Industry

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The moderate period of national capitalism between 1949-1953 involved minimal disruption. During this period, the state took over the ownership of heavy industry and the banking system only. Wages and prices were regulated, but members of the 'national bourgeois' were still able to make profits. In 1953, 20% of heavy industry and 60% of light industry were still privately owned.

The first five years plan - intended to speed up China's industrial growth. Over the next two years, all private industries and businesses were nationalized. According to official statistics, heavy industrial output nearly trebled and light industry rose 70% during this period. Overall target were exceeded by 20%. These figures cannot necessarily be trusted, but for the first time China was producing it's own cars, tractors, aeroplanes, cargo ships, machine tools and penicillin. The urban population grew from 57 million (1949) to 100 million (1957).

Aims of the great leap forward:

Wanted to reassert China's independence from the Soviet Union.

Wanted the Chinese people to take responsibility for their own future; he believed success resulted from determination, not money and expert advice.

Mao was 64 and in a hurry; he believed the pace of change had been too slow and he wanted to prove himself after the failure of the 100 flowers campaign.

He wanted China to 'walk of two legs' and develop both industry and agriculture.

The slow rise of agricultural productivity had meant a shortage of capital.

Pay differentials between skilled and unskilled workers had reappeared in 1965 to provide incentivisation, which clashed with Mao's ideology.

He was worried that the CCP was becoming bureaucratic and wanted to reduce the influence of central planning ministries and revive the 'Yanan spirit'.

Sate-owned enterprises (SOEs), under complete state control, with state subsidies, fixed rates of pay, conditions and output targets, also increased in number. Managers no longer received a share of the profits and any surplus went to the state. These enterprises were organised rather like the countryside communes, with accommodation, schools, hospitals and other facilities for workers.

In 1958, the 'drive to produce metals locally' lead to around 90 million peasants getting involved in steel production. Small-scale 'backyard' industrial projects began on farm units and peasants abandoned other work to build brick furnaces in the yards. Children collected peasants' donations of metals, including pans, tool and even bicycles to add to the ore. Adults stocked and attended the cauldrons, or helped push barrows or drive buffalo carts to bring in the raw materials and carry away the finished product. Around 600,000 furnaces reddened the rural skies and brigades competed with one another to produce the most.

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