On 1 October 1953, the Chinese government announced its First Five Year Plan, which would herald the beginning of ‘the general transition to socialism’. This plan for the economic growth of China prioritised heavy industry, with 88.8% of the government’s budgeted capital being contributed to the sector. With the help of Soviet funding, 700 new enterprises were set up, including oil refineries and coal mines, and transport infrastructure was expanded. Production quotas were set by the centralize State Planning Commission, and demanded an increase of 10-16% in overall annual production. As part of the First Five Year Plan, the nationalisation of industry was quickened. In late 1955 industrialists proposed that the nationalisation of the private sector should be carried out, and on 6 December 1955 Mao declared that by the end of 1957, all private enterprises would be taken over by joint-state ownership. At a state-sponsored rally on 15 January 1956, 200,000 people gathered at Tiananmen Square to celebrate the ‘triumph of socialism over capitalism’.

Industrial sector

The First Five Year Plan achieved considerable growth in the heavy industry sector, with main heavy industrial production growing 102.7% by 1957

Rural reforms

While the main focus of the First Five Year Plan was heavy industry, it also coincided with the staged collectivisation of the Chinese countryside that aimed to bring rural China in line with socialist principles of shared ownership of land. At first, the CCP adopted a gradualist position towards collectivisation, beginning with the optional ‘lower’ Agricultural Cooperatives of 20-40 families, where peasants received payment depending on the amount of land owned and labour contributed. These were phased into ‘higher’ Agricultural Cooperatives, of 100-350 families, where land ownership became collective. CCP leaders such as Finance Minister Bo Yibo and Vice-Chairman Liu Shaoqi believed a gradualist approach should be continued until industry could provide enough tools and machinery for farming, even authorising the dissolution of some Agricultural Cooperatives in 1955. But with food production barely keeping pace with the population growth of 2.2%, action was needed. Mao and Chen Boda believed that the peasants would move towards capitalism if left unchecked, and therefore pushed for ramping up collectivisation. In July 1955 a conference of regional and provincial CCP secretaries was held, at which those who failed to embrace the ‘high tide’ of socialism (increased collectivisation) were denounced. This spurred cadres to mobilise support for the quickening of collectivisation, and by the spring of 1956, 92% of all peasants had joined Cooperatives, compared to 14% the previous spring. ‘Higher’ cooperatives, in which peasants were paid for the work they did rather than the assets that were taken off them, became more widespread. In reaction, tens of millions left the countryside, boosting the urban population and further increasing the strain on rural areas to feed it¹. Meanwhile, agricultural growth of 4% was not keeping pace with the population growth of 7%. Tough 84% of China’s population lived in the countryside, 88% of investment was allocated to heavy industry in urban areas. A state grain monopoly introduced by the new government sometimes led to forced procurement of grain. In March 1955, riots broke out in Jiangsu province, where farmers were left with only 35% of their output – as a result procurement was cut by a third. Some historians argue that the CCP saw the countryside as a “reservoir to be pumped dry to feed the industrial workers”² – in 1952, the state directed 4% of its expenditure to agriculture while drawing 23% of tax revenue from it.

 Historiography

“The First Five-Year Plan achieved considerable success…A very respectable increase of 10-16% in overall annual production was achieved. China, for the first time, was able to produce its own cars, aircraft, cars and ships.” Ryan

1. Fenby ↩

2. Fenby, J., 2009. The Penguin history of modern China: The fall and rise of a great power, 1850-2008. London: Penguin ↩