p Of the absolute increase in the gross and net product, 78 and 72.5 per cent, respectively, came from industry, and 22 and 27.5 per cent—from agriculture.
p The accumulation fund in the countryside, though going up in absolute terms by 1,500 million yuans, remained the same in relative terms—15.6 per cent. In industry, on the other hand, the accumulation fund trebled from 5,000 million to 15,100 million yuans, and in relative terms was up from 20 to 31.5 per cent.
p The accumulation fund, 17,400 million yuans of which went into production, was chiefly used for investment in the national economy, direct investment in 1957 totalling 12,600 million yuans; 1,200 million of that went into agriculture, and 7,500 million—into industry.
125Here is how the net product turned out by industry and agriculture in 1957 was distributed between accumulation and consumption (Table 5).
Table 5 Distribution of Net Product Industry Agriculture Overall national income Thous mill yuans Per cent Thous mCl yuans Per cent Thous mill yuans Per cent Consumption fund ..... 32.8 15.1 68.5 31.5 38.4 7.1 84.4 15.6 71.2 22.2 76.3 23.7 Accumulation fund ....p The net product in industry consisted of the means of production worth 24,000 million yuans and the articles of consumption worth 33,000 million yuans; together with the 21,000 million yuans going to compensate for the material inputs, this gave a gross industrial product of 78,000 million yuans.
The latter (leaving out the arms spending, exports and reserves) was distributed roughly as follows (thous mill yuans):
Means of production compensation of material inputs........22 raw materials and depreciation.........10 investment..................10 Articles of consumption urban demand.................15 rural demand.................13 126p These figures show that while the countryside was consuming 41,800 million yuans’ worth of products, industrial goods amounted to only 13,000 million yuans (goods produced by the rural handicraft industry and the domestic trades amounted to 8,300 million yuans). This meant that the countryside was still a very narrow market for modern industry, the means of production in particular.
p Estimates show that at the end of the first five-year period modern industry in China still had a narrow domestic market, with most of its output being consumed in industry itself. Together with compensation of inputs, internal industrial consumption came to 42,000 million yuans, or 54 per cent of industrial production as a whole, whereas consumer demand accounted for less than 35 per cent, the share of the countryside being only 15 per cent.
p It would have been fairly easy to redress the disproportions listed above, for these were largely an expression of the difficulties of building up a modern industry in a backward agrarian country. By consistently implementing the general line through the correct use of the advantages of the socialist mode of production (like the principles of centralised administration, the law of balanced and proportional development, the principle of material incentives combined with moral stimuli, the principle of the division of labour and co-operation both within the country and the socialist system, and the rational location of industry), the Chinese people, helped along by the socialist countries, could have laid a sound material and financial basis for socialist industrialisation. This required rapid development in agriculture, and the light and handicraft industries, which could have been possible had productive capacities in the heavy industry been aimed to reconstruct their backward material basis on modern technical lines. True, this would have called for appropriate changes in the sharing out of the accumulation fund and for more investment in these sectors, which would have served to accelerate their growth rates while holding back to some extent those in the heavy industry and allowing for the necessary changes in the proportions within and between the latter’s sectors. Changes of this kind were in 127 complete agreement with the Party’s general line for the transition period and made it possible to redress the abovelisted disproportions, which had come to light in the course of the first five-year period.
p Thus, in 1956, the basic provisions were drafted for the 1956-67 plan for the development of agriculture, which provided for a marked rise in investment in crop growing, an increase in the area of farmland, a broad irrigation programme and an increase in irrigated areas, use of mineral fertilisers and high-quality seeds and an increase in the output and use of modern farming implements. In 1957, the plan was extended still further.
p The First Session of the Eighth National Congress of the CPC in 1956 adopted a decision to raise the growth rate in agriculture to stop it from lagging behind and realise the 12-year plan, and laid down the line for a simultaneous development of industry and agriculture on the basis of priority development in the heavy industry. The share of capital investment in agriculture was accordingly increased from 7.6 per cent in the first five-year period to 10 per cent in the second. It was also decided to review the structure of the heavy industry so as to ensure the development of the sectors servicing agriculture and the light industry, particularly the output of mineral fertilisers, agricultural engineering, and the manufacture of synthetic fibre, and also the production of more electric power, coal, oil and metal. The Second Five-Year Plan also provided for coordinated development of large-scale and small-scale industry so as to turn the latter, like agriculture, into both a market and a source of accumulation for the heavy industry, and at the same time to satisfy the needs of agriculture in small modernised implements and mechanisms and consumer goods. There was also to be more rapid development in the light industry through greater supply of agricultural and synthetic raw materials.
p The primary basis of industrialisation—the major branches of the heavy industry built up in the first five-year period with the help of the USSR and other socialist countries—made it possible to fulfil the tasks of strengthening the material and financial foundations of socialist industrialisation and achieve the great goals of socialist construction in 128 China as mapped out by the general line for the transition period.
p But Mao Tse-tung did not want the decisions of the First Session of the Eighth Congress to be implemented, for he saw these as a threat to his own plan for China’s headlong economic development to secure leadership among the socialist countries and to thrust upon them his own petty-bourgeois views in the political, ideological and economic spheres. Maoists feared that building the material and technical foundation of socialism on the basis of the time-tested regularities of socialist construction with emphasis on the heavy industry would mean a strengthening of the working class’s leading role, its alliance with the peasantry and its fraternal ties and close co-operation with the peoples of the USSR and other socialist countries.
p In pursuing his hegemonistic line for China’s economic development, Mao Tse-tung did not seek to rely on the working class, but on the co-operated peasants and handicraftsmen, and also on the national bourgeoisie, which was given a handout in the form of a 5-per-cent interest rate on its investments in the mixed enterprises. Counting on the support of these sections, he came up with a maximalist economic programme which provided for stepped-up development of all the main branches of the heavy industry and, moreover, for burdening the country with “super-industrialisation" based on the involvement in industrial construction of millions of unskilled farmers and urban dwellers who had been forced into the so-called people’s communes—giant semi-subsistence producer complexes combining production and circulation (industry, farming, trade and financial activities) with elements of the local social superstructure (management, education and military training). These territorial producer complexes based on enforcement, paramilitary manual labour, medieval implements, primitive production methods and egalitarian distribution, were made out to be a model of communist social organisation and Mao Tse-tung’s “great contribution" to the creation and development of a new social system, a system bound to win out in all countries, including the USSR and other fraternal countries, which were said to have bogged down at the 129 socialist stage and to be moving towards communism at a “slave’s pace”.
Mao Tse-tung wanted his primitive, egalitarian peasant society, modelled on the Taiping Heavenly Kingdom of Great Peace, to resolve all the contradictions that had emerged in China’s economic development during the first five-year period, primarily the contradictions between industry and agriculture and between population pressures and labour productivity growth. He hoped that the 15-year programme of building up a powerful all-round heavy industry could be squeezed into three years, by the end of which he also wanted to have the whole of that industry geared to his goal of establishing primitive small-scale production in the people’s communes so as to lay the material groundwork for his communisation idea. This called for a retreat from the Party’s general line for the transition period, a line based on the ideas of scientific communism and the working class’s leading role in socialist construction, and substituting for it a new economic policy that would make it possible to muster the many millions of peasants and petty urban bourgeoisie for the purposes of “communisation” and “super-industrialisation”. Instead of relying on the working class and strengthening its alliance with the peasantry, Mao Tse-tung cut across the economic and political essence of modern socialist industrial society by putting forward his idea to develop agriculture and primitive small-scale production as the economic basis of society, vesting leadership in the peasantry instead of the working class. In doing so, Mao Tse-tung sought to rely on the peasantry’s egalitarian ideals, its discontent with its low living standards, which lagged behind those of the workers, and its sheer ignorance of the laws of social development and the principles of organisation and management in modern industrial production. Mao Tse-tung’s stand was reactionary and at crosspurposes with socialism, and so required a totally new economic policy. This took the shape of the “three red banners" policy, which virtually denied all the socialist regularities of organisation and management in production (the laws of proportional and balanced development, division of labour and co-operation, rational location of production, centralised management and the development of large-scale 130 industry as the basis and motive force of the whole economy), and replaced them with idealised primitive subsistence and small-scale production and denied division of labour and co-operation both at home and across national boundaries. The objective laws of socialist production and, for that matter, social production in general were cast aside and replaced with reliance on the masses’ vigour, military organisation, the use of force and coercion, that is, subjective factors and voluntarist principles of economic administration through political and ideological channels alone.
_ - _ - _p ^^1^^ To Fight for the Mobilisation of Every Effort to Turn Our Country into a Great Socialist State. Theses for the Study and Propaganda of the Party’s General Line for the Transition Period, p. 15.
p ^^2^^ Ibid., pp. 11-12.
p ^^3^^ Ibid., p. 20.
p ^^4^^ Ibid., p. 35.
p ^^5^^ Second Session of the NPC, Moscow, 1956, pp. 260-79 (in Russian).
p ^^6^^ Extra-large enterprises are those requiring outlays (depending on the industry) of from 3-4 million yuans in the light and food industry to 5-10 million yuans in the heavy industry. (Second Session of the NPC, Moscow, 1956, pp. 19-20, Notes.)
p ^^7^^ Second Session of the NPC, p. 260; Ten Glorious Years, Peking, 1959, pp. 48-51.
p ^^8^^ Ten Glorious Years, p. 119.
p ^^9^^ Ibid., p. 79.
p ^^10^^ Pravda, April 19, 1957.
p ^^11^^ Chao Jih-wen, Industry in the New China, Moscow, 1959, pp. 61-62.
p ^^12^^ Jenmin jihpao, September 25, 1959.
^^13^^ Tseng Wen-ching, China’s Socialist Industrialisation, Moscow. 1959, p. 189.
Notes
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