of China’s Economy
p V. Vyatsky
p In furtherance of their Great-Power, nationalistic ambitions, Mao Tse-tung and his group are seeking to effect a radical reorganisation of China’s political and economic pattern and eradicate the fundamental socialist gains of the Chinese people. The "cultural revolution" has shown lucidly that the emerging military-bureaucratic regime is designed mainly to serve their hegemonistic plans, speed up the development of war industries, ensure the creation of missilenuclear weapons and militarise the economy. The militarisation programme is the principal component of Mao Tsetung’s strategy in recent years and is being carried out under the slogans of "Prepare for War”, "The whole country must learn from the army" and "Work on military science and arm the whole people”.
p The adventurist "big leap" and "people’s communes" policy, which demonstrated Peking’s departure from the socialist principles and methods of economic management and clearly revealed that the Maoists had dropped the experience of the Soviet Union and other socialist countries and were out to sever relations with the socialist community, marked, among other things, a turn towards a rapid growth of military expenditure with the purpose of developing "their own" nuclear weapons. In 1953-58 China’s allocations for military requirements amounted to 5,000-6,000 million yuans or 19 per cent (in 1957) of the state budget expenditures, and in 1958 to 12 per cent. In subsequent years despite the fact that the "big leap" and “communisation” had brought China’s economy to the verge of irreparable catastrophe, the Maoists doggedly steered towards the country’s militarisation. Many factories of the civilian branches of industry were brought to a standstill after the failure of the "big leap”. Famine prevailed. Nevertheless every effort was made to satisfy the ravenous nuclear appetites of the Chinese nationalists. Foreign research centres have estimated that in 1966 China’s military expenditures totalled nearly 15,000 million yuans. Almost three times more money was spent for military purposes in 1967 than in 1960. China began to spend over 10 per cent of her national income on militarisation. 173 The preparations that were made in 1958-64 for the first nuclear test cost the Chinese people roughly 10,000 million yuans. According to the estimates of foreign experts had the funds used by the Chinese leaders on the production of nuclear weapons been used in the same period for industrial development China might have doubled her output of steel and pig iron, increased her output of electric power fourfold, and of oil fivefold, or fully satisfied her grain requirements. It is not hard to picture what this would have meant to China, where the level of modern industrial development is still low and the people have to contend with many hardships.
p Directly before the "cultural revolution”, the Mao group, which had by that time seized control of the army, took a number of steps to speed up the development of the war industry. An agency for war industry was set up at the State Council and five new “engineering” ministries were formed to direct various branches of military production. After starting the "cultural revolution" and attacking their opponents, the Maoists began dealing summarily with those who held that China did not need an atomic bomb of her own. China’s military expenditures went on growing. Today they amount to over one-third of the budget, exceed the total investments in the national economy and are several times larger than the investments in industry. The disorders generated by the "cultural revolution" hardly affected the war industry. According to the French journal Energie the building of new projects of the nuclear industry went forward apace. An atomic reactor was completed in a Peking suburb in mid-1966, and a cyclotron was placed in operation in early 1967. China’s second plutonium reactor was under construction near Paotou, and a plant with the most up- todate installations for the production of concentrated uranium by gas diffusion was built in Sinkiang. All attempts to spread the "cultural revolution" to war industry enterprises were cut short. Addressing war industry workers early in 1968, the Premier of the State Council stressed that as distinct from other branches of the national economy, where the “ revolution” should be pressed forward, "in the defence industry first place must be accorded to production and research”. The Chinese Academy of Sciences was put under army control in order to speed up the nuclear armament programme. 174 In developing nuclear weapons the Maoists draw on the services of militarists in a number of leading capitalist countries. In January 1969 the newspaper Die Welt wrote that "despite the disturbances caused by the cultural revolution ... in the immediate future China will have the possibility of going forward with her armament plans”.
p Where are the Maoists thinking to get further enormous funds for these plans?
p At present China does not have the economic possibilities for quickly mobilising considerable funds for military purposes on a more or less sound foundation. The "cultural revolution" has dislocated the economy. In a speech in February 1968 Chou En-lai noted: "The cultural revolution is costing us very dear, only a little less than the anti-Japanese war and the civil war against the Kuomintang”. Last year industrial output fell by at least 10-15 per cent compared with 1966; agricultural production likewise declined; finances and domestic trade were disrupted; foreign trade shrank by almost 20 per cent. The state reserves of many key commodities have been almost totally exhausted, and many factories and entire branches of industry are short of raw materials.
p The attempts of the Mao group to solve the problem of increasing farm output by political campaigns and the building of primitive irrigation systems without providing the rural communes with modern machinery, without promoting a real cultural revolution in the village, and by constantly wringing the surplus product from the countryside are impoverishing the Chinese peasant.
p While continuing to enforce their voluntaristic economic policy in this situation, the Maoists are trying to obtain funds for their military programme by a further assault on the vital rights and interests of the Chinese working people. In this assault they are, among other things, reducing state allocations for public education, culture, the health services and other social needs of the working people.
p Some idea of the "latest constructive" steps taken by the Maoists to attain these aims is given by the massive measures that have been lately started in China.
p The transfer of the elementary schools to the agricultural brigades in the countryside and to the factories in the towns. With more than 90 per cent of the elementary and 175 secondary schools and 80 per cent of the pupils in rural localities, the Maoists are at the moment concentrating on transferring primary schools to the production brigades. After this transfer is completed, the Chinese press openly states, "the state will no longer finance the primary school" and "will not pay salaries to teachers; instead the production brigade will allot work-day units to them”. Formerly the state paid teachers the tiny monthly salary of 33 yuans and half a kilo of grain (including sweet potatoes in terms of grain) per day against ration cards, now this “burden” is being removed and the "saved funds—money and marketable grain—are being channelled into ... defence requirements”. Moreover, on direct instructions from Mao Tse-tung, the term of instruction and number of students at institutions of higher learning and secondary schools is being reduced. The entire system of education is being militarised to a point where a "new structure" is replacing classes and courses: the students are formed into companies, platoons and squads, and the system of education is being reorganised on the model of military and political training in the army.
p A "cooperative medical system" under which medical services for the rural population (in China the people have to pay for medical attention) are paid for out of funds formed by contributions by the peasants and the brigades (usually one or two yuans per person per year), and medical personnel are reduced to the position of “doctors-and-peasants”. Instead of a salary from the state they will be paid against work-day units by the brigade. Attention is drawn to the experience of "barefooted doctors" who treat patients without discontinuing agricultural work.
p In rural localities trade is placed in the hands of the rural communes and production brigades, and the supply and marketing cooperatives are, in effect, being abolished. Moreover, the state reserves the right to determine the procurement plans, prices and volume of trade. It pays for transportation but divests itself of the obligation to pay wages to employees of the rural trade network, who are beginning to be paid by the brigades against work-day units as peasants. The production brigade is obliged to fulfil the state purchases and sales plan in the countryside.
p More than 20 million people are being moved from the towns to the countryside. Mao Tse-tung has personally 176 ordered “mobilisation” with the purpose of resettling town dwellers in the villages. In addition to its aim of stabilising the political situation in the towns and alleviating the food shortage (the peasants are compelled to provide for the maintenance of the resettlers), the resettlement pursues military objectives: young people are sent to frontier regions where they are formed into paramilitary “building” units; moreover, a number of industrial projects are being moved to inland regions. In the new localities the factories are distributed over a large territory to enable them to continue operating in the event of war.
p The policy of reducing wages is being continued in the towns. During the "cultural revolution" wages have dropped by 10-15 per cent. At present it is planned to cut the wages of skilled workers and office employees receiving over 100 yuans; the salaries of teachers and other intellectuals are being cut drastically. The question of decreasing the wages of skilled workers is being “discussed” at the factories.
p Militarisation is embracing all aspects of life in China, including the national economy. Mao Tse-tung has openly declared that the army should be accorded a "major role" in China, that it should be turned into a "great school" and that it should be used as a model for reorganising the country. "Inject the army spirit into the national economy!" the Maoists demand.
p In China today all more or less large-scale “undertakings” are strictly controlled by the army and directed by army instructors. In economic management, too, the army plays a considerable role. The economic and organisational functions of the people’s state and the CPC’s leading role in the economy have been reduced to zero. The military control committees have taken over the central departments; the revolutionary committees direct the economy in the localities; and army representatives are in charge of factories and offices. The journal Hungchi admitted: "The participation of army representatives or the militia is necessary in all organisations, from top to bottom.”
p The management of many industrial enterprises is being reorganised on the military pattern, army discipline is enforced and military training is conducted everywhere. In the national economy executives are required to "study the experience of organising labour on the pattern of military 177 units" and to form workers into "industrial units" that would be an "army in civilian clothes”. Numerous cases of militarisation at factories are now openly featured by the Chinese press. The newspaper Chiang-hsi Jihpao wrote, for instance, that squads, platoons and companies on the model of army units have been introduced as a form of labour organisation at the Nanchang Tractor Plant and the Nanchang Cigarette Mill. Work begins and ends and the workers take a break by signal. Workers have to march in file when they want to go anywhere on the premises of the factory, and they are controlled by army supervisors.
p The 9th Congress of the CPC endorsed the policy of militarisation and reiterated the line towards "preparations for war”. The Congress communique bluntly states that the army will continue "exercising military control and supervising the military and political training" of the entire population. Control functions in industry and agriculture have been secured to the army.
p All these trends are leading towards the disproportionate, misshapen development of China’s economy: the atomic bomb and the rickshaw, the electronic equipment of missile systems and the conservation of backwardness, the illiteracy of hundreds of millions of people, huge allocations for the war industry and the reduction of the already small expenditures on the health services—these are becoming typical in China.
p This situation is witnessing a sharp aggravation of political contradictions in China, a growth of popular unrest and increasing resistance to the dangerous, anti-popular policies of the Mao group. The Maoists organise foreign policy adventures in an effort to break the resistance of the healthy forces, divert the people’s attention from the failures of their policy and justify the country’s militarisation and the tragic condition of the Chinese working people. In China herself Mao Tse-tung and his supporters are trying to create an atmosphere of "class struggle”, portray China as a fortress besieged on all sides by enemies and fill the Chinese people with the poison of nationalism and bellicose anti-Sovietism.
p At no time has the Soviet Union threatened China. The Soviet Government Statement of March 29, 1969 declared in part: "True to Lenin’s behests, the Soviet Government has done everything in its power to strengthen 178 Soviet-Chinese friendship and co-operation.” While emphatically denouncing the present dangerous policies of the Peking leaders, the Soviet people believe that in the long run the fundamental interests of the two peoples will make it possible to remove the obstacles to normal Soviet-Chinese relations.
Ekonomicheskaya gazeta. No. 22, May 1969, p. 21
Notes