Source: PEKING REVIEW Vol.1 No.4, March 25, 1958
What is meant by the statement that China has laid “a preliminary foundation for socialist industrialization” often encountered in discussions of China’s economy? It means that China has greatly increased the capacity of her basic industries created new industries set up regional industrial centres raised the technical level turned capitalist enterprises into socialist increased the proportion of industrial production in relation to agriculture, while increasing agricultural output.
WITH the successful fulfilment of the First Five-Year Plan, China has laid down the preliminary foundation for her socialist industrialization. What is meant by “preliminary foundation"?
Before answering this question, we must first make clear what we mean by socialist industrialization.
A Comprehensive Industrial System
For a vast country like China, with a huge population and rich natural resources it means the building of a more or less comprehensive industrial system. China must be able to produce all the main types of engineering equipment and raw materials to supply the main means of expanding her national economy and re-equipping it technologically. At the same time she must be able to turn out all kinds of consumer goods to maintain a steady advance in the people’s living standards.
To reach these objectives, China must first of all achieve an adequate level of development and proper coordination of such branches of heavy industry as metallurgy, fuels, power, engineering, basic chemicals and building materials. In modern technology, she must also develop atomic, radio-electronic, and other such industries.
DURING THE FIRST 5-YEAR PLAN(1953-1957)
Originally Planned 694
Units Actually Under Construction 825
In her socialist industrialization, China adheres to the principle of priority for the development of heavy industry — the centre of her economic construction. Besides the growth of its basic existing branches, special stress is laid on starting up or reinforcing those which China did not possess in the past, or that were very weak. The aim here is a considerable degree of self-sufficiency in the basic capital goods required by a growing economy and by her national defence.
Geographically, owing to her immense area, China’s comprehensive industrial system must be based on a number of relatively independent centres to ensure the balanced economic growth and defence needs of the country. Along with this, there must be inter-regional co-ordination and division of labour to bring all productive potentialities into play.
A comprehensive industrial system requires a strong force of scientists and technicians and a high technical level — so that complex tasks in geological prospecting, the designing and building of industrial enterprises, or the designing and manufacture of new products can be tackled independently.
China’s way of industrialization is socialist. Therefore her policy has been to develop state-owned industries to the fullest extent possible and to transform private industry along socialist lines. In this way socialist — state and collectively-owned — industry has become absolutely predominant, and will ultimately be the only type of industry in our economy.
When we speak of the preliminary foundation for socialist industrialization, we do so in the light of the considerations outlined above.
In her First Five-Year Plan, China concentrated her main efforts on the construction of 694 “above-norm” or high-investment industrial projects,* with the 156 designed with Soviet help as the core. Headway was made on 112 of these 156; and 57 arc in full or partial operation. At the same time the building programme was expanded. Instead of the planned 694 above-norm projects, work actually went ahead on 825; of which 449 were fully or partially completed and are now in production. All are large, technically up-to-date enterprises such as old China could never afford to build. Those already operating form the initial sinews of China’s new, modern industry.
In these five years, the growth of capacity in various lines has been as follows:
Pig Iron 3,270,000 tons
Steel 2,346,000 tons
Electricity 2,335.000 kilowatts
Coal 61,200,000 tons
Motor Trucks 30,000
Synthetic Ammonia 147,000 tons
Cement 2,554,000 tons
Cotton Spindles 1,995,000
Machine-made Paper 237,000 tons
Machine-made Sugar 550,000 tons
Most of these additions exceeded old China’s total capacity in the same lines, reached after 100 years of previous industrial development. In steel for instance, old China’s peak capacity was less than two million tons; actual output less than one million. But more than two million tons of steel of new capacity was added in the First Five-Year Plan.
The completion of 449 above-norm industrial units not only strengthened China’s modern iron and steel, non-ferrous metal, power, coal, petroleum, and engineering industries but also filled many gaps in her old industrial system. Prior to the First Five-Year Plan, her engineering industry could produce only spare parts and small-sized machines. Now. in addition, it can build over 200 new types of machine tools, and complete factory installations for a number of industries. In 1949, there was no Chinese-made metallurgic, mining or power-generating equipment, not to mention aircraft, motor vehicles and tractors. Today China already produces all these things. As late as. 1952, China’s metallurgical industry could only make about 180 kinds of steel, and steel products to some 400 specifications; by 1957, the range was some 370 kinds of steel and steel product to over 3,000 specifications.
In the development of regional centres, in the First Five-Year Plan, China practically completed her northeastern industrial base with the Anshan Iron and Steel Works as its centre. The north-eastern base has all kinds of heavy and light industries in more than ten big industrial cities; Anshan alone now turns out more than half the nation’s steel.
In the same period, existing coastal bases of industry, in such cities as Shanghai and Tientsin, were also vigorously strengthened; Shanghai’s total output almost doubled in the five years.
In central China, large-scale construction was started on a new industrial base with the Wuhan Iron and Steel Works as its centre, and in the north, work began on yet another with the Paotow Iron and Steel Works (in Inner Mongolia) as the centre. Construction has also begun in north-west China and, in a more preliminary way, in the south-west and south.
Better Geographical Distribution
The uneven geographical distribution of industry that was a feature of the old Chinese economy has begun to disappear. All this makes it possible for China to develop subsequent industrial construction, in the interior provinces, at greater speed and on a much stronger foundation than was the ease in 1952.
In the First Five-Year Plan, besides the erection of new industrial plants, existing units were strengthened and transformed; some were rebuilt or expanded, some readjusted and technologically re-equipped and reformed. This too resulted in a big increase in productivity. During the First Five-Year Plan, total industrial output increased by 133 per cent. The average annual rate of growth was more than 18 per cent.
At the beginning of the First Five-Year Plan, there were great difficulties due to lack of technicians and adequate technical knowledge. Today, after five years’ hard work, these have in the main been conquered. The number of technicians in prospecting, designing and capital construction has multiplied eightfold; in civil engineering and installation 4.4 times; in industrial production 3.6 times. By 1957 the technical force numbered 600,000. Thanks to the guidance and help of Soviet experts, a great many of these technicians have acquired full competence through study and training in the course of day-to-day work. Except in cases involving geological conditions and technical problems of very great complexity, China can now design and build her own industrial units, railways and water conservancy projects such as integrated iron and steel works with an annual capacity of 1.3 million tons, coal mines with similar capacity, chemical plants capable of turning out 50,000 tons of nitrogenous fertilizer each year, hydro-electric plants of one million kilowatt generating capacity and thermal electric plants of 400.000 kilowatts In the manufacture of many major products, China is already leaving the stage of copying foreign blue prints and beginning to design her own models.
Large-scale industrial construction and the rapid development of state-owned industry has gone hand-in-hand with the socialist transformation of private enterprises. By 1956, nearly all capitalist industries had come under joint state-private operation and most of the small and handicraft shops had been organized into cooperatives. This marked a fundamental change in the structure of China’s industrial economy. At the end of 1957, of the total industrial output (excluding handicrafts). state-owned industry accounted for 65.12 per cent; cooperative industry for 3.14 per cent; joint state-private enterprises for 31.71 per cent; private enterprises for 0.03 per cent.
By 1957, reckoned in value, industrial production (including that of the handicrafts industry) had come to occupy 55.5 per cent of the total production of industry and agriculture, as compared to 41.5 per cent in 1952; the output of modern industry had risen from 32.7 per cent of total industrial and agricultural production to 46.4 per cent. Within industry, the output of capital goods rose from 39.7 per cent of total output in 1952 to 52.3 per cent in 1957, and the output value of the engineering industry from 5.2 per cent to over 9 per cent.
What is more important, during her First Five-Year Plan, China supplied 60 per cent of her own needs in machines and 80 per cent in steel products. This was a very big change from 1952. The achievement was all the greater because the needs themselves had multiplied. The 1957 volume of industrial building and installation work in China was more than three limes the 1952 level.
That is why we say China has laid down a preliminary foundation for her socialist industrialization, a good basis for its further rapid advance.
The “norm” of investment in capital construction for heavy industry ranges between five and ten million yuan and that for light (consumer goods) industry, between three and five million yuan.
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