p Under the First Five-Year Plan, 76,600 million yuans were to be invested in the national economy, 40.9 per cent of these going into industry and 8 per cent—into agriculture. Industrial production was to have gone up from 27,000 million to 53,600 million yuans, that is, by 98 per cent, with the annual increase in gross output averaging 14.7 per cent.^^5^^

p The plan centred on the heavy industry, the measured and agreed development of its extracting and manufacturing sectors, especially the fuel, electric power, iron ore, metallurgical, chemical and engineering industries.

p With that aim in view, the plan laid down growth rates for the various sectors, allocated capital investment among them and decided on the proportion of enterprises to be reconstructed and built anew, on a more balanced location of the new enterprises across the country, and an introduction of economically grounded specialisation and co-operation involving various sectors and enterprises.

p The First Five-Year Plan provided for a marked increase in labour productivity and a corresponding rise in the wages of workers and employees and also of the farmers’ purchasing power. The latter goal could only be achieved provided farming and the auxiliary peasant trades increased their 111 production, and prices for industrial goods and farm produce were altered in favour of the countryside. The plan’s specific feature was that it provided for more rapid growth in modern industry (as compared with that in the rest of the economy). Its successful implementation would have meant the establishment of a primary basis for industrialisation, a reliable basis for the country’s further progress towards laying the material foundations of socialism.

p Its implementation, however, was marked by a tendency to force the pace of industrial development, a tendency fueled by Mao Tse-tung’s nationalistic aspirations. It aimed at the utmost development of the heavy industry, engineering in particular, at the expense of other sectors, and was most pronounced in 1956, when the increase in industrial output was pushed up to 40 per cent, and in engineering—even to 60 per cent.

p Under the First Five-Year Plan, construction of 694 extralarge^^6^^ and 2,300 small enterprises was to be started in industry, but the actual figures were 921 and more than 9,000, including 1,921 metal-working plants, 832 building materials, 637 chemical, 600 coal, 599 electric power and 312 ferrous-metallurgy enterprises.

p The First Five-Year Plan provided for a sharp increase in the output of the key industrial products. As a result, the share of industrial investments in total investments in the national economy went up from 35.5 per cent in 1953 to 52 per cent in 1957. Over the five years, investments in industry came to 25,000 million yuans, or 45.5 per cent of total investments in the national economy, as compared with 40.9 per cent under the plan.

p In the first five-year period, the structure of industrial investments was marked above all by a vast preponderance of investments in the heavy industry (85 per cent of all investments). Here, investments were made not only in the basic industries which ensured further development—fuel and power (28.6 per cent), metallurgy (18.6 per cent), chemical coking (5 per cent), construction, including the timber industry (5 per cent)—but also manufacturing, primarily metalworking (15.4 per cent). The whole of the light industry received 15 per cent of the investments (including textile—6.4 per cent and food—3.7 per cent). This was reflected 112 in the growth of fixed assets in the corresponding industries and an increase in their share in the value of the gross product.

p Investments in agriculture, water conservancy and forestry came to 7.6 per cent as compared with 8.1 per cent under the plan.^^7^^ The bulk of the investments in agriculture did not go into the production assets (machinery, farming implements and draught animals), but into buildings and irrigation facilities. State investments in agriculture went mainly into the state farms, where the number of draught animals over the period increased by only 42,000 head, tractors by 8,586, harvesters by 1,254 and trucks by 3,215. The total number of tractors in the country went up by 22,500.^^8^^

p Fixed assets in the national economy started in the first five-year period were valued at 39,000 million yuans, including production assets—32,000 million, of which assets in industry were 19,700 million yuans, or 61 per cent, in transport and communications—7,600 million, or 23.7 per cent, and in agriculture—3,100 million yuans, or 9 per cent. (In the USSR, the increase in fixed assets in production in the first five-year period was 41 per cent in industry and 24 per cent in agriculture).

p The mastering of investments in agriculture—3,100 million out of 4,190 million yuans, or 73 per cent—also lagged behind that in industry, where the figure was over 78 per cent. The manufacture of the means of production as a share of gross industrial output in the five-year period went up from 35.6 per cent to 48.4 per cent.^^9^^

p Implementation of the First Five-Year Plan was marked not only by the launching of a great number of projects without an adequate basis, but by a desire to build up far too many branches of the manufacturing industry. Suffice it to say that in engineering the target was to build up all the necessary branches, so that in the rehabilitation period many metal-repairs works had already been converted to various types of engineering works.

p During the first five-year period engineering was developed on a particularly sweeping scale. Military projects apart, construction was started on 1,921 metal working enterprises, including 108 extra-large enterprises, 62 of which were put in operation in full or in part. In 1957, the 113 metalworking industry had 508 operation enterprises with 734,000 workers, and an output worth 6,500 million yuans, including 331 engineering works with 524,000 workers and an output of 4,500 million yuans.

p According to other figures, engineering was producing as much as 6,200 million yuans’ worth of goods, that is, more than four times the 1952 level, and was producing complete electric-power equipment (24.3 per cent), heavy metallurgical, mining and crane equipment (17.7 per cent), tractors (6.6 per cent), machine-tools (6.2 per cent), cars (8.5 per cent), shipbuilding equipment (6 per cent), farming machinery (6.1 per cent), and general engineering products (5.2 per cent). According to the First Ministry of Engineering of the PRC, the growth rate in engineering over the five-year period averaged 29 per cent a year.

p In the five years, several dozen new branches were established in engineering and the range of products increased by about 5,000. Its self-sufficiency in machinery and equipment went up from 53 per cent in 1952 to 62 per cent in 1957. Almost all the engineering products were produced under licences provided by the USSR and other socialist countries, but one target of the first five-year period was to go over from copying to the output of home-designed machinery. Hence, the establishment of more than 80 research and design organisations and several dozen higher and secondary educational establishments with specialised laboratories enrolling more than 100,000 (1959/60 academic year).

p The rates and trends of growth in engineering show very clearly that even in the later years of the first five-year period the PRC leaders were already seeking to establish, with the fraternal countries assistance and largely at their expense, an autarkic industrial-economic system, which would enable Mao Tse-tung to carry out his nationalist schemes quite “independently” and without relying on the socialist community.

But the establishment of a system isolated from other socialist countries and relying solely on the backward agrarian economy with a very low potential for accumulation and the marketing of goods produced in the heavy industry has utterly failed to justify the hopes of the nationalist elements in China’s leadership.