103

p In 1952, gross output in agriculture, including the peasant cottage trades, totalled 48,400 million yuans, or 58.5 per cent of the gross product, the rural population at the time being 104 estimated at roughly 500 million and employment in agriculture at about 200 million. Soviet estimates show that farming provided about 60 per cent of the national income, that is, 36,700 million yuans, 31,300 million of these (85 per cent) making up the consumption fund, and 5,400 million (15 per cent)—the accumulation fund. The bulk of the consumption fund (about 20,000 million) was consumed on the spot, and the rest (more than 11,000 millon) took the form of commodities, mainly going into industrial consumer goods like fabrics, matches, kerosene, ritualistic articles and salt. Most of these products were produced by the handicrafts, rather than by modern industry. Part of the accumulation fund went into fertilisers, seed, primitive implements, cattle and land (in 1952, the land reform was still in progress, whereas socialist transformations were yet to begin), so that very little was in fact left for purchasing the means of production turned out by modern industry (1,400 million yuans).

Rural demand for industrial goods was estimated as follows (thous million yuans):

Output of modern urban industry Output of urban and rural handicraft industry Consumer goods . . . Means of production . Total rural demand for industrial goods . . 7 1.4 8.4 5 2 7 105

p The urban consumption fund comprised outlays on administration and defence, taking the form of wages to personnel employed in the state apparatus and the army—a total of about 3,000 million yuans. The fund also included wages to workers and employees in the national economy—6,000 million yuans, the incomes of the small urban bourgeoisie (handicraftsmen), workers in traditional transport, the fisheries and salt mines—6,000 million, and the net profit of the national bourgeoisie—1,000 million yuans a year.

p The overall earnings of all the categories of the population listed above amount to 16,000 million yuans a year. A study of worker family budgets shows that about 50 per cent goes into food, and the rest—into consumer goods and the utilities.

p The urban areas were able to consume 6,300 million yuans’ worth of raw materials to be used in production and the means of labour to replace worn-out equipment, and 8,000 million yuans’ worth of consumer goods to maintain the various urban classes.

Here is the overall distribution of gross industrial production in 1952 (thous million yuans):

Means of production Consumer goods Total 1.4 7.0 8.4 6.3 8.0 14.3 Replacement of inputs .... 6.7 3.5 1.5 6.7 5.0 Total ....... 17.9 16.5 34.4

p These figures show that of the purchased goods produced by modern industry the countryside could only use as little as 8,400 million yuans worth, or less than 25 per cent of the overall consumption fund (more than 30,000 million yuans), with the addition of more than 5,000 million yuans from the accumulation fund, which meant that modern industries, and particularly those producing the means of production, had an extremely narrow market.

p Let us now consider the PRC’s urban market in 1952. Gross output in urban industry totalled roughly 34,000 million yuans, 10,000 million of these going to compensate the inputs, 20,000 million of the remaining net product—into consumption, and 4,000 million—into accumulation.

Thus, the urban areas supplied the countryside with 8,400 million yuans’ worth of industrial goods in return for 8,000 million yuans’ worth of foodstuffs.