Industry under Mao

1. Industry under Mao • Yes, this combined with agriculture = mao economic policies

2. Background • Since pre Qing era through the GMD, China had suffered a large trade deficit • Foreign ownership predominant in resource rich areas • For example, in 1922, 78% of cola mines were owned by foreigners • Concessions had happened frequently since the 1942 treaty of Nanjing

3. General communist aims • Belief in independence from foreign influence (due to manipulation) • Foreign trade should be kept at an absolute minimum for the establishment period • In order to build socialism, growth of industry is imperative. By 1952, the year communism completely took route, Mao began economic planning • He felt that full industrialization could be achieved in 15 years via 3 separate 5 year plans

4. The first 5 yr plan: 1953-57Just like Stalin done it • Focus on increasing 'heavy industry' and infrastuructural needs • Ex: steel, iron, transportation, energy and communications • Consumer goods have low to no priority...practically nonexistent. Limited consumer goods means people have little to spend on • "patriotic savings" campaigns exhort citizens to use State banks, savings were celebrated. • All of this worked to finance government industrial investment

5. Also vita that government took a part of the agri-output. • This was done through government procurement quotas. • Quotas were set low • Government could then feed the growing (necessary) urban population and keep industrial workers' wages low

6. Results of 1st 5yr plan • Ambitious targets were set • According to most figures, although Chinese based, targets were met in 1956 and exceeded in 1957 • regardless of reliability, the output was immense and mao's ability to mobilize the population; impressive

7. Targets and achievements of the 1st plan

8. Published shortcomings • Uneducated and illiterate workers ruined equipment or couldn't read to install and operate things • Emphasis on quality not quantity • State planners lacked business savvy, often led to bureaucracy, and issues in supply, production and distribution • Competition for scarce resources meant necessity for interaction with private sectors and foreign actors • Peasantry was deliberately held down to allow urban/industrial growth

9. Socials and economicses consequenceses • Workers gained better job security, more consistent wages • Living standards in China generally increased, but nowhere near global standards • In 1949, appx 57 million in cities, by 1957, almost double (appx 100 million) • Some costs were met by borrowing from USSR with large interest. Much was paid via food shipments, further injuring peasant value • In 1955, Mao began the process of abolishing private industry by creating joint State-Private companies • Due to the beating from the 5 anti-s campaign, most businessmen took the deal openly to become part of the system • By the end of Feb, 1956, private industry in China was gone

10. The Great Leap Forward • "Catch up with Britain in fifteen years!"

11. Aka the second 5 yr plan • Slogan:"more, faster, better, cheaper" • Through mass mobilization and solid communist leadership, China could overtake all world powers. • Largest documented mobilization of a population/social experiment • Potentially disastrous and definitely infamous

12. Key aims • Decentralize control to local cadres in order to decrease bureaucracy • Fly through socialism to achieve cull communism quickly • Group agricultural cooperatives into even larger communes - these will overtake the basic unit structure, taking over functions of local government, education, even military • Complete abolishment of private life, everyone for the good of the people • Even children were cared for by the commune kinder, thus releasing other women to labor

13. Follow soviet agri-scientist Lysenko policy of planting closer together and tilling land deeper: disastrous yield results • Slogan: "walk on two legs" - communes ordered to have center for industry, which generally amounted to backyard furnaces for cheap iron and steel production. Low quality • All metals were requisitioned when needed to be melted into pig-iron • All trees, wooden furniture and doors...etc used for fuel • Laborers mobilized in groups of 10,000 were organized for large scale engineering projects such as clearing roads and building bridges. Many times they dug by hand. • Mao began to ignore economic planners and his ego and irrationality grew. Many claim due to previous successes in the first five year plan • He made plans and speeches promising output that far exceeded the laws of economics

14. Outcomes • Due to fear and cadre preessure, sectors began reporting false outcomes • For example, the 1959 grain harvest reported 270 million tones, in reality, it was closer to 170 • Steel was similar and the quality of the product (pig iron) was even worse • In order for industry to keep pace, a large food surplus was necessary to feed the cities, but by summer 1959, shortages and rice rations hit the country

15. In the communes, propaganda worked against Mao. Many felt the importance placed on steel and industrial production was seen as more important. • Farmers focused more on the furnace and qt times, land was left uncultivated or poorly tended to • Melting of equipment also led to lack of equipment and tools in the farms • Frequent military manoeuvres and trainings by the commune pulled necessary workers away from work too often • Communes had little training on planning, timing and necessity • Despite the growth and urbanisation, Mao focused on sheer numbers, promoting the most successfully immense outputs in Chinese history; although true, they didn't reflect the country's needs

16. In a nutshell...why did it fail? • Remember this phrase: it was bound to fail; a project based on total denial of the actual capacity of China's agricultural and industrial base, a refusal to be bound by economic laws and an assertion that economic targets could be based on political necessity rather than rational calculation is bound to fail.

17. Sources: • J. Horn - Away With All Pests, 1969 • Chang - Wild Swans, 1992 • Chang and Halliday - Mao: The Untold Story, 2006 • J. Becker - Hungry Ghosts, 1996 • J. D. Spence - The Search for Modern China

18. Horn • The setting up of rural peoples communes in the countryside in 1958 radically changed the situation. For the first time, large scale collectivization created the political social and economic conditions to support a rural system of social security and welfare. • Then came three bad years during which, chiefly because of exceptionally widespread draughts and floods, poor harvests were reaped throughout the country. During these years, the people were short of food, but none starved. When these lean years passed, the whole nation realized the truth of what chairman Mao had been saying for years - that agriculture was, and must be, the foundation of a national economy

19. Chang • Starvation was much worse in the countryside because there were no guaranteed, Organized rations. Government policy was to provide food for cities first; commune officials had to seize grain from the peasants by force. In many areas, peasants who tried to hide food to live on were arrested, beaten and tortured. Compassionate officials who we reluctant to carry out this policy we themselves dismissed, many physically mistreated. As a result, peasants who had actually grown the food had dies by the millions all over China.

20. Chang and Halliday • Close to 38 million dies of starvation and overwork during the Great Leap Forward and the famine which lasted four years as a result. This is the greatest famine on record in all human history. Mao knowingly worked tens of millions of people to death. During the two most critical years, 1958-59, grain exports alone, almost exactly 7 million tons, would have provided the equivalent of over 800 calories per day for 38 million people - the difference between life and death

21. Spence • The result was famine on a gigantic scale, a famine that claimed 20 million lives or more between 1959 and 1962. Many others died shortly thereafter from the effects of the Great Leap - especially children, weakened by years of progressive malnutrition

22. Becker • That winter (1960) cannibalism became common. Generally the villagers ate the flesh of corpses, especially those of children, elder brothers ate younger brothers, elder sisters ate their younger sisters. In most cases, cannibalism was not punished by the Public Security Bureau because it was not considered as severe a crime as destroying State property and disrupting the means of production. This latter crime often merited the death sentence. Traveling around the region (Henan) over thirty years later. Every peasant I met over the age of 50 said he personally knew of q case of cannibalism within his production team.

23. A few final points • Militia sent to western provinces to put down revolutions often raped and mistreated populations • Many committed armed robberies and stole goods as well • Labour camps were born and expanded quickly to deal with many peasants found guilty of cultivating food for personal use. • In key provinces, approximately 25% of the population died • The final figure of death has been agreed to state a little over 20 million • In December, 1958, Mao stepped down as chairman, handing over the position to Lu Shaoqi

24. New imports • By 1960, the government secretly abandoned it's policy of independent growth and isolation. • They imported grain from Canada, Australia, and indirectly from the united states • To distract, the government continued and propagated many international and developmental projects. • In 1964, they tested their first atomic bomb successfully • In 1980, the government finally admitted to the famine of the late 50's

25. The Third 5 yr Plan, 1961 • The importation and poor production of grain forced a power struggle and policy rethink in the party. • Step one was to abandon the commune system • Policy shift away from USSR due to the split • Economic changes and a new minister Chen Yun • More purges also helped consolidate Mao's power, but more on that later

26. Abandoning the communes • Communal canteens abandoned, peasants allowed to eat at home • By June 1961, they could privately cultivate land again • The communes used financial incentive to encourage hard work and good output • Communial fairs and markets we reestablished allowing for some independent price setting, within reason • By 1962, some 25 million peasants returned from the cities to the fields • Many inneficeint goventment enterprises closed down

27. The Sino-Soviet split • 1960, Soviet experts were withdrawn from many posts • Soviets stopped making loans to China. • China still had to repay by continuing the shipment of millions of tones of grain, which they couldn't afford

28. Chen Yun policies • New economic minister and part of a newer appeal to the intellectuals and scientists • Reintroduction of centralized planning, power taken away from communes • Solicit advice and hear grievances from peasants • Value the expertise of the educated and specialized, revamp education to train more • Production targets reviewed on an annual basis and flexible to needs and climate • Financial incentives replaces appeal to belonging/revolutionary fervor

29. Effects • By 1965, production levels were back to the normal pre-1957 levels • Output of light industry expanded by 27% • heavy industry increased by 17% • oil production increased by 1000% • natural gas production increased by 4000% • China became free from dependence on Soviet energy for surplus. Somewhat hurt Soviet economy at the time • Mao NO likey...more later