#3055 - Week 13 Reading Yang Chapter 1 - Chinese Economic History Since 1850

During 1949-57, adopted Stalinist development model

• i.e. focus on heavy industry, and the rural sector should provide the savings for industrial investment and raw materials for light industry

The Chinese leadership invested only minimally in agriculture

During First Five-Year Plan (1953-57)

• Rural sector:

  • Produced > 50% of income

  • Employed > 80% of labour force

  • But received < 8% of the total state investment

• Industry:

  • Received > 52% of the total state investment

Land reform = The confiscation and redistribution of landlord-held land and other property

• Destroyed the old elite

• Built up credibility and support in the rest of rural society

• Peasants were encouraged to form mutual aid teams, which pooled labour, but retained ownership of land and other productive assets

• Peasants had the dream of “building up a family fortune” (fa jia zhi fu)

Land reform of 1950-52 coincided with spurts of agricultural growth and significant improvement in standard of living of average peasant

• Major agricultural indicators had reached or exceeded the best levels of the mid-1930’s

By end of 1957, over 97% of all peasant households had been organized into agricultural producers’ cooperatives (APCs)

• Peasants in the larger APCs received no dividend

  • Received only labour payment

Collectivization campaigns over the 1953-57 period failed to energize agricultural growth

Growth rates slowed dramatically beginning in 1953, when collectivization began nationwide

• Because of rapid population growth, per-capita grain output was even lower

  • Grew at 1.13% annually

Autumn 1952 – “Lavish official praise for Soviet collective agriculture”

Localities view with each other to hastily organize more mutual aid groups and bigger APCs

Peasants viewed collective property as ‘communization’

In many places, farm work, as well as side-line businesses, was neglected, because peasants, especially idle ones had little incentive to work

Mao wrote directives calling for “scaling down the targets of collectivization,

• Emphasized the need for agricultural policy to suit the special characteristics of the peasant economy,

• Made spring planting the top priority

• “Any assignment or method of work that hinders the production of the peasants must be avoided”

The directives led to a moderation of the pace of collectivization

Output of both grain and cotton per mu (land productivity) declined in 1953

By fall 1953 there was a grain crisis

• Result of unsatisfactory summer harvest and rapidly growing urban consumption

Vice-Premier Chen Yun decided to implement a state system for the procurement (through compulsory deliveries at state-set prices)

• Rationing of grain beginning in November

• Did this even though they anticipated that the program would undermine production initiatives and probably cause local rebellions

Collectivization was deemed a crucial measure in increasing agricultural output

• Would facilitate the CCP’s control over rural production and thus extraction of resources from rural areas

October and November 1953 – Mao Zedong – “it is at once imperative and possible to develop agricultural producers’ cooperatives” and urged people to “go for a medium-sized or big cooperative wherever possible”

• Argued that “there must be a transition from individual ownership to collective ownership, to socialism”

1954 cooperative campaign (till Jan 1955):

• Instead of focusing on development of mutual aid teams (as in the winter reform), focused on development of APCs

Local cadres commonly used illegal methods to force peasants to surrender their grain at state-determined prices

• Procurement increased by 42%

The state used institutions to restrict the private economic opportunities of richer peasants

• Credit cooperatives

• Supply and marketing cooperatives

• Incentives were beginning to turn against those who remained outside the collectives

Newly created cooperatives were best with problems of poor planning and bad leadership

Some peasants rushed to sell or kill their draught and domestic animals and decreased their investment in land

• Complained that “the Communist Party has suddenly turned hostile”

The disruption of collectivization, overzealous procurement and bad summer weather meant agricultural production in 1954 was almost an exact repeat of 1953

Central aim of the directives was to create incentives for peasants to produce

Two-pronged approach:

• Collectivization drive would pause and consolidate

  • Mao “pause, contraction, and development)

• Three-fix policy was introduced into grain procurement to reassure peasants about the state’s claims on them

  • Compulsory quotas for 1955 were fixed for 3 years

Peasants immediately praised the changes

1955 was significant improvement over 1953-54

Launching the “tide” is interpreted by some as a clear indication of Mao’s “vexing propensity to change his position suddenly”

• But recent readings suggest, that Mao was probably more consistent that has generally been believed

Mao was convinced that peasants desired to follow the socialist road because they did not have much land and were not prosperous

• Mao thought it was strategic to exploit the peasant’s enthusiasm for change and speed up the socialist transformation of agriculture

The Second Session of the First National People’s Congress (NPC) July 5-30

• Convened to ratify the 1^st Five-Year Plan

• The more conservative vision of the Rural Work Development was ratified

• Mao criticized the RWD (headed by Deng Zihui) for having carried out “a wrong policy”

In October 1955 at the 6^th Plenum of the Seventh CCP Central Committee

• Mao argued that the policy of contraction “reflected the demands of the bourgeois class and the spontaneous capitalist forces in the countryside”

Because of Mao’s preeminent position provincial leaders quickly jumped on his bandwagon

In Jan 1956, a 12-year program for agriculture was adopted by the Politburo, chaired by Mao

• So ambitious that it took until 1980’s to be fulfilled

“Peasants wanted to join collectives not because they were convinced of the inherent superiority of collective production, but because the potential alternatives, such as individual farming were being closed to them”

The excesses of the 1956 upsurge prompted peasants to demand redress

Peasants tried to withhold agricultural products from state procurement so that they could get a better price in rural markets

• State Council sough to prohibit the sale of major agricultural products such as grain and cotton in rural markets, though with limited success

Economist Nicholas Lardy – “The collectivization campaign of 1955-56 did not provide even a partial solution to China’s agrarian problems”

1957 (last year of the FYP) agriculture had risen to the top of the agenda for the formulation...