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p Despite the massive capital investment and the growth of fixed assets in industry, the rehabilitation period did little to change the industrial structure of the RFC. Over that period, capital investment in the economy at large totalled 7,840 million yuans, with 40 per cent of the total going into industry. The bulk of these (83 per cent) went to restore and reconstruct old enterprises, and only 17 per cent—to 102 build new plants and factories. By 1953, fixed assets in industry had gone up by 3,000 million yuans, to 15,800 million. These, however, consisted of worn and outdated equipment, so that depreciation had pushed down their value to 10,000 million yuans. In 1952, industry had about 100,000 machine-tools, largely primitive and mechanical-driven, having been in operation for an average of from 20 to 30 years, which meant deterioration and obsolescence. The metallurgical industry did not have a single blast-furnace with a volume of more than 800 cubic metres, and 24 of its 34 operational furnaces totalling 5,179 cubic metres had a volume of less than 100 cubic metres; only two of the 26 open-hearth furnaces totalling 726 square metres had a hearth of more than 50 square metres. The technical performance of this kind of equipment was very poor. Other industries were in a similar state.

In 1952, manufactories still accounted for 83.5 per cent of all industrial enterprises, and only 16.5 per cent ranked among the so-called modern enterprises. The handicrafts and domestic peasant trades were still very prominent in production (Table 1).

Table 1 Industrial Enterprises Banged According to Socio-Economic Sectors and Type of Production (1952^^*^^) Type Modern Manufactories Number of workers (thous) Per cent Gross output (mill yuans) Per cent State ..... 8 609 2,062 3,206 24.2 14 258 34.2 Privatecapitalist Co-operative . . Mixed 17,073 1,025 820 132,498 5,139 177 2,057 328 248 15.6 2.5 1.9 10,526 1,109 1,367 25.2 2.7 3 3 Handicraft .... Peasant cottage trades ..... 7,364 55.8 7,066 7,370 16.9 17.7 ’CfciiC —— Total .... 27,527 139,876 13,203 100 41,696 100 _ - _ - _

p ^^*^^ Economic Development of the PBC, Moscow, 1956. p. 12; Thi Economic Situation and Life of the Peoples of Our Country, Peklng, 1957, p 73.

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p Here are some figures on the private-capitalist sector in 1953. Of the 150,275 enterprises with 2,251,000 workers, 13,100 million yuans worth of capital, and an output of 13,100 million yuans, 104,776 employed less than ten workers each, whereas of the remaining 45,499 enterprises (which accounted for 68 per cent of the workers, 79 per cent of the capital and 87 per cent of the output in the sector as a whole) only 164 enterprises, or 1.1 per cent, had more than 500 workers.

p In the state and mixed sectors, most of the output—about 40 per cent—was being turned out by modern enterprises and the remaining 60 per cent—by small manufactories, handicraft workshops and the peasant cottage trades.

Modern industrial enterprises were now producing slightly more due to the fall-off in handicraft production. The inner structure of industry, however, was virtually the same. Light industry was still producing 37 per cent of the overall output, and the handicrafts and the domestic trades—34.6 per cent, whereas the main branches of the heavy industry—-metallurgy, chemicals, oil and electric power—were producing only 7 per cent, and the coal and metalworking industries—24 per cent. This meant that in 1952 the PRC’s industrial structure differed very little from that of the old China. Per worker output, though up as compared with 1949 in view of the better use of productive capacities, remained low (yuans):

State industry ....... Private-capitalist industry . Handicrafts ...... 1949 2,630 4,273 568 1952 4,447 5,117 959

This low output, however, was many times the figure for agriculture, which was 181 yuans in 1949 and 250 yuans in 1952.