THE INDUSTRIAL LABOR FORCE OF COMMUNIST CHINA 1950-55

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01093A001000110001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 43
• Document Creation Date: November 9, 2016
• Document Release Date: July 14, 1999
• Sequence Number: 1
• Publication Date: January 30, 1956
• Content Type: IR

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PROVISIONAL INTELLIGENCE REPORT
THE INDUSTRIAL LABOR FORCE
OF COMMUNIST CHINA
1950 - 55
CIA/RR PR-133
30 January 1956
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
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This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Sees. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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PROVISIONAL INTELLIGENCE REPORT
THE INDUSTRIAL LABOR FORCE OF COMMUNIST CHINA
1950-55
CIA/RR PR-133
(ORR Project 45.54+7)
The data and conclusions contained in this report
do not necessarily represent the final position of
ORR and should be regarded as provisional only and
subject to revision. Comments and data which may
be available to the user are solicited.
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
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C ONTENTS
Page
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . 1
I. Estimated Size of the Labor Force . . . . . . . . . . . . 4
II. Industrial Employment . . . . . . . . . . . . . . . . . . 10
A. Recruitment of the Industrial Labor Force . . . . . . 10
B. Influx of Peasants into the Cities . . . . . . . . . 10
C. Opportunities for Urban Employment . . . . . . . . . 11
1. Women in the Labor Market . . . . . . . . . . . . 12
2. Urban Underemployment . . . . . . . . . . . . . . 12
3. Urban Unemployment . . . . . . . . . . . . . . . 14
D. Forced Labor . . . . . . . . . . . . . . . . . . . 16
E. Labor Discipline . . . . . . . . . . . . . . . . . . 17
F. Working Conditions . . . . . . . . . . . . . . . . . 18
1. Hours . . . . . . . . . . . . . . . . . . . . . . 19
2. Labor Insurance Law . . . . . . . . . . . . . . . 20
3- Wages . . . . . . . . . . . . . . . . . . . . . . 20
III. Development of Technical Skills in the Industrial
Labor Force . . . . . . . . . . . . . . . . . . . . . . 22
A. Shortage of Technicians and Skilled Workers . . . . . 22
B. Attempts to Meet the Shortage . . . . . . . . . . . . 23
1. Use of Foreign Technicians . . . . . . . . . . . 23
2. Redistribution and Allocation of Skilled
Workers . . . . . . . . . . . . . . . . . . . . 21+
3. Training Programs . . . . . . . . . . . . . . . 24
a. University Training . . . . . . . . . . . . . 25
b. Primary and Secondary Education . . . . . . . 28
c. Secondary Vocational Schools . . . . . . . . 30
d. On-the-Job and Spare-Time Training . . . . . 31
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Appendixes
Page
Appendix A. Gaps in Intelligence . . . . . . . . . . . . . . 35
Appendix B. Source References . . . . . . . . . . . . . . . 37
1. Estimated Population and Labor Force of Communist China,
1953 .......................... 5
2. Wage and Salary Earners in Communist China, by Socialized
and Private Sectors, 31 December 1952 . . . . . . . . . 7
3. Expected Increase in the Socialized Sector of the Labor
Force of Communist China under the First Five Year
Plan, 1953-57 . . . . . . . . . . . . . . . . . . . . . 8
4. First Five Year Plan for Education in Communist China,
1953-57 . . . . . . . . . . . . . . . . . . . . . . . . 25
5. Enrollment in Institutions of Higher Education in
Communist China, by Academic Year, 1949-55 _ . . . . . . 26
6. Enrollment in Secondary and Primary Schools in Communist
China, Selected Years, 1945-54 . . . . . . . . . . . . . 29
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CIA/RR PR-133 S-E-C-R-E-T
(ORR Project 45.547)
THE INDUSTRIAL LABOR FORCE OF COMMUNIST CHINA*
1950-55
Summary
The most serious labor problems facing the Chinese Communists are
unemployment and a shortage of skilled labor. Of the two, it is be-
lieved that the surplus of unskilled workers, which is responsible
for unemployment and underemployment, will be the more difficult
problem to solve. The shortage of technical skills, although a de-
cided hindrance, does not cripple industrial development and will
probably be eased by the increasing number of technical specialists
and the accrual of industrial experience. The problem of surplus
workers, however, is more difficult to solve because its very essence
is overpopulation -- too many people for too few jobs.
In 1953 the labor force of Communist China probably included
303 million of the total population of 582.6 million people. This
total labor force was composed predominantly of agricultural workers,
with only about 20 percent, or 62 million people, classified as non-
farm workers. Employment in industry probably accounted for no more
than 10 percent of the nonfarm workers, or approximately 6 million
people. Although industrial workers accounted for only 2 percent of
the total labor force, and despite the rapid expansion of industrial
facilities, there is increasing evidence that industry has hired
a larger labor force than it can efficiently use at this stage of
development.
Industrial employment has grown rapidly under the high priority
accorded it by economic plans. Labor allocation agencies, which have
the task of controlling the distribution of labor for construction and
industry, found a sufficient source of labor among the urban unem-
ployed to meet all commitments for economic construction. Such pro-
jects, however, have not alleviated the problem of urban unemploy-
ment. It is doubtful whether these new jobs equaled the number
of jobs abolished by the Chinese Communist attack on private com-
mercial and manufacturing enterprises in 1952.
* The estimates and conclusions contained in this report represent
the best judgment of ORR as of I January 1956.
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Throughout the period of Chinese Communist control, the influx of
surplus farm labor into the cities has continued despite Communist
attempts to halt this migration. To complicate the matter further,
official Communist policy called for the emancipation of women, in-
cluding equal rights to employment, with the result that women have
increased the size of the urban labor market by entering occupations
previously closed to them.
Underemployment in industrial plants is illustrated in the current
drive to increase productivity and reduce costs by removing surplus
workers. In this campaign the Chinese Communists have cited consider-
able evidence of surplus workers, especially in the administrative
and service sections of industry. Under present plans, these workers
are to be withdrawn; and since no alternative employment has yet
been suggested, it seems likely that they will join the urban unem-
ployed. Communist authorities are displaying an increasingly pessi-
mistic attitude toward unemployment, apparently recognizing that
Marxian theory is a poor substitute for a job.
Involuntary labor serves to channel some of the surplus labor in-
to productive work. Forced labor has drained off some of the urban
unemployed but not enough to ease the problem. A far greater number
of involuntary workers have been drafted for corvee labor.* Water
conservation, land reclamation, road construction, and irrigation
and sanitation projects have absorbed enormous numbers of surplus
labor at a minimal cost to the state and also have made real con-
tributions to the economic growth of the country. This labor force
has been drawn principally from the rural population, however, and
thus has done little to ease the problem of urban unemployment.
Controls over labor have been strengthened steadily since the
Chinese Communists came to power. Beginning with a generalized con-
trol over the labor market, the government has since extended con-
trols down to the individual worker through a set of disciplinary
regulations. Any accidents, mistakes, or shortcomings in the process
of production are now punishable under a system of strict accounta-
bility. The constant pressure to raise productivity also adds to the
burdens of industrial workers. The frantic pace being set by many
plants is revealed in the increase in working hours, round-the-clock
working shifts, shock work, and speedups. In addition to reflecting
* Unpaid or partly paid labor exacted by public authorities, espe-
cially for highways and other public works.
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faulty management, this trend emphasizes the shortage of both machines
and skilled operators.
The Chinese Communists claim to have compensated workers for the
increased workload by increases in wages and welfare services, espe-
cially in those benefits included under the labor insurance law.
While there is no doubt that industrial labor has fared better than other
sectors of the labor force, there is reason to doubt that the
actual benefits have begun to approach the promises featured in
Communist propaganda.
Initial Chinese Communist efforts at reconstruction and industriali-
zation were severely handicapped by acute shortages of skilled workers
and technical specialists. In order to remedy this situation in the
shortest possible time, the Communists pursued three courses of action.
First, they relied heavily on foreign technical specialists, both
Soviet and Japanese. Second, they instituted firm controls over the
distribution and allocation of the few available technicians and
skilled workers. Finally, they organized accelerated training pro-
grams both in the schools and in the factories. In general, these
measures have had considerable success in alleviating the shortage.
The Chinese have recognized, however, that the long-term solution
must be sought by expanding and improving the educational system,
and a maximum effort is being made in this direction.
The quality of academic work has suffered considerably in the
rush to expand educational facilities and to achieve short-term quan-
titative goals in enrollments and graduations. Great stress has been
put on "practical work," with the result that many educational insti-
tutions have been converted into trade schools. The demand for skilled
workers has been so urgent that secondary technical schools have been
attached to factories and mines so that the students can integrate
their studies with actual working conditions. In addition, industrial
plants have been encouraged to develop their own training programs in
an effort to speed up the training process. On-the-job training and
spare-time training have thus made a large contribution toward reduc-
ing the shortage of skilled and semiskilled workers.
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1
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I. Estimated Size of the Labor Force.
According to the official Chinese Communist census of the popula-
tion, there were 582.6 million people on the China mainland in mid-
year 1953. The predominantly agrarian character of this population
is emphasized by the classification of 505.3 million people -- 86.7 per-
cent of the total -- as rural inhabitants. Although not defined by the
Chinese Communists, the term rural probably refers here to inhabitants
of towns and villages of less than 10,000 people. The rest of the
population of the Chinese mainland -- 77.3 million people, or 13.3 per-
cent of the total -- live in cities. 1/*
No statistics on the total labor force** in Communist China have
yet been made available. On the basis of comparative data from other
Far Eastern countries, 2/ however, it is estimated that the total
labor force of Communist China in 1953 numbered approximately 303 mil-
lion people, or 52 percent of the total population. This percentage
may be compared with 47 percent in the USSR, 3/ 48.3 percent in
Thailand, 43.7 percent in Japan, and 39.5 percent in the US. The
higher rate shown for China includes a considerable number of under-
employed and many unemployed people. As is the case with most under-
employed populations, low income tends to pull family members into
the labor force who might otherwise have remained nonworking dependents.
This is true, for example, of peasant housewives, 60 to 80 percent of
whom are believed to participate in agricultural production. 4/ It
is also true of children who cannot be accommodated in the overcrowded
school facilities of Communist China.
Table l*** shows the estimated population and labor force of
Communist China in 1953.
* For serially numbered source references, see Appendix B.
The use of the term labor force in this report follows the prac-
tice of the US Bureau of the Census. It includes all those people
above a certain age who have jobs or are looking for jobs. It in-
cludes unpaid family labor and those temporarily laid off. This defi-
nition is sufficiently broad to include in China, what might other-
wise be marginal groups, such as the underemployed and the unpaid
family workers.
*** Table 1 follows on p. 5.
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S-E-C-R-E-T
Table 1
Estimated Population and Labor Force
of Communist China
1953
Population a/
Labor Force
Urban
77.3
40
Rural
505.3
263
Total
582.6
303
a. Official figures of the Chinese census as
of 30 June 1953?
The US Bureau of the Census estimates that of the total China
mainland population, 71.7 percent, or 417.9 million people, were in
the working ages of 10 to 69 years old. Of this group, it is be-
lieved that 72.5 percent, or 303 million people, were in the labor
force in 1953. Among the estimated nonworking population of
279.6 million people, children below the age of 10 years accounted
for 155 million, and the remaining 124.6 million people included
housewives, students, and unemployables such as the physically
handicapped. It is believed that the Chinese labor force includes
most of the available labor, so that no large reserve of nonworking
employables exists to be called upon in an emergency. Any signif-
icant increase in production probably will come from the more
efficient use of the existing labor force, especially the underem-
ployed, rather than from an enlargement of the total working force.
The Chinese urban labor force in 1953 is believed to have con-
tained at least 34 million workers engaged in nonfarm employment.
It is also estimated that in the rural labor force approximately
28 million individuals were engaged principally in nonfarm occupa-
tions. The resulting total of 62 million people in nonfarm employ-
ment represents slightly more than 20 percent of the total labor
force. Unfortunately, these estimates cannot be documented with
reliable statistics. Before 1955, Chinese Communist announcements
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contained almost no useful information on the size of the labor
force, a subject which apparently was as much a mystery to the
Chinese as it was to outsiders.
With the publication of the First Five Year Plan (1953-57),
however, the Chinese Communists released information on the size
of certain sections of the nonfarm labor force at the beginning
of 1953. Although no definitions were given for the various cate-
gories of workers, it is probable that the 21 million workers
listed were all wage and salary earners. This group accounts
for only one-third of the estimated nonfarm labor force of 62 mil-
lion people, and the remaining two-thirds, or 41 million workers,
are evidently self-employed, unemployed, or only partially em-
ployed. Most of the self-employed among the nonfarm workers are
handicraft workers, private traders (usually peddlers), or, to a
lesser extent, fishermen or forestry workers.
Table 2* shows the number of wage and salary earners in Com-
munist China by socialized and private sectors as of 31 December 1952.
The First Five Year Plan of Communist China calls for an in-
crease in the number of wage and salary earners from 21 million
at the end of 1952 to 25 million by the end of 1957. This net increase
amounts to only 20 percent over the 5-year period, or approximately 4 percent
a year. The socialized sector of the labor force -- workers in state, coopera-
tive, and joint private-state enterprises -- is expected to increase from
10.1 million in 1952 to 15.5 million in 1957. The socialization
of private enterprises accounts for part of this increase, an expected
1.1 million workers over the 5-year period. By the end of the first
2 years of the First Five Year Plan, approximately 56 percent of
the total planned increase had already been attained, and the
absorption of the 1.1 million workers from private enterprises
by the socialized sector was already accomplished. 5/ Workers
in industry totaled 5.4 million at the beginning of 1953. Of
these, workers in private industry accounted for 2.5 million of
the total, leaving 2.9 million workers in socialized or partly
socialized industries. Employment in the socialized sector of
industry is expected to increase to 5.1 million workers by 1957.
* Table 2 follows on p. 7.
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S-E-C-R-E-T
Table 2
Wage and Salary Earners in Communist China
by Socialized and Private Sectors a/
31 December 1952
Socialized Sector
(State, Cooperative, and
Joint State-Private
Segment of t
he Economy
Enterprises)
Private Sector
Total
Industry
2,864
2,542
5,406
Building ind
ustry
1,021
1,021
Transportati
and telecom
on, postal,
munications
716
716
Commerce
1,134
2 320
454
3
Finance
305
,
305
Agriculture,
servation,
water con-
afforestation
239
239
Municipal public utilities
41
41
Government organs and
mass organizations
Cultural, educational, and
health services
Handicraft wage earners
and native transport
a. 6
1,523 1,523
2,282 2,282
6,035 6,035
10,125 10,897 21,022
Table 3* shows details of the expected increase in the socialized
sector of the labor force under the First Five Year Plan of Communist
China, 1953-57.
The Chinese Communists may find that the main difficulty with these
goals is that they are too easily attainable. The rapid growth in the
number of industrial workers during the first 2 years of the Plan 7/**
* Table 3 follows on p. 8.
Continued on p. 10.
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Expected Increase in the Socialized Sector of the Labor Force
of Communist China under the First Five Year Plan a/*
1953-57
Number of
Workers
1952
Number of
Workers
1957
Expected b/
Percentage
Increase
Segment of the Economy
(End of Year)
(End of Year)
1952-57
State
2,513,000
3,836,000
52.6-
Cooperative
130,000
222,000
70.8
Joint private-state
220,000
1,077,000
389.8
Total
2,864,000
5,135,000
79.3
Building industry
1,021,000
1,765,000
72.9
Transportation, postal,
and telecommunications
State
707,000
1,o68,000
50.9
Joint private-state
9,000
25,000
177.8
Total
716,ooo
1,093,000
52.5
Commerce
State
492,000
1,075,000
118.3
Cooperative
641,ooo
1,012,000
57.8
Total
1,134,000
2,087,000
84.1
* Footnotes for Table 3 follow on p. 9.
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S-E-C R-E-T
Table 3
Expected Increase in the Socialized Sector of the Labor Force
of Communist China under the First Five Year Plan
1953-57
(Continued)
Number of Number of Expected b/
Workers Workers Percentage
1952 1957 Increase
Segment of the Economy (End of Year) (End of Year) 1952-57
State 298,000 369,000 24.0
Joint private-state 8,000 8,000 0.0
Total 305,000 377,000 23.4
Agriculture, water
conservation, afforestation 239,000 610,000 155.5
Municipal public utilities 41,000 96,000 134.7
Government organs and
mass organizations 1,523,000 1,578,000 3.6
Cultural, educational, and
health services 2,282,000 2,744,000 20.3
Total labor force 10,124,000 15,484,000 52.9
a.
b. As given in the text. Minor discrepancies may be the result of
rounding.
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has increased the cost of wages without increasing productivity. As
a result, a campaign has been launched to reduce costs and increase
the productivity of labor by eliminating surplus workers and control-
ling the practice of excessive hiring. As will be discussed later,
the Chinese face no problem in meeting quantitative goals for indus-
trial employment. The achievement of qualitative standards of skill,
however, is of continuing concern to the Chinese planners.
II. Industrial Employment.
A. Recruitment of the Industrial Labor Force.
The present industrial labor force was recruited almost en-
tirely from urban labor. When the Chinese Communists came to power,
they found an immediately available reservoir of unemployed labor in
the cities. They faced serious problems in the distribution and alloca-
tion of labor, however, because of the small number of experienced
workers and skilled technicians. One of the first Communist steps in
initiating industrial recovery in the northeast area, therefore, was
an attempt to recover factory and mine workers who had been dispersed
during the intermittent fighting between 1945 and 1949. 9/
In addition to returning these experienced workers to their
former jobs, the Chinese Communists began a recruiting campaign to
supply the northeast area with sufficient workers to carry out recon-
struction and step up new industrial construction. By the end of
1953, there were labor allocation agencies in 93 cities. In 1953
these agencies placed a total of 450,000 workers in jobs in the north-
east area -- 61 percent of them in basic construction units. 10/ In
Shanghai alone, from 1950 to 1953, more than 263,000 unemployed, in-
cluding more than 50,000 skilled workers, 11/ were placed in jobs by
the labor bureau of the municipal government. 12/
B. Influx of Peasants into the Cities.
The concern of Chinese Communist authorities over the unem-
ployment problem was limited to the urban areas. The vast numbers
of rural unemployed and underemployed were never included in Communist
estimates of the jobless. Although the rural unemployed were allowed
to register for construction work before 1952, no serious recruiting
effort was made on their behalf, and by 1952, active steps were being
taken to discourage the migration of surplus farm labor to the cities. 13/
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According to the Communists, the unemployment problem was complicated
by the fact that "the rural surplus labor force is moving blindly in
an unorganized manner toward cities." 1)+/ In the spring of 1953, fol-
lowing reports of increasing numbers of peasants migrating into the
cities, the Government Administrative Council issued a directive
aimed at preventing further movement of surplus rural labor into the
urban areas. 15/ This order obviously was unsuccessful, because the
following spring brought a repetition of the movement, with the re-
sult that the Ministry of the Interior and the Ministry of Labor were
forced to issue a joint directive on 12 March 195+ calling on the local
governments to "halt the continuous migration of peasants to the urban
centers." 161 This directive ordered the local governments to inform
the peasants, through intensive propaganda, that industrial construc-
tion was only in the initial stages and did not require additional
workers. At the same time, factories and mines were ordered to notify
their local labor bureaus of their labor requirements and were warned
that "any arbitrary recruitment of workers will not be tolerated and
that those who persist will be strictly dealt with." 17/
The persistent recurrence of this influx of peasants reflects
chronic underemployment in the rural areas as well as the hope of better
living conditions in the cities, made even more attractive by the great
emphasis in Communist propaganda on industrial achievements. This migra-
tion of population would not be a serious threat if opportunities for
urban employment were expanding sufficiently to absorb some of the sur-
plus rural labor. This obviously is not the case, however, nor has it
been true since the Chinese Communists came to power.
C. Opportunities for Urban Employment.
It is doubtful whether opportunities for urban employment have
kept pace with the growth of the urban labor force in Communist China.
Although industrial employment has undergone a rapid increase since
1949, this has not been true of other employment sectors of the urban
economy. Opportunities for employment in commercial and service
occupations were severely curtailed by the anticorruption campaign,
which reached its peak in 1952 and resulted in the closing of many
shops and small factories when the owners or operators were forced
out of business. 18/ Because the rural migrants were traditionally
absorbed by tertiary industries rather than manufacturing industries,
this sharp decline in service and commercial opportunities left most
of the destitute peasants with no prospect but continued unemployment.
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The manufacturing and construction industries found a supply of labor
which was more than sufficient among the urban unemployed who, accord-
ing to government edicts, had first priority on jobs.
Because Chinese Communist government controls have been only
partly successful in stemming the influx of the rural population into
the cities, there has been a rapid increase in the urban population,
with the industrial cities expanding at unprecedented rates. Indus-
trial cities such as An-shan, Fu-shun, Tang-shan, and T'ai-yuan have
reportedly tripled in size between 1950 and 1953, and the total urban
population has increased 40 percent from 1950 to 1953, according to
official claims. 19/ Although part of this increase may be attributed
to improvement in estimates of the population, there is little doubt
that the influx of peasants has increased the urban population and
seriously complicated the problem of unemployment.
1. Women in the Labor Market.
To complicate the problem further, the Chinese Communist
government has gone to great lengths to encourage women to enter the
labor force. Although women have not previously entered the indus-
trial labor force in large numbers, except in the textile industry,
they have traditionally contributed heavily to farm labor -- as many
as 60 percent to 80 percent of the rural women participating in agri-
cultural production, according to Communist estimates. 20/ With the
current emphasis on equality between the sexes, women are entering
industrial employment in an increasingly wide range of jobs in heavy
industry as well as light industry. 21/ The increasing number of
women in the urban labor market and the rapid growth of urban popula-
tion have resulted in the expansion of the urban labor supply at a
faster rate than opportunities for employment. In addition to the
obvious problems of unemployment, this situation has brought about
an urban counterpart to the rural underemployment which is so charac-
teristic of China.
2. Urban Underemployment.
The sheer abundance of labor in Communist China has en-
couraged its inefficient use and has resulted in the overstaffing
of industrial operations on the administrative and service levels,
as well as in the overrecruitment of unskilled labor. Technicians
and skilled workers are obvious exceptions, because the supply is
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still far short of industrial demands. For the remainder of the urban
labor force, however, the excess of workers has generally resulted in
the proliferation of administrative sections and the maintenance of
large pools of unskilled labor.
The coal industry of Communist China may be cited as an
example of this development. According to official statements, in
1953 the "administrative staff in State coal mines constituted on an
average about 32 percent of the production personnel -- over 50 per-
cent in some individual units -- and the number of idle workers in
productive workshops generally exceeded 10 percent.".22/ In an attempt
to rectify these conditions, the Ministry of the Fuel Industry has
listed the inefficient utilization of labor as one of the main problems
of the coal industry and has issued resolutions calling for the reduction
of administrative personnel, the elimination of idle workers, and a
general improvement in the organization of labor. As an example of
successful reorganization of labor, the Communists have cited the T'ang-shan
Mine, where one mining team was reduced in personnel by 18 percent
and yet fulfilled its quota and increased efficiency by 50 percent.
Later, when an additional 10 percent of the original personnel was
withdrawn, the daily output increased by 57.9 percent. 23/ Although
these results seem extreme, they serve to illustrate a relatively
new trend in industrial labor planning. For example, the Fu-shun
Mining Administration has developed a plan for production in 1955
which calls for a 10-percent increase in output over 1954 and at
the same time a reduction in the labor force of several thousand
men. 24/
Reductions in the labor force are not limited to the
coal industry. In the electric power industry, for example, the
Shih-ching-shan plant planned to operate in 1955 with personnel re-
duced by 21 percent. 25/ The Pen-ch'i Construction Engineering
Company plans to economize on construction costs by reducing the
number of administrative personnel, which had expanded to a ratio
of 1 administrator to every 3 workers. 26/ Criticism has also been
aimed at the Pen-ch'i Iron and Steel Company, where nonproduction
workers increased from 23 percent of the total in 1950 to 36 per-
cent in 1953. This increase in nonproduction workers resulted
from the expansion of welfare and service functions -- such as the
public health office, the housing section, and the building and
grounds maintenance section -- and of the number of dormitory man-
agers, doormen, statisticians, cashiers, and kindergarten workers. 27/
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This attack against overstaffing even includes top-level
central government organizations, where it is claimed that surplus
personnel have impaired efficiency. The Ministries of Agriculture,
Internal Affairs, and Light Industry, the Second Ministry of Machine
Building, and the Government Organs Affairs Bureau of the State Coun-
cil have recently made preliminary proposals for reorganization call-
ing for reduction of existing personnel by more than 50 percent. 28/
These practices of overstaffing and spreading work are
by no means new to China. They are the natural outgrowth of cheap
and abundant manpower and, as such, have a long history in China.
The purpose of Communist attempts to eliminate or reduce this form
of underemployment is to reduce the cost of production by increas-
ing the productivity of labor. There seems little doubt that the
present levels of production in many sectors could be maintained
even with significant cutbacks in the labor force, and this, of course,
could be cited as an increase in the productivity of labor. 29/ It
would also represent a saving in the cost of production by reducing
payments for wages. Unless additional jobs can be created, however,
the net effect of any extensive campaign to reduce surplus workers
will be to increase the ranks of the unemployed. In the long run,
moreover, the state may find it less expensive to maintain underem-
ployed workers than unemployed workers.
3. Urban Unemployment.
Chou En-lai has admitted that the problem of unemploy-
ment in Communist China will continue for a comparatively long time
because the population is enormous and productivity is still low. 30/
This statement is more realistic than those made by official planners
in the past, when it was expected that economic progress would be
rapid enough to eliminate unemployment and guarantee full employment.
The earlier plans ordered state and private enterprises to retain
supernumerary workers who have been uncovered through the enforce-
ment of production reforms and the raising of work efficiency." 31/
These surplus workers were to be kept at full pay and trained as
reserves for future expansion. The urban unemployed were to be reg-
istered in the municipal labor offices and allocated to the new
economic construction sites after the workers had received necessary
training. 32/
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The earlier plans are in rather sharp contrast with pre-
sent policy, which is more in line with Chou's statement that unem-
ployment is a long-term problem with no solution in sight. At a con-
ference on unemployment held in Peking, the Ministry of Labor recently
announced that the old relief program had been detrimental to produc-
tion and had wasted relief funds. A new program was proposed which
stressed the necessity of individual initiative among the unemployed
workers in locating jobs. It was also stated that placement and re-
training of the unemployed would be geared to the actual needs of
production and not regarded as relief measures. 33/ Relief measures
have also changed considerably, according to an announcement of the
National Conference on Urban Relief Work held in Peking in December
1954. Instead of receiving direct relief, the "indigent people" of
urban areas are being organized into seasonal production teams for
undisclosed types of work. At the time of the announcement, approxi-
mately 250,000 people were organized into such teams in 52 cities. 34/
This change in policy apparently resulted from a recog-
nition of the immensity of the task. The manpower resources of urban
Communist China are already so much larger than the possibilities for
employment that ameliorative measures, such as relief or government-
financed training, are increasingly regarded as too severe a drain
on the national economy. Equally discouraging to the authorities
must be the knowledge that any improvement in urban standards of liv-
ing acts as further incentive for the migration of surplus rural labor to
the cities. Any significant decline in urban unemployment would surely
be counteracted by an increased influx of destitute peasants from the
rural areas. However large the number of urban unemployed, it is
dwarfed by the size of the surplus rural population. Any changes in
policy on urban or industrial employment, if they are to have any hope
of success, must therefore also consider the enormous rural popula-
tion.
Recognition of the dangers of an influx of surplus farm
labor into the cities has resulted in strong government measures
against this movement as well as efforts to return the destitute peas-
ants who have successfully evaded these restrictions. According to
newspaper reports, Shanghai authorities plan to evacuate 1 million
unemployed, 80 percent of whom are peasant migrants. At least 400,000
of the surplus population of Shanghai were removed from the city dur-
ing a 4-month period in 1955, 35/ but this movement is apparently be-
ing curtailed because of difficulties in obtaining work and food in
rural areas for the evacuees. 36/
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Other measures to cope with unemployment have included
the development of large-scale uses for unskilled labor such as water
conservation projects, land reclamation, road construction, irriga-
tion projects, and sanitation efforts. By their very nature, however,
these projects are better adapted to the use of the underemployed
peasants rather than the unemployed urban population. C orvee labor
has been extensively used for these projects, and such a system tends
to work better in peasant villages, where there is a tradition for
such contributory labor. Moreover, problems of transportation are such
that it is generally more convenient to recruit large labor gangs
from the immediate area of the project. It is not only cheaper, there-
fore, but also more efficient to recruit workers from the rural labor
force.
D. Forced Labor.
As a means of channeling surplus labor into productive work,
forced labor is assuming increased significance in Communist China.
The Communists have announced that "over 83 percent of the prisoners
in penal institutions of the country are engaged in agricultural or industrial
production as work teams erecting new buildings, clearing timberland,
or building water conservation projects, railways, or highways." 37/
Although the Communists have never given any information on the num-
ber of people undergoing "reform through labor," they have admitted
that "labor reform has saved the state immense amounts of money and
has created economic wealth for the nation ... both in providing
goods for basic construction and for public consumption." 38/
To define forced labor in terms of convict labor, however,
restricts the meaning to limits too narrow for the total number of
involuntary workers in Communist China. In addition to the forced
laborers in prison camps, the Communist authorities control a large
number of involuntary workers, composed of the corvee laborers pre-
viously mentioned and similarly drafted personnel from the ranks of
famine victims, refugees, and the unemployed. Some idea of the size
of this fluctuating labor pool may be gained by citing the example
of dike repair work during the winter of 1954-55 in the middle reaches
of the Yangtze. The plan called for 5 million to 6 million civilian
workers over a period of 3 months. It was specified that the laborers
were to be paid for the work in lieu of relief, indicating that the
working force was to be selected from among the victims of the floods
in 1954. 39/ Subsequent reports indicated that over a 2-month period,
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more than 3 million workers had moved more than 120 million cubic
meters of earth in repairing dikes along the lower and middle reaches
of the Yangtze River. 40/ This operation, although larger than most,
is representative of current uses of drafted surplus workers. On such
a project it would be extremely difficult to make any clear distinc-
tion between forced laborers, involuntary laborers, and free laborers.
Because all labor is coming under increasingly stringent control, the
categorical differences between free and involuntary labor are rapidly
reduced to a matter of degree.
E. Labor Discipline.
Controls over Chinese labor, especially the industrial workers,
have'become increasingly severe in the past 5 years. In addition to
the controls over the labor market previously mentioned, the government
has further restricted the freedom of the Chinese worker by instituting
a set of detailed labor regulations for the enforcement of labor dis-
cipline. The central government promulgated those rules in July 1954,
apparently in the form drawn up by the All-China Federation of Trade
Unions, 41/ with the hope that improved labor discipline would result
in higher productivity and improved quality of products. Although
developed mainly for state-operated enterprises, the rules were clearly
intended as a model for labor regulations to be drawn up by joint state-
private, cooperative, and private enterprises. Thus the rules can
be taken as the standard for labor regulations throughout Communist
China.
One of the most significant provisions of those rules requires
each applicant for a job to furnish certification of his past record,
including his release from his last employment. No worker may resign
or transfer from his job without the approval of the manager at his
place of work, any such attempt being considered a breach of labor dis-
cipline. A system of responsibility is to be set up so that a strict
accountability can be made for defective products or errors in produc-
tion. Workers are enjoined to "fulfill and overfulfill the production
target ... be punctual in attendance, apply the entire working period
to production, do nothing unrelated to production, engage in no idle
talk, take no idle walk, do not interfere with the work of others." 42/
The risk involved in ignoring these rules is clearly spelled out in
the section devoted to penalties. Punishment ranges from warnings,
fines, and demotion to dismissal and trial before the courts for "economic
sabotage." Workers who turn out defective products or who damage tools
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or equipment in the course of their work are to be held responsible
for "part or whole payment of compensation for the material loss."
The amount of compensation is to be decided by the management and
deducted from the worker's wages until it is paid in full. 43/
The application of penalties for lapses of labor discipline
has apparently been far-reaching, judging by the announced need to
expand the People's Courts attached to factories, mines, and economic
construction sites. 44/ Created for the purpose of adjudicating cases
of "economic sabotage," these courts had disposed of 90,000 cases in
1 year. In spite of such measures, the Chinese Communist newspapers
continued to demand stricter labor discipline and punishment for acts
inimical to economic construction. 45/ The extent to which punitive
sanctions have been used was revealed in an editorial in the Peking
Worker's Daily. 46/ Under the title of "Oppose the Trend of Punitivism,"
the Worker's Daily argues that punishment, although necessary, has
been used to excess. Failures to complete production plans, low pro-
ductivity, and inadequate business management have all been blamed on
the workers, with labor discipline being used as a convenient technique
for shifting all blame to the workers.
F. Working Conditions.
The constant pressure to increase productivity in order to
meet higher goals has put an increasingly heavy burden on the individual
Chinese worker. Productivity drives and emulation campaigns are now
common to practically all economic enterprises in Communist China.
During these campaigns, workers are expected to fulfill or surpass pro-
duction quotas by technical innovations, speedups, overtime, and holiday
work. The results generally show some increases in production, but
they also show even greater increases in accident rates, rejection
rates, and mechanical breakdowns. Lai Jo-yu, chairman of the All-China
Federation of Trade Unions, has described the consequences of drives
to increase production as follows:
There has been no limit to the prolongation of
working hours; individual workers have worked con-
tinuously for 72 hours through additional shifts
and working hours. In order to fulfill their tasks,
individual factories have required their workers
to work on Sundays for a period of ten months. On
the surface, this unlimited increase of labor inten-
sity has resulted in accomplishment of production of
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plans but actually it has brought about damage
to the State in varying degrees. As a result
of exhaustion, sickness and casualties have been
serious. There are quite a few cases in which,
owing to exhaustion, workers have fainted, vomited
blood, or even died. In individual factories, in-
creased shifts and working hours reached 260,000
hours, but the number of hours lost due to sick
leave amounted to 220,000, the two almost cancel-
ling out each other. Moreover, owing to shock-
work, the quality of products has failed to reach
the planned targets. The huge expenditure for
increased shifts and working hours has increased
the cost of production. 47/
According to industrial experts in a Dutch mission to Peking,
the Chinese Communists are using manpower and machinery at a pace that
surpasses anything previously seen by the observers. All the factories
visited were working three 8-hour shifts per day. 48/ Although there
is insufficient evidence for generalization, the number of reports on
factories working around the clock is growing, especially in mechanized
plants. 49/ In those plants working only 1 shift a day, there is evi-
dence that the working day exceeds the 8 hours which the state claims
as the standard. 50/ Even where production work is limited to 8 hours,
workers are required to put in an additional hour or more attending
classes devoted to political indoctrination. The workweek is normally
6 days, although this may be lengthened to 7 days during production
drives.
The seeming contradiction between these reports of intensive
utilization.of labor and the previously reported conditions of unemploy-
ment and a surplus of labor can be explained mainly by differences in
the type of labor involved. The greatest demands are made upon the
skilled and the semiskilled workers in the manufacturing and extractive
industries, especially those industries assigned a crucial role in the
economic construction plans of the Chinese Communists. The pressure
in these industries is centered on the skilled workers and technicians.
The unskilled workers and administrative personnel are rarely in such
great demand, because they are available in sufficient numbers. With
machines and skilled operators in short supply, there is a strong tendency
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to push the utilization of machines to the maximum. In the textile
industry, for instance, the Communists claim that about 95 percent
of the spindles in China are being operated on a 3-shift system. 51/
2. Labor Insurance Law.
Communist claims of rapid improvement in the living stand-
ards of the working class are based largely on reported increases in
wages, welfare services, and labor insurance benefits. 52/ There
seems little doubt that the welfare provisions in the Labor Insurance
Law have greatly benefited the industrial worker. As amended in 1953,
the law covers all manufacturing and extractive industries, construc-
tion, and transportation and communications enterprises having a labor
force of over 100 workers. The workers do not contribute to the labor
insurance fund. Management makes a contribution equivalent to 3 per-
cent of the total payroll, and none of this is supposed to be deducted
from the workers' wages. 53/ Welfare provisions include retirement
pensions, medical treatment, injury compensation, sick leave, mater-
nity leave, and funeral expenses. At the end of 1954 the Chinese
Communists claimed to have extended labor insurance coverage to over
5.4 million persons. 54/ This group of workers, representing less
than 2 percent of the estimated total labor force, is the industrial
elite who have been directly engaged in large-scale economic construc-
tion and, as such, have monopolized the benefits accruing to labor.
A very high percentage of this group probably belongs to the All-China
Federation of Trade Unions, whose total membership reached 12.5 million
in 1954. 55/ Membership in a trade union not only enhances the status
of a worker but carries preferential treatment in most employment and
welfare benefits. Another claim for improved living standards is
based on the construction of 12 million square meters of housing for
workers in 1953. 56/ The government has reported the construction,
in addition to homes, of many new hospitals, clinics, and sanatoriums
for the exclusive use of workers. 57/
3. Wages.
Communist claims of steady improvement in wages are far
less convincing, but here again, relative to the total labor force,
the industrial worker has made a better showing. At the present time
a worker's pay is determined by three basic factors: (a) the type of
industry, with the highest rates of pay for mining and heavy indus-
tries and with consumer industries at the bottom of the pay scale;
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S-E-C-R-E-T
F
(b) the productive capacity of individual plants, with the larger and
more efficient plants having a higher wage level; (c) the skill'of
the individual worker, usually classified by an eight-grade system. 58/
Incentives for higher output include piecework pay rates, bonuses for
high output, and awards for technical innovations.
In order to make wage incentives consistent in large areas
where prices vary, the Chinese Communists introduced a system for com-
puting wages in terms of units of purchasing power. Thus a worker's
wages are computed as a given number of units, the value of the unit
being based on the price of a market basket of commodities. 59/ The
value of this unit is announced periodically in the newspapers, and
in 1954 it ranged from 2,000 to 2,500 JMP,* depending on the time and
the locality. There are indications, however, that the wage unit
was rigged so as not reflect the actual increases in commodity
prices, with the result that increases in wages are lagging behind in-
creases in prices for consumer goods. 60/ If this is true, the real
wages of urban workers may have declined in the past 2 years. In any
event, the First Five Year Plan calls for the gradual abandonment of
the wage-unit system and a shift to the direct calculation of wages
on a monetary basis.
The Communist claims of large increases in "real wages"
cannot be accepted, because the definition of that concept is so
vague as to defy calculation. According to their definition, "real
wages" included nominal or monetary wages and funds for cultural or
social benefits. The funds for cultural benefits included (a) allow-
ances, pensions, subsidies, and other compensations in the form of
money from the state or trade union organizations; (b) the services
of education, training, and clinics provided by the state free of
charge; (c) the benefits enjoyed by workers through reductions in
the prices of foods. All this, plus the monetary wage, constitutes
the "real wages." 61/ Since the state has failed to announce the
cost of services extended to the workers, the concept is virtually
useless.
As regards monetary wages, it has been announced that
the average monthly wage of workers (presumably industrial workers)
was from 500,000 to 600,000 JMP in 1953. 62/ Available information
* Jen-min piao (yuan). Through 1954, US $1.00 - 24,500 JMP. Be-
ginning in 1955, US $1.00 : 2.45 JMP.
S -E -C -R -E -T
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on scattered plants and industries tends to support this range. For
example, the nonferrous metals industry reported paying average monthly
wages of 496,000 JMP in 1953, compared with the planned average wage
of 570,000 JMP. 63/ Monthly wages for workers at a Tang-shan textile
mill were announced as 548,000 JMP for 1953, a reported increase from
an average of 465,000 JMP in 1950. 64/ More recent information indi-
cates that the average monthly wages of the 5.3 million workers covered
by labor insurance amounted to 62.89 yuan (new JMP) in 1954. 65/
III. Development of Technical Skills in the Industrial Labor Force.
A. Shortage of Technicians and Skilled Workers.
When the Chinese Communist regime launched the program of in-
dustrialization, it was immediately apparent that one of the most serious
obstacles would be the shortage of skilled workers and technicians.
Plans for large-scale economic construction demanded technical skills
that were in acutely short supply. Since no basic statistics are avail-
able, it is impossible to determine the levels of skill available to
economic planners in China. It is clear, however, that the Chinese
labor force had and still has a very low proportion of skilled workers
and technicians. This deficiency can be traced to the limited indus-
trial experience and training available to the Chinese, which precluded
the development of any large group of skilled industrial technicians.
The limited industrialization of China before the Communists
assumed control was accomplished primarily through foreign technicians
and managers, and little industrial experience accrued to the Chinese.
In Manchuria, for example, the Chinese gained very little technical
experience from Japanese efforts to industrialize the area between
1932 and 1945. Almost without exception the Japanese occupied the
technical and administrative positions, and the Chinese worked as un-
skilled or semiskilled factory laborers. Furthermore, education in
China, traditionally oriented toward training scholars and adminis-
trators, emphasized literary and philosophical subjects and devoted
little time to technical or scientific subjects. Advanced training
in engineering or the physical sciences, which had to be obtained
outside of China, was received by relatively few students.
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B. Attempts to Meet the Shortage.
It was against this background of limited technical experience
that the Chinese Communists announced their plans for rapid industrial-
ization. In their haste to advance economic construction, the authori-
ties adopted three methods of coping with the shortage of technical
personnel and assigned to each method a high priority. First, they
relied heavily on foreign technicians, using the interned Japanese and
accepting aid from their Soviet allies. Second, they sought to make
maximum use of the few available technicians and specialists by dis-
tributing them according to the priorities of the industrialization
program. Finally, they organized training programs, both in the schools
and on the job, to turn out technicians as rapidly as possible.
1. Use of Foreign Technicians.
Japanese technicians and specialists played a significant
role in helping reorganize production in Manchuria after the Communists
came to power. Because the Japanese had had a monopoly on managerial
and technical functions during their control of Manchuria, those ex-
perts trapped in China after World War II were well equipped to give
specialized aid. The Communists recognized the value of the Japanese
specialists and managed to make maximum use of their technical capaci-
ties. 66/
Soviet advisers in Communist China have been reported in
practically all phases of economic construction and in a wide range of
social and cultural activities. 67/ Information indicates that the
Soviet advisers coordinate closely with the Chinese ministries in work-
ing out specific plans for construction projects. Soviet specialists
and technicians may be assigned to various phases of the work, such as
superintending projects, advising the Chinese managers, and training
the Chinese workers in the required techniques. 68/ Soviet experts in
China also include academic personnel assigned to Chinese colleges.
People's University in Peking reportedly had 89 Soviet specialists on
its faculty in 1953, 69/ and Russians have been reported teaching a
wide variety of subjects in universities throughout China.
The prompt arrival of the Soviet technical experts and the
availability of the interned Japanese specialists helped the Chinese
Communists to alleviate a shortage of technical skills which could have
restricted severely their initial efforts at economic reconstruction.
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Not wishing to remain permanently dependent on foreign technical aid,
however, the Chinese Communists also concentrated on the task of ex-
panding their own technical force as rapidly as possible.
2. Redistribution and Allocation of Skilled Workers.
One of the primary reservoirs of skilled labor in Communist
China, the city of Shanghai, sent out more than 63,000 skilled workers,
technicians, engineers, and management personnel to construction sites
throughout China in the 5 years from 1950 through 1954. The factories
of Shanghai were also the training ground for additional skilled workers
who, once trained, were sent to basic construction sites, usually in
the northeast or northwest. 70/ Similarly, An-shan sent out large
groups of technical workers to aid in construction and production in
heavy industry plants in other areas. During the latter part of 1953,
over 1,000 workers were sent to Peking, Pen-ch'i, Fu-shun, Mukden (Shen-yang),
Chang-ch'un, T'ai-yuan, and other cities. The personnel transferred
included chief engineers, engineers, technicians, and technical workers. 71/
Although such moves contributed to more efficient use of the available
skilled labor, the more important task of increasing the number of
technicians and specialists was left to the training and education
program. _
3. Training Programs.
The first official Chinese Communist estimate of personnel
requirements for economic construction was announced in late 1951. 72/
Over the period of the First Five Year Plan, the Chinese Communists
estimated that their economic construction would require an additional
150,000 senior technical and administrative personnel and 500,000 in-
termediate and junior technical personnel. In addition to this total
of 650,000 personnel for economic construction, the Chinese Communists
listed a need for 1.6 million teachers -- 10,000 with college training,
100,000 with at least secondary school training, and the remaining
1.5 million with at least primary school training. They also stated
a need for 200,000 additional health workers at the advanced and inter-
mediate levels and an unspecified number of personnel for financial,
administrative, and judicial work.
These preliminary and rather vague goals were extensively
revised in the official version of the First Five Year Plan announced in 1955.
The new goals call for a total of 283,000 graduates from colleges over
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the period of the First Five Year Plan. In addition, the secondary voca-
tional schools are expected to graduate 888,000 students, half of
whom will become teachers and half junior technicians or adminis-
trators in industry.
Table 4 shows the First Five Year Plan for education in Communist
China, 1953-57.
First Five Year Plan for Education in Communist China a/
1953-57
Expected Number
of Graduates
Planned Enrollment
1953-57
for 1957
Colleges and universities
283,000
434,000
Secondary
Vocational
888,300
671,800
Senior
602
000
000
724
Juni
,
,
or
4,093,000
3,983,000
Primary
Higher
20,150,000
12,170,000
Lower
43,260,000
47,630,000
a. 737
a. University Training.
The pressure to train specialists for economic, cul-
tural, and health work has resulted in a rapid expansion of the enroll-
ment in institutions of higher education. According to Communist claims,
about 117,000 students were enrolled in colleges and universities in
the academic year 1949-50. By the academic year 1954-55 the enrollment
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was more than double that of 1949-50, having increased to 258,000 stu-
dents.
Table 5 shows enrollment in institutions of higher education in
Communist China, by academic year, 1949-55.
Enrollment in Institutions of Higher Education
in Communist China, by Academic Year a/
1949-55
of Student
T
1949-50
1950-51
1951-52
1952-53
1953-54
1954-55
ype
Graduate
629
1,261
2,168
3,520
4,249
4,700
Engineering
30,320
38,462
48,517
66,583
80,089
94,970
Education
12,039
13,312
18,225
32,108
39,958
N.A.
Medicine
15,234
17,414
21,356
24,206
29,025
N.A.
Other
58,911
68,282
65,3o4
67,961
63,444
N.A.
133
117
138,731
155,570
194,378
216,765
258,000
,
a. 747
Chinese Communist universities and colleges graduated
40,300 students in 1954, compared with 34,900 graduates in the spring
of 1953 and 28,200 in 1952. The enrollment of new students has shown
a similar steady increase, rising from 66,000 new enrollments in 1952
to 72,000 in 1953 and to 94,000 in 1954- 75/ The percentage of engi-
neering students to the total enrollment has increased from approximately
25 percent in the academic year 1949-50 to 37 percent in the academic
year 1954-55. In terms of absolute numbers, the enrollment of engineer-
ing schools in 1954-55 totaled 95,000 students and was thus 3 times the
total number of engineering students graduated from Chinese universities
over the 20-year period 1928-48. 76/
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Although there has been an unusually rapid expansion
in the enrollment of Chinese Communist universities and colleges, the
1954 graduating class of 40,300, including 15,000 engineers, was con-
sidered by the Ministry of Personnel to be "far from enough to satisfy
the growing needs of the country." 77/ It is expected, however, that
the graduations will increase in proportion to the increase in new en-
rollments, and in view of the expansion of polytechnical colleges, China
probably will graduate at least 95,000 engineers during the First Five
Year Plan.
The concentrated effort to turn out large numbers of
college graduates has served to lower academic standards. The Communists
themselves have acknowledged that there is "a serious tendency to strive
blindly for quantity while disregarding quality." 78/ A serious shortage
of specialized teaching personnel has grown in proportion to the increase
in enrollments. It has been reported that 18 percent of the 1953 gradu-
ating class returned to teach university courses, 79/ thereby reducing
the potential number available for economic construction. The unrelenting
emphasis placed on proper ideological orientation, resulting in numerous
meetings for political discussions, self-criticism, and the like, has cut
severely into the time available for academic subjects. The dual objec-
tive of the Communists -- to turn out large numbers of college-trained
specialists and at the same time to insure their political reliability
by constant indoctrination -- has placed a heavy burden on the time and
energy of students, resulting in lower standards of work. As a counter-
measure to improve the quality of work, the suggestion has been made that
engineering colleges and universities should gradually shift from a 4-year
to a 5-year course of study. 80/
As a result of the high priority given to college
training, the drive for increased enrollments made demands on the sec-
ondary schools which they were unable to meet. The plan for college
admissions in 1954, for example, called for at least 90,000 new enroll-
ments, despite the fact that senior secondary schools would graduate only
70,000 students that year. 81/ The admission plan was eventually over-
fulfilled, however, by the expedient of drafting 126,000 people to sit
for the college entrance examinations, including not only the entire
graduating class of the senior secondary schools but also graduates of
worker-peasant and vocational schools and some 40,000 people from such
groups as political cadres, discharged veterans, "intellectual youth,"
and primary school teachers. 82/ It is extremely doubtful whether the
latter individuals met the normal prerequisites for college admission,
and a further decline in quality of college students can therefore be expected.
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b. Primary and Secondary Education.
In terms of total enrollments, the senior secondary
schools of Communist China have grown at a slower rate than have the col-
leges and the primary schools. One of the most obvious reasons for this
situation has been the shift in emphasis from general education to spe-
cialization, particularly in technical subjects. A more fundamental
reason is the fact that, despite the unprecedented expansion of school
facilities, educational opportunities are still severely limited.
The most striking evidence of failure in education is
found in the Chinese Communist admission that more than 80 percent of
the Chinese population is illiterate. 83/ Although the Communists claim
to have expanded primary schools to an enrollment of 51.5 million students
in 1954, they admit that this number includes only 62 percent of all
eligible school-age children, leaving some 30 million children completely
outside of the educational system. 84/
Enrollments drop sharply as one moves up the educational
ladder. In the academic year 1953-54 the enrollment of 51.5 million stu-
dents in primary schools contrast with the enrollment of 3.6 million in
secondary schools and with the enrollment of about 216,000 in colleges.
The large enrollment in primary schools should not be construed as an
indication of future enrollments in the secondary schools or colleges. Chinese
Communist authorities have made it clear that graduates of primary schools
"must be instructed in the dignity of labor and prepared to work in in-
dustrial and rural centers." 85/ The great majority of students in the
primary schools do not advance beyond the 4 years of instruction in the
lower primary schools. There is a sharp decline at this level, with a
much smaller enrollment for the succeeding 2 years of higher primary schools.
The same is true for the secondary schools, which are divided into 3 years of
junior secondary school and 3 years of senior secondary school. Over the
4-year period 1951-54, the junior secondary schools graduated approximately
1.1 million students and the senior secondary schools, more than 216,000
students. 86/ This high rate of attrition is in accord with the announced
aim of elementary education to "train a reserve labor force with some
political consciousness and cultural knowledge for industrial and agricul-
tural production. The number of students who will enter junior middle
fecondary7 school will constitute only a segment of the elementary school
graduates." 87/
Table 6* shows details of enrollments in secondary and primary schools
in Communist China, 1946, 1949, and 1953.
* Table 6 follows on p. 29.
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S -E -C -R -E -T
Table 6
Enrollment in Secondary and Primary Schools
in Communist China a/
Selected Years, 1945-54
1945-47
1949-50
1953-54
Secondary
Technical
137,040
77,095
299,994
Other (teacher training,
245,609
151,750
397,102
health work, and the
like)
Senior
317,853
207,156
359,532
Junior
1,178,031
831,808
2,571,636
Total secondary
1,878,523
1,267,809
3,628,264
Primary
23,683,492
24,391,033
51,504,312
a -BSJ
The failure of the senior secondary schools to provide
the colleges with an adequate supply of qualified students has threat-
ened severely Chinese Communist plans for expanding the colleges. '
The First Five Year Plan apparently recognized this problem, however,
since it called for a belated expansion of the secondary schools.
The number of graduates over the 5-year period is supposed to reach
602,000 students, and enrollment in the senior secondary schools is
scheduled to reach 724,000 students in 1957, almost tripling the en-
rollment in 1952. 89/ If enrollment should reach this planned fig-
ure, the colleges would be,guaranteed an adequate pool of qualified
candidates for admission.
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c. Secondary Vocational Schools.
The reorganization of the secondary vocational schools --
undertaken in 1952 and largely completed by 1953 -- was aimed prima-
rily at strengthening and expanding the technical schools. Before
this reorganization the secondary vocational schools were predominantly
normal schools, and the technical schools were limited mainly to train-
ing for light industry. Under the First Five Year Plan, total enrollment
in the secondary vocational schools in 1957 is expected to be only
slightly higher than in 1952. The composition of the enrollment will
change drastically, however, and enrollment in the industrial technical
schools is expected to double, while enrollment in normal schools will
be reduced to 63 percent of that in 1952.
The need for skilled workers in industrial production
is so great that graduates of the secondary technical schools are not
allowed to take examinations for entrance to higher schools. 90/ They
are expected to report immediately to work and cannot be considered
for matriculation at higher institutions until they have worked for
a definite period of time and can obtain the approval of their employers
to leave their work. As is the case with graduates of the primary
and the junior secondary schools, considerable bitterness reportedly
has developed over this denial of opportunity for higher education. 91/
In the :rush to turn out graduates, the vocational schools
face the same problem as the colleges, that of maintaining adequate
educational standards. This problem is especially severe in the tech-
nical schools affiliated with factories, mines, and other such indus-
trial organizations, because these schools are under the administration
of the industrial or economic ministry involved rather than under the
Ministry of Higher Education. According to a directive of the Govern-
ment Administration Council, the Ministry of Higher Education "will be
responsible for providing unified guidance of the work of middle fecondary7
vocational education throughout the country." 92/ All operational
problems, however, remain the responsibility of the industrial or eco-
nomic unit sponsoring the school. Under these conditions, theoretical
instruction has been restricted in favor of "practical" experience
in production. It has been recommended, for example, that experience
in production make up at least 25 to 35 percent of the instruction
time, but it is quite possible that production work takes an even larger
share of the students' time.
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In addition, the students are exposed to the inevitable
political indoctrination, which is estimated to take up at least one-
fourth to one-third of the time available for instruction. Consequently,
there is little attempt at general education in these schools. Theo-
retical background is greatly simplified and limited to the necessary
prerequisites for specific tasks. Under these circumstances, it is
questionable whether the technical training of the secondary specialized
schools is greatly superior to on-the-job or spare-time training car-
ried out in most Chinese Communist industrial plants.
d. On-the-Job and Spare-Time Training.
In addition to sponsoring secondary technical schools,
the industrial plants and mines of Communist China are engaged in a
variety of worker training programs. For example, the Mukden Cement
Machinery Repair Plant is using three methods of training which can
be considered representative of those being offered. 93/
The first method is an orientation course for apprentices
entering the plant. This course consists mainly of a study of the
plant rules, organization, inspection system, wage scales, and union
benefits. One-third of the course is devoted entirely to political
indoctrination consisting of a study of Communism. A final examina-
tion determines the job placement of the worker.
The second method of training is based on the tradi-
tional master-apprentice relationship. This type of on-the-job train-
ing is carried out under a contract agreed to by both master worker
and apprentice and approved by the plant. A master worker may have
one or more apprentices, depending upon the type of work.
The third method of training used at the Mukden plant
is the spare-time class. This system uses skilled workers and tech-
nicians to help less experienced workers improve their technical skills.
One obvious advantage of this method is that, by limiting the classes
to off-duty hours, the training program proceeds without cutting into
the schedule of production. According to a recent announcement, 91+/
over 2.7 million workers throughout Communist China are attending
training courses of this type. It is doubtful, however, whether all
these workers are engaged in technical training. Many of the spare-
time classes are devoted solely to the task of raising the low lit-
eracy rate of the workers as a prerequisite to training of a technical
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nature. For example, of the 270,000 workers attending spare-time
schools in Liaoning Province in 1954, 130,000 were attending lit-
eracy classes. 95/ The remainder were in spare-time primary and
secondary schools, including secondary technical schools.
As an example of spare-time education devoted entirely
to technical training, the state-controlled factories and mines of
T'ai-yuan claimed a total of 30,000 workers participating in such
courses during 1954. 96/ An even more impressive record of technical
training is that of the An-shan Iron and Steel Company, which turned
out 30,000 trained personnel from its various training programs over
a 2-year period. 97/ This total apparently includes on-the-job train-
ing as well as spare-time classes and was made up in large part of
personnel sent from plants and schools throughout Communist China for
technical training at An-shan. Of the 600,000 railroad workers in
China in 1953, it has been claimed that 200,000 have participated in
literacy courses and 165,000 in technical courses. 98/
These figures indicate something of the extent of illit-
eracy among Chinese workers. It is obvious that technical training
cannot be widely expanded until the problem of illiteracy is brought
under control. As a result, the tendency has been to stretch the term
"technical courses" to include any instruction, no matter how informal,
which increases the familiarity of workers with mechanical or plant
operations. Similarly, the title of "technician" is obviously used to
include workers who are merely skilled or semiskilled by Western stand-
ards.
According to the Chinese Communist First Five Year Plan,
the number of skilled workers is to grow by 920,000 over the period
of the Plan. These workers are to be trained by the economic enter-
prises under the general guidance of the responsible economic ministry.
Workers' technical schools and spare-time training classes are expected
to turn out more than half of these skilled workers, and the remainder
are to be trained on the job by the master-apprentice method. The
number of workers to be trained by each economic ministry is as fol-
lows 99/:-
Ministry of Heavy Industry 176,800
Ministry of the Fuel Industry 172,000
Ministry of the Machine Industry 174,l00
Ministry of the Textile Industry 55,400
Ministry of Light Industry 22,900
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Ministry of Geology
11,800
Ministry of Construction
39,800
Ministry of Agriculture
21,500
Ministry of Forestry
33,000
Ministry of Railroads
158,800
Ministry of Communications
19,800
Ministry of Labor
14,500
Ministry of Posts and
Telecommunications
19,900
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S -E -C -R -E -T
APPENDIX A
GAPS IN INTELLIGENCE
Gaps in intelligence exist in every phase of the subject of this
report. In an analysis of the Chinese Communist labor force, the
most serious gap is in the absence of basic data concerning its size.
No statistical information is available on the size of either the
total labor force or the urban labor force, and only partial infor-
mation is available on employment by industry. The announcement of
the First Five Year Plan furnished the best coverage of nonfarm employment
to date, but even these data have serious shortcomings. Not only
are the figures themselves at variance with previous announcements)
but the units and categories are undefined. The reliability of this
information cannot be fairly judged, because there are inadequate
data for cross-checking.
No reliable data are available on unemployment or underemploy-
ment. Information on wages, hours, and general working conditions
is somewhat more plentiful, although the variations in the data are
often so extreme as to throw grave doubt on the use of any precise
summary estimates. Rates of labor productivity, in spite of fre-
quent mention in the press, are rarely-usable, because the figures
cited are invariably expressed in terms of percentage increases, and
no information is available on the methods used in compiling these
rates.
No comprehensive data are available on the level of skill of the
Chinese labor force, although statistics on technical training are
frequently announced for specific plants and schools. In general,
education and training are the only subjects covered in this report
for which reasonably complete information is available.
With regard to population statistics, the summary totals of the
1953 census seem reasonably reliable, but no detailed information on
age, sex, or occupational composition has been forthcoming, and the
usefulness of the summary totals is thereby greatly diminished.
The really serious gaps in basic information, such as the size
and skill of the Chinese labor force, cannot be ascribed entirely
to failures in the process of information collection. On the contrary,
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it seems likely that the Chinese Communists themselves do not know
the answers to many of the questions on manpower. It must be remem-
bered that China had not previously had a centralized, efficient
system for the collection of statistical data. The Chinese Communists
are attempting to develop such a system, having repeatedly acknowl-
edged the importance of statistical information for economic and
social planning. It will necessarily be some time, however, before
statistical competency is achieved. Nevertheless, it is reasonable
to expect a steady improvement in both the accuracy and the coverage
of statistics on population and the labor force.
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S-E-C-R-E-T
APPENDIX B
SOURCE REFERENCES
Evaluations, following the classification entry and designated
"Eval.," have the following significance:
Source of Information
Information
Doc. - Documentary
1 - Confirmed by other sources
A - Completely reliable
2 - Probably true
B - Usually reliable
3 -
Possibly true
C .- Fairly reliable
4 -
Doubtful
D - Not usually reliable
5 -
Probably false
E - Not reliable
F Cannot be judged
6 - Cannot be judged
"Documentary" refers to original documents of foreign governments
and organizations; copies or translations of such documents by a staff
officer; or information extracted from such documents by a staff offi-
cer, all of which may carry the field evaluation "Documentary."
Evaluations not otherwise designated are those appearing on the
cited document;. those designated "RR" are by the author of this re-
port. No "RR" evaluation is given when the author agrees with the
evaluation on the cited document.
25X1A
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 5X1A
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C Cr`D CT
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