Economic Policies of Mao Zedong

Mao Zedong was born in 1893 and died in 1976. He was a Chinese revolutionary and a communist leader. In 1923, Mao, the Leader of the Chinese Communist Party and Chiang Kai-Shek, the leader of the Kuomintang temporarily merged parties. Even though the communists held no respect for the Kuomintang or their leader, Mao was willing to form temporary alliances which would help him achieve his long-term goals. In 1927, the merge split due to the different views on Soviet interests that Mao and Chiang held. Mao then formed the Red Army and his followers elected him as the chairman of the Chinese Communist Party. After World War II ended, Mao's army defeated Chiang's army and Chiang retreated. Mao then declared the People's Republic of China and accepted the election to chairman on October 20, 1949. From there on, Mao ruled with an "iron fist." He executed all that opposed his ideas. He attempted to show the "joys" and "advantages" of being communist. He wanted to change the agrarian society that is China, into a modern communist society instead. He wanted to do that through agriculturalizing, industrializing, and collectivizing. Mao proposed two main Five Year Plans to change China. This, along with the Cultural Revolution, changed China forever. Mao's vision for China was to transform China into a "strong, prosperous, independent, modern industrial socialist state by combining effective leadership with participation by the people." (Suyin, 1976) In some ways he achieved that.

The First Five Year Plan was from 1953-1957. The objective of it was to increase the rate of economic growth. The plans started after the completion of the first phase of the land reform campaign. "China was basically a land of individual peasant owner-cultivators."(Meisner, 1999) This allowed the Chinese Communist Party to be able to develop a plan for the nation's economic development. In November of 1952, a committee was formed to supervise and direct the First Five Year Plan. Deng Xiao-Ping, as the Minister of Finance, played a major role in the drafting of China's First Five Year Plan. He was among 15 other members who were also in the committee. Kao Kang was the chairman of the committee at the time. The choice of Kao Kang to be the chairman was a clear dependence on the Soviet Union as he was chosen by Mao. Kao Kang was the head of administration in Manchuria at the time. Manchuria had the greatest concentration of natural resources and due to it being a Japanese puppet state, it was the most industrialized area in China. This was an ideal area for the start of the First Five Year Plan. This plan was inspired by the Soviet Five Year Plans by Joseph Stalin in Russia, which started in 1928. In the comparison of the Chinese Five Year Plans and the Soviet Five Year Plans, the Chinese Five Year Plans occurred at a faster rate.

The process was accelerated due to Soviet help and also from referencing to the examples provided by the Russian Five Year Plans. A treaty was made between the Chinese and the Russians for support. This treaty was called the Sino-Russian Treaty of Friendship, Alliance and Mutual Assistance and it was formed in 1950. It promised China support in every field. This included the following: political, military, economic, and cultural. The Chinese army grew stronger due to the modern weapons supplied by the Soviet Union. This is the support that Russia already gave China before the First Five Year Plan. In 1953, when the First Five Year Plan was being initiated, more assistance from the Soviet was required. An agreement was concluded in Moscow where the Soviet was provided with "equipment and technical aid for the construction of 141 large-scale enterprises as contribution to the Chinese First Five Year Plan." (Michael, 1977) Soviet aid was later increased even more and this was to 400 industrial plants. In order to handle this program, thousands of Russian technical advisors were sent to China to help with industrial planning, factory building, development of hydroelectric power, extension of the railway network, and more. (Spence, 1990)

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Due to the new economic development, a great deal of capital was required and this was provided from agriculture, which was the focus of the Chinese economy at the time. Only the peasants could provide both the labor and the tax that was required by the economic development. Even with all the taxes and labor, the Communists lacked the capital required to repay the Soviet government. The government had a great deal of budgetary deficits and they solved that problem by selling government bonds. In comparison to the Kuomintang, the Kuomintang solved budgetary deficits by issuing new notes and borrowing large sums of money from creditors. The Communists were more efficient. Along with this, bank interests were brought down. "Bank rates that had been 70 percent to 80 percent per annum in December 1949 were brought down to 18 percent in 1950, and to 3 percent in 1951." (Spence, 1990) The Chinese utilized a method that was also applied in Eastern European Communist states. This was a system which involved grain rationing and also forced grain deliveries at fixed prices by the government that was imposed by Mao in 1953. They also added a new policy called "primitive accumulation" and this forced peasants to sell more than a quarter of their total grain production to the state at very low prices. Agricultural collectivization was required at the time. The beginnings of agricultural collectivization included mutual aid teams and peasant cooperatives. Collaborations were arranged among peasant families in harvesting and planting crops.

The gradual transformation from private ownership to collectivization was to test whether collectivization was accepted or resisted. In 1955, Mao stated that full collectivization would have to be completed by the end of the First Five Year Plan and the industrial development depended on the full collectivization of agriculture. Under Mao's pressure, the transformation occurred very rapidly. Unfortunately, in 1956, resistance against collectivization became evident. This resistance could not be expressed through the taking of land without an open rebellion. Instead, the peasants resorted to the sabotage of farm implements and animals. The slaughtering of their animals at the time was called "wanton slaughter," and this reduced the animal population in large areas drastically. This slowed the rate of collectivization. During this time, many people were looking for jobs and people moved from rural areas to urban areas. Therefore, there was a great deal of people who were illiterate which made them unprepared for factory work. Expensive equipment was ruined simply due to not being well informed. For example, running machines without oiling them, and not installing the machines on a level surface were some of the common mistakes made. In addition to this, high output of materials was very important and therefore quantity was placed above quality. There was little attention paid to quality. Despite all of this, the First Five Year Plan changed China enormously. It was mainly focused on industrialization; with this plan, China saw a dramatic increase in the industrial production of goods. Many of the output goals were met or exceeded with few exceptions. As the First Five Year Plan, it moved China forward a great deal. China's First Five Year Plan "led to the growth of bureaucracy, new social inequalities and privileged elites."(Meisner, 1999) The plan met its quotas well enough but it revealed the flaws in the Chinese economic system.

The Second Five Year Plan occurred from 1958-1962. It is also called The Great Leap Forward because of how much it moved China forward. "It was the Maoist response to the consequences of early industrialization." (Meisner, 1999). In May of 1958, Liu Shaoqi announced the program for Mao. It was placed under three additional slogans, "Three Red Banners: the General Line," "the Great Leap Forward," and the "People's Communes." It has become more popularly known under the second slogan though. During this time, Mao attempted to encourage peasants to form communes which would increase production levels. A way he utilized was a slogan which said "Dare to Think, Dare to Act." He took advantage of the financial state that the peasants were in. He utilized the fact that the Chinese people were "poor and blank" and as he phrased it, "poor people want change, want to do things, want revolution. A blank sheet of paper has no blotches, and so the newest and most beautiful words can be written on it, the newest and most beautiful pictures can be painted on it."(Spence, 1990)

The communes were used to group collective farms combined with local towns into huge centralized systems. It was a massive organization of human labor. China was organized into approximately 26,000 communes. The people were to live together in barracks and they were to eat together in barrack mess halls with communal kitchens and they were then to be organized into work teams with labor applied to industrial or rural work. Children were to be placed in communal nurseries and schools and to live in dormitories. The elderly people were to be placed in "old peoples' happy homes" where they were made to work according to their ability. The idea of a family was eliminated and husband and wives were split up and did different jobs. Houses were demolished and the materials from the demolished houses were used for other purposes. People were provided with clothing and food and even burial services. The idea was to "use militarized manpower instead of capital equipment to speed up and increase economic production." (Michael, 1977) "The people were assigned to squadrons, formed into companies, battalions, regiments and divisions, and in addition to the organization of labor in this form, these units were also to provide regular military training-for women as well as for men-in a people's militia." (Michael, 1977) Everything was carried out with military exactness. Every day at six o'clock AM, there was a reveille and the people were to march in military formation to and from work. The rest of the day was also scheduled and the evenings usually included communal recreation. In Mao's opinion, this way, China was growing closer to communism.

The people worked so much that even at night, there was little time to rest, due to the resulting weakness, illness, and death caused by the labor. Everything was described in military terminology; for example, labor was described as a military campaign. Industry had to be shifted from the construction of small enterprises to the establishment of small enterprises all over the country. This was the work of the communes and the communal labor teams. One small-scale industrial development that was used were the "backyard steel furnaces." They were built all over China. October of 1958, it was claimed that fifty million people were in iron and steel production in over 600,000 backyard steel furnaces. Scrap metal from households were collected to be used as the raw materials needed. The private ownership of domestic animals was even prohibited. Production figures at the time were disappointing. Grain production could not match population increase. In order "[f]or China's heavy industry to keep up its rapid development, accordingly, production by the agricultural sector had to increase." (Spence, 1990) China's central planners, including Chen Yun and Zhou Enlai believed that the peasants of China would produce more if they were given the motivation to do something, the opportunity to buy more consumer goods, better agricultural machinery, and an increased amount of chemical fertilizers.

During the drafting of the plan, the planners projected an annual growth in grain production of around 5 and a half percent. This is from the current 185 million metric tons to a target of 240 million metric tons. Mao's response to the disappointing agricultural production was "a strategy of heightened production through moral incentives and mass mobilization under the direction of inspirational local party leaders." (Spence, 1990) These methods were carried out by Deng Xiaoping as the party secretary-general, and Liu Shaoqi who seemed to be Mao's possible successor. At the time, China still owed Russia a great deal and China greatly needed an agricultural surplus in order to pay back the huge amount of debt it owed to the Soviet government. The plan was to double industrial output and increase agricultural output by 35 per cent in five years. Mao stated that there were two possible methods of work. "One will result in doing the work faster and better; the other slowly and not so well. Which method shall we adopt?"(Winnington, 1986) The Great Leap Forward was Mao's attempt to free himself from Soviet control and to speed up the advance towards communism. Mao realized that he could no longer rely on the Soviet government and he sought ways to break free. For a year, propaganda was spread throughout the country on the enormous success of Mao's plan. In reality, it was not as successful as it was said to be. "It was not until a year later that the full catastrophe of Mao's utopian economic planning sank in."(Michael, 1977) Instead of an increase in production as was stated, there was actually a decline.

There were food shortages which led to strict rationing and ultimately this lead to famines. The products of the backyard steal furnaces were found to be a waste of labor and were considered useless. Therefore, by the end of 1959, many of the furnaces were left which was due to them not being able to produce a high-standard product. Along with this, poor agricultural techniques were utilized which caused a great deal of damage. One of the main ones was the wrongly applied method of deep plowing used. This caused "salinization, irrigation systems constructed in unsuitable areas, senseless deforestation, [and] poorly planned reforestation which caused damage to soil and water levels affection production on a large scale." (Michael, 1977) Due to the disappointment brought on by the plan so far, the policy of the Great Leap was quietly abandoned. This resulted in a restatement of the aims of the economic program on December 10. The idea of communes was still maintained but the function of these communes was limited to coordination and direction. The workers were now paid for the work they did in place of being paid according to what they needed. The amount of working hours was reduced while the amount of pay was increased. Private garden plots and the ownership of domestic animals were permitted again. Family life was again permitted and the old and the young were allowed to live together. The communes were no longer military-like, but instead they were administrative units. Despite the Great Leap was not very successful, it still brought on a several fundamental changes to China.

The pooling together of households, child-raising, and cooking arrangements changed family structures significantly, though it showed that independent families were still a more popular form of social organization. "The massing of huge numbers of rural and city workers for giant irrigation, terracing, and construction projects changed the face of China's landscape and brought prosperity to previously infertile regions."(Spence, 1990) Cities were transformed a great deal, sometimes costing the cities aesthetically. For example, the remaining great city walls of Peking were demolished in order to create flaw new boulevards, and many underground shelters were built in case of nuclear attacks from the United States. The people's militia that was formed brought strength to local areas. There was even an attempt to introduce a great leap forward to poetry, which encouraged millions of people to try writing poetry which produced hundreds of thousands of folk tales and songs. Peasants at the time were starving in their villages. Some remember how they searched for apricot pits fallen from trees in order to press them for oil or boil them for porridge. Even pigs at the time were starving; therefore they were allowed to roam.

China's investment in industry rose along with the rise in national income in 1959, therefore grain exports to the Soviet Union also increased in order to pay for heavy machinery. "The average amount of grain available to each person in China's countryside, which had been 205 kilos in 1957 and 201 kilos in 1958, dropped to a disastrous 183 kilos in 1959, and a catastrophic 156 kilos in 1960." In 1961 it fell to 154 kilos."(Spence, 1990) The resultant was a famine that caused a great deal of damage. It took 20 million lives or more from 1959 to 1962. Many died after the Great Leap due to the effects of the plan. These people included children who suffered from the years of malnutrition brought on by the Great Leap. In 1957, before the Great Leap had begun, "the median age of those dying was 17.6 years; in 1963 it was down to 9.7."(Spence, 1990) This meant that at that time, half of those that were dying were under 10 years old. "The Great Leap Forward launched in the name of strengthening the nation by summoning all the people's energies, had turned back on itself and ended by devouring its young."(Spence, 1990)

The Cultural Revolution spanned from May 1966 to October 1976(the death of Mao marking the end of it.) It was Mao's last revolutionary act and it turned into a great catastrophe. Mao named this act as "the Great Proletarian Cultural Revolution." "It was his last desperate attempt to revive a revolution that he believed was dying."(Meisner, 1999) This attempt distorted the social and political life of the People's Republic. The goal of this was to bring China back onto the path to socialism and to secure Mao's power over the country. Due to the lack of success from the Great Leap Forward, Mao stepped down from his leadership. Two of the party's senior officials Liu Shaoqi and Deng Xiaoping replaced Mao with the day-to-day affairs of the People's Republic. They both started incorporating more liberal economic policies, but Mao soon realized that the two officials were "abandoning socialist principles and betraying the Communist revolution of 1949."(Suite 101, para. 2) Mao's wife, Jiang Qing was the one who urged Mao to start the Cultural Revolution. Mao wanted "to replace his designated successors with leaders more faithful to his current thinking; to rectify the Chinese Communist Party; to provide China's youths with a revolutionary experience; and to achieve some specific policy changes so as to make the educational, health care, and cultural systems less elitist. He initially pursued these goals through a massive mobilization of the country's urban youths. They were organized into groups called the Red Guards, and Mao ordered the party and the army not to suppress the movement." (Fortune City, para. 2) Mao shut down schools and he ordered the Red Guards to attack traditional values and "bourgeois" things and to publicly criticize party officials in order to test them. Many young people were ordered to relocate to the countryside. He believed that this would be beneficial for the young people of China because they could learn proletarian values and the lifestyle. The young were encouraged to attack their teachers, school administrators, party leaders, and parents. During this time, religion was frowned upon and temples and religious monuments were destroyed or damaged. Numerous cultural artifacts were destroyed.

Elderly people and intellectuals, in addition to being verbally abused were also physically abused by the Red Guards and many died. In 1966, two groups met to discuss the Wuhan incident which was a conflict between two hostile groups wanting to take over the city of Wuhan. They engaged in a propaganda war and this affected Mao's leadership as some was anti-Party. Jiang Qing along with some cultural workers deemed the Wuhan work as "a perfect example of politically erroneous writing, and warned that the Chinese cultural garden was overgrown with "'anti-socialist poisonous weeds.'"(Spence, 1990) The revolution was an attack on culture. For example, they used the Peking opera as an example to show that it could be revolutionized. They believed that the Chinese had a blind faith in literature and they wanted to destroy that blind faith. A small group of Mao's followers, along with his wife Jiang Qing and other radicals, the party was purged and soon both Liu Shaoqi and Deng Xiaoping were removed from their posts and subjected to an enormous amount of criticism and humiliation, their families included. The leaders of the Revolution also "called for a comprehensive attack on the '"four old'" elements within Chinese society-old customs, old habits, old culture, and old thinking…"(Spence, 1990) The Red Guards were eager to prove their integrity and anyone who had had Western education or interacted with Western businessmen or missionaries, and intellectuals were punished. The forms of public humiliation grew more and more humiliating and complicated. It ranged from parading through the streets wearing a dunce cap, to wearing a placard around their neck. One very extreme form of humiliation was when the people were force to stand with their backs bent and arms outstretched which was described as an "air-plane position.""Thousands of intellectuals were beaten to death or died of their injuries. Countless other committed suicide…"(Spence, 1990) The country was gripped with fear, excitement, tension, and euphoria which brought on violence. Thousands were imprisoned in solitary confinement and millions were sent off to "purify" themselves through labor in the countryside. The political agenda at the time was to not only confiscate or destroy private property, but to also completely nationalize all industrial enterprises, to abolish interests on deposits in the state banks, to evict landlords from their own houses, to eliminate private plots, to strengthen the commune system, and to private market economy (this included even very poor peasants selling vegetables at a village corner).

The highest point of this radical program came in 1967 and it was given the name the "January power seizure." "[V]arieties of radical groups who were not coordinated by central leadership, struggled with party leaders and with each other." (Spence, 1990) Human rights at the time were annulled and many people were persecuted. It was a very violent mass movement which affected the People's Republic of China socially, politically, and economically.

Mao Zedong, along with his followers attempted to change China, and they succeeded in doing so forever. Mao's First Five Year Plan was utilized to increase the industrial and agricultural output of the People's Republic of China. In other words, it was used to improve the economic status of China. The purpose of Mao's Second Five Year Plan was still to increase industrial and agricultural output but it was not a very big success. It lowered the average age of people dying and it caused a great deal of famine and death. The Second Five Year Plan did not go at all as planned and China's state was not very good at the time. Immediately after the Second Five Year Plan, Mao initiated the Cultural Revolution. He started the Revolution in order to ensure the support of his followers, to recover from the Second Five Year Plan, and to bring China back onto the path of socialism. The Revolution was an enormous catastrophe and it resulted in a huge number of peopled dying and important cultural monuments and items getting destroyed. Mao's intention of changing China was fulfilled but the consequences were immense. The aftermath of his plans and his revolution continued to change China, long after his death. Whether the effects were positive or negative, Mao definitely changed China forever.