AT THE Eighth National Congress of the Chinese Communist Party held in September, 1956, Premier Chou En-lai stated that the basic tasks required for Red China’s transition to a modern industrialized state would be completed by 1967.
To propose to convert a country of 640 million of whom about 550 million are peasant farmers into a modern industrial state is alone an audacious conception, but to expect to complete this Herculean job in ten years is even more so. This year will see the completion of the First Five Year Plan, and from the results so far it is possible to arrive at an estimate of Red China’s progress on the road to industrialization and its chances for success in this grandiose scheme.
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In attempting to evaluate the Communist plans and the extent of their execution certain facts have appeared. First of all. under the First Five Year Plan, to be completed this year, very considerable progress has been made. In Manchuria the Communists, admittedly building upon the existing complex of industry left behind by the Japanese — the power plants, railways, harbor facilities, factories, and dockyards have rebuilt the damaged factories, renovated and enlarged the existing facilities, and restocked those plundered by the Soviet “liberators.”
The Chinese have bridged the Yangtze at Hankow with a giant 3700-yard-long doubledecked span and have reactivated the Anshan Iron and Steel Works, which already has 64 operating factories and plans to build 42 more by 1960. At Anshan there is also a seamless steeltube plant where a visiting German engineer confessed surprise at the efficiency of production and the degree of technical ability demonstrated.
Manchuria, the Chinese Ruhr
In Manchuria the Fushun collieries, one of the major causes of the Japanese incursion, supply adequate coal, and the Russian-built generators of Fengman and the Yalu River hydroelectric stations supply plenty of power for the existing industries with a handsome surplus for any new developments.
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At Changchun there is a car factory producing, according to the Party propagandists. 30,000 “Liberation” trucks per year, and at Mukden and Harbin there are MIG jet lighter aircraft assembly plants. Mukden, the Pittsburgh of China, also boasts machine tool plants, turbine and transformer factories, and important armament works; at Dairen the dockyards are busily constructing cargo vessels, small tankers, and other vessels, and here China’s first home-designed locomotives have gone into production; at Shanghai the yards are turning out small freighters, tugs, lighters, and barges as well as Soviet-designed U-boats and motor-torpedo boats for the Red Navy.
But Manchuria is not the only industrial complex. There, industry is greatly concentrated in one huge area on the coast. Two new industrial centers are under construction, one at Hankow and the other in Inner Mongolia at Paotow. These are to be centers of heavy industry, each grouped around an integrated iron and steel plant on the Anshan model, while Shanghai, Tientsin, Canton, and other cities are to concentrate on the production of consumer goods and light machinery.
In order to build the huge industries envisaged, Red China is pushing exploration everywhere and particularly in the wild lands of the West and Northwest, in Kansu, Tsinghai, Sinkiang, and now Tibet. Literally armies of workers, some made up of regiments of demobilized troops, others of “counterrevolutionaries" being “remolded” by enforced labor, are working in the oil fields, pushing roads across the deserts and over the mountains, and feverishly extending the railways, one of which will, they claim, ultimately reach Urumchi, the capital of Sinkiang, and from there link up with the Turksib Railway inside the Soviet Union.
Hundreds of teams of geologists, scientists, and mining engineers are scouring these areas for coal, oil, iron ores, and other metals. Uranium is of course a prime goal, and Japanese scientists, recently returned from China, report that several uranium-bearing ores have been discovered.
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Search for raw materials
Without more raw materials the potential industrialization of China is very rigidly constricted. The country has very little oil, and even where it has a sufficiency now, such as in coal, timber, and bauxite, these raw materials cannot yet be transported in the quantities needed to provide enough for the planned industry. There is not enough iron ore, or nonferrous metals except tin and antimony, to supply any great expansion of industry, and in consequence the hope is that vast new sources of raw materials will be found.
The Chinese have great expectations for the oil fields in the Tsaidam and Dzungaria basins and, to handle the oil from these fields, a new refinery is nearing completion at Lanchow on the Yellow River. This refinery is supposed to process one million tons of crude per year, but with construction on the Far West railways temporarily at a standstill, the problem of transporting the crude from field to refinery has yet to be solved. Near this refinery Soviet engineers have built a machine tool factory to produce drills, digging machinery, and rigs for the oil fields.
China’s new factories are also training institutions, since technical know-how is perhaps an even greater bottleneck than lack of resources.
The present government recognized this fact and established a twelveyear plan for the training of scientists and engineers, both at home and abroad, but there is no doubt that Red China will be largely dependent on foreign technical aid for a very long time to come; and herein of course lies one great weakness.
Too much, too soon
The model factories shown to foreign visitors are real, but no one is told the true output, the rate of rejections, the costs of production, the wastage of material, the ultimate quality of the products.
Competent observers believe that China is capable of producing only very small quantities of high speed steel or special steels. There is no petrochemical industry; the metallurgical industry is rudimentary and high precision instruments are virtually nonexistent, though a great new central precision instrument factory is now being built by the East Germans outside of Sian; there is almost no advanced electronic industry.
Mao Tse-tung and Chou En-lai have admitted that planning has been bad, that there were too many ambitious schemes started which resulted in waste and inefficiency. Mao recently stated that the emphasis should be changed from large heavy industry to smaller units, to the development of smalland medium-sized industry; in other words, to do what the Chinese know how to do. Certainly in 1955 and 1956 they tried to do too much too quickly and the economy suffered a very decided setback.
It was so grave that Chou En-lai reluctantly had to admit at the National People’s Congress held in June, 1957, that government ineptitude had resulted in a huge budget deficit, mainly due to excessive spending for capital construction, bad management, and bad planning. Added to this, the worst typhoons and floods in many years impoverished over 70 million people and inundated 40 million acres of arable land, with the result that the government was compelled to release huge quantities of hoarded grains and to spend large amounts of cash in order to relieve the famine in the stricken areas. On top of all this, consumer goods became short, certain foreign materials did not arrive, and, in fact, a shortage of all supplies caused tensions both in industrial production and in the supply of daily necessities. Finally, Chou En-lai admitted, all the savings of former years had been used up in the vast amount of building and on payments for relief, and this had put the budget badly in the red.
It was apparent that the cotton crop had failed by the fact that clothing coupons, already inadequate, were reduced last summer to one half their purchase value and have been further reduced since, under more stringent rationing.
Visitors to China reported grave shortages in all forms of transportation, machinery, and parts; in aviation gasoline, jet fuel, and diesel fuel. The new refinery at Lanchow was said to be virtually inoperative, since only a trickle of crude had arrived; the automobile plants had cut production drastically and the tractor factories had to stop turning out units, as there was no diesel fuel to drive them. Foreign trade also was disappointing as both exports and imports were curtailed, but under the 1957 budget plan they will be even further reduced. Only firstpriority imports will be permitted, which will effectively dampen the ardor of those Japanese and others who have rushed over to China with order books in their hands.
Austerity: new model
China’s budget for 1957—1958 is to be a model of grim austerity, in order to try to recoup the losses of 1956 and to pull the Chinese out of the economic quicksand. Every expense is to be reduced and new construction discouraged. The people are to spend less and to receive less in staple goods. There are to be higher taxes, fewer clothes, no wage increases, and a harder life for everybody. In his economic report at the Congress, the finance minister outlined all these unpalatable plans, but, he commented, although some carping critics had said that the Five Year Plan had been bungled, Premier Chou himself had vigorously denied this.
It must be remembered that China’s great industrial developments are largely dependent on the credits, technicians, and materials provided by the U.S.S.R. Recently there has been evidence that the Chinese Communists are not getting quite as much aid as they had hoped for and that Russia is showing little enthusiasm for the demands to implement the Second Five Year Plan.
Paradise dimmed
It has become obvious that the heaven for the peasant farmer, long promised by the Party propagandists, has largely failed to materialize, and there are widespread grumblings. The phrase “the Party forgot the peasants when it entered the towns” became so current that it had to be officially denied in a long report by Mao himself. Also there is evidence that the farmers are restless under the compulsory state coöperative system, are obstructing deliveries, and are deliberately trying to cheat their new masters.
Even in the cities, some workers are finding that Communism is not the paradise they had hoped for, and there have been reports of strikes and slowdown tactics in several factories and even cases of violence to the Party bosses. Unemployment has increased, and the promised improvement in the standard of living has not materialized.
The intellectuals who originally gave their support to the Party are now openly critical and have become the chief target for condemnation. The official published policy, “Let 100 flowers blossom and 100 schools of thought contend!" apparently produced more of a reaction than was bargained for, since a surprising number of influential voices were raised in criticisms so damaging to the Party line that the policy had to be “re-explained.” There has been a harsh clamp-down on those who were gullible enough to indulge in criticism in the mistaken belief that Mao and the Party would at least permit, if not listen to, adverse comment. Certainly the promise of free discussion implied in the statement backfired upon those who fell for it and voiced their criticisms, since they now seem to be in for greater repressions than ever.