Success/Failure

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Success:

The SOEs fulfilled the communist notion of centrally controlled industry.

For workers the positive side was that they had an 'iron rice-bowl'. Moreover the SOEs provided the workers with accommodation, medical and educational benefits for their families.

There were apparently impressive increases in output.

Many of the communal endeavours that took place under the plan thrilled the Chinese and impressed the foreigners.

Discovery of huge oil and gas field (Daqing).

Failure:

SOEs performed less well than anticipated. Basically inefficient, largely as a result of the abandonment of any incentives. Destroyed any motive for the workers of managers to show initiative.

Any surplus the SOEs earned went straight to the state.

No matter whether a worker was conscientious or idle, they still received the same pay.

China lacked the following essentials: technical skills, managerial know-how, efficiently run factories and plants, an adequate transport system. Therefore, China could not build the modern economy Mao had promised would overtake the world in a 'great leap'.

Instead of growing under the great leap forward, the output of industrially produced goods actually fell.

The plan did not reach its objective of laying the basis of a modern industrial economy. Among the reasons for this were the following:

The quality of China's furnished products fell a long way short of meeting its domestic industrial needs.

Political interference made the plan impossible to manage purely as an economic enterprise.

Officials issued demands and threats a plenty, but hardly any detailed instructions as to how things were actually to be done.

Despite the setting up of SOEs, so much was left to local initiative that China never really operated an integrated national plan.

The result was that effective organisation and quality control became difficult to achieve and impossible to sustain.

The USSR stopped providing technical assistance in 1960. This resulted in the closer of half the 300 industrial plants that the Soviet Union had sponsored in China, including a number of steel mills.

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