p By 1952, China’s industrial backwardness had become the main obstacle to economic development, hindering both the 106 advance of the productive forces and the transformation of the forms of property.

p Industrialisation, accelerated industrial development, which had once been only a plank in the programme of the Chinese revolutionary democrats and Communists, now acquired top priority.

p The nationwide victory of the people’s revolution, the total rout of the counter-revolutionaries, the people’s takeover and the failure of the imperialist attempts to frustrate the Republic’s peaceful construction through the war in Korea had laid a favourable political groundwork for transition to full-scale economic construction.

p The fraternal support of the USSR and other socialist countries, which gave China financial and economic assistance (gratis or on easy credit terms) by delivering equipment, designing enterprises, handing over technical knowhow, dispatching specialists and training skilled workers and engineers, had enabled China to launch its industrial construction at an advanced level, bypassing the intermediate stages of industrial development, and to some extent to disregard the volume of expenditure and market capacity. This opened up a favourable prospect, allowing China to overcome its industrial backwardness in a historically short period.

p The Theses on the general line, adopted by the CPC Central Committee in December 1953, said: “Upon the victory of the revolution, the main task facing our Party and the whole people is to ... turn this economically backward, poor agrarian country into a mighty socialist industrial power."^^1^^ Socialist industrialisation and the building-up of large-scale modern industry were the chief ways to attain this goal.

p The Party’s general line for the transition period, however, did not regard priority development of heavy industry as an end in itself. Building up a heavy industry is the only way to provide equipment for the whole of industry, transport and farming. The general line devoted much attention to the light industry, farming and the handicrafts as a source of accumulation for industrialisation and a market for the heavy industry.

p Having pointed out that “the heavy industry requires 107 massive outlays, while its profits are fairly small and slow in coming”, the Theses said that there was need chiefly to rely on the internal accumulations in the national economy, industry above all. Much importance here attached to accumulation both in the state and the private-capitalist industry, which produced mostly consumer goods.

p In agriculture, the task was “to produce yet more grain and industrial raw materials. ... To help the farmers develop agricultural production, promote mutual assistance in work and co-operation in farming and raise the farmers’ living standards”. The Theses emphasised that any underestimation of agriculture would have a slowing effect on industrial development.

p In view of the importance attaching to the handicrafts in the national economy and in providing the population with consumer goods, and the consequent need and possibility for their development, the Theses also said that “even under socialism, the handicraft industry will continue to be a necessary aid for mechanised industry”.

p These statements show that while advancing development of the heavy industry as the priority task, the general line also maintained the need for balanced development on the basis of the heavy industry of all the economic sectors, so as to prepare the ground for further boosting the heavy industry and to create a market for the means of production. “Concentration on the development of the heavy industry should, naturally, go hand in hand with balanced development of transport, the light industry, farming, trade, culture and education. Lack of appropriate development in all the sectors would not only make it impossible to improve the people’s livelihood or satisfy their numerous needs, but also to develop the heavy industry or carry out the country’s industrialisation.” The general line set the task of maintaining balanced development in all the sectors of the national economy through the priority development of the heavy industry, so improving the people’s livelihood.

The task was being tackled in accordance with the basic economic law of socialism. The Theses devoted much attention to reshaping the whole economy—industry, transport and farming—on modern technical lines; using the existing industrial base not merely for turning out goods but for 108 accumulating funds and providing equipment, skilled manpower and funds for capital construction; developing agricultural production, notably, increasing grain deliveries and raw material supplies to industry, and producing farming implements, machinery and chemical fertilisers, so as to provide a firm economic basis for the political alliance between the workers and the peasants; developing the light and handicraft industry as a reserve and support for the modern factory industry in the output of the prime necessities; and, for some time to come, using capitalist enterprises to provide the population with industrial goods, ensure employment and increase accumulation for the country’s industrialisation.