In 1949, when the Communists took over the reins of the government, the country was underdeveloped and ruined by a long period of war. Underdeveloped because traditional production techniques were backward; the industry, still in its infancy, existed only in the coastal regions of NE and was for the most part in the hands of foreigners; furthermore, the country was equipped with poor communication routes. The immense China presented, in relation to physical (and above all climatic) diversities, conditions very different from one side to the other, but primitive, semi-colonial and semi-capitalist economic and social systems prevailed. It should not be forgotten that China is frequently subject to natural disasters. The terrible floods of August 1954 and the exceptional frosts of January 1955 made it necessary for a certain time to ration food. Also in 1957 the main rivers broke their dams in several places, submerging 150,000 km2 and causing 15 million homelessness.
The reconstruction work undertaken by the Communist government was characterized by the progressive and partial dismantling of the “feudal” structures of Chinese society, represented by the antiquated ways of agricultural production and the lack of industrialization.
This dismantling began with the land reform law, promulgated on June 30, 1950, which was followed by the laws on trade unions and on labor insurance; heavy industry passed entirely to the state, while in the light industry sector the survival of private and mixed enterprises (state and private) was allowed. As a result of these measures, the value of agricultural production returned to the pre-war level (48 and a half billion yuan) in 1952, and in the same year industrial production exceeded the pre-war level, especially in the steel sector, which increased tenfold compared to 1949; good progress was also made in the transport sector and in statistical organization.
The first five-year plan, whose implementation began between 1952 and 1953, marked the transition from the transitional phase of the reconstruction period to the establishment of a true socialist economy, centered on the effort for the industrialization of the country. Fiscal measures against private property were intensified, and state and mixed enterprises ended up absorbing almost all private enterprises, both in industry and commerce, while in agriculture the system of collectivized cooperatives was generalizing. Particular attention was paid by the plan to the preparation of skilled workers and it was expected that within the five-year period a million workers would be specialized.
According to PROZIPCODES, the social objectives set by the plan were fully achieved in 1956, while the economic results, at the end of 1957, far exceeded forecasts, according to official data. In particular, the value of industrial production reached 69 billion yuan (with a 132% increase over 1952) and that of agricultural production 64.5 billion (with a 25% increase over 1952). The greatest successes were obtained in the production of coal, steel and electricity, while the results achieved in the cotton and cotonate sectors were lower than expected. The first plan had the merit of laying the foundations for the industrialization of the country; the uncertainties and mismatches through which it took place, and the relative failure in the agricultural sector, however, they prompted the Chinese authorities to re-examine the economic situation. On the basis of this review, the second five-year plan was prepared and is currently under construction.
The second five-year plan, approved on 27 September 1956, foresaw, among other things, for the period 1958-62: a 50% increase in national income; the allocation of 60-70% of state revenues to productive investments; the achievement of the following production volumes: 40-43 billion kWh of electricity, 200 million tons of coal, 11-12 million tons of steel, 250 million tons of cereals, etc. However, partly political and partly economic considerations prompted the authorities, in the second half of 1957, to launch a campaign to make a so-called “leap forward” in order to accelerate the achievement of the objectives as much as possible.
In August 1958, major changes were made in the organization of agriculture, with the merger of agricultural cooperatives into over 26,000 “people’s communes”, each of which comprising about 5,000 families. The main objective to be achieved with the municipalities is the mobilization of resources in the framework of the “super effort” to be applied in the period 1958-60 to expand the economy to an extent adequate to maintain constant development. We give below particular information on the development of agriculture, mineral extraction and industry.