p The general line assumed that socilaist industrialisation in China was inseparable from socialist change in the capitalist and the petty-commodity sectors, this being the essence of the transition period. “The tasks of developing socialist industry and carrying out socialist reform are closely bound up together and inseparable from each other, because, on the one hand, socialist industry is the material basis for socialist change throughout the national economy, and, on the other, if no socialist change is carried out in capitalist industry and trade, individual farming and the handicrafts and these are left to develop on the laissez-faire principle, they will not merely be unable to provide due backing for socialist industry, but are bound to run into contradiction with socialist industrialisation."^^2^^ Here, the general line fully agrees with the proposition—a proposition borne out by earlier experience, in the USSR in particular—that socialist change in other sectors should be based on the advanced technology being created in the advanced socialist industry as a material basis for socialism. The Chinese Communists wrote at the time: “Only once a new industry is built up will it be possible to restructure the country’s economy on technical lines and provide a highly advanced technical foundation for the country’s industry, transport and farming."^^3^^

p Socialist industrialisation and socialist change were to have been gradual and run parallel to each other, reinforcing and stimulating each other until the victory of socialism was complete.

p The general line laid down an adequate, 15-year term for the achievement of this goal, in the course of which China was to have become an industrial-agrarian socialist state.

p With respect to the productive forces, the general line said that priority development of socialist heavy industry should be combined with the proportional development of all the economic sectors. The gradual socialist restructuring of farming, the capitalist (mostly small-scale) industry and the handicrafts, and the consequent pickup in the development of their productive forces was to provide a large market for socialist industry and accumulations for industrialisation. To rechannel material and financial resources, the heavy industry was to supply other sectors of the national economy with the means of production, instruments of labour, raw materials, fuel and power, semi-finished products and means of transport, while the latter were to supply heavy industry with their own products.

p That was the way to ensure the economic link-up between town and country, and also between large-scale socialist industry and small-scale co-operative and individual industry. Accumulations were to be redistributed through an appropriate market price policy: low prices were to be fixed for the products turned out by the heavy industry and farming, and higher prices—for those of small-scale co-operative industry. In pointing out the interdependence between socialist industrialisation and socialist reform, the general line emphasised that if socialism was fully to win out in the countryside, there was need to establish an adequate material basis. It said: “To help agriculture score a full and final victory in socialist change, and to undermine the positions of capitalism in the countryside, the most important thing is to equip agriculture with new machinery."^^4^^ That provision, however, did not apply to the early forms of co-operation, but to its higher forms, in the period when producer cooperatives were being established.

Since all the branches of the national economy (with the exception of state industry) were equipped with extremely 110 primitive machinery by no means adequate to socialism, the Theses did not make the establishment of the simpler cooperatives (that is, the launching of socialist change) contingent on the existence of a socialist material basis. Under the general line, the two processes were to have run parallel and stimulated each other. As socialist industrialisation advanced and created the material basis of socialism, the lower forms of socialist relations of production were gradually to have developed into higher forms, so that by the end of the 15-year term, that is, by 1967, the two processes—completion of socialist industrialisation and establishment of the material basis of socialism, and completion of socialist change and transformation of all socialist relations of production into one form of property—were to have brought about the complete victory of socialism in China.