Economic Changes after the 1949 Communist Revolution in China

Economic Changes

Agriculturally, wars had left people starving, the rents were high and the lack of production meant that people could not be paid. During the Civil War, Mao noticed how peasants were willing to co-operate as long as the benefits were obvious to them. Mao aimed to up food production and prevent starvation by introducing the Agrarian Reform Law in 1950. This involved sending out communist cadres to survey land and classify the villagers on a social scale from landlord through “rich”, “middle” and “poor” peasants down to landless labourers. Debts were immediately cancelled and rents reduced.

Then came the transfer of surplus land from the top two categories, to the bottom two; leaving the former gentry families with just enough to live on. The situation of most middle families was unchanged. For millions of downtrodden peasants, the land reform was the heart of the Chinese Revolution. This was the moment when the peasants stood up to face their own personal enemy, the landlord. Land reform at last fulfilled Sun Yatsen’s goal of “Land to the Tiller”. But, despite the fairness of the original share out, differences of wealth and status would soon increase as, larger or harder working families bought up neighbouring land. It was also essential to increase agricultural output, and the government believed this could only be achieved by pooling the peasants labour, tools and animals, in larger farming units where machinery and new farming methods could be introduced. Peasants were not forced but gently coaxed into co-operative farming. First mutual aid teams were formed, with seven to ten households sharing their tools, labour and draught animals whilst working each families land separately. More money was earned from extra crops produced; it was then shared out according to how much work was done by each person. Some arguments arose over whose land was to be farmed first, but overall production did increase, however, not quickly enough to satisfy the demand. A peasant in south china told an American visitor about mutual aid teams

“Our team is made up of seven families, all poor peasants and before that farm labourers. We faced a shortage of labour during the busy seasons and were too poor to afford hired help. We were also short of farm tools and to poor to buy fertilizer…so we set up our mutual aid team. We pooled our labour and farm tools for common use. Every family started to collect fertilizer, solving that problem. The autumn crop was a bumper one, and we had surplus grain to buy tools and fertilizer. This year we plan to start breeding pigs and hens and reclaim some waste land to increase our crop area.”

The next step was to set up lower stage co-operatives of thirty to forty households, in which the land was collectively farmed but still individually owned and profits were accordingly shared.

In 1953 this went another step forward to higher stage co-operatives. These consisted of 200 to 300 families, usually the people of a group of villages. The big difference between these and the lower stage co-operatives was that families were not paid rent for the use of their land. They received only wages for labour. They had to surrender the title deeds to their land, their equipment and their animals to the co-operative. They were allowed to keep only a few square metres for their personal use. This they used for growing vegetables or raising chickens. The peasants were forcefully encouraged, many unhappy peasants ended up joining.

By the end of 1954, 95% of peasant families had joined higher stage co-operatives. Food was shared out equally, not according to how much work had been done, so harder working families did less because they couldn’t see the point in doing more work than others. Most of the 300 million peasants who had received land in 1950 were therefore landless again. Food production almost doubled but this was still not as good as expected, this might have been because of poor weather. In some areas there was no rain, in others there were floods. Millions of people left their villages and went to live in the cities. Production increase meant more money, however 80% of surplus food was sold to the government at very low fixed prices. This meant that the farmers had little reason to try to produce more food. By the end of the five-year plan in 1957 Chinas industrial production had increased by 120%. Food production was only up by 25%.

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In setting up co-operatives and ending private ownership of the land, the Chinese government was following soviet example. However, the position of the USSR after the Russian revolution (1917) and Chinas position in the 1950 were very different. Russian peasants had been forced into collective farms so that farm machines could be used and fewer peasants would be needed on the land. The Russian peasants were no longer needed on the farms and went of to the cities where more workers were needed to build the USSR’ industries. In china there were very few machines to use on the new large-scale farms. In any case there was no point in getting machines to take over more and more peasants, because there was just not enough work for the peasants to do in the cities. It might seem the simple way to end this problem would be to start new industrial projects. However the government did not have enough money to do this. Mao Zedong was beginning to believe that soviet methods were no good for dealing with Chinas problems. In 1958 the Chinese Communist Party’s Central Committee under Mao’s leadership launched the great leap forward, a gigantic national effort to increase industrial and agricultural production Officially this was Chinas second five-year plan. China didn’t have enough money or expertise for the high technology projects, but Mao thought that if the peasants worked hard enough they would be able to build small industries. The peasants didn’t have any form of experience and were untrained but Mao believed if they practised the new techniques and training they would learn. Instead of building and basing the aim on towns the government based the building of industry in villages. This was cheaper for the government as they would overcome the problem of transporting food supplies to the workers. In the spring of 1958 communes replaced the co-operatives. The communes combined collective farming and small industries with all the functions of the local government. They included up to 5’000 families grouped into production teams (one village each) and production brigades (several village teams joined together). They gave up land, tools and animals to the common ownership of the commune. The purpose of the communes was to release what Mao called “The tremendous energy of the masses” by making sure that time and effort were not wasted and that the members of the commune could work at a great variety of tasks. Mao also said

“The advantage of the peoples communes lies in the fact they combine industry, agriculture, commerce, education and military affairs”

At first, the communes were organised so that nothing could distract people from their work. Around 4 million communal eating halls were set up so that the number of people who spent time cooking food was reduced. Several million children were put in nurseries and schools so that both parents in a family were freed for full-time work. Old and unwell people were moved into ‘houses of happiness’ so that their families did not have to take time off from work to look after them.

Communes controlled almost every activity in a person’s life because they combined several different functions. First, a commune was a unit of local government with a committee made up of peasants, party members and soldiers running schools, clinics, nurseries, eating halls, entertainment and other public services. Second, a commune was a unit of work organisation, with the work of the commune divided among work teams of a dozen families, and grouped into work brigades of a dozen work teams. And thirdly, the commune was a unit of the communist party; with a party committee making sure that the commune always followed party decisions.

The speed with which the communes were created astounded not only the Chinese, but the rest of the world too. By the end of 1958 approximately 700 million people (90% of the population) had been placed in 25,578 communes across the country.

Communes were responsible for the building of reservoirs and irrigation canals, dikes and drainage ditches. Some workers were labelled as ‘model’ workers because of their efforts and were made famous in newspapers and on wall posters throughout the towns and cities of china. This was meant to give other workers a standard to aim for. Communes were expected to contribute to the great leap forward in small as well as big projects. Particular emphasis was placed on steel; so 600,000 ‘backyard steel furnaces’ were set up in towns and villages all over china. Before long these little furnaces, each one capable making only a few tonnes of steel had turned out 11 million tonnes of steel – 65% more than the total for 1957. In the country side the great leap forward failed badly. Although weather in 1958 was excellent, two problems prevented the harvest from being a good one. First, so many peasants were working in industry, especially in backyard steel making, that there were too few people to harvest the crops properly. Second, party officials ignored this fact and falsely claimed that the grain harvest had been a record 260 million tonnes. As a result, many communal eating halls started giving the peasants very generous meals, using up valuable stocks. A modern historian said

“The total grain crop for 1957 had been about 195 million tons. In 1958 the total actually increased to 200 million tons. At the time however, it was officially proclaimed that the crop had been 260 million tons. The exaggerated estimate led to dining halls in some communes to offer very generous meals, and use up most of their food stocks before the 1959 harvest came in”.

None of this would have mattered if the harvest in 1959 had been a good one. But the weather in 1959 was very bad. In some parts of china there were floods, in other parts there was drought. The result was a harvest of only 170 million tonnes. Before long, people were going hungry. Some began to starve. To complete the farming crisis, the weather in 1960 was even worse than in 1959. The bad weather, combined with the failure of the great leap forward, reduced the harvest to 144 million tonnes. This led to a major famine, killing around 9 million people in 1960 alone. The government introduced a rationing system under which people were given a maximum of 125 grams of grain a day, but the death toll continued to raise. Between 1959 and 1962 some 20 million Chinese died of starvation and relate diseases. This period was known as the ‘Three bitter years’. Mao's Great Leap Forward proved to be a disaster for the Chinese. It so crippled the economy, that the people of China avoided famine only because of the government's strict and efficient rationing system.

The failure of the Great Leap Forward brought stinging criticism from Nikita Khrushchev in 1960. Mao, in turn, criticized Khrushchev as a coward, and a capitalist. Khrushchev then cut off all economic and military aid. The rupture between the two governments would never heal. The world now had two separate communist superpowers pursuing radically different courses; the immediate effect, however, of the split was to isolate China internationally, for it now had no friends in the world.

China in 1949 was in a bad way industrially. Its industry had been disrupted by eight years of bloody fighting with the Japanese and four years of civil war piled on top of that. Inflation had rendered the currency useless and industrial output had dropped seventy-five percent since 1937. In order to stabilize the economy, the People's Republic introduced a new currency, controlled it strictly, and set all wages by the price of five staple products: rice, coal, flour, oil, and cotton. As the prices of these commodities fluctuated, wages would correspondingly increase and decrease. So while wages constantly changed from week to week, the purchasing power of those wages remained constant. The government took rapid steps to overcome Chinas grave economic problems. To start with, all major banks, the railway network, and about a third of heavy industry were taken away from their owners and made into state property. The profits from these enterprises were then paid directly into the State Treasury, giving the government around two thirds of its yearly income. A peoples bank was opened in 1951 to replace the private banks. The peoples bank had control of all financial transactions. It was therefore able to rid the country of inflation entirely by the mid 1950’s. The communist party was in charge of the banks so you could only get a loan if you supported the communists. Mao increased the taxes paid by businesses. He rebuilt the railway to bring coal to Chinese industries from the northern coalfields.

In order to recover the industrial base, Mao launched the First Five Year Plan in 1952. Under this plan, China embarked on an ambitious project of building factories and communications. Even though the plan wasn't implemented until 1955 (making it, really, the Two Year Plan), the massive expenditure of industrial investment doubled industrial output in China by 1957. The Five-Year Plan stressed the development of heavy industry on the Soviet model. Soviet economic and technical assistance was expected to play a significant part in the functioning of the plan, and technical agreements were signed with the Soviets in 1953 and 1954. These agreements pledged 300 million U.S dollars over 5 years as well as thousands of soviet Technicians to help construct large industrial plants in china. In total 10,000 soviet Scientists, engineers and other experts were sent to help in 694 important industrial projects. Many Chinese students were sent over to Russia for training. For the purpose of economic planning, the first modern census was taken in 1953; the population of Mainland China was shown to be 583 million, a figure far greater than had been anticipated. The industry was based in central china and Manchuria with nearly 700 production plants.

Five year plan output, in million tonnes:

These results would have to be questioned, as many government officials changed the figures to make it look like production had gone up more than it had. The result of the five year plan was that transport was greatly improved, cities developed, and many people were educated.

Social Changes

In 1949, people’s lives were shattered and their morality was low. The first concern of the government was health care; it was made free for all. Public health campaigns tackled widespread diseases and the high infant mortality rate. The government aimed at prevention rather than cure and gave the people a weekly quota of rat’s tails to be collected. In education the government tried to bring down the number of illiterate, more schools were opened, as 80% of the population were illiterate. Mao also recognised women as equal and introduced the marriage law of 1950, which legally placed women on an equal basis with men. It prohibited child marriage, matchmaking for money and other practises of old china, and it carefully laid down the rights of women and children. Other regulations provided for equal pay and maternity benefits, and for childcare at the workplace, to enable women to work outside the home. The overall aim of these changes was to break the power of the traditional male-dominated family, which had kept women in helplessness. In old china the family had been the focus of personal loyalty. Now the communist party wanted everyone to feel part of a wider national community and give their loyalty to the people as a whole. This was part of a general campaign to encourage socialist ways of thinking in Mao’s China. Ruth Sidel a specialist in women and children’s welfare said in 1972

“There was a rash of divorces following the marriage law, and on 29th September 1951 the peoples daily reported 21,433 divorce cases, 76.6% had been brought by women…Now divorce is relatively rare, we were told “Why would people want a divorce when they married of their own volition.”

Although Mao had retired, he re-emerged again in 1966 noticing that the educated were beginning to get wealthy again, hence the ‘Cultural Revolution’. Mao set up a scheme to equalise society in reality he just wanted to rid the cities of the educated. The scheme involved the educated students and city dwellers going out to the farms to work there and hopefully learn from their experiences, while the rural working class people were brought from the rural areas to the city and were often educated even if it were only basic skills. By the early 1960’s Mao was worried about the future of communism in china. He thought that many of the communist party officials were becoming too conservative. He feared that as the people in the government who had fought in the revolution died off, the new leaders would lose interest in the aims of communism. Instead they would only be interested in their own concerns. Mao believed this was happening in the USSR. To stop this happening in china, Mao decided that the peoples liberation army and millions of young people must learn everything possible about his communist theories. They must always think about communist aims so they would be able to teach Mao’s theories to the rest of the Chinese people. Also he wanted them to hunt out anyone who might be conservative or against the aims of communism. On 1st June 1965 Lin Biao, now minister of defence, got rid of all ranks of the public liberation army. All soldiers were given a copy of the newly published Quotations of Chairman Mao, known as the little red book. In August 1966 Mao told students in schools and colleges to form Red Guard units and seek out teachers who might be against communism. He also told them to go into factories and offices and into the countryside looking for officials who might not be true communist. All schools and colleges were closed so that pupils might take part in revolutionary activity. Many were to stay closed for the next three years. Between 1966 and 1969 the red guards took the law into their own hands. In many areas they carried out search raids on people homes to see if they had anything to show them to be against communism. All over china books were burned, works of art were destroyed and temples and churches were wrecked. The Cultural Revolution was out of control. In January 1976 fighting broke out in Nanjing between red guards and local capitalists. 50 people died and many more were wounded, soon street battles were going on in other towns and cities. Often the fighting was between Red Guard units and workers groups. The peoples liberation army was not meant to interfere, but sometimes they still took sides. Even the Prime Minister, Zhou Enlai, was taken prisoner by the red guards. He was questioned for 48 hours. In some places the PLA was sent in to restore order. By 1969 the Cultural Revolution had come to an end, although it was not officially called off until after Mao’s death.

Conclusion

In conclusion Mai started of with good intentions and put a lot of effort into reform, yet all his efforts and attempts seemed to go wrong or backfire. The two five year plans did not have his desired effect, but it did manage to boost the economy and morale. The failure of the great leap forward had something to do with the bad weather but as Liu Shaoqi said later that the disaster was “30% the fault of nature, and 70% human error”. In the country it seemed maybe the communists would reform but Mao went over the top to introduce socialist values and resulted in leaving a country in possibly more ruin than when he had came to power. Before Mao many had died because of war. He managed to destroy the faith and hope of millions, many of which died from lack of organization at harvest time and generally throughout the year. He had not done much to help the peasants and their situation, he gave them land then took it away from them, in some cases their living conditions had become worse. Even the Red Guard, when they finally reached the rural areas, realised that while they thought their lives in the city were bad, that it was nothing compared to the hardship endured by those in the country. Song Mingchao, a red guard remembers

“Chairman Mao said we were supposed to learn from the peasants, but the peasants didn’t want anything to do with us. We couldn’t understand their accents anyway. They thought we were lazy. They blamed us for eating all their food without earning it.”

The Red guards were not used to hard labour. Song tells us:

“We were always hungry. We scrounged in the fields, looking for sweet potatoes, roots, herbs, whatever we could find.”

During Mao’s reign no one gained anything, the peasants gained land then lost it, many people lost their lives. The educated, were stripped of their riches, their wisdom was ignored. As soon as a new leader emerged all the old values and ways were changed and the old china of Mao was left behind.