brigade in Shandong
Province over the last 30 years.
SINCE the Third Plenary Session of the 11th Party Central Committee
in 1978, the Chinese Party and Government have adopted a host of new
policies aimed a,t arousing the peasants1 enthusiasm for production and
activating the rural economy, alongside, the slogan *Let some localities
in the country and a section of -the peasants prosper first." Peasants
as well as cadres at the grass-roots level in the countryside have
shown their support for this policy. There are, however, also people
who consider it a ’’bourgeois slogan” because, they say, it departs from
the socialist ideal of common prosperity and will lead to a polarization
where the poor will become poorer and the rich increasingly richer, and
eventually to capitalism.
In r.iy opinion such a view is mistaken and I wish here to state ny
views •
UNEVEN ECONOMIC DEVELOPMENT
The idea is in fact not new. It is actually recognizing the
objective fact in the present stage of socialism that economic develop
ment in various localities and the ability to labour among the peasants
are uneven.
ormer ’’Left" deviationist thinking led to a refusal on our
part to acknowledge this fact and to a policy of trying to achieve an
equilibrium artificially. This penalized the more advanced and '
favoured the backward; it failed to achieve an equilibrium. Today wo
recognize this and are offering guidance in policy that should lead in
achieving stop by stop by step a relatively balanced development.
Socialist transformation of the Chinese countryside was effected
in a situation that was extremely backward, somifoudal and seme-colo
nial. China’s size makes its various localities and perhaps even the
communes and. production brigades and teams in one locality differ in
natural and production conditionstheir management is also as varied
as their unevenness in economic development. Although we put agricul
ture on a co-operative basis in 1956, eliminated exploitation, insti
tutod public ownership of naans of production, and despite quadrupling
the total a gricultural output value and tripling total grain output
over the past 50 years., we have encountered difficulties in promptly
overcoming the disequilibrium in the various localities1 development.
According to statistics compiled in 1977, the
■'
’
level of rjreduction
of 200 of the 2,000—odd counties in this country was not far from
that in the early days of the young People’s Republic. Most of these
counties arc located in the northwest and southwest frontier regions,
fairly poor and backward areas through the ages.» Places often leading
(129)
As to the nature of the system of fixing output quotas on the households
basis, there has been much talk amoung the foreigners^,., and in China a
few people have differing views. They consider that the implem- ntation
of this sy stem has thus deviated from the socialist road; some even
call it a ’’retrogression to capitalism”. That some people should hold r
such views is probably because the influence of ’’leftist” ideology and
mistakes over the years has not been eliminated. Manifestations of
’’Leftist” errors mainly are: as regards managements, there was the
tendency to go after biiig labour organisations with large numbers of peple
working to-gether; and in distribution the principle of absolute equalitarianism was adhered to. The system of responsibility and san zi yi bao
(means extension ©f plots for private use and of free markets, the in
crease of small enterprises with sole responsibility for their own profit
or losses, and the fixing of farm output quotas a for individuals house
holds with each on its own') were for a long time citicized as ’’capitalist” •
If the influence of ’’leftist” ideology is eliminated and an analysis
made bbjectiveljr, then the nature of fixing farm output quotas on the
households basis can be dischBned easily.
Accoording to Lenin’s thesis, the basic characteristic of Socialism acre:
(1 ) public ownership of the means of production and (2) the principle of
”to each according to his work”. Id these two principle are upheld, then
a clear line of demarcation is drawn between socialism aoh the one hand
and capitalism and all other systems of exploitation on the other. As
regards management, labour organisation and method of remuneration, they
can take diversified forms in accordance with actual conditions, and
should not be indiscriminately dubbed”capitalist”•
The fixing of output quotas on the household basis is a form of organisa
tion and management within the collective economy^ it nanuot be regarded
as a retrogression to individual economy. Under this system, the peasants
are still members of the collective economy, with corresponding rights
and obligations. Moreover, the means of production are still collectively
owned. The peasants have the right to use the land, farm machinery,
draught animals and big farm tools, but they do not wn them. In addition
under this system the production team is still the basis accounting unit.
It is a fact that implementation of this system will result in some
peasants households getting more income than the others because of the
difference in manpower. Those households with a stronger labour force
may become better off than the pthcrs. But this is essentially different
from the polarization caused by exploitation. Facts prove that fixing
output quotas on the household basis has promoted production, withmore
public welfare funds for the production team to help those families in
difficulties, so the difference in living standred will not become in
creasingly big. Some peasants will become welloff first, and this will
spur the others on so as to achive common prosperity.
0:2 cpurse, the system of fixing output quotas on the household basis has
its short comings too. For instance, it may deter the purchase of farm
machinery and might prove to be unfavourable to concentrating big forces
to combat natural disasters. But the primary aim in areas carrying out
this system is to enhance the commune members’ enthusiasm for production
and improve their livelihood as a whole. When this is achieved, the
other contradictions can be tackled more easily.
SOURCE: Beijing Review, No. 11 March 16, 1981 • pp. 5—4 ? by Wang Dacheng.
A.
(151)
the country m ocononic dovolopnont are areas in the SonghuaLiao valley
in the northeast, on the Changiang (Yangtze) delta and tho Hangzhou-Jiaxmg-Huzhou plain in the cast, on the Zhujiang (Pearl) River delta in
the south. Tho outskirts of largo cities do well also, thanks to
priuc geographical location, conparatively prosperous conditions and to
proxinity to large industries. Most of the 1,622 "outstanding” produoriifadGS (about 2.5 per cent of the total in country) which in
y/y received an average inconc of over 500 yuan per person (this refers
^o he inconc distributed by the collective econony, not including that
iron snail plots reserced for pricatc uso and fanily sideline production)
were located m those regions. Anong
those, 26.1 per cunt was located1 in
Aaong these,
faming areas, 8.5 per cent in pastoral areas, 5.8 per cent in fishery
1*9 per cent in forest areas and 57«7 per cent on city out—
skir ts, Over 400 of these nost prosperous production brigades are
located on tho Shanghai periphery alone.
There are differences in incone within a connune, brigade or
tean depending on the
.— xpeasants'’ physical strength, skill and willingnoss to work. Bccause
:
in the histroical period of socialisu a pertaining principle is:: :fron each according to his ability and. to each accending to his ability and to each according to his work. Hard workers,
the physically
... strong
- and skilled
-- arc better paid-a nornal and tho only
situation which encourages advancenent while spurring the loss advanced.
This conds to mcroasd the wealth of society as a whole and also, the
peasant s personal incones. But to attenpt to renove this diffeioncc
by mtrocucing absolute equal!tarianisn would be.to seriously affect
the peasants1 onthusiasn for labour, stagnate and undemine the rural
productive forces and collective ownership; for peasants are practical
poop e ana usually have a way to protest against equal pay for unequal
work. They nay just go slow- or stage a sit-down strike; in their own
words, to go to work without really doing any work.”
THE KEY TO PROSPERITY
Will allowing a section of the peasants to prosper before other
lead to polarization and give rise to a new exploiting class? The
answer depends on whether socialist principles are adhered to or not.
, p°larization springs fron the exploitive systen, which was elinin^ted in China with the establishnent of public ownership.of the wans
o production and of the policy of distribution according'to work done.
In china, therefore, the social conditions for polarization do not exist.
Land (including grassland in pastoral regions) in the Chinese
countryside, as well as water space, forests, large fam inpleucnts and
nacainery, draugnt aninals-all principal neans of production-bolong
collectively to the comunes production brigades and teans. Peasants nay
t. then according to a countrywide contract systen, but buying or
selling tnon is prohibited, and this applies also to the snail private
plots reserved for peasants' own use. Exploitation
'xploitation is
is thus
thus ruled
ruled out
out
as a neans of gaining wealth, and so also is polarization.
Under socialisn, the colledtuve economy is the nain source of the
peasants inconc, and m fact at present, fron 70 to 80 per cont of
their mcone is derived fron distribution fron the collective while the
ost cones iron ianily sideline production and the snail private plots.
Great effort is needed therefore to stinulate the collective economy
ana nake it prosper. This applies especially to places with nore
favouravle conditions where nore investnents nay be nade for then to
go
‘“‘■-ad before other places with agricultural nodornization. The present
task, apart fron making continued efforts to nochanizo faming and inProve nanagenent of the collective econony through the introduction of
the latest achevenents in agricultural science, is to gradully change
the rural economic structure geared to grain production alone into a
diversified eoonony appropriate to tho resources of the localities COrcorned.
Ji
pivSPTY
(134)
Following is the first-'of three special
reports on the changes which have taken
place over the vast ti^o years in the rural
areas of Chuxian Prefecture in east China's
Anhui Province. Parts 2 and 3 will appear in
succeeding issues.
Chuxian Prececture is an histroically
poverty-stricken area which had hot made ant/
substantial progress in farm production for''
many years. Put the recent introduction of
of more flexible agricultural policies has
made a dramatic difference in the lives of
Chuxian's peasants.
Peasants support the adoption of various
forms of re snonsibility system in farm produ
ctions, including the fixing of output quotas
on the basis of individual households9 and
the development of household sidelines and
a diversified econokiy.
The Party Central
Committee formulated appropriate polices^
in compliance with'tne peasants' wishes
and after investigations of local conditions.
For many years, fixing output quotas
at the household level was mistakenly cri
ticised as attempts to "restore capitalism. "
The reappearance of these things in poor
and backward areas has given rise to many
questions among friends of China in other
countries.
i/e hope that publication of
these reports will help clarify those
questions.- Ed.
CHUXIAIT Prefecture includes seven counties in eastern Anhui Province
with an agricultural population of 2.95 million, -during my visit I
talked, with a considerable number .of Chuxian peasants and rural cadres.
Their favourite topic of conversation was. the new policies, which had
allowed them to achieve a prosperity they had. never known before.
Their^enthusiastic approval of the new forms of responsibility system
was oovious from their every tone and gesture, from every smule that
creased their sunburnt faces. The story of Aiaogang Village is typical
of what has happened throughout the area.
In 1978 Anhui was hit hy serious drought. That September the
Party committee secretaries of over 240 communes of Chuxian Prefecture
met to discuss ways of helping the peasants recover from the natural /
disaster. COne of~ them
‘
raised an issue that toughed a nerve in all of
them: nWhy on earth are the peasants here so poor? One or two of us
secretaries might be charged with incompetence, but can all of us be
incompetent?° (Could we make some changes in the organizational and
' Vinrl n
~ T *1 _
___
managerial methods
of our
collective
economy? "
aii m
A commune Party secretary of Laian County replied with an account
of recent developments in his area. To combat the drought, one
commune’s production team had decided to subdivide itself into several
small work groups. Each group had signed a contract with the team
accepting the responsibility for meeting specificproduction quotas.
Everything taey produced within the- quota went as usual to the team for
unified, distribution. But if they surpassed the quota., the surplus
would belong to the work group members. They.settled among themselves
the hours of work, the division of labour and other matters.
(155)
big improvement c
• were not clearly defined and i
and quality of the work people
to
Then the Third Plenary
———d at tne
of the sa?s
h!/end
n‘L°£
emancinato
^led upon people
rural policies.
T-HB XI AO GANG EXPERIMENT
Co^,s ^an oommunm
Selected as
°f the
115 people of ^iaogang
in
experimental Zite
The 20 h
were very poor? lAev^Id no f
aT hr ““*•
»r Slxs:.
IS
Sy 00™h“X MS’a 0altl0i
”st f“
"
satisfactory
team
aeciaea to ‘-y
quotas on the basis
The team’s 25.3~ hectares
'
of cultivated land was divided and
allocated among the households
J according to tho nukbor of people each
hao..
The land is still c
owned oy the collective; household members
have only the right to use it.
In accordance with the number of people
each household T"
- was
assigned quotas-so much to go towards meeting the*
the overall state qquota, so much towards
repayment of state quota, so
much towards the team’s
accumulation and welfare funds. The income
fron any surplus above these
j quotas could be kept by the fnm' 1ion
themselves.
-p Ya2, HonechanS> a 32~year-old Xiaogang
before the new system went into effect: °i resident, recalls the days
on p-rain
nnfl
-p .<■
"From 1976, the peasants here
had to depend r' and
on erain
relief funds from the state for six months
out of every year.
The collective income was so low that each person
got an
average of only.25.8 yuan a year as his hhare.
----. The prolonged
hard life left
all, much less working^Sr^Wo
itx,_4A
“T SaW n0 P°int in workinS at
rming hard. We let weeds grow wild in the fields
Some lost hope altogether^
, and left for other places to make a livhg."
Ten years
a ‘kiJself left home to do odd jobs elsewhere,
years ago,
ago^ T
Man
He
returned
only
after
" Pal1 of the gang of four in 1976. at the
end of 1978 he 'was LLS
"work out a way to food all ofleader because he proposed to
the peasants unwilling to trv V-foon after the election, he found
level. So he?nrSejunc?L t
quotas.
.
o/
f <1U0?S °Ven at.a SEla11 work
ne ’earn leader, devided to try household
REMARKABLE CH.ANGES
Before the r_..
neW Z/SV?8 introduced» the peasants were so
dispirited that few
" v\
™ it
T initiative» and planning and
organizing was left to the team leaders. The leaders had to try to
arrange production scheduoes, i
work, and solve any problems ‘ that pd°Ple 1:0 SO out to the fields, to
erain nnrt ■
“?se’
teasers were blamed for
the low levels of gram
and income distribution.
now the peasants themselves :
Many
land they have contracted
wasteland
(21 hectares
out in the fields iearlv
and wn-Hr
in
farJ. Family members are
early
and
work
”- day’ W1th tllG able“bodied
taking on the heavier jobs while hard
fh & a11
tasks. During the summer rninv the very young
yoLU1fi’ or very old do lighter
peasants go out to the fields
in their raincoats. ‘
7 season» Peasants
(136)
There is ]new
-- concern
-about soil fertility, weather changes and
water resources,. Each Household tries to get better varieties of seed
to plant. Those who never bothered about insect control have bought
sprinklers and $
scietific methods,
harvastinS, Xiaogang peasants
watch over their crops as e r
as carefully as mothers tending their babies.
69,5^.SU^owreS2ntoOthe0t’otSa?ianS,S
In the same year 17,600 L. of oi^c n
°Utput was
°UtpUt frOffi 1966“7O
surpassing total amount rrovm in -i-t. uearing croPs were harvested,
of Pigs raised exceeded any ve^r in61 ^xCeedin^ 20 years« The number
aside some grain and
1 nistory. The team not only set
12,000 kg. each of grain Sd oi!^tt
State QOre than
farm and sideline income reached"?! 1 yi^n^Z*1 977%'aSG
von the household which gained thp
*
I977 fl®ure was 41 yuan)
income of 240 yuan.
°
least earned an average per-person
^SMQG..UP THE EXPERIMENT
had /iaoeans's history of backwardness in agricultural production
natural
the root cause ?ay £etS !ack oGfia\haSe10Cal pfrequent
-pi0;belH™
XX^nrriJnchidi^
Arning*
This initiative and enthusiasm h-d6?^813521
Part °f the Poasonts.
ultra-Left practices in tie
a£S.SUPPreSsed as'ain
by
as .
team to Xiaogang ’(there were on w o > commune sent an 18-member work
tine). A leader of the work team told°th
“ the„villa®e at the'
longer permitted to take the coni^i jV
peasanrss
You are no
leave here ubtil yp4ve been driVb^
'
differXlTiif S?"
lablled as capitalist
first, the small
work "and /
x T dUe t0 the practice of were,
"to each according to his
household sidelines ' both^f ° h^h P1°tS f°r. personal
, ,
needs and
As one might expect’ peasant initiati1'6 Perm;Lti:e<i
state policies,
labour efficiency and ecualitorian ' ! was seriously damaged. Low
dlhg probions ia tho
o» .“KXXqX!'"”
.After the (cultural
“ '
revolution" ended, plots for
were given back°to the
personal needs
Th«
„n^
”
J
PeaSants
and'’family sidlines
supported, r
were encouraged and
were happier,• But the1abo"LtUa'tl+n 1EproVed a little and the peasants'
collective economy, and stoo™ theX^f^eal^111 eZisted in the
uue way 01 real progress.
W • J_T_
s
the peasants themselves
quota method.
set Propor?ionntodtheesS£reIdSthe
of the peasants.‘ ^tCr llandine' Ovef a
the peasants can koep all the rem —1o collective
11 oilve according to contract,
income depends directly on thoS woS^
°f thelr laboUr- Their
aeant no differences in income whZ?h
e9uali*arianisa, which
m incoke whether one did - good !
One dld neant 110
nine a
good
job
sl
°ppy
job,
is
inotas include allocations to the col?r a.S1°Ppy iob'
£°ne. Because
;or public welfare and s°Xidi s to fSS’, funds r
Stl11 aVaila^
families
■ mancial difficulties, so thZ Lol
J
and individuals
lnd:LViduals with
-n this respect is maintained.
P<-L ority ofthe
collective
economy
of the
•f ill5SinedSrespinsibil?ti
The?7 systen has
solved the problem
saving everything to the 1 T anc‘ 1017 labour efficiency. Instead of
11-I6 to the leaders, the peasants themselves
now take
(137)
the initiative in deciding such things as hours of work, crop rotation
and the use of more scientific farming methods.
-Is easy to administer. Instead of trying to manage every aspect
of farm production, production teadm leaders'can concentrate on overall
planning for the team, while leaving details cf farm work to each house
hold. Contracts are drawn up on clar and simple language, and •
are
singed cnco a year. This system of management se ms more suitable for
poor and backward areas.
.THE STRENGTH OP RESPONSIBILITY SYSTEM
—
»
w».i .ilw i—n< ■
.i uMi ...i
^_^Tr
In 1979 many rural cadres who had been influeneeed by "Left" ideas
opposed the fixing of output quotas for each household. In Liyuan
People's Comnune the Party secretary forbade this practice under the
pretext of preventing a "restoration of capitalism."
Chen ingyuan, the Party committee secretary of Fengyang County,
went to investigate the situation in Xiaogang team in the company of
the Liyuan commune Party secretary. After they examined the newly
sprouted peanut crop and held discussions with. various commune members
they went to deputy team leader Yan Hongchang1;s thatched' cottage for
a rest. Party secretary Chen asked Yan:”Can you peasants do if quotas
are assigned to each family?” ”
Yan Hongchang declared with assurance:
Yes,” Chen Tingyuan then turned to the
___j commune Party secretary and said
’’Let’s give them a chance. Kaybe this method suits their conditions.”
Chen Tingyuan’s :remarks seemed quite spontaneous but actually he
had
problems
for many years. In the 1950s, Chen
T. thought
- . about rural
-*1 x-n-l-- f-r
Hngyuan raised controversial opinions concerning the problems in imple
menting the Party’s agricultural policies and protecting the peasants’
interests. For this he was wrongly labelled as a ’’Right opportunist.”
This counb. yParty secretary has worked in the countryside for
30 years and knows well the diffic Ities- the peasants face. He was
concluded that the distinction between socialism and capitalism is
not decided by collective or indicidual labour, but by the form of
ownership of land and other major means of producition and by whether
tnere is exploitation or note He believes that there is no correlation
oetween fixing output quotas for households and capitalism. In poor
and backward areas like the A.iaogang team, fixing output quotas for
households may be a fuller expression of the socialist principle of more
reward for more work and distribution according to labour.
Chen Tingyuan again vidited iaogang after the summer harvest. He
investigated the results of the n§w system and observed that the harvest
iorh
and the Peasantst
supply was adequa te. In February
Wan Li, then the provincial Party committee secretary and now
.c?7 Renier and Minister in Charge of the 6tatc Agricultural Commission,
visited Xiaogang. He went from house to house to talk to the peasants
and subsequently commerided the way ^iaogang was managed.
In 1980, the Xiaogang team signed contracts with every household.
The contracts set clearly the responsibilities of both sides. They
fixed:
Output quotas, including the land area to be sovm with each
^°P» output per-unit and total output; (2) quotas to be supplied to
the state, including annual and seasonal quotas for grain, edible oil,
hogs, poultry and eggs; (3) money and grain to be handed over to the
production team for the collective accumulation fund, the public welfare
'un , collective grain reserves, and to be used to repay loans, to
compensate for the depreciation of fixed assets and•to subsidize the
G k
°f tie Production ^eam. Many of t.jese items were recorded in
a table m the contract when they were fulfilled.
(158)
The contract for fixing output quotas for households is a legal
document. With it, the people in Xiaogang feel reassured. They have
opened up more wasteland and their enthusiasm for production has been
enhanced. In 1980, despite three months of cloudy and rainy weather,
the quotas of oil—bearing crops to be sold to the state remained the
sane as in the previous year. While the output of oil-bearing crops
fell slightly, the total grain output went up by 64 per cent compared
with the previous year when fixing output quotas had just begun to be
implemented. Grain sold to the state increased by 114 per cent, and
the average per capita income,- 41 per cent, In the last two years, 82
now rooms have been built in Xiaogang and the unmber of draught animals
has increased from one to 19.
A
iaogang is a miniature of ^engyang County. In the years 1953to
197.8, the state had supplied on the average 8,650 tons of grain annually
to Fengyang. In 1979 and 1980, the situation changed drastically as a
result of the adoption of fixing output quotas for households and other
forms of the responsibility system, for these tfewo years, Fengyang
handed over and sold to the stage an average of 50,500 tons of grain
por year. The peasants in Fengyang had not had so much grain before.
Many ooserved that fixing output quotas for households is really an
efiective way of eliminating poverty•
Various forms of responsibility system have been practised in
Chuxian Prefecture. Those production teams which carried out the
system of fixing output quotas for households account for 92,9 per cent
and they have achieved good results in increasing production. So far
_
they have only taken the initial steps in meeting the needs of the
people^
people• \The government policy is that this system will remain unchanged
for a relatively long period of time. How long the period will be and
when and how it will be changed depend on the wished of the peasants.
THE TEST OF TH2 BIG FLOOD
When fixing output quotas for households is practised, each house
hold becomes a productionunit. If there is a natural calamity, can the
people be organized to resist it?
Last summer, rainy weather lasted for nearly three months in
Chuxian Prefecture. As a result, 40 per cent of the land suffered
from waterlogging and crops were destroyed on 13,000 hectares of land;
houses embracing more than 30,000 rooms were damaged and some 30,000
people were endangered by the rising waters. The prefecture experienced
its second largest flood in the 32 yrars since liberation.
In fighting the flood and draining the waterlogged fields, water
conservancy projects built by the state and collectives played a role.
More than 100,000 peasants from seven countries served as a shock force
to protect dykes and deal with emergencies. This enabled throe flood
peaks to pass safely. Those left in the villages drained water from
the fields and replanted then, and cultivated the new crops.
^11 the seven counties in the prefecture reaped in Lumber harvests
under these conditions. The total output did not decrease, but, for
tne first time, went above 1.5 million tons, thehgghost level in history.
Jia Changzhi, former Party secretary of Jiashan County in the north
ern part of Chuxian Prefecture, recalled that last July water in a
lake in Jiashan went up rapidly and the 22—kilometre-long dyke was in
danger. In the evening when the county announced this 13,700 commune
members rushed to the site. After five days of hard work, the danger
was fencted off. Why did the commune members who were responsibile
only for their family’s production rally in face of such a natural
calamity? They realized that no matter how well the rice in their own
fields grew, it would come to nought if they did not join hands to
fight the flood.
(139)
Jia Changzhi revealed; "At first I was not sure myself if the
commune members under this responsibility system could be mobilized to
fight such a big flood. Now I think, with necessary ideological educa
tion and organizational leadership, this system in production is
excellent, because the peasants work net only for the state and the
collective, but also for their immediate interests. That is why they are
as active in fighting the flood as•they are in production."
LET.
CHOOSE
Now most production teams in Fengyang County have adopted the
system of fixing output quotas for households, but there are also
some which practise fixing output quotas for production groups or keepthe team as a production unit. The opinion of the county people1s
government is: Let the peasants choose; no unitary pattern should be
forced. In poor production teams like Xiaogang, fixing output quotas
for households is a good way to eliminate poverty and provided the
peasants with enough to eat and wear. However, in areas where the
collective economy is fairly developed and mechanization and economic
development have reached a highe level, the peasants do not want to
implement this system of fixing output quotas for households. They
want to establish responsibility systems which suit their own conditions
and can further develop their collective economy.
The Jiangzhuang Production Brigade in the mountainous area of
southeastern Fengyang dounty is one such case. It is composed of
2,250 people who are divided into 11 production tcams. Taking
advantage of its remoteness, its Party branch reduced to the minimum
the influence of "Left iddology when the gang of four held sway. Since
the early 1970s, it has led the peasants-to develop agricultural,
industrial and domestic sideline production in a planned way. They
have planted 80,000 trees, cultivated 80 hectares of economic forest,
raised 2 million fish and set up seven industrial enterprises. Their
income from industry and sideline occupation has surpassed that from
agriculture and the total value of fixed assets and collective accumu
lation is 1 .09 million yuan. Everyone is guaranteed 550 kilogrammes
of grain annually. In agricultural production, tractors have replaced
heavy manual labour and the peasants are satisfied with the low-cost
co-operative medical service. In addition, the brigade has a permanent
construciton team to build houses for the brigade members. Already 40
per cent of the brigade members have moved into new houses.
In order to carry forward to the strong points of collective
management and overcome its shortcomings, i.e., not clearly defined
responsibility and inflexibility, since the beginning of this year,
the Jiangzhuang brigade established a new responsibility system in
production. The brigade-run enterprises carry out independent accoun
ting and have introduced a more flexible system of awarding compcnsa tion. Most of the wages are fixed (decided according to skill, amount
of labour and productivity); the rest is given as bonuses based on
monthly production figures. Hi th regard to agricultural production,
rice and wheat, two major crops, still remain under the care of the
production teams or groups, while other crops (oil-bearing crops, cotton
maize and sweat potatoes) which are not planted in large quantities
are the responsibility of households with fixed output quotas.
Jiangzhuang adopted this formula coiapleteljr on their own accord
and it has received approval from the county Party cormittoe. If
necessary, the brigade has the right to change it in the future.
(140)
FjiM OUT PUT AKO COMMUNE MEMBERS' INCOME IN CHUXIAN PREFECTURE
1979
1980
Percentage
increase
Total output of grain (1,000 tons)
1,416.5
1,608.5
13.6
Total output of oil
bearing crops (ton)
49.530
75,710
52.9
Per-capita income from
agriculture (yuan)
82
105
25.6
Note: 7The responsibility system in production L
in 1979. By 1980, 85 per cent of the productionbegan to bo implemented
prefecture had adopted this system.
a teams in Chuxian
Since the introduction of the responsibility system, agricultural
production and the standard of living
*
in Chuxian Prefecture have gone
up (see table),
7
’
,j Its achivements represent the
“
—j Jhope of‘ China
’s backward
countryside to eliminate
---- j poverty and develop prosperity,
SOURCE;
Beijing Review, No,34 August 24, 1981. Page no. 21-26.
******
(141)
SCO NO MIC REFORM IN POST-MAO CHINA:
AN INSIDER'S VIEW
This paper reviews general developments in the
economic and political cituation of Post-Mao
China; in particular, it focuses on the weak
ness of economic institutions in that country,
the necessity for reform, and some political
aspects of economic development and reform.
The discussion is organised as follows: Parti
analyses the failure icfff the "Ten Years Plan”
of February 1978, as a means of highliting the
principal problems affecting China’s economy.
Part II treat the nature and limits of the
economic reforms that began in the latter part
of tha"t year and the change in the underlying
political conditions. The policy of readjust
ment,which halted the spread of reform, is
taken up in Part III. Finally, brief specula
tion is offered as to possible future develop
ments in China’s political economy.
THE "TEN YEAR PLAN" AMD ITS FAILURE.
itoustry
In genexa.1, the process of economic development in post-Mao
China can be divided into throe stages: the ’’Ten Year Plan,” the
Economic Reform, and the Economic Readjustment. The ’’Ten Year Plan"
was formally put forward by the First .Session of the Fifth National
People’s Congress in February 1978. Although economic reform was
also mentioned at that time, it was not initiated until jjhe end of
1978, when the profound weaknesses of the "Ten Yrar Plan' became
apparent and the political situation changed. Finally, Economic
Readjustment was introduced in the mi •die of 1979 and actually became
the main economic strategy from mid-1980.
It is not necessary to dwell in detail on the over—antitious Ten
Year Plan, which is now moot, 1 Suffice it to say that the Plan rapidly adde
added to the difficulties already faced by the economy* Accumulation
increased to 56.5 percent of not material output, but at the expense
of efficiency and living standards. Large numbers of heavy industrial
projects, based on imports of equipment from Japan and Western Europe,
were begun only to bo cut back or abandoned before completion. The
government ran a deficit of over ten billion yuan annually from 19?8to
1980; and open price inflation became a problem for the first time
in many years.
Because the Plan itself was poorly conceived, an explanation of
its failure must include the reasons for its adoption in the first place
These are essentially two: first, policy-makers understood at that
time that after more than ton years of "Cultural Revolution," the
mahority of Chinese people were impatient for improved living standards
and increasingly weary of political slogans* Second, the power struggle
in the lea.dership was at a delicate stage. Consequently, the "Four
Modernizations" became a banner by which Hua Quofeng, the formal
Chairman of the Chinese Communist Party (CCP), and his supporters
sought to bolster their popularity among the people.
1.
For .‘details of the Plan, see Beijing Review, March 1978,
PP.7-40
(142)
Most economists in China wore later to ascribe the failure of the
Plan primarily to imbalances in the development of the national economy,
i.e., (a) the rate of accumulation was too high; (b) investment in
heavy industry, chemical industry, basic construction, and military
industry was too groat, while investment in agriculture and light
industry was inadequate. Certainly, unbalanced development of the
national economy was an important reason for the failure of the Plan,
but it was not the major one. The most important and general reason
was the ovorcentralized and bureaucratic system of economic planning
and mhnagemont. This was recognized at the time, and explains why,
in the latter half of 1978, both academic people and the Reform Group2
in the leadership claimed to favor political as well as economic reforms.
The process of making the Ten Year Plan itself expressed the
dangers of the Chinese-type planning system. First, as suggested above
political factors were always more important.than economic realities
to planners, whose political power and positions determined their
ecohomic benefits, 3 and whose decision making went unchecked by any
market mechanism. 4 For example, when the Petroleum Group 5 controller
the planning process, the greater part of total investment was put
into heavy industry, chemical industry, basic construction, and military
industry, which led directly to the imbalance described above*
Second, the ability to construct a reasonable macroeconomic plan
was lacking. Economists and technicians were not given an important
role in plan making, and most of the could not even get basic data
about the national economy because of the ’’security system.” On the
other hand, many planners lacked the technical knowledge needed for
economic planning. The statistical system was so backward and confused
that planners at the central level also were deprived of accurate
information. This was in part bofause the arbitrary pricing system
did not link social demand with supply, and in part because managers
-•
, p
or
and cadres on every level were able to-and did----—falsify figures.
For
instance, the Dazhai Production Brigade, an ’’advanced” unit in the
nation, falsely reported its output by more than.twenty percent for
many years. 6 Thus, despite the fadt that some forty percent o± iron
and steel output could not be sold.- ton new large-scale iron and steely
complexes wore included in the Ten Year Plan; and the decision to builo.
ten oil and natural gas fields was made before it was known whether and
whore s ch oil and gas resources existed in China.
2. The Reform Group, which included people such as Deng Xiaoping,
Vice Chairman of CCP and Ch../:. Tun* Vico Chairman of CCP, claimed to
favor economic and political reforms from 1977 to 1979.
3... Those who lose their political position or power lose their
economic privileges. On the other hand, people might commit terrible
mistakes in their plan making and waste over a billion yuan of invest
ment without any punishment, if they are still in power.
4. Concerning this point, W, Drus as well as 0 , Sik provide some
excellent arguments. Sees W, Bnus, The Market in a socialist Economy;
'
j Czechoslovak
Ota ik, plan and market Under Socialism (Pragues
and
The
Communist
Power
(New York: Praeger,
Academy of Science, 1967)? i---- ----- 1 981 ).
5. The petroleum roup, backed by Li Xiannian, Vice-Chairman
of the CCP, includes people who were heading the Ministry of Petroleum
and controlling the ^ta.te Planning Commission and many other industrial
ministries from the early 1970s to the first half of 1980.
6* Rennin ribao, December 24? 1980, p*, 2; November 22, 1979?
pp.1-2; and December 29? 1979? P*2? and Ilongqi 1981? no.2,p.2«
(143)
The system of management, like that of planning, has been insuffi
cient and bureaucratic.
'xt every level of management, from ministry
and local industrial bureau to company and factory, down to the work
shop, there aro ti-ro separate lines cf control: . .the Party organization
and the state administration. Unlike in nost ^astern European countries,
the the Party organization directly controls the administration. F or
example, ministers are usually first secretaries of the Party organi
zation in their ministries. The director of a company or factory,
however^ is often only vice-secretary of the Party organization in the
unit. A1J important issues have to be first discussed and decided
upin at’ the Party meeting. Nevcftheless, unlike most Eastern European
countries or even the Soviet Union, where a largo number of cadres and
Party members received advanced training in technology and management
after ^orld War II, in China sone cadres attended colleges in the 1950s,
but most of then studied the social sciences. Moreover, not only wore
nany of these (along with many intellectuals) criticized during the
ensuing political movements, 7 but the political opinions and back
ground of the cadres became the overriding, if not the only, criterion
for promotion. As a result, nost surviving managers were pure political
people, and management became politics. 8 In addition, because ’’redness,”
i.e. political loyalty, and political edu cation” were emphasized,
nabagerial trining was underdeveloped, Befofe 1966, China had a total
of only four or five colleges to train managers, and students even in
these colleges spent the greater part of their time studying polites
rather than management and technology. -During the Cultural Revolution,
all programs of management training were stopped and management became *
synonymous with "class struggle,1' i.e. direct political control. As a
result, the general standard of management in industry was very low.
A second reason for failure was that Host intellectuals did not
and could not play an active role in production. No doubt, after the
failure .of the "Gang pf Four," nost intellectuals have felt nuch freer
than before* However, the continuing problen of bureaucratisn remains
a source of discouragennt. In addition, nost intellectuals were not
Party nembers, andtherefore could not nako inportant decisions about
production. On the contrary, in many cases managers or political
people erected obstacles to technicians1 work, which threatened to
expose the technical inconpotoncc of the former. Moreover, because the
system of allocation of labor was very rigid and bureaucratic, especie
ally for intellectuals, no one could choose or change jobs without
permission from the cadres. Finally, nost intellectuals’ living condi
tions were unsatisfactory oven compared with the workers’. For example,
many got a lower salary than workers, and husbands and wives were often
assigned to different citieso Especially in large urbancenters, very
very few young families were able to get an apartment with two rooms.
^11 of this undermined the intellectuals’ enthusiasm.
Third, since the end of the 1960s, the working class has undergone
important changes. More than thirty million young graduates have left
high schools or technical schools to enter factories. Certainly, they
have much stronger trainihg than older generations both in reading and
analysis. Half of them spent severa 1 years working in the countryside,
where the serious shortcomings of the social structure were more
apparent than in cities. Moro importantly,people learned a deep lesson
7. For example: in 1957; more than half a million intellectuals
were criticized as "rightists," and, according to Mao, China had a total
of 5 million intellectuals (including primary school teachers in the
countryside) at that time.
8. Lack of a strong Party-Technology stratum is an important
difference between China and most Eastern European countries or even
the Soviet Union, where this group has strongly influenced processes
and effects of economic and political reforms. In China, the Reform
Group complined that the cadres’ standard of education was too low.
(144)
from the ten years of politica.l upheaval, the burcacracy^ privileges, the
worsening situation of the national economy, and greater information
from abroad after 1976. As a result, worker alienation and the practice
of work slowdown" became very popular, and young workers wore called
a tindependently; thinking generation.”
i
->
i
'y
fourth, the system of wages (including bonuses) did not accord with
equal^pay for equal work” and was not linked with the social value of
production. For more than fifteen years, wages and salaries remained
unchanged• Finally in 1978, sone workers1 wages were raised, ■
but
partly
managers
, . . according to their seniority and partly
u by -----o-- r 1 and cadres1
j
decision.
Before 1978, bonuses were :fixed (five percent of total wa^es)
and distributed ovontly as ian additional
—•••
- wage to everyone except absentees.
Since 1978, many factories have changed this system and workers bonuses
now accord more closely with their
production,
z. x performance
--- in
— ar
----------------However,
the following problems remain: ((a)' managers and cadres consistently got
the highest bonuses everywhere. ((b) The production targets are raised
too quickly, and are used to control the workers. (_
__ of
(c)zBecause
differences in the technical structure of production in different
industrial sectors or.different product typos, sone enterpoises find
it easy to exceed their production target while for others it is diffi
cult or even impossible. As a result, gaps in bonuses between different
sectors and factories became large, (d) For the Government, the new
system contributed to widening the budget deficit. On one hand, the
government spent more money for bonuses; on the other, the bonus system
led many ent erprises to exceed their target by wasting energy, raw mat
erials, and labor. Here again the culprit was the absence of a link
between bonuses and the social value of products duo to the lack of
an efficient price structure based on some kind of market mechanism.
i
iinports of coplc-ol, tectoclogy -nd oquipnent consti
tuted tne nain stra/uego of the lo.no The results ?rere disastrous, in
part because of the pitfalls of.the planing system, wealmesses in the
process of decision Baking for Juvosteont, and indequate nanagement.
However, wealmesses j.n the foreign crade systen itself should also be
mentioned. For tne : nport of large -scale projects, each industrial
ninistry could usually negotiate th c'^ly with foreign conpanios without
intervention iron the dr nLsthy of Foreign Trade. But much unofficial
information suggosus that trained personnel were often kept from playing
much of a role in such negotiations, while the cadros who made the
important decisions lacked Imoulcdgo or experience of technology and
world market conditinru.
Finally, there was the problem of assimilating and digesting the
imported.equipment and technology Hot only did the ’’Cultural Revo
lution. interrupt technical education for ten years, it also disrupted
scientific research. Many technicians wore left doing work they were
not interested in or wh?.ch did not utilize their knowledge.
By tne latter half of 1978, it had become apparent that if China
were to avoid an economic or even a political crisis and at the same
time implement the ‘^our Modernizations” policy, a change in economic
strategy from the "Ten Year Plan” to economic reform was needed. From
the lessons of the Flan the following conclusions wore drawn:
o
Bureaucratic control of the economy had to be reduced.
o
o
o
Economic planning and decision making had to make use
of the
•market mechanism.
the<market
mechaDlsT:...
A direct link was needed between economic benefits
for planners and managers a, nd their record of
p^rformancc.
The ’pricing system had to express the relation
'between social demand and supnly0
i!
(145)
o
Politically oriented managers had to be
gradually replaced by technically oriented
managers, and workers given a significant
role in enterprise management.
o
Direct links were needed between production
and social demand and between the quality
and quanty of workers r output and their
income.
o
Enterprises needed greater autonomy in
deciding what, how, and how much to produce
for the market.
AGRICULTURE
The situation in agriculture was different. In general, because
of the lack of capital and technology, as well as the low standard ofeducation, geographical location and the weather are still very important
determinants of output and income. Moreover, institutional shortcomings
had an even greater negative effect in agriculture than in industry.
The "Peopled Commune" has been the basic economic, political,
social, and militia unit in the countryside. Before 1979, local govern
ment at the province and county levels sent production target figures
(determined oy the central government’s economic plan) to each commune.
Cadres in the communes directly controlled production (what, how, how
much, in what proportions, or even when peasants had to plant) and
completion of state purchase quotas. On the production brigade and
production team levels, cadres were able to deuddehow every household
and peasant did their work each day and how products and income wore
distributed after taxes and sales quotas werefulfilled. Theoretically,
peasants1 incomes depended on the harvest, which would determine the
’’value of a work point, and on how many work points they accumulated
Nevertheless, because of cadres1 power and loopholes in the accounting
system, 9 the cadres1 income was usually several times that of the
peasants. 10 Even when the harvest was \very poor and many 'peasants had
to leave their villages to become beggars, the government could still
get agricultural products from the cadres, while the latter still
enjoyed economic benefits and privileges.
The state economic plan and political movements strongly influenced
agricultural production, because the whole process of production and
distribution was controlled by cadres, the state’s representatives,
whose economic and political benefits were not linked to their success
in stimulating prodiicting
prociiicting production,
production and because many cadres were poli
tical people and knew little about agriculture, f'or example, the
movements to "Learn from Dazhar" and "take grain as the key link" destr—
oyecl agricultural production in many places.
Therefore', botho cadre privileges and the arbitary leadership of
production gave rise to ’’work slowdowns” among peasants and retarded
agricultural growth.
9. In fact, accountants were appointed or dismissed by cadres; usually
the accountant’s work was not supervised by peasants. One reason was that
many peasants wore illiterates or semi-illiterates.
10. No statistics can show this situation; however, during the past
throe or four years, many newspapers in China, such as People’s Daily,
Kenmunribao), have published articles criticizing this situation.
See people’s Daily, July 30, 1982, p.5, August 27, 1982, p,5, and
September 16, 1982, p. 4.
(146)
!LIn ^dClplop because of the large gap between prices of agricultural
PeasmtsScouS p:i:’°dUcts and tlle state monopoly of purchase and marketing
peasants could not earn enough to permit investment and savings.
Consequently, mitigation of the conflict
c
between peasants and
caares,
relaxation
of
state
control
of
, .
,
,
----- -T production and distribution,
and increased peasant autonomy in production became the peasants'
c io cemands and the principles of economic reform in agriculture.
POLITICAL DEVELOPMENT
+b , The,faPure1 ?f th^
th?i "Gang of Four" did not stop the struggle among
the top leader snip.
lignment and realignment of political forces
0?2frlns- BGfore th0 Third Plenary Session of the
11th Central Committee, held in December 1978, there were basically
three contending forces: the "New Gang of Four" 12 (including their
aohleved their position during the Cultural Revolution;
t
Group; and the Moderates, 13 who at that time were conccnF th"
the ?otroleun Group. The position of the "New
andSthe m 7 +aS Wea^ SlnCe lt WaS oPPosod
noth the Reform Group
neonle ns wen eSm
“2? inPortantly, by the majority of Chinese
peopie as we^l. On the otner hand, because the "Nc^. Gang of lHour"
S2ne P°W1er at th“ center while the Reform roup‘itself was
very
S"PP"‘
““ ’Otal“O> “=
To nobilize this support, the "liberation
of thinking" was put forward, several inportant theoretical discussions
wore held, and '’Democracy Wall" was created, 14.
Compared to "Prague spnin^
j
of a decade earlier, the Beijing Spring n
at the end of 1978 and the beginning of 1979
--J was very short and weak.
In Beijing and other large cities, 2Bi5-Character
.
Posters'1 at first •
mainly criticized the "New Gang”of Four,
" and leaked infornation about
the struggle at the top to support the Reform Group. Consequently '
Consequently
December me
1p1^ect ^PPort for the "Democracy Wall" before
the Third T’ Pr°sa01y fron Dcng Xiaoping himself. However, after
situSon S
? erlon °f th0 10-^th Central Committee, the
ituation began to change. On the one hand, the "New Gang of Four"
the nature o? "J
eforri, rouP,was strenghtened. On the other hand,
the nature of "Democracy Wall" (sone people called it the Bcnooracy
s2Le^ / Was als° changed. Sone young students and workers
15 not
satisfied with confining their criticism to the "Now Gang of •™our
,"
?zanple’ dn nany places, especially in “poor” areas,” 'output- of '
^2
Tho5"?,8 GaS tW2
fiV° tirleS that
collective fields.
nan of CCP 2nd
°f
lncluded WanG ongxing, former Vire Chair13
Tb2 "mT1
°thGr uenbGrs of the Political Bureau.
13.
_•
Moderates ,in.this.case means the people who viewed the pre"Cultural Revolution situation as the best noderl for China’s future.
Basically, they are a najority in the Party, the government, and the
Arny.
14.
Beiiin^^At
3?^
Wal1 in xidar- close to Tian
Men Square,
tost of ’th
th^?^e, "Big-Character Posters" were put up on it.
°n
C^ticized the bureaucracy and discussed " sorialist dono
ofbova
rte:refcre»- People called it "Democracy Wall." In the autunn
01
it was "cancelled."
here»SeIa^aMAnv1n-fS^b°Ut y0U^ students and workers should be mentioned
• la/ Hany of tncn wore Party nenbors or Lea -ue members
(b) Most
SX’W.S
lfe0
LZXono
1
After 1968 n-nv of t1 C"
10
of bho Cultural Revolution, (c)
then did not hnv
SGnt t0 th° CGUnbryside. (d) Although most
sCy In ZuS to^t °ppOrtmity to sbudy in colleges, they organized
problems before 1Q7R S/U3\ 3?Clal; Pdibica, economic, and theoretical
the liZ^Ln oi thi ^VheZiluro of th0 "G^g of Four,n especially
Hr H 2 L
f thlllklng" and tnQ creation of the "Domocr’cv Wall "
afforded then an opportunity to express their opinions! (f)Z policy
(147)
of openness after Mao dies gave them move information fron abroad.
(g) theoretically, they can ]?e divided into left" and "right” as
with people in sone Eastern uropean countries and the Soviet Union.
T-- H--- - -
1^1
-
-
~. T
-
T—. —
r
I
n~
— —-- ■
■----- — —
r - ■- —■■■—inir
.— —i---- —--fr-
w-w.t-
rr
- r-
-------- w ---— -
■■ ■ —
—■
—■ *■■■ —- »
"■i
•
*'
TRIED to criticize the system itself. In addition to "Big-Character
Posters” on "Democracy Wall, ” many private magazines and newspapers
were published; mass rallies and discussions were held; small groups
were organized; and demonstrations occurred in many cities. No doubt,
such a "Democracy Movement” strayed for fron the permission granted
by the system. In particular, Arny criticism of the movement became
stronger and stronger.
Many workers and intellectuals sympathized with sone aspects of
the Democracy Movement.'’ However, they were also becoming increasingly
weary of political movements in general and more interested in econonic
benefits. Moreover, at that tine they placed great hope in the Reform
Group’s ability to bring about political and econonic changes. And,
although the "Democracy Movement” made sone incisive criticism of the
bureaucracy, theoretically its argunents were still very weak and at
tines confused. For all of these reasons, political support for the
novenent fron workers and intellectuals was limited and passive.
THE ECONOMIC REFORM
Fron the latter half of 1978| roforris began'to bo inploncnted
in industry, foreign trade, and agriculture. This process lasted
about a year, after which the nsin ocononic strategy began to change
to one of Roadjustnont, the nonentun of Econonic Reforn was stopped,
and high level centralization was once again enphasized.
In general, the Reforn was more talked about than acted upon, and
most argunents wore uade by scholars and professors rather than by
planners aaid nanagers with practical experience in econonic work. More
importantly, the Reforn never had behind it the requisite political
conditions for success. Besides the change of political
lino
by the Reform Group (soe below), it was in fact the Petroleum Group
and not the Reform Group that controlled power in the econonic shore
during the crucial period. In addition, the cadre system remained
intact,and the Reforn GrOup could not find -a strong Party-technician
stratum to support its policies. Discussion and implementation of the
Reform therefore wore loft to political people at every level, who in
fact, directly or indirectly, opposed most of its measures.
Basically, the central administractive planning systen was not
changed much; i.e. plans and' targets fron the central level still
connanded the activities of enterprises. Compared with the situation
before the ^eforn, localities (especially provinces) received more
rights and were freer to make decisions regarding finance, investment,
price regulation, and foreign, trade. However, the fulfillment of state
plans and targets was stikl the precondition for such freedom. Similarly
for most enterprises selected as "reform exporinont” sites, the "expan
sion of enterprise autonomy” did not go very far (see below).
On the other hand, the process of plan making on the high level
was not changed; that is, it was still a top-down process, and more
importantly, the plan was not based on an accurate perception of
social scarcities. The central level still controlled price making,
allocation of most in raw materials, energy, taxation, wages and most
invostrient.
'
Thus, the reforn of the planning system actually amounted
to: (a) the attempt to fashion a reasonable state plan without
recourse to a market mechanism; and (b) the attempt to stimulate local
and enterprise plan fulfillment by permit ting enterprises to keep a
somewhat higher percentage of total enterprise profits. Consequently,
the Reform was basically modeled after the Soviet type.
f 148)
nude andront?oUedebyrhChin%Wer "planni^ prices» ; they wore directly
except on the frco Xr
T ral and local Pric° bureaus'.
cost of production, X :n:SisCeCrrfitrS pr±Ce was
Certainly,
to
its "
profits, and taxes. However, rates of f !’ c?nnercia;L cost, connercial
f
were decided arbitarily and Aot
in nof 0“torI,rise Profit and taxation
vrty or the social valuX not in aCpordancs ^th enterprise productia direct or even an iMir^
™
between profit and productivity? £
^^ciivity, or
in p
addition,
uoually was stable productivity.
or even fixed th
dltion' 'because the planned price
or even
express social denand
or ?hofixed,
chX there WaS 110 aoVu“cnt of prices to iCG
—
1
or
the
changing
enterprise. As a result
chan6iug productivity of the
individual
result, plannersS
nation about the arelatXbi^f
nOt
to ®ot
correct
infora reasonable plan.relationship
'
P between
betwocn social denand and
supply to nake
?r» ™
In sone Eastern European countries, such
vakia (1968^)
Were dividod int0
of the price ’sysS:
0
(a)
0
(b) general consuner goods,
0
(c)
food, energy and sone basic
luxury goods and
Hungary and Czechoslo—
groups in the refonn
nocossitics.
moans or production.
For type /k> bot.
i-hey understood government made it their policy to keep prices'
Prices
Price of Type A Soods, dince both supply hA'
um enly
XarPly increase
increaso the
and ^
sharply
such goods had be-n c
■
'
> ospocially, demand for
-^ type
constrained
for a long tine,
sharp inflation of
a W(5uld
Such a sudden and
bo very dangerous for their reforms,
to p °C0^mcally and politica. lly
„ * This was the case with respe-ct
beginning of their
were allowed to float freely,
within limits. This contrasts
with the approach taken bv Ch-ir>< i,- ,
structure for tyoe B -dr
a> Whlch did not
--- change the
(type A). At first h— , eC0^s> hut raised in agricultureprices
, prices
e of the reform in
’‘s'Son”?
”
1
on the free jnarkot increased, which had
market. Then the governnont tried to
Xven
administrative)1 noasures,
such
as by subsidizing pric ref agricultural
contributed to enlar-i-l t
a
X products. Put this
;eficit, and did not in any case
At the r—
a4y Case
same time, imbalances and
products to^ri --b
presented the supply
of sufficient
on tho st-t neeti 'the denands °f the
,
--- J industrial
tno stuuto market were contmii peasants.
i “xi ---.Therefore
, though prices
strong, finally, the
,r„-.d lled’ the Potential
inflation
was very
subsidiary foods by an governkent raised the retail prices of eight main
average of 35- sorcont. T1M effocts of
.Ml,
BypS:r,ot‘E„0oaCTS8rid;.
---- -j •
(
government suent n
subsidy for workers and tne
staff
nenbers (Se yuan Sr
ncubers were mde Chappy ^the’f^t
Workers and how
families, the food
-1 subsidy was no? noX Jo
f°r nost
subsidy was not enough to conpensate f?r th? _?°npensate for the infood
________________
___ deficit grew Ja^cr.--------------------- “ inflation;
16 and
(c) the budget
16.“
The food subsidy is Th ven TA
‘---- ...-------------------
r»,.,ur o^’c“
sasnsren;and on
-anillcs, food expenditure is
their r50
60
. to
.
’0 Percent- of total income
US to buy subsidiary foods. po?’oXT AT01'? °f/J0 f°od ^PcnditUro
yuan por month (two persons, i o b??h , ’ f a family's income is 100
one child), plus the food XT
aA
X
wifo
a*d have
per month. On the other hand if’th ^f ’
totallllcome is 110 yuan
of total income before planned inflT X cx;caaditurc was 55 percent
for subsidiary foods was oTi ?? A tT’1*®; 55 yuan’ ^0 expenditure
--
-s
:£r£cat
(149)
nanufaeturcd ionsweJ^oX^id sociS^1™’ priCes of
othe3;’
^aiy, nany
rais^
unchangod during tho^Refornt^The
?nd'naterials was relatively
: .1 •controlled nost raw natorials and ener-y* ^Ithou . Comiss±on still
none agricultural products thnn h -f
tllthou8h conniines could P-et
efficient industry because of^thc^S^^^cZ^Se!
^^^^airS^fiBwaZ^ivenOr2\tThC
°f
10anS
that of allocation of financial^renourr6 eGter role than before, but
syston was given greater freedL to
We'?^ned* Th® hanking
of the central bonk. JiS a ^s’ult it T ?
WlthoUt thG P^nission
local givcrnnents, enterprises ™/
°CSiQr than before for
at low interest rates (less tlnVl pcrS^ /
1°Cf'J ban]£s
wore two problens. Because the Price slrLSre^n^’ +H°*G^ ^o
(!•©• price was not
• 1, c STruct^re was not refornod
relation between social donand^nd^unnl^^^^^-°f onto^^os or the.
could still nake profits if they produced 1 ■ :L^offlclont enterprises
connodities. Second, such de cent™X? hlS^ ?riCe but lcw c08*
had a strong inpact on the national ocon™^ °f,tlle finoncial systen
■allocation of both financial resource
r?lc
Wlt^ respect to the
-nt lost control of
governexaapS®
ref ornod.
hise school graduates in jobJ ^HwovS^tJ11-CZanination
placing
renained a very inportant deterninant of tlieS Par®nts’ social Position
For an ordinary graduate, the type S lob hZtd
Prospects,
usually was a deternining condition fnn
1
n brotllor or sister
for "waiting for enploynent." ’ But verv
J°b °r ^Ualifyine
was given up. Later, an in-ortont ch-™
the examination systeh
problem of unenploynent and^he^robt'^of^ac^ 7°
b°th tllc
the governnent pernit+od
f baclward social services.orkshops,
to »emll0 a,l°ll
interesting thing is that sone’of th 7 private sercicce. The
five workers. 17 However, a person -1™^'been.PGrnitt°d to hire up
that position. Certaihly this n™
? a J°b could not ieave
ding acre jobs for yoSg g^ato
been ve^ helPf^
provisituation in the social services ’ On the Sh°
?reated a oompotive
especially intellectual, are stm
hand’ although people,
jobs or to emigrate from one city to an'obh°WeC'+’t0 choose or change their
exchange jobs with each other 5?
n the^ tne3r
allowed to
another person in a similar position67 ?rG.p?ftuna'tQ enouSh to find
*nd if both sides can get permission fro/f?111313 to,nake ‘3Uch an exchange
have been more difficult for iSeUecS
’
J°h e2chaE^
intellectual than for unspecialized workers.
•orkoS SS%rIVjyS’«’
»=»• ftr most
important determinant of ware 1JCQrs enPloycd was still the most
People (less than 5 percent ) r™
i
the R°forn’
a ^w
twelve yuan-per month ) wage intr^S C ™d
(by six or
and model workers. On the other hand ’ih n.nos of fhese were cadres
m several ways, but because tho
" e.lJonus system was reformed
largely unchanged, the bonus reform pcns'
sysion as a whole remained''
the government anjbounced a poLct ofW?t
llnbc'd effectiveness. Later,10 or 15 percent of wages ™J
boMS®8 t° less than
policy with "work slowCwns^
W°rkerS
Stnff rcacbcd to this
Zt last count (the c__l
en--0fnd9°°)11th0re Wei>6 TO0’000 P^ate individuals engaging in handicraft
--- and snail connorcial services.
(150)
In publications, many people (fron tho ^eforn ^roup to riany
ccononists) talked extensively about tho reforn of the nanagorient
system, and, in fact, experiments with decentralization wore made in
sone enterprises. Nevertheless, in general the system of management
was not markedly changed, especially at the enterprise level. Concer
ning this situation at least four problems should be discussed here: '
autonomy of the enterprise; the relationship between the political
and the technical people; the position of workers and democratization
of management; and scientific methods of management.
The ’’expansion of enterprise autonomy” was implemented in a large
number of enterprises. In this experiment an enterprise was able to
produce limited types of commodities for the local market after fulfill
ing its plan target. It was also permitted to pay higher bonuses than
other enterprises if it exceeded its target and successfully made profits
Iron its market sales. In addition , an enterprise was able to a keep
a percentage of its profits (enterprise funds). Finally, it held the
right to appoint its own middle—level managers without permission from
high level administration officials. S
0E10 investigations indicated
Sono
that this experiment was successful—most of the experimental enterprises
increased their out put and exceeded their plan targets, and they made
higher prodits than other enterprises in the sane sectors. Consequently,
their workers and staff received higher bonuses. However, the experi
mental enterprises were carefully chosen: they hold sone prior advantages
over other enterprises in the same sectors. ^Iso, the government
favoured the experimental enterprises with superior access to credit,
energy, raw materials, technology, and markets. 18 Therefore, their
experience was of limited relocanco to other enterprises, for the
governenont would not have been able to provide similar advantages
to all»
Moreover, the success of the experiment was further limited by
developing contradictions with the old planned and ovorcentralizcd
system. 5or example, the old arbitrary price system could hot properly
reveal the strengths and weaknesses of the experiment, and the old
system of allocation of raw materials and energy was not always at le
to provide enough energy and raw materials
. In ad.'.ition, for the
--------government, there was a conflict between the experimental units and
other enterprises.
Besides this moderate change, a handful of enterprises in 1980
experimented more radically with a system called ’’self—responsibility
for profits and losses.” These enterprises could make their own decisions
about what, how, and how much to produce, according to the market situ
ation. They were permitted to keep about half their gross profits,
on^the average. Very few enterprises were involved in this experiment,
and its scale has not subsequently been oxpanod. 19.
The relationship between political and technical people concenned
not only the system of management, but the political system of management,
but the political system as well. The government emphasized that it
wanted to promote more intellectuals to positions of leadership, and
that the political^peoplo had to study technology and management. How
ever, only a ve y few technicians were appointed leaders of enterprises
(and then usually only as assistants), and the power was still held
by the political people. The reason many political cadre opposed
management roxorm was not only that they feared losing their positions
(wlA*rh entitled them to political and economic benefits) to technical
people, but also that they really were not able or willing to learn
more about technology and management after thirty years of political
indoctrination.
18. See Jingji guanli 198T,' voT.6," nosTf6-23, and nos.24-26; and 19807
vol. 6,nos.15-21.
19. Ca,rl Risnin: '’Market, Maoism, and Economic Reform in China,”
Bulletin of Concerned Asian Scholars, vol.15,no.3 (l98l),p.57.
(151)
According to publications, some elections of leaders, and managers
were held, and Congresses of Workers and Staffs took place in many °
enterprises. Nevertheless, un-official information indicates that
political .cadres often won such elections; and the Congress of Workers
and Staff were often controlled by these people. In fact, the situation
of alienation in enterprises was already very serious. Both "political
education and,the "class struggle" had already lost their appeal to
workers. During the Reform, the new bonus system and a system of heavy
penalities for nonfulfillment of production targets, absences, etc.,
oecame the economic method" for cadres to control workers. Nevertheless
the cadres -^widespread incometence, bureaucratism, non-responsibility,
privileges, waste, and inefficiency all contributed to increasing worker
alienation, and also provided an important basis for the sympathy and
support that many young w rkers extended to the "Democracy Movement."
Although scientific management was greatly emphasized during the
Very
enterprises actually employed it. The reasons were
hat general knowledge of modern management science ^as quite under
developed in China, kost managers were not trained in economics, busi
ness, or management, and under a socialist system, modern scientific
management should also be democatic management in which workers and
ow-level staff play,a more active and important role in shaping the
enterprise s activities. However, such a role was in conflict with the
bureaucracy’s position.
Sone important reforms were made in the foreign trade area. In
articular, the system of foreign trade was decentralized, the import
o± capital, especially direct foreign invesment, was permitted, and
special Econmic Jones (SEZ) were established. All this affected both
the economic and political structuresc
Deoentralisatiin of foreign trade took the following course. First,
the o-d overmentralized top-down systen w^s changed into a nore pluralistic
syston, in which local goveri-; • ' '■ , particularly on the provincial
evel, and even sone enterprises, hecane increasingly active and had
greater froecon to engage
encode in foreign trade. They could, for instance,
directly negotiate and
with foreign companies.
—L sign contracts with,
companies • CSecond,
they were alloweed tc keep a percentage
percentage of
of foreign
foreign exchange
exchange earned.
earned.
is po icy was a strong stiriulus to local governments and enterprises
o increase exports. However, a number of problems arose. The large
price gap oecwo-en tho domestic and world markets generally caused inporS. surprises to enjoy high profits but exporting enterprises ; ’ .to
inert.,
aecentra.h.zotioi of foreign trade conflicted with the state
macro-economic planning system; inefficiency and low productivity due to
|111 bi1Q CiOnscfc-LG system of planning and management were exposed
efla1bOna7 C0’nP°titi011> and hindered the development of trade; and
people skilled m icreign trade work were in short supply, ^ctually,
except for the last, ttese problems could be solved only by further
and more thorough reform of the whole economic system.
By the end of 1980, the government had borrowed S 14 billion from
^+bbIta^7’r''SShFe5nally' Swode' Belgium, Argentina, Canada, and
ritam. To facilitate the borrowing, the Bank of China had 114
ranches abroad, and 20 branches of foreign banks were established in
eijmg. In i960, China befane a member of the ‘’orId Bank and the
1 Q«nrn+u Ona^ M°netary Fund. Perhaps more importantly, by the end of
i 0 SE?1 S WSre seated under the "open door" policy, and these
JG 1,lor<s t'-an £500 million in foreign capital. «rom the SEZ, the
°°^ld.set foreign exchange, Irstn sbouy international compand vrain managers. However, the SEZs have also made the
na s people more aware of the major problems of Chinese people
%0Wn o^onic syste. In addition, tne management systen in the
zones ‘^Mor
tSS-n 33 & thrSat to th® Cadre systen outside of the
the
^eover, the income-gap between workers within and outside
the bEZ threatens to become a political problem.
( 152)
20 Finally, tnere is the broader issue of what ought to be the relation
ship between the \ecial Export Zone and the whole national JcononJ.
ar®a where the Beforn had been significant is agriculture.
oi lonec earlier, for the Chinese peasants, there were three overri
ding issues: autonomy in production fron bureaucratic <
control; distrioution according to output and without the bureaucracy’
rs economic privileges; and expansion of the free narket to ng-ke cash,
The Reform in
agriculture spoke to all three issues.
A„
First, since the end of 1978, the system of fixed fiarm output
quotas for each household, or the system of production responsibility,
has bocome widespread, Cadres’ control of production has therefore
been able to make their owndecisions about production. Because income
has become directly linked
; to output, and team and brigade cadres have
had to take full responsibility for output quotas on a priece of land
and earn their own income through labour, it has been more difficult
for them to <command special privileges. Second, the size of private
plots has grown, permitting peasants to produce more subsidiary foods
for
been the market. Tnlrd, S^te aon°poly of purchase and marketing has
limited to grain, cotton, and some oil crops, allowing the free
market has
-- been
-1 a very important way to make cash, since without it
they could only get4- cash annuaiiy
en^
yoar# finally,
because the government’s control in the countryside has been weakened,
small-scale industry has had
had more opportunities to develop.
^ricultur^ bCMn a Veh difficult
to inplenent the Reforn in
agriculture. Many cadres m the countryside have opposed it. Their
contributedT •
fron the a fact that the free narket has
urovido Sn, S
aR°n’ specially with the governnenf unable to
for raw nXr? “duStrlal Products to the countryside. Conpetiticn
ior raw naucnals, energy, and narkets between urban large-scale
anotKrhand^SU+lly inefficient rural snail-scale industry has been
nentation S
fRctop Moreover, this Reforn with its fragc However the
P0SeS,a Carrier for the nechanization of agriculture.
f . , ’
lral population is still nore than 80 percent of the
exch nSPtiin01ih .China’
spendinff
amounts of foreign
uent^ it win +'Or
co'fcton is a heavy burden on the governReforn tSbhn
dTfTflcult for . the policy-nakers to stop the
>
o b ^erc nay be continuing struggle ever it in the future.
THE .REFORJL occurred at both the
was bX^hZTSS r°OtS leVelS‘ M the t0P’ th0 P°wer structure
of the W™tbThly/20r£'ar-ized- Mter the Third Plenary Session
returned tc +1J i r
nore and nore "eld cadres" were
■, 1
,
heir f orner positions and regained power. Many of these
Revolution °p?°S°d the ^cf°rn, and favored restoring the pre-cultural
ModeSX
tuaJ1lon‘ together with the
they becano the new
s-en the ‘
10 loaoershiPthe gfassroots level, as we have
MovXJi n
Se^ ®eneration continuously expanded the "Denocracy
and their nr^601^11? ln lnrce cities during the first half of 1979, ’
svstenntio " HeIlti-be?an0 n°re and n°rc Philosophically challenging,
strong'S o™ radlcad; Sn thQ face of this, the Moderates’exterted
nov-nfnt woe hnr- U^°n
eforn group to suppress the novenent. The
were n -rosL ci
’ private publications were United, and sone poeple
were a,..,.cs-ced and sentenced to priseon terms.
In the end, the Reform G-rrnm i i-c< -i-fi <changed
’
- •
its
emphasis from
the Ration of
to persist
RoJ
S.lcRdyshiP» the Proletarian Dictatorship,
the Socialist
Road, and Marxian, Leninisn, and Mao Zedong Thought.
20. 1
staff working in the zones have an incone which is
over
40
percent
higher
"China's
1 T>~ — than
'““i outsidQ the zones, on the average. See
Processin? 7 n Econonic Zones as Seen fron Conditions in ExportTn/6
■fcle DevoloPing Countries and Areas," by Tang
Huai, Juno 1981 Jingji Yanjiu, pp. 62-68.
(153)
As a result, economic reform in China lost its iiofcssarjr political
foundation, in contrast to what occurred in Yugoslavia, Hungary (1968),
and Czechoslovakia (1968).
THE ECONOMIC RBADJUSTMENT
Although the Economic Readjustment was put forth in the middle of
1979, in fact, it replaced the Reform as the main economic startegy in
the first half of 1980. At that time, the Moderates hag gained consi
derable power in the economic sphere and the ^etroleum roup had begun
to come under criticism. Except in agriculture and foreign trade, the
Reform had made little headway, and the government now seemed alarmed
at the continuing budget deficits and the development of open inflation.
In general, the strategy of Economic Readjustment is recentrali
zation, strengthending the central government’s control of planning,
finance , and investment decision making.
ccording to official
opinion, the Readjustment should solve the 5r°blems of imbalance in the
national economy, inflation, and deficit spending. The following
measures were taken: the amount of investment in the state plan was
cut down, experiments with the expansion of autonomous jurisdiction
of enterprises were slowed down, wages and bonuses were generally frozen
many enterprises and institutions in heavy industry and military industry
were closed, and some uncompleted large-scale projects were stopped.
21.
However, the Reform in agriculture and foreign trade has not yet
stopped, since the government has required more grain and row materials
from agriculture for light industry and for the reduction of imported
grain and cotton in order to create more foreign exchange and to attract
more foreign capital.
The results of the Readjustment have not been encouraging. The
central government has cut expenditure for and investment in heavy
industry and military industry. However, on the local level, investment
has not been rcduced-but hasincreased quickly-since the banking system
has been encouraged, and more importantly the price system has not been
reformed. As a result, on the national level, total investment has
increased according to government initiative. 22 Furthermore, the
efficiency of investment, productivity, and the condition of management
have been poor because the management system has hot been markedly
reformed. And finally, the political cadre have continuously controlled
production, but technicians and workers have not yet played an active
role and the system of wage and bonus, and the economic plan have not
been based on the market mechanism.
According to official statistics, the inflation rate decreased
markedly in 1981. However, the price of food as a whole rose 3.7%
(4.1 percent for non-staple foodstuffs, including a 10.6 percent
increase for vegetable prices.)
23 In addition, some enterprises
sold shoddy goods as quality goods, decreased the quantity of produce
per unit price, and otherwise raised prices in disguised forms. This
increased the burden on the consumer. The reasons were that industrial
production, inciting light industry, has been poor; there arose a
conflict between the free market and the state market; the pitfalls
of the old pricing system have not been overcome; and the management
of the commercial sector has not been inporved.
21 . Unfortunately no statistics about such ’’stopping, closing, and
changing” have been found yet, but unofficial information suggests
that the losses suffered were heavy.
22. See Jingji yanjiu, March 1981, pp.3-12.
23 • See Beijing Review, May 18, 1981,p. 17 and nay 17, 1982.
************* **
The structure of industrial production has been readjusted to the
extent that the proportion of investment, raw materials, evergy, and
labor force going to light industry hrs been increased. As the result,
the value of output of light industry increased to over 50 percent of
the total gross industrial output value in 1981. Nevertheless, the
government has continously criticized this situation because a larger
number of light industrial products could not be sold.
Tlie economic strategy of Readjustment is to continue for several
years. These are to witness more decrease in total investment, invest
ment in heavy industry, and budget expenditures at both the central
and local level; further strengthening of. the centralized planning
system; tightened control of prices; and a return to centralized deci
sion making regarding investment, finance, prices, wages, foreign trade
and the allocation of important raw materials and energy. However, the
Reform in agriculture will continue and greater ’’openness” in foreign
trade will be maintained.
However, the Road jus tnent has given rise to and will continue to
encounter the following problens.
Recentralization has strengthened and will further stronghen
the power of planners of the central level but weaken that of planners
at the local level. As a result, the activity of the local level has
diminished and the pitfalls of the overcentralizcd planning system,
which arc the most important reasons for imbalance in the national
economy, have been deepened.
0
0
The/ conflict between the Reform in agriculture and the Readjust
ment in the national economy has been and will continue to be sharp.
For example, when the government is not able to provide enough industrial
products for peasants, the production responsibility system and the
development of the free market must strongly stimulate inflation, In
addition, the ^icclinc of cadro control in agriculture has been in
conflict with the recentralization in industry, and it has been in
and will be opposed further by the bureaucracy (and even the Army)
in both countryside and cities. Moreover, the development of smallscale but inefficient industry has not only become a threat to the
state-owned light industry in cities, but has also disrupted the state
market and price structure.
0 The contradiction between the rocentralization and the Reform
in foreign trade will be another difficulty for the government, ^or
foreign trade, a reformed price structure and management system are
necessary conditions for competition in the international market. r
However, those measures conflict with the strategy of Readjustment.
o
The attitudes of workers and intellectuals toward their work
will be a continuing problem. On the one hand, during the Readjustment
period, wages and salaries have been frozen, bonuses have boon limited,
and the reform and democratization of management have slowed down. On
the other hand, inflation has still been a problem to the government,
and the bureaucracy’s position has been strengthened.
o
Even local cadres have opposed the Readjustment, because their
power ..and privileges have been reduced.
0 Lack of energy resources has been and will further be an
important problem for the Readjustment, particularly under the planned
but bureaucratic sustem of allocation of energy. In addition , at the
present time, many heavy industrial enterprises have closed or stopped
their production under the Readjustment, and, according to some publi
cations, the utilization rate of equipment in industry is only about
75 percent because of the lack of energy,. However, further development
of small-scale industry in the countryside and increased production
in the pctrocherd.on.’l industry nro ndiill ihn Rend jusrhnont1 s focal poihts^.
t
(155)
0 The international environment is not very helpful to the Read
justment. The econonic situation, in most western countries and many
semi-industrialized countries is not good, and international conpctition
especially in manufactured goods is very sharp. Therefore, if China
does not reform its inefficient econonic structure, its position in
international competition must be weakened. Also, although several
measures (for example, the establishment of the SEZ and the Investment
.and Trust Company ) to attract foreign capital have been taken, the
stability of the political situation and of economic police, the incom
plete legal systen governing foreign investment, and the dangers of
the overcontralizcd econonic systen are still concerns of foreign
investor. For example, the Readjustment stopped some large-scale
projects, which wore imported from Japan and West Germany. This
measure had a strong impact on Japanese and other investors. 2^4
And finally, in the near future, China will continuously have to import
a lot of grain and cotton for its food supply and textile industry.
However, the price fo grain and cotton is increasing and will continue,
to increase on the world market.
Officially, Readjustment is a necessary precondition for further
reform of the economic system in the "future.” But to sun up the above
arguments, it is unlikely that the Readjustment will succeed fully,
especially with respect to efficiency of investment.
Readjustment
is a process of recentralization of the econonic systen, and it therefore
will further stronghen the position and power of the central bureaucracy,
which is an inportart obstacle to future reform.
Recently, Hu,Yaobang, the Secretary General of the CCP^: clearly
stated at the Twelfth Party Congress that by the end of this decade
the basic economic strategy will still be ’’Readjustment.” In parti
cular, he emphasized a necessity to "concentrate funds on key develop
ment projects.” In addition, upholding both the "loading position of
the state, economy” and a planning system of a "mandatory nature" were
strongly emphasized, while economic reform was given very little atten
tion. It is still unclear how the government can improve balance in
the national economy without further reform of economic institutions,
and how central administrative control of industry can be made compati
ble in the long run with decentralized agricultural policy relying
heavily on the free market. 25•
L BRIEF PROSPECTUS
The future course of events will probably depend heavily on whether
the strategy of Readjustment succeeds or fails. If it succeeds, a
number of results would follow. The sectoral proportions of the national
economy would be changed, Although no concrete proportions of models
are proposed, the government obviously is determined to being about a
’’strategic change”- that the output value of the light industry, as
indeed happened in 1981. The rate of accumulation would be kept at 25
percent, although there is no satisfactory explanation of why this
particular rate would be the perfect one for China. The government
deficit and inflation would be reduced or eliminated bjr means of fiscal
austerity. Industry would become somewhat more efficient in the use of
energy, and the problem of unemployment would be solved. Finally,
export of manufactured goods would increase, although it seems very
difficult or even impossible to make further reforms in the management
systen of foreign trade.
At present, people avoid discussing what type of econonic systen
would be created by the Readjustnent. However, analysis of the strategy
of Readjustnent suggests that it will further strengthen the centralized
administrative planning systen and thus lead back to the Soviet model,
even though the issue of Reform in agriculture will cause sone struggle.
24.
25.
See, e.g., Shijie Jingji daobao (World Economy Herald),July 27,
1 981 .
See Beijing Review, September 15, 1982,pp. 11-40
The problems of chronic inefficiency, low labor productivity and absence
of^incentive to innovate would thus remain endenic to industry. In
adciuion, edeept for the Special Export Zones, which are very weak and
and strictly controlled, and other projects of direct foreign investment,
the system of foreign trade would again be likely to become more
I!°^eover> although the system of allocation of labor haP
enofited from the revival of independent businesses, their position
is very weak arid opposition and criticism from cadres is becoming
increasingly strong. Therefore, if the economic situation should
inprove, sone, kind of control (for example, transforuing then into
cooperative enterprises) would be likely to bo inposed.
Finally
, the . probion
is3 norc conplcx. On the one
.,’
. of agriculture
- - - ---- —
hand, the
Kpforn in agriculture has increased both output and peasant
incone. COn bac.other hand, it has been nore difficult that before for
the governnent to
to procure agricultural products fron the peasants.
Aaaitionaiiy, che dovelopnent of the free market has contributed to
infiation. More importantly, the bureaucracy’s power, position, control,
ant privileges have been reduced in
the countryside,
in the
countryside, which
which has
has also
also
weakened the political system, Chinese peasants much he worrying about
whether the rnew policies
-• will he rolled back, as happened in 1964-65
after a similar period of liberalization”
■JS.p00'3?
f’ailuro of the policy of Readjustnent to surnount
e difficulties discussed earlier, both the econonic and political
situation will be very conplex. On the one hand, the Moderates will
search for new policies with the support of the Amy. On the other
hand, the Denocratic Movonont” nay well becone active again. As a
'thG possibility Of a situation arising similar
to that of xoland. In comparing the situations in China and Poland,
however, taero arc at least throe questions that must be addressed:
ka J What role do the armies of each play in political life? (b)
zh ,rlOpf1101? do
cadres no^d about political and economic reform?
kej What international environment does each country operate in? *
4-k
I
i
r
CHINA TODAY CHINA TO DAY CHINA TODAY CHINA 'ODAY CHINA TODAY CHINA
TODAY CHINA
TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHIAA TODAY CHINA
J|hINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY
TODAY CHINA
ODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA
CHINA TODAY CHINA TODAY
CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY
TODAY CHINA TODA'' CHIN'
TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA
china to da a
CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY
TODA7 CHINA
TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINATTODAY CHINA
CHINA TIDAY
CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY
TOD^Y CHINA
TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA
TODAY CHINA TODAY china TODAY
CHINA TODAY CHINA TODAY CHINA TODAY CHINA
TDD:f^ CHINA
TODAY' CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHIN'
TODAY CHINA TOD'Y CHIMA TODAY
CHINA TODAY CHINA TODAY CHINA TODAY CHINA
TCDAY CHINA TODACHINA TO DAY CHINA TODAY CHINA TODAY C'ilNA TODAY C-IINA
ChINA TODAY CHINA
TODAY CHINA TODAY -CHINA TODAY CHINA TODAY CHINA TODAY
TODAY CHINA TODAY CHINA TODAY CHI.IA TODA'I
CHINA TODAY CHINA TODAY CHINA
TODAY CHIfA TODA'
TODAY CHINA TODAY CHINA TODAY CHINA
CH INA TODAY CHINA
C'HHA TODP
TODAY CHINA TCDAY CHINA TODAY CHINA TODAY CHINA TODAY
CHINA
:
-
"
.
■
.
..
:■■■■
today china today thin
TODAY CHINA TODAY CHINA TODIY CHINA TODAY CHINA
CHINA TODAY CHIN
TODAY CHINA TODAY' CHINA TODAY CHINA TODAY CHINA TODAY
CHINA TODAY CHIS'
TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY
TODAY CHINA TOD-''
CHINA TODAY CHINA TODAY CHINA TODAY CHINA TO'DAY CHINA
TODAY CHINA TODAY CH
TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA
CHINA TOHAY CHINA TOD,'
CHINA TODAY LHIVATODAY CHINA TODAY CHINA T'ODAY
TODAY CH II'
TODAY CHINA TOL.YCHINA TODAY CHENA TODAY CHINl TODAY CHINA
TODAY CHINA TOT''’
CHINA TODAY CHIN; TODAY CHINA TODAY CHINA TODAY CHINA
TODAY CH’vTDDAY CHINA TODAY CHINA TODAY CHINA TODAY -CHINA TODAY CHINA
CHINA TODAY CHINA TO'Av
CHIHA TODAY CHINA TODAY CHINA TOPP CH UNA TODAY
TODAY CD N/
TODA'' CHINA TODA' CHINA TODAY CHINA TOPAV CHINA TODAY. CHINA
TODAY CHINA -TOLA .
CHINA 'ODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA
CHINA TODA'I CHK'
TODAV :HINA TODAY CHINA TODAY CHINA TODAY CH INA,TODAY
CHINA TOD, .
CHBA IO£)AY CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY
CHINA TODAY CHINA TODAY CHII'TC'J'AY L'r'JNA TODA'I CHINh today CHINA TODAY
today china tod
CVlNA TODA' CHINA TODAY CHINs TODAY CHINA TODAY CHINA
"IjDAY CHINA TODAY CHINA TODAY ?.H INA - T/jDAY CHINA TODAY CHINA TODAY CHI CHINA TCD'"
>11 NA TODAY CHINA TODAY CHINA TODAY(|4:HINA TODAY CHINA TODAY
TODAY CHI IODAY CHINA TODAY CHINA TODAY CHINA' TODAY CHINA TODAY CHINA
CHINA TDD .
CHINA TODAY CHINA TODAY CH IN,A TODAY CHINA TODAY CHINA TODAY
CHINA TODAY CHI' A
TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY
TODAY CHINA TOD1
CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA
TODAY CHINA TODAY CHI
TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA
china TOJ
CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY CHINA TODAY
- Media
1090.pdf
Position: 213 (23 views)