First five-year plan (China)

A Chinese poster during the five year plan saying, "Strive to fully complete the Five-Year Plan ahead of schedule and above quota".

The First Five Year Plan (Chinese: 第一个五年计划; 1953-1957) in China, was the plan initiated by the revolutionary Communist Party of China, set out to industrialize the People's Republic and to transform the Chinese Economy into a Socialist Planned Economy. The First Five-Year Plan was very influenced by Soviet methods (From the Stalin Era) and had assistance from Soviet planners.

Background

Pre-Plan Economy

After the proclamation of the People's Republic, China set out to convert China from a backward agricultural state, into an advanced Socialist, industrial state. Near the end of 1952 before the first Five Year Plan remarkable achievements were observed, all major industrial and agricultural products surpassed peak pre-People's Republic levels. Transport and posts and telecommunications were restored and expanded, the total value of China's industrial and agricultural production 77.5% increase compared with 1949, Modern industry showed an increase of 178.6%, and agriculture saw an increase of 48.5%. Pre-People's Republic, the highest annual output of pig iron was only something over 1,800,000 tons, and steel, slightly more than 900,000 tons. There was no machine building industry to make essential means of production, however in 1952 the output of pig iron was only 1,900,000 tons, and steel, 1,350,000 tons.
The share of state, co-operative and joint state-private industrial enterprises rose from 36.7% of the total industrial production in 1949 to 61 per cent in 1952. The absolute value of output by private enterprises did increase but, its share of total industrial production dropped from 63.3 per cent in 1949 to 39 per cent in 1952. In agriculture, 40% of the nation's peasant households had joined mutual-aid teams by 1952, while 3,644 agricultural producers' co-operatives were made, foreign trade was under state control, the socialist sector of the Chinese economy had a stronger leading role. Nonetheless, the state of the national economy was still extremely backward, small-peasants still constituted the overwhelming proportion of the agricultural economy, and Capitalist sector's still had a fairly large portion of the economy.

The 12 tasks of the First Five Year Plan

The various tasks of the plan were:

1. To establish and expand power, coal and oil industries; establish and expand modern iron and steel, non-ferrous metals and basic chemical industries; establish machine-building industries for the manufacture of large metal-cutting machine tools, Power-generating, metallurgical and mining equipment, motor vehicles, tractors and aircraft.
2. Develop to an appropriate extent textile and other light industries, as well as new small and medium industrial enterprises serving agriculture, in order to supply the ever growing needs of the people in town and countryside for daily necessities and agricultural means of production.
3. Utilize existing industrial enterprises in the fullest and most suitable way and develop their productive potential. During the First Five-Year Plan period, the fulfillment of production quotas in heavy and light industry mainly depends on existing enterprises.
4. Promote the co-operative movement in agricultural production by relying on the poor peasants (including all new middle peasants who were formerly poor peasants) and firmly uniting with the middle peasants, and by using the methods of persuasion, providing good examples and giving state assistance. the initial transformation of small-peasant economy by adopting the agricultural producers' co-operative as the main form of organization, in which ownership is partially collective. This will be the basis for carrying through elementary technical improvements in agriculture and raising the yield per unit area. At the same time, the productive potentialities of individual peasants should also be developed. Energetic use will be made of-every possible means to reclaim wasteland and to enable the state farms to play a bigger role as models. All this will ensure a further increase in the output of farm produce and especially that of grain and cotton, and thus gradually remedy the anomalous situation in which agriculture lags behind industry. Develop water conservancy and afforestation work and take extensive measures for water and soil conservation. We must develop animal husbandry and fisheries and raise the output of special farm products.
5. Develop transport and post and telecommunication services in keeping with the expansion of the national economy, railway construction being of the first importance; side by side with the development of inland and sea-going shipping, as well as highways, Civil aviation and posts and telecommunications.
6. Organize individual handicrafts, individual transport enterprises and independent small businesses stage by stage under the state's over-all plan into various forms of co-operatives according to the different conditions in their respective trades, so that they will effectively serve the needs of the state and society.
7. Continue to consolidate and extend the leadership of socialist economy over capitalist economy; to make correct use of the positive sides of capitalist economy which are beneficial to national welfare and the people's livelihood, and restrict their negative sides which are not beneficial to national welfare and the people's livelihood, and thus gradually bring about their socialist transformation. Whenever possible and necessary, the number of joint state-private enterprises is to be gradually increased. Also increase the number of government contracts awarded to private industries for the manufacture and processing of goods and increase state purchases of the output of private enterprises. Private commercial enterprises will be drawn in one after the other to act as distributors working on a commission basis on behalf of state trading concerns or co-operatives, or purchasing commodities from them and retailing these commodities at fixed prices.
8. To ensure stability of the market: continue to balance revenue and expenditure and to increase reserves of financial and material resources; increase the exchange of goods between town and countryside, between home and abroad, and expand the circulation of commodities in step with the growth of industrial and agricultural production; and implement step by step, on the basis of a vigorous effort to increase production, the policy of planned purchase and supply of certain principal industrial and agricultural products the output of which lags behind demand.
9. Develop cultural, educational and scientific research work, raise our scientific and technological level and actively train personnel needed for national construction, particularly for industrial construction.
10. Practice strict economy, eliminate waste and increase the rate of accumulation of capital for national construction.
11. Steadily improve the material well-being and cultural standard of the working people on the basis of development of production and a rise in labor productivity.
12. Continue to strengthen economic and cultural mutual aid and co-operation between the various nationalities in China, and accelerate the development of economic and cultural work among the national minorities.

Results

Industry

By 1955 the total value of China's industrial output was 101% of what was expected, and within this, State-owned industrial enterprises produced 108% of what was expected. The Ministry of Power Industry produced 102%, the Coal Ministry produced 104%, the Petroleum industry produced 109%, the Ministry of Heavy industry produced 106%, the Ministry of Machine Building Industry produced 110%, the Ministry of Textile Industry produced 101%, Light Industry produced 106%. The total output value of private industry dropped by 30%, by 1955, 37 out of the 45 industrial products were fulfilled or over-fulfilled. The rest were not owing to the lack of raw-materials. The output of the following industrial items in 1955 compared to 1954 were: Electric power 112%, Coal was 117%, Crude Oil was 122%, Pig Iron was 123%, Steel 128%, Ammonium sulfate (A type of fertilizer) 109%, Cement 98%, Electric Generators 197%, Tools 86%, Locomotives 188%, Freight Wagons 170%, Shared Ploughs 873%, Cotton yarn 86%, Cotton Cloth 84%, Paper 106%, Sugar 118%. Majority were above expectations, new technologies were also developed, Large-Scale power equipment including, 10,000-kilowatt automatic turbo-generators and water turbines, 6,000 kilowatt steam turbines and boilers with an evaporation rate of 40 tons an hour. Equipment for mining metallurgy were capable of dealing with 90 tons of ore an hour, there was also 59 new types of including universal slotting machines and single-spindle automatic lathes, etc. Meanwhile, Capitalist industry was transformed into joint state-private industry there was a continued growth in the proportion of the total industrial output produced by socialist and semi-socialist industry. Of the total value produced by China's industrial output in 1955, 63% was by state industrial enterprises, 5% by cooperatively run industry, 16% by joint state-private industry, another 16% by private industry. Meanwhile the organization of handicraft co-operatives continued to develop, the number of them were 64,000 with a membership of 2,200,000.

Agriculture

Agriculture was immensely transformed, about 630,000 co-operatives were shared in the distribution of the Autumn Harvest, and by the end of year there was over 1,900,000 embracing over 75,000,000 peasant house-holds, or about 63% of all those in China, the area of land under collective cultivation went grew to over 1000 million Mou about 64% of the total cultivated area, in 1955 there was a great harvest, a total yield of food crops were 368,000 million catties (184 million tons) about 102% of the state plan, 9% greater than in 1954, production of cotton reached 30,360,000 piculs (1,158,000 tons) fulfilling the plan of the year by 117%. As for the output of staple crops in 1955 compared to 1954, Rice was 110%, Wheat 98%, Coarse Grains 111%, Soya beans 100%, Sugar Cane 94%, Sugar-Beet 161%, Jute 195%, Groundnuts 106%. Tea was up 17% compared to 1954, and cocoons 44%. Staple fruit crops were about 10% more than in 1954. Meanwhile in 1955 tractor stations numbered 138, and they served 4,900,000 Mou, four times more than in 1954 and irrigated 8,300,000 Mou, Major and Minor works extended China's total irrigated area by 19,000,000 Mou. In fisheries mutual aid and co-operation developed rapidly in 1955, the number of fishing co-operatives in 1955 rose to about 7,600, comparing with 1954 the amount of aquatic products increased by 10%.

Construction and Transport

The state invested about 8,630 Million Yuan in capital construction, 94% of the planned amount and 9% more than the previous year but due to reduced unit cost the actual amount of capital construction was 15% greater than in 1954, building and installation work increased by 18%, the actual amount of industrial construction increased by 27%. Capital construction in 1955 in the field of transport, posts and telecommunications was 27% greater than in 1954. And about a total of 1,222 kilometers of new railway track was laid. Along the Lanchow-Sinkiang railway 24.8% of the track-laying was completed in 1955, along the Paochi-Chengtu railway 73%. New main lines of traffic were built in the Chining-Erhilen, Litang-Chanchiang, Fengtai-Shacheng and Lantsun-Chefoo railways. A total of 8,138 kilometers of highway was built in the, Chengtu-Ngaba and Shigatse-Gyangtse highways.

Work, Education & Health

Near the end of 1955, there was over 18,500,000 workers and employees throughout the country, and increase of 200,000 from 1954. In 1955, 96,000 skilled workers were produced, in the same year the average wages of workers and employees (excluding those in private industries) increased by 3.9% compared to 1954, however the total wage bill was 12% higher than in 1954. In the education sector, students in higher education numbered 290,000 in 1955 a 13% decrease over 1954, this decrease was due to an underestimation of the medium-grade technical personnel needed. In 1955 more than 200,000 people attended spare time higher educational institutions and spare-time secondary vocational schools over 56,000 students graduated from higher education in 1955, and increase of 13% from 1954, among other achievements.

Aftermath

The Five Year Plan of the People's Republic of China marked the transition of China into a Socialist-Planned economy.