ECONOMIC ASPECTS OF COMMUNIST CHINA'S COMMUNES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01141A001500020002-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 54
• Document Creation Date: December 23, 2016
• Document Release Date: July 24, 2013
• Sequence Number: 2
• Publication Date: August 1, 1959
• Content Type: REPORT

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CO
N? 101
ECONOMIC INTELLIGENCE REPORT
ECONOMIC ASPECTS
OF COMMUNIST CHINA'S COMMUNES
CIA/RR 59-31
August 1959
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
5IsiviDEt.4n4
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WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. '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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ECONOMIC INTELLIGENCE REPORT
ECONOMIC ASPECTS OF COMMUNIST CHINA'S COMMUNES
CIA/RR 59-31
CENTRAL INTITELLIGENCE AGENCY
Office of Research and Reports
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FOREWORD
The purpose of this report is to describe the development of the
Chinese Communist communes in their first year of existence and to
analyze their economic effects. Because the communes themselves are
in a period of consolidation and redefinition of function, some of
the material is speculative. The final form of the commune has not
yet taken Shape', and we can count on the Chinese leaders to be creative
and flexible in adjusting their policies pragmatically to meet changing
economic conditions. Where appropriate, data are qualified or labeled
as tentative, and alternative explanations are advanced for features of
the communes that are either unclear or unsettled. This report de-
scribes, in turn, the genesis of the swift campaign that brought about
the establishment of communes (II, below), the organization and methods
of operation of the communes (III, below), and the probable economic
effects of the communes (IV, below) and considers the current problems
and future course of this revolutionary Chinese Communist institution
(V, below).
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CONTENTS
Summary and Conclusions
I. Introduction
II. Establishment of Communes
Page
3
4
A. Predecessors of the Communes
4
B. Genesis of the Idea of Communes
4
C. Growing Awareness and Acceptance of Communes
?
?
?
?
5
D. Beachhead in the Urban Areas
6
E. Period of "Tidying Up"
7
III.
Organization and Operation of Communes
8
A. General Structure
8
1. Size
2. Membership
3. Top Administrative Layer
4. Lower Layers
5. Role of the Party
8
9
10
11
12
B.
Agriculture
12
C.
Industry, Including Handicrafts
14
D.
Commerce
17
E.
Finance and Credit
18
F.
Services
20
G.
Planning and Statistics
22
H.
Militia
23
I.
Others
23
IV.
Economic Effects of Communes
24
A.
On the Economic Control Structure
24
B.
On the Allocation of Economic Resources
24
C.
On Agricultural Production
26
D.
On Industrial Production
27
E.
On the Accumulation of Real Capital
28
F.
On the Distribution of Income
29
G.
On Economic Self-Sufficiency
30
H.
On the Growth of the Population
31
V.
Current Problems and Future Course of Communes
31
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Appendixes
Appendix A. Chronology of the Establishment
of Peoples Communes in Communist
China, by Major Event, July 1958 -
June 1959
Appendix B. Chronology of the Establishment of
Peoples Communes in Communist China,
by Area, April 1958 - June 1959 . .
Page
35
Diagram
Following Page
Simplified Administrative Structure of a Commune . 12
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ECONOMIC ASPECTS OF COMMUNIST CHINA'S COMMUNES*
Summary and Conclusions
Communes -- the new monolithic political-economic-social units of
Communist China that are consolidating all previous controls at the
local level under one tightly knit semimilitary authority and are
rapidly remolding the way of life of 660 million people -- were intro-
duced in mid-1958 in response to the great problems in the organization
and control of the economy which had resulted from the rapid but uneven
increases in production of the "leap forward" program. So swift was
the development of the new commune system that by early November the
regime could claim that 99 percent of the rural population had been
organized into 26,500 communes averaging about 4,750 households each.
This amazingly rapid growth is explained partly by the energy put into
the commune program by a hard-driving leadership, partly by the fact
that many of the new communes were coextensive with existing hsiang
(townships) the governmental apparatus of which was readily appropriated,
and partly by the fact that the majority of communes were set up hastily,
with details of organization and operation being left for the future.
The communes in mid-1959 range from a few fully developed model
communes in which the future life of the whole rural population is
probably foreshadowed to organizations that exist merely on paper and
in which previous modes of living under the old agricultural producer
cooperatives (APC's) have not yet been disturbed. Most communes lie
in between, not in a stable state but moving rapidly toward the ideal
commune. Speakers at the National Peoples Congress in April 1959 spoke
of the necessity of a rather prolonged period of "tidying up" the
existing rural communes, and, accordingly, the extension of the system
to urban areas will probably be postponed for some months. But it ap-
pears inevitable that urban areas will ultimately be subjected to the
same program, although the leadership will encounter much more formida-
ble political and economic problems in establishing communes in urban
areas than in imposing the system on the countryside.
The essence of the commune is that there is brought together in a
single center of authority almost all power over the economic, political,
and social life of several thousand rural households. This power is
being used to (1) consolidate the control of the central leadership over
* The estimates and conclusions in this report represent the best judg-
ment of this Office as of 15 June 1959.
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the planning and managing of local economic activity, at the same time
delegating decision-making in day-to-day operations to the commune;
(2) mobilize the vast manpower resources of rural Communist China and
maintain -- by means of an almost incredible intensification of the
pace of work -- the "leap forward" program in agriculture, industry,
and construction; (3) maximize the margin between total output and
consumption in the rural areas by allowing consumption to increase
only to the extent required to obtain a reasonably well-nourished and
contented labor force; (4) eliminate the vestiges of private enterprise
and private control over consumption and greatly reduce the ability of
people to survive in the interstices of the society; and (5) destroy
traditional family life and replace it with a communal life -- communal
messhalls, dormitories, nurseries, tailor shops, and the like -- that
could have been taken directly from George Orwell's 1984.
Chinese Communist propagandists at first claimed that the communes
were an important shortcut to Communism. They publicized as one of the
goals the distribution of income according to need rather than produc-
tive ability and strongly implied that they were in the vanguard of the
march to the brave new world, ahead of their doctrinally softer com-
rades of the Sino-Soviet Bloc. This challenge to Soviet ideological
leadership appeared for a short time to be a threat to the unity of the
Bloc, but a bland restatement and cutting down of claims by the Chinese
Communist leaders restored harmony, at least on the surface. In addi-
tion to their retreat on the ideological front, the Chinese Communist
leaders also have retreated somewhat in their efforts to change greatly
the traditional mode of family life and to eliminate immediately the
remaining fragments of private property, but it is believed that the
concessions are temporary and designed to meet the short-run problem
of how best to maintain the intensive pace of the "leap forward" pro-
gram through 1959.
The long-run economic significance of the communes lies in their
role in speeding up the industrialization of Communist China. With
small regard for human costs, the leaders of China have plunged ahead
on a revolutionary course from which there is no easy turning back,
and, so far, they are succeeding in their scheme to drive the Chinese
people ahead at a frenetic, yet increasingly disciplined and coordi-
nated, pace.
With respect to the allocation of economic resources, the communes,
because of the greater breadth of their control, have proved to be a
potent force for either better or poorer use of resources. At first
the communes appeared to aggravate, rather than solve, the problems
of allocating resources raised by the "leap forward" program -- for
example, thousands of rural people were mobilized for industrial or
construction tasks while rice stood unharvested in the field. For the
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long run the communes appear to be a very effective mechanism for im-
plementing the economic plans and policies of the regime. Whether or
not the results will represent a rational use of resources will depend
mainly on (1) the soundness of the plan directives imposed on the
communes from above and (2) the extent to which the top leadership
feels constrained to use an all-out mobilization psychology to.stimu-
late lagging enthusiasm even at a considerable cost in efficiency.
I. Introduction
In the summer of 1958 the attention of both the Communist and the
non-Communist worlds was captured by the announcement by Communist
China of a tremendous drive to organize a new form of totalitarian
institution -- the "peoples commune." By early November 1958 the re-
gime could claim that virtually all of the overwhelmingly rural popu-
lation of China lived in communes of one form or another. Conclusions
as to the meaning of this drastic recasting of Chinese society were
varied and, in some cases, extreme, partly because the concurrent
crisis in the Taiwan Straits was used by Communists as, a goad in the.
organization drive for communes. The dramatic aspect of the situation
was increased by the fact that the commune movement appears to have
little or no precedent in the history of the evolution of the USSR.
The Chinese Communists could legitimately claim to have made a substan-
tial contribution to the "science" of Marxism-Leninism. Isolated state-
ments made in the first flush of enthusiasm, however, left the implica-
tion that this new contribution, in contrast to the Soviet experience,
was an alternative and shorter road to the attainment of Communism. By
the end of 1958, however, such statements, which reflected unfavorably
on the role of the USSR as the leader of the "Socialist, camp," were
carefully refuted by the regime.
Another aspect of.the impact of the commune movement was the real
or apparent association of the new institution with the remarkable
economic growth which took place in Communist China in 1958. The pre-
sent and future operations of the communes will be closely observed by
those underdeveloped nations of Southeast Asia and Africa in which
problems of maximizing economic growth on primarily agricultural bases
are similar to those prevailing in China. The degree of success ob-
tained by the Chinese Communists in changing China from a backward,
agricultural country into a modern, industrialized state through the
instrument of communes may well determine whether other underdeveloped
countries will elect to continue to approach the problems of economic
development within a democratic frame of reference or will choose to
follow the totalitarian alternative exemplified by Communist China.
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The Chinese Communist communes consolidate all elements of politi-
cal, economic, and social life at local levels under total state
authority. Communes were established initially with the objective of
maintaining the momentum of the "leap forward" program, which had run
into organizational difficulties in the countryside and which needed
a shot-in-the-arm. Although communes remain primarily a rural phenome-
non, the regime continues to experiment with the extension of the
communal form to the urban population. The semimilitary organization,
which is a distinguishing feature of communes, not only facilitates
mobilization of manpower for the tasks of production and aids in con-
trolling consumption but also affects such highly individual activi-
ties as leisure and rest and appears to have gravely weakened the
family as the basic unit of Chinese society.
II. Establishment of Communes
A. Predecessors of the Communes
The greatly stepped up tempo of production and construction in
Communist China under the great "leap forward" of 1958 brought with it
serious problems in the organization, coordination, and control of
economic activity, especially in the countryside, where the ability of
Peking to direct economic affairs had always been weakest. In an at-
tempt to determine the best organizational forms for combining rural
agriculture and industry as well as for bringing financial, commercial,
and administrative activities into harmony with the expanded activities
in agriculture and industry, experiments with different forms of or-
ganization were being carried on in early 1958 just before the formal
establishment of communes. One major type of reorganization was the
amalgamation of several mall APC's into one large APC. This amalgama-
tion was often synchronized with the merging of hsiang, as in Liaoning
Province in May 1958. 1/* The other form of experimental reorganization
was the merging of a credit and a supply and marketing cooperative with
one or more APC's in the same area to form what might be considered an
incipient form of commune. In addition to these mergers of cooperatives,
public services -- messhalls, nurseries, and other facilities -- were
set up in some rural areas to free more people, especially women, for
full-time work in agriculture and industry.
B. Genesis of the Idea of Communes
Even though communes now appear to be a quite logical develop-
ment in the light of economic developments during the past few years,
there is no tangible evidence to indicate that communes were planned
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or even well thought out before their establishment on a broad scale.
Their emergence in mid-1958 took place, according to 'Van Chen-lin -- at
this time the most prominent spokesman on agricultural problems -- "pre-
cisely because the development of China's productive forces at the
present stage demanded a change in the relations of production." 2/
More specifically it has been claimed that APC's were unable to accu-
mulate sufficient capital to finance the large capital construction
projects planned for 1958. The labor force of APC's also lacked the
degree of mobilization and flexibility required to carry out large-
scale projects and agricultural tasks as well as to operate the small-
scale industrial installations which APC's and local governments were
beginning to finance and construct in growing numbers.
Illustrating the suddenness of the actual launching of the
commune movement was the absence of any published reference to com-
munes -- let alone a preparatory publicity campaign -- until the
publication of the 1 July 1958 issue of the leading theoretical jour-
nal, Hung Ch'i (Red Flag).* 1/ In an article describing an outstand-
ing agricultural cooperative in Hupeh Province, Ch'en Po-ta, the
journal's editor and the personal mouthpiece of Mao Tse-tung, wrote
that "a cooperative which is changed into a fundamental organizational
unit which includes both agricultural cooperation and industrial co-
operation, in reality, is a peoples commune which combines both in-
dustry and agriculture."
In the following issue of 16 July, Ch'en Po-ta quoted Mao as
having said that the general direction should be gradually to "or-
ganize industry, agriculture, commerce and trade, culture and educa-
tion, and the militia ... into a large commune."12/ Although it is
not certain when Mao made this statement about communes, it is be-
lieved to have been in May 1958 at the Second Session of the Eighth
Party Congress or earlier and is the earliest evidence of identifica-
tion of top leadership with the commune movement.
C. Growing Awareness and Acceptance of Communes
After July 1958, other Party leaders began to make reference
to communes, their approval becoming more and more enthusiastic as
the movement gained momentum. T'an Chen-lin, for example, pointed
out the "inadequacies in the original size, management, and distri-
bution systems for agricultural cooperatives" which had led to the
establishment in certain areas of "a kind of comparatively high-level
communal form." 2/ A short time later T'an quoted Mao as having called
for the organization of "large communes as the basic units of our so-
ciety." Liu Shao-ch'i referred favorably to the new institution in
* For a chronology of the commune movement, see Appendixes A and B.
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the 30 July 1958 issue of Jen-min Jih-pao (Peoples Daily), describing
them in great detail although not using the term "commune." 1/
The commune movement, off to a slow and uncertain beginning
in the early summer of 1958, received its first major stimulus from
the well-publicized, tour of Mao in August. Mao toured Honan, Shantung,
and Hopeh, visiting communes and commenting favorably on them. The
real commitment to the commune -- from which there could be no turning
back -- came, however, with the Politburo meeting held in the latter
part of August 1958 in Pei-tai-ho, Hopeh, to coordinate and standardize
the now fast developing commune movement. On 29 August the famous
"Resolution of the Central Committee, CCP, on the Establishment of
Peoples Communes in the Rural Areas" was adopted, describing the
developing commune movement; the size, organizational structure, and
operation of the ideal commune; the method of establishment; and the
significance of communes in the ideological framework of current so-
cialism and future Communism. Following wide dissemination of the
resolution in early September, a "high tide" developed, and by the end
of September more than 26,000 communes had been set up, embracing
122 million households -- about 98 percent of all peasant households.
Spearheading the commune movement was the highly publicized
Wei-hsing (Sputnik) Model Commune. Wei-hsing, claimed as the first
commune in Communist China, was reportedly set up in April 1958
through the merger of 27 APC's, which together embraced 9,369 peasant
households. This amalgamated cooperative -- later called a commune --
is located in Sui-p'ing Hsien, in Honan. During the early days of
communalization, every aspect of Wei-hsing's organization and operation
was given the widest publicity, and there was a flurry of sweeping
generalizations based on the typical conditions of one or two show-
piece communes. The majority of communes were only "paper communes"
at first. In fact, these communes were not expected to be more than
that, according to the August resolution, which stated: "In the first
period of the merger, the method may be adopted of 'changing the upper
structure, while keeping the lower structure unchanged' ... to make
sure of avoiding any adverse effect on production." 21/
D. Beachhead in the Urban Areas'
The apparent quick success of the commune movement in the
countryside created enthusiasm in some official quarters for the
development of urban communes. Mao wanted an extension of the com-
munalization process into urban areas "as a necessary step in the
drive towards total state ownership." 12/ Whole cities (perhaps with
a substantial piece of the surrounding countryside) or parts of cities
were to become communes. In October the Secretary General of the
Secretariat of the Party's Central Committee, Vice-Premier Teng
Hsiao-p'ing, lent his weight in calling for further establishment of
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urban communes on an experimental basis. Before long, however, re-
ports of disenchantment came from the cities. It became quickly
evident that communalization of the urban areas would be decidedly
more difficult than that of the countryside, and an official halt
was therefore called in the Party resolution of 10 December 1958.
Although the resolution called for future large-scale estab-
lishment of urban communes "only after rich experience has been gained,"
it was not long before urban communalization was again actively under-
taken, at least in certain areas. With little or no publicity, the
communalization of 97 percent of the total urban population of Honan
Province was accomplished by mid-January 1959. 11/ Honan is not very
highly urbanized and is only an experimental area. Generalizations
based on its experience might be amiss, but the regime appears to be
ideologically committed to urban communes. Their development could
begin in earnest at a future time when the problems in the organiza-
tion and operation of rural communes have been brought under control.
E. Period of "Tidying Up"
Communalization of the Chinese countryside was basically com-
pleted by mid-October 1958. A few provinces moved slowly at first --
Yunnan, for example -- but progress generally was quite impressive.
Because communes were organized in such a hurry, a consolidation cam-
paign was started in December 1958 and is continuing as of June 1959.
In Honan the Party felt that educating the peasants on socialism and
Communism was the "primary step for improving and consolidating
peoples communes." In Kiangsu, it was believed that "higher produc-
tion is the key to consolidation of peoples communes."
Whatever the emphasis, large inspection teams were sent out
to investigate commune management and operation throughout the country.
Cadres were "sent down" to communes from urban areas to aid in strength-
ening commune operation. The cadres were expected to gain a better
understanding of commune problems, and their experience -- although
this aspect has not been mentioned in Chinese Communist publications --
could prove useful in the event of a concentrated effort to communalize
urban areas in Communist China.
At the National Peoples Congress in April 1959, the rapid pace
with which communes had been established in rural areas was highly
praised, but the necessity for a continued "tidying up" of the system
was admitted. Elements in the "tidying up" are as follows: (1) the
transformation of communes that are mostly on paper to full-fledged
communes, including the integration of financial and commercial ac-
tivities with production activities (the degree to which each activity
is brought under control varies with the activity -- for instance, the
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formation of standardized statistical and planning departments has
still not been carried out in many communes); (2) the consolidation
of central control over the functioning of the communes (an example
in point is the development of a system of contracts among communes
that will permit a more smoothly functioning specialization of pro-
duction); (3) the growing insistence on establishing goals in agri-
culture that have a reasonable chance of being fulfilled; (4) the
reduction of wasteful expenditures of manpower and raw materials and
the concentration upon achieving efficiency (in an effort to avoid
spoilage of crops and other wastes in agriculture resulting from
allocation of a large proportion of the rural labor force to non-
agricultural production, 80 percent of the manpower in rural areas
is now supposed to be concentrated on agricultural pursuits); and
(5) the partial retreat from the extreme measures taken to break up
the prevailing structure of the family (this retreat probably repre-
sents a "one-step-backward, two-steps-forward" program and serves the
present purpose of conciliating the rural population, whose coopera-
tion is needed to maintain the momentum of the "leap forward" through
1959).
III. Organization and Operation of Communes
A. General Structure
1. Size
Whereas many of the preceding APC's had as few as 150
households, the average commune had 4,000 or 5,000 households when
first established. Communes vary greatly in size, however, from
province to province and within any given province. At the end of
September 1958, for example, the communes in Kwangtung averaged
9,845 households each, whereas those in Kweichow embraced only
1,413 households. 12/ The average size of communes in the remaining
provinces lay between these two extremes.
The great majority of communes were first established on
a hsiang (township) framework. The Party resolution of August 1958
stressed the unity of hsiang and communes. The resolution recommended
the merging of several hsiang where appropriate in sparsely populated
areas and the formation of communes on this enlarged base. The ad-
vantages of the "one hsiang - one commune" arrangement were that the
administrative structure and personnel of the political unit (hsiang)
could be transferred intact to the new communes, thereby reducing
disruption of economic activity during the height of the crop season.
The August directive also stated, however, that federations of communes
throughout the hsien (county) on a hsien-wide basis would be the pre-
ferred structure as the movement progressed. In September, Li Hsien-nien
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called for the establishment of these hsien federations, to be followed
ultimately by complete amalgamation into larger hsien-wide communes --
"one hsien - one commune" -- after basic financial and economic problems
of the member communes had been worked out. 13/
Because the eventual form which rural communes are expected
to assume is based on the single hsien, and because there are now
probably fewer than 2,000 hsien, a considerable degree of amalgamation
of the 26,500 communes must eventually take place. Although there has
been no announced decrease in the national total of communes, recent
reports from several provinces indicate that the amalgamation has al-
ready begun.
At present, then, there are three different patterns of
organization of the communes. The great majority are -- or at least
started out -- on a hsiang-wide basis. The second pattern is a tran-
sitional stage, namely, the organization of these hsiang-wide communes
into federations which loosely tie together all communes in a hsien
area. The third pattern is believed to be the pattern of the future,
the hsien-wide commune. In December 1958 it was reported that in Honan
Province -- which is in the forefront of the commune movement -- there
were 6 hsien-wide communes, 95 hsien-wide federations of communes, and
1,242 individual communes with an average of 8,000 households each. 14/
2. Membership
Citizens 16 years of age and older are allowed to become
full members of communes, and noncitizens such as former landlords and
rich peasants are allowed to become "unofficial members" until such
time as their political rights are restored.* The right to vote and
to participate in the supervision of commune affairs is restricted to
commune members, but unofficial members "may enjoy the same economic
treatment as full members." Both full members and unofficial members
are enjoined to carry out commune resolutions, observe labor discipline,
and protect public property.
Upon establishment of communes, APC's have been required
to transfer their collectively owned property to communes. The shares
held by former cooperative members no longer bear interest. Except
for a "small number of domestic animals and fowl," members are re-
quired to turn over such privately owned property as land holdings,
large farm tools, and livestock. Livestock and holdings of trees, how-
ever, have been considered as investments in the new commune for which
* Much of the information in this report about the organization struc-
ture of communes is based on the draft of the regulations governing
the model Wei-hsing (Sputnik) commune. 15/
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compensation is to be paid. Much unfavorable criticism of the loss of
private property -- as well as examples of decreases in output attribu-
table to neglect of property under communal control -- appears recently
to have brought about a more lenient attitude in regard to private
property. The most important recent concession to private initiative
is the granting of permission for individual raising of hogs. Up to
5 percent of the commune's acreage, but no more than 0.2 mou* per hog,
may be assigned to support individual hog-raising. If there is con-
tinued failure in the collective raising of meat animals and in the
collective growing of vegetables and other subsidiary foods, there
may be further relaxation of private property privileges. In general,
however, the long-run trend during a decade of Communist control over
the mainland has been a squeezing out of elements of private ownership,
and any respite given private property under the communes should be
regarded as a temporary tactical retreat (except perhaps in certain
limited areas of economic activity, like the raising of livestock,
where collective ownership has repeatedly failed).
3. Top Administrative Layer
The top layer of the administrative apparatus of a coMmune
consists of the chairman of the commune, a congress of the commune
elected by commune members for a 2-year term, and an administrative
committee elected by the congress. The congress, which includes repre-
sentatives of all sections of the people -- women, youth, old people,
cultural and educational workers, medical workers, scientific and
technical workers, managers, agricultural and industrial workers, and
minority people -- is nominally the locus of highest authority in the
commune, outside the local Party apparatus. From analogy with similar
organizations within the nations of the Soviet Bloc, it is believed,
however, that the congress actually has no power at all. Its members
are in effect designated from above rather than elected from below;
they have their own daily jobs and problems and assemble only once or
twice a year; and their role is presumably limited to applauding the
top functionaries and voting "aye" after perfunctory discussion of the
proposals thrust on them from above.
The chairman of the commune is considerably more inde-
pendent. He is responsible for the over-all direction of the commune
and appoints the heads of the staff departments and production bri-
gades under which the commune operates. He heads the standing com-
mittee of the administrative committee of the congress. Although the
announcements about communes often refer to the powers and responsi-
bilities of the "commune committee," it is believed on the basis of
fragmentary information about the activities of the chairman that his
* 1 mou is equivalent to 0.1666 acre.
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power is closer to that prevailing under "one-man rule" rather than
that prevailing under a "first among equals" relationship.
Attached to the top layer are staff departments, each
covering an important area of the commune's activity -- such as
agriculture, industry, commerce, finance, credit, communal services,
planning and statistics, and militia. Although the organization of
communes is not yet thorou&ly shaken down, it is believed that these
departments will not ordinarily function as line operating departments
but will confine themselves to the technical direction of their repre-
sentatives in the production brigades and production teams. Included
under technical direction would be the promulgation of standard oper-
ating procedures, the introduction of technological change, and the
support of emulation campaigns and other "leap forward!' techniques.
4. Lower Layers
Below the top administrative level is the production bri-
gade, and below the production brigade is the production team.* The
size of the brigades and teams depends on the region in which the com-
mune is located, the density of population, the degree to which the
commune program has been pushed, and other local factors. As to a
general idea of the size of brigades: in Kiangsu the production
brigades at present are to have approximately 500 households and the
teams 50 households; and in March 1959, in Chen-lai Hsien in northern
Kirin, there were 8 communes, 35 production brigades, 361 production
teams, and 29,309 households. lg
The primary task of the production brigade is agricultural
production, but the production brigade is also charged with the man-
agement of industry, commerce, education, and all other economic and
welfare activities within its jurisdictional area. In some regions
the principal task of a brigade could be forestry, or the raising of
livestock, or even mining or industry.
The production brigade in many instances has apparently
taken over the personnel and assets of one or more of the former
APC's together with the commercial, financial, and welfare people
formerly in the area of the APC's. The brigade constitutes a uni-
fied "accounting center," although profits and losses are pooled in
the commune as a whole. In some cases the production brigade has
appeared amazingly autonomous in its operations, as in those instances
when it has been granted authority to draw up production contracts
directly with state commercial organizations or to receive directly
* For the internal organization of the commune, see the diagram,
following p. 12.
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the budget subsidies that have been recently authorized to aid poorer
communes. Because this kind of bypassing of the top administrative
layer of the commune brings into question the raison dlgtre of the
commune itself, it is believed that control over the policies of the
production brigade by the top administrative level of the commune
will have to be very clearly established in the future.
Under the production brigades, at the lowest level of au-
thority, are the specialized production teams. Production teams
carry out agricultural, industrial-, and construction tasks under the
direct control of the brigade.
The internal organization of the commune, as described
to this point, is in three tiers. When several hsiang-wide communes
are amalgamated into a hsien-wide commune, a fourth tier of control
is introduced. The new structure presumably would consist of (a) the
top administrative layer, (b) administrative districts (the former
hsiang-wide commune), (c) production brigades, and (d) production
teams.
Role of the Party
The Chinese Communist Party plays a prominent role in com-
mune administration, but whereas all other elements -- such as agri-
culture, industry, commerce, finance, credit, communal services,
planning and statistics, and militia -- are designed to be subordi-
nate in the monolithic structure of the commune, the Party remains
a separate -- and superior -- element. Each commune? has a Party com-
mittee, headed by a secretary. In addition to several departments
at headquarters, the Party generally sets up branch committees in
both the production brigades and the production teams. The commune
Party committee reviews major problems in commune administration, di-
rects propaganda within the commune, sees to it that state procurement
quotas are being met, and performs the function of an inspector
general, acting as the agent of the central Party apparatus. In some
cases the secretary of the local Party unit is also chairman of the
commune, and in these cases the separation of commune and Party lines
of control is not fully realized. This blending of commune and Party
control, however, is diametrically opposed to the Party line 27/ and
may be expected to diminish once the communes become established on a
more solid basis.
B. Agriculture
Before communes were established, state plans for agricultural
production were primarily limited to indirect planning through the
setting of national goals such as average yields and sown acreage for
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CONFIDENTIAL
SIMPLIFIED ADMINISTRATIVE STRUCTURE OF A COMMUNE*
Agriculture
Industry
Commerce
Finance
Credit
Services
Planning and
Statistics
Militia
Others
COMMUNE CHAIRMAN
STAFF DEPARTMENTS
PRODUCTION BRIGADE
PRODUCTION TEAM
* The organizational structure of the communes has not yet been shaken down,
and in sone communes the specialized staff functions are a0Parently not
clearly distinguished from the line operating functions.
CONFIDENTIAL
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major crops. The principal points of contact of the state plan with
the local levels were the quotas set for the collection of taxes and
for the purchase of major agricultural commodities. Now, however,
in addition to their role as basic production units, communes are
also basic planning units, linked directly to the hsien Party com-
mittees and the state planning organs. The result is a simplifica-
tion of planning procedures and a strengthening of control.
Since the establishment of communes, attempts have been made
to determine the most efficient system of control over agricultural
production. In Shantung, the experience of which is probably appli-
cable to most of the country, the commune is expected to draw up
plans and set targets for the production brigades and production
teams. Such plans are to be drawn up "on the basis of unified state
plans and on the principle of suiting local conditions," with pre-
liminary consultations held at all levels before the final plans for
the communes are established. Once goals are set, however, the bri-
gades and teams are then required to make detailed arrangements to
guarantee the fulfillment of their quotas. In some communes a sys-
tem of internal contracts between the top administrative layer and
subordinate production units has been instituted for this purpose.
This development may reflect the increase in size of the communes to
the point where control by the top layer over actual production be-
comes more and more a matter of formalized administrative procedure.
In their work for 1959, communes are generally planning to
continue three of the mass campaigns which characterized the "leap
forward" of 1958 -- conservation of water, collection of fertilizer,
and the introduction of improved farm tools on a large scale. Com-
munes are expected to offer considerable advantages over APC's in
carrying out large-scale irrigation, reclamation, and flood control
construction projects. With greatly increased labor force units re-
sulting both from the amalgamation of APC's and from the establish-
ment of public service facilities, the typical commune immediately
gains the potential benefits of labor mobility and flexibility. With
more efficient use of the labor force, less capital will be required
to achieve the same results in large-scale irrigation and water con-
servation tasks. With a more rational allocation of land, including
the elimination of many field boundaries, a more efficient program
for conserving water should be possible. The task of the communes in
making additional gains comparable to those of the 1957-58 campaign
is a difficult one, because the pay-off from further extension of
irrigation diminishes as the program advances into less and less
tractable areas. The introduction of improved tools on a wide scale
is considered a basic step in the long-range drive toward the mech-
anization of agriculture, a goal once set for as late as 1977 but now
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moved up to the Second Five Year Plan in some areas. lY The cam-
paign to invent new farm tools, to improve old ones, and to mechanize
as many agricultural operations as possible received a great amount
of publicity in 1958. The campaign will probably become more urgent
in 1959, when demands on the labor force are likely to increase still
further. Results could be increasingly effective, however, with the
establishment of industrial facilities to support the program and im-
proved channels for distribution of the equipment. In general, how-
ever, technological developments in agriculture in Communist China
will continue to follow for a long time the principle of the combina-
tion of smn.11 amounts of relatively simple capital equipment with
large amounts of labor.
As mentioned above, one of the most important contributions
expected from the communes is the fuller use of the labor force.
Off-season agricultural labor is to be used in operating the new
small-scale industrial facilities of the communes. The need for
properly planning the efficient use of the large pools of manpower
on communes was stressed early in the campaign and has continued to
be stressed. In spite of such emphasis, however, instances of im-
proper and inefficient allocations of a rapidly tightening labor sup-
ply* have frequently been reported, especially in the case of the
harvest of grain and cotton crops in late 1958. Premier Chou En-lai,
at the National Peoples Congress in April 1959, claimed that the num-
ber of people engaged in agriculture "should not in general be less
than 80 percent of the manpower available in the countryside." 12/
This statement was a sharp reversal of earlier plans to divide com-
mune manpower about equally between agriculture and industry.
C. Industry, Including Handicrafts
The industrial activity of communes is considered one of their
major responsibilities and also one of their most important advantages.
The combined ideological and economic importance of such industry to
communes was editorially stated as follows: "In order to develop the
economy of the peoples communes rapidly at the present stage and re-
duce step by step the differences between city and countryside and
workers and peasants over a longer period, it is necessary to carry
out the industrialization of the peoples communes." 22/
* In a study on Communist China a distinction should be made between
two meanings of the term shortage of labor: (a) the meaning according
to which labor in the aggregate is scarce relative to land and capital
(a situation which does not exist in Communist China); and (b) the
meaning according to Which labor has been subject to high-pressure
mobilization for many competing purposes in which large amounts of
labor can be readily used (a situation which does exist in Communist
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The December Party resolution on communes pointed out more
specifically the mission of commune industry: "Industrial production
of the peoples communes must be closely linked with agricultural pro-
duction. It should, first of all, serve the development of agricul-
ture and the mechanization and electrification of farming; and, at
the same time, it should serve to meet the demands of commune members
for daily necessities, and serve the great industries of the country
and the socialist market." 21/
Industrial production by communes is only indirectly guided
by the state plan at the present time. Industrial production goals
are indirectly levied on communes by means of contracts drafted be-
tween the communes and state commercial organizations down to and
including the hsien level. In the communes, industrial planning may
be carried out on two levels -- the top administrative level and the
production brigade. The commune is charged with the fulfillment of
state plan quotas, which it has contracted to meet. The commune also
exerts direct control over the plans for major plants and mines under
its jurisdiction as well as over plan targets for capital construction
and the production of important products. The production brigade is
required to fulfill the production and construction targets trans-
mitted down from the top layer of the commune, and the brigade trans-
mits this pressure to its production teams.
Commline-directed industry covers many types of activity, in-
cluding iron works capable of forging and repairing farm tools; pro-
ducer goods plants producing such materials as cement, fertilizer,
and iron and steel; small powerplants; plants to supply semiprocessed
materials to larger industrial enterprises; and plants producing con-
sumer goods such as processed foods, textiles, footwear, paper, and
household furnishings. Farm machinery plants and traditional ferti-
lizer plants* are the most common types of industrial facilities at
the present time.
When communes were set up, the full-time production activities
of handicraft cooperatives and the part-time handicraft pursuits of
APC members came under the control of communes, and many small instal-
lations became "industrial plants" overnight. By late 1958 the fantas-
tic figure of 6 million local industrial facilities were claimed to be
under the operation of communes and hsien governments. 22/ Some
* In traditional fertilizer plants, various types of organic or in-
organic materials are combined at a low technical level -- for example,
the process may be the crushing of phosphate rock or the mixing and
fermenting of human or anims1 manure.
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handicraft production, formerly included in the output of the agri-
cultural sector, now appears to be classified as industrial produc-
tion. "Handicraft" production, under that name, seems to have all
but disappeared from the rural scene with the advent of communes.
There are several other reasons for the changing status of
the part-time production activities carried out by peasants. The
mass labor projects of the communes have had priority and have quite
effectively prevented the peasants from working at their traditional
spare-time pursuits. The decline of the household as the basic unit
of rural labor, the practical cessation of household agricultural
production, and the institution of public service facilities on a
wide scale have prevented the continuation of many of the former
spare-time activities by individuals.
The extreme limitation on spare-time production activities of
individuals -- an effort which was in part devoted to the production of
supplementary foods such as vegetables and meat -- was a contributing
factor to the serious difficulties in food supply which arose in the
fall of 1958. Similarly, the former spare-time output of "handicraft"
products suffered. Increased emphasis has since been placed on the
development of all types of so-called sideline occupations, under cen-
tralized commune control. The policy of developing a diversified
economy has been stressed, and a greater effort to produce much-needed
consumer goods of a handicraft or home-industry nature should take
place as a result, but on a more carefully planned basis than previously
and with wages often replacing profits as an incentive. The economic
setbacks which result from upsetting the traditional balance of peasant
off-season labor comprise a lesson which the regime appears to have
forgotten -- the same type of shortage occurred in 1956 as a result of
the intense collectivization and construction drive during the winter
of 1955-56.
The native iron and steel campaign of 1958 was a much propa-
gandized activity which began on APC's and under local governments
as a part of the "leap forward" and continued on communes after their
establishment. Thousands of sman blast furnaces sprang up like mush-
rooms throughout the countryside, often in out-of-the-way locations.
About 175,000 small native furnaces were reportedly in operation by
September 1958.
The campaign was a huge propaganda success, and the smAll fur-
naces even produced about one-third of the total pig iron output of
1958. But there were many shortcomings in the campaign; men and ma-
terials (notably coal) were inefficiently used, transportation prob-
lems were created, and the quality of the steel was generally poor.
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As a result, many of the inefficient units have been shut down in
1959. Where locational factors permit, however, a native furnace
may become the nucleus for a small mill.
D. Commerce
The commercial departments of communes were formed by taking
over the supply and marketing cooperatives, which previously had con-
stituted the component of the state-controlled system which distributed
the bulk of consumer goods and farm tools and supplies in rural areas.
The funds of the former cooperatives became the operating funds of the
commune commercial departments, the personnel of the cooperatives were
transferred to the communes, and the commercial functions of the co-
operatives were assumed by the communes. The commercial departments,
although within the commune administrative framework, operate under
the direction of the state commercial departments and maintain sepa-
rate accounting systems, but profits from the commercial departments
are remitted to the commune.*
The first responsibility of the commune commercial department
is to fulfill the quotas for purchases by the state. The department
is also charged with the purchase and sale of commodities normally
distributed through the market. In keeping with the principle that
they should not be allowed to increase their income through excessive
commercial profits, communes are required in all their transactions to
abide by the procurement prices and retail prices set by the state.
The December resolution on communes pointed out that, although
communes should develop production which directly meets their own
needs, they should also act to increase production of commodities for
which they have a natural advantage. Such commodities would be ex-
changed with other communes and with state-owned enterprises. Through
exchange the communes could get the machinery and equipment needed to
improve agriculture as well as obtaining the consumer goods required
to meet the needs of commune members. To insure fulfillment of plans
for commodity exchange, the institution of an extensive system of con-
tracts between the state and the communes and among communes was called
for in the December "Resolution to Improve Commune Finance and Com-
merce."
* Once more we have the problem of dual control over an economic or-
ganization -- in this instance, subordination of commercial depart-
ments to the commune's administration, on the one hand, and to the
central apparatus controlling commerce, on the other. It is believed
that, if the communes are to play their fundamental role as the single
tightly knit unit of control -- which is assigned all responsibility
at the local level for directing an economy in miniature -- they must
have a stronger hold over commercial activities than they ndw appear
to exercise.
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State plans at the national, provincial, and even at the hsien
levels include targets only for comparatively important industrial
and agricultural products. Contracts concluded under the new system
have, however, the intent of encouraging the production and distribu-
tion of many types of less important products which are nonetheless
important consumer items. The contracts cover a vast range of ma-
terials and commodities, stipulating the type, amount, quality, time
of delivery, and means of transport in most cases. In producing the
coMmodities under contract, communes are supposed to receive strong
support from the hsien commercial departments in the form of "tech-
nical guidance, financial aid, and supplies of raw materials." Al-
though it is not clear how much freedom is allowed or how widespread
the practice, production brigades in communes are allowed to sign
contracts directly with state commercial departments.
E. Finance and Credit
Financial work is carried out by the financial and credit
departments of the individual communes. Although both departments
control commune funds, each has its distinctive functions. The finan-
cial department controls the financial income and expenditures of the
commune. Commune income is derived primarily from the sales of prod-
ucts, and expenditures are primarily for capital construction, for
wages, and for purchases from the outside. The credit department
accepts deposits and makes interest-bearing loans to commune opera-
tional units for use as working capital in agricultural and industrial
production and in commercial activities. In May 1959, permission to
extend credit to individuals for the purchase of piglets was one of
the measures taken to stimulate hog production.
Theoretically the financial and credit departments are mutually
supporting as the credit department can concentrate all temporarily
idle capital which cannot be mobilized by the financial department and
then can lend this capital to other departments where needed. Credit
departments have been established in the communes through the absorp-
tion of the personnel, fixed assets, and working capital of the credit
cooperatives which formerly existed in the rural areas. The financial
workers of former hsiang and hsien governments and of APC's became
financial personnel of the communes.
The most important tasks in the financial work of communeslin
the order of priority, are the following: (1) the collection of
taxes for the state, (2) the accumulation of public funds for the com-
mune, and (3) the distribution of the product within the commune. The
basic taxation responsibilities of the communes were laid out in the
December financial resolution. EL4/ The "one quota" system, called for
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in the resolution, represents an attempt to consolidate the various
types of taxes, heretofore levied on individuals and organizations
now included within the commune, into one single payment levied on
the commune as a single tax-paying entity. In computing the "one
quota" tax, former agricultural, industrial, and commercial taxes
are combined with income from enterprises recently transferred to
the commune and income from other sources. Certain administrative
and operational expenses formerly borne by the state are then de-
ducted and a portion of the difference forwarded to higher authori-
ties. These funds can be either a fixed amount or an amount propor-
tional to the commune income, with allowance being made for basic
natural and economic differences among the various communes. In
attempting to equalize tax burdens, the policy is generally to
place a heavier burden on richer areas, on areas of industrial
crops rather than food crops, and on areas with a greater develop-
ment of industrial and commercial subsidiary production. _21/ This
kind of tax policy illustrates the ability of the state under the
commune system to "extract" more resources from relatively well-to-
do areas than under the former system of organization.
In addition to assistance in the form of relatively lighter
tax burdens, the central government can provide to poorer communes
financial assistance such as the 1959 budgetary a]location of 1 bil-
lion yuan* announced in April 1959 at the National Peoples Congress.
It should be noted that these same communes might well be paying
taxes of that amount or more and that there is, therefore, no assur-
ance as to how much of the 1 billion yuan, if any, is net support.
The second basic task of financial work in communes is
internal -- namely, the accumulation and maintenance of (1) public
reserves for investment in productive facilities and (2) public wel-
fare funds for the development of facilities for education, health,
culture, and other welfare services. Recent editorial comment has
demanded that agriculture must be assigned top priority in the allo-
cation of public reserves, and the recent emphasis on manpower allo-
cations seems to bear out such a trend. The periodical Hung 0h'i,
in fact, called for the diversion of "superfluous" capital from indus-
try back to agriculture. 2g
The third major responsibility of financial work in communes
is the distribution of income to individual members. A great deal of
fanfare accompanied the institution of the part-supply and part-wage
* Yuan values in this report are expressed in current yuan and may
be converted to US dollars at the official rate of exchange of 2.46
yuan to US $1. This rate of exchange, however, does not necessarily
reflect the true dollar value.
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system in the enthusiastic early days of the commune movement. An
ever-increasing portion of an individual's basic requirements for
food, clothing, and shelter supposedly was to be distributed on a
"free supply" basis, according to need. The peasants soon, however,
began to lose the incentives which were more directly encouraged
under the labor-day system of remuneration. As a result, there has
been a considerable toning down of the "distribution according to
needs" since the appearance of the December resolution on communes.
Basic' supplies may continue to be furnished in a number of instances,
but a regular system of wages tied in some way to the individual's
level of production generally will prevail, and bonuses and other
incentive measures may be expected to increase in order to maintain
the productive efforts of the members of the communes. The official
policy now appears to be a strong return to the socialist principle
of "to each according to his labor." There now seems to be recog-
nition that production is by no means sufficiently advanced to permit
consumption to be divorced from production. For example, Peking in
May 1959 declared that idle people were not entitled to get food from
public stocks.
In December 1958, regulations governing the operation of credit
departments were approved by the State Council. El/ Among important
features are the stipulations that all cash deposits and loans handled
within the commune will bear interest and that capital flowing between
credit departments and upper-level banks will be handled as deposits
and loans, with a monthly rate of interest of 0.42 percent. Although
discretion may be exercised in granting loans to various commune de-
partments, funds must not be used for capital construction but must
remain relatively fluid for continuous support of current production
activities and commodity circulation. Beginning in 1959 the interest
rates on agricultural, industrial, and commercial loans have been
standardized throughout the country at 0.6 percent per month in an
attempt to promote uniformity of credit operations between the rural
and urban areas. At the same time, interest on savings deposits will
be considerably reduced. It is not at present known to what degree
individuals in communes are coerced into putting money in savings
deposits, although the doubling of the amount of rural savings de-
posits in 1958 perhaps gives some indication. It hardly seems likely
that this aspect of an individual's life will escape the scrutiny of
the state.
F. Services
One of the most publicized features of communes has been the
institution of the public messhalls, which were quickly organized
during the early stages of the commune movement. Commune members
were generally forced to eat in the messhalls as soon as they were
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set up -- to emphasize this policy, household cooking equipment was
"donated" to the scrap drive during the 1958 iron and steel campaign.
Through the use of messhalls and other public services a large supply
of labor, especially female labor, has been released for other pro-
duction and construction work in the communes. Other advantages are
claimed to be better control of food supplies, conservation of fuel,
and general improvement in living standards_. By March 1959, about
3.6 million messhalls are reported to have been established.
These messhalls serve more than 90 percent of all commune members
and have an average of 100 to 150 persons per messhall. There has
been some relaxation in messhall membership requirements recently,
however, and members in some areas have been allowed to take food
home or even to withdraw from membership if desired. There have also
been some cases in which commune housing construction has included
individual kitchen facilities for each dwelling unit. Whether peas-
ants are eating better or worse in the messhalls depends largely on
highly localized economic conditions as well as the time of year and
the attitude of the commune's administrators.
Although messhalls are probably the most spectacular form of
commune public service, other types of facilities have been estab-
lished both to release labor and, ostensibly, to improve living stand-
ards. Nurseries and kindergartens have been established in both the
rural and urban areas, releasing many women for other tasks. By
March 1959, nearly 5 million nurseries and kindergartens reportedly
had been established, with 70 percent of all the preschool children
throughout the country in attendance. 22/ Schools and "collages"
have been established, operated under the basic Communist policy of
combining education and production. Many of the schools are board-
ing schools, allowing more complete control over the part-time educa-
tional and part-time labor activities of commune youth.
Other commune public service facilities include tailor shops,
laundries, medical and hospital facilities, old people's homes,* and
new housing facilities. The construction of communal housing has
probably been the most controversial "service" outside of messhalls.
Earlier enthusiasts called for dormitories separated according to sex
and ignoring family relationships. Such excesses proved to be
* Old people's homes are given the deftly ironic title of "happy
homes." The general effectiveness with which the regime can squeeze
additional productive effort out of the populace is illustrated by
the assignment of such tasks as raising chickens to the occupants of
"happy homes." The poetic and often humorous phraseology employed
by the Chinese Communists in their ruthless march toward their ver-
sion of the brave new world makes interesting reading compared with
the humorless and boorish administrative language of the USSR.
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exceedingly unpopular, however, as pointed out in the speech of Tsai
Chang, president of the Chinese Womens Federation, at a national con-
ference of women in December. 12/ Tsai Chang demanded that all mem7
bers of a family be given suitable accommodation together in all
plans for new housing in the rural areas. The December commune reso-
lution supported Tsai Chang, and housing now under construction makes
allowance for "togetherness." Even before this tactical retreat, it
Is probable that -- in spite of enthusiastic talk about the breakup
of the bourgeois family -- any separation of members of families was
almost always caused by assignments to jobs in outlying areas and
not by deliberate official policy.
G. Planning and Statistics
The commune is an integrated unit for planning purposes and
in some respects represents a miniature planned economy. The develop-
ment of the commune system, however, has not yet proceeded to the
point where full-blown planning can be carried out. The commune
similarly represents a central unified point of accounting; all sta-
tistics on production, income, and expenditures are being (or will be)
collected and compiled by the planning and statistics department of
the commune. In contrast with the shadowy control formerly exercised
by the central government, therefore, the communes provide a poten-
tially effective means of control by the central authorities over
agricultural planning and production and over the handicraft sector
of the economy.
In the past, reliable statistics on rural production were most
difficult to obtain. Effective planning of rural production was not
possible. Tremendous numbers of smAll reporting units that had no
established system for keeping records on output or income were in-
volved. The extension of state control into these areas through con-
solidation of the myriad small units -- APC' s, handicraft shops, and
small industrial units -- into communes permits the central authori-
ties to control local planning more closely and to obtain statistics
on kinds of output that previously had not been adequately covered.
In 1958, however, the "leap forward" program brought about a
situation in which planning and statistical reporting increasingly
served as propaganda material for the support of emulation drives.
Local leaders were encouraged to set high goals in order to promote
"production enthusiasm," and the high goals sometimes seemed to ac-
quire gradually the status of actual production achievements. In
addition, the system of production was changed drastically, and ac-
counting procedures that had no counterpart in previous economic re-
porting were introduced. The new accounting procedures tended to
measure not only increases in output but also output not included in
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previous statistics oroutput which was achieved at the expense of
a decline in farm home industry or other household activities not
previously measured. In addition, there has been a chronic lack of
statistical workers to cover rural areas in detail, and there have
been delays in setting up the planning and statistical departments
of communes.
H. Militia
Widely publicized during the latter part of 1958, the militia
program was established with two announced purposes: to strengthen
the production effort and to promote national security. The militia
was expected to contribute significantly to national security, both
Internal and external, but its importance up to now has been primarily
in the application of military organization and methods to commune
production tasks. The organization of labor into quasimilitary bri-
gades wa8 expected to permit a high degree of mobility, to make ad-
justment to collective living easier, and to generate an enthusiastic
"combat spirit" in production activity. Although more than 18 million
commune militiamen are claimed to have been trained by units of the
PLA,* the military character of communes has been considerably deempha-
sized in the past few months. In fact, it was flatly stated in Jan-
uary that the organization of production along military lines did not
Imply that communes were "troop camps" or that members were "combat-
ants of military units" but merely that "people must work in a more
organized and orderly manner." 2_7/
I. Others
Depending upon size, natural factors, and the complexity of
economic operations, the commune may have other staff departments.
For example, a commune covering a large area may assign to a trans-
port department the responsibility of coordinating the use of the
limited transport facilities -- primarily animnl-drawn carts, animals,
and men. In a commune which has as a major economic activity the
operation of small river boats, the transport department would be
among the major staff departments. Similarly, in areas where local
conditions favor concentration on activities such as animal husbandry,
forestry, fishing, and mining, staff departments for these activities
would be established.
Departments of construction and of science and technology
might also be set up. The building of dams and irrigation ditches,
construction of industrial plants and dwellings, and other construc-
tion would come under the general supervision of the construction
department. The science and technology department of a primarily
agricultural commune would concentrate on the development and in-
troduction of improved farm tools and seeds, better agricultural
* Peoples Liberation Army.
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techniques, and improvements in animal husbandry. This department in
a commune with industrial facilities would cover a wider and more
complex range of scientific and technological work.
There is in the typical commune a department of internal af-
fairs. So far as is known, this department concerns itself with
governmental administrative matters rather than economic matters.
TV. Economic Effects of Communes
A. On the Economic Control Structure
Communes represent an unprecedented concentration of control
over all aspects of economic life in rural areas. Control over agri-
cultural, industrial and handicraft, commercial, and financial ac-
tivity has been unified through the amalgamation of former APC's and
rural commercial and financial organs into the commune structure.
Planning is being centralized under the communes, and the system of
internal and external contracts is affecting an ever-growing number
of productive and commercial operations.
B. On the Allocation of Economic Resources
From the economic point of view, the year 1958 was a year of
remarkable achievement, but part of the cost of the achievement was
a gross misallocation of resources in important sectors of the econ-
omy. Three examples follow:
Relatively Too
Many Resources Devoted To:
Growing Main Food Crops ... vs
Stoking Blast Furnaces ... vs
Industrial Production ... vs
000
O00
O00
Relatively Too
Few Resources Devoted To:?
Growing Subsidiary Food Crops
Harvesting Crops
Transportation
The mobilization psychology of the "leap forward" program
was designed to bring forth, above all, more output, and it was
hardly to be expected that the program could at the same time pre-
serve the niceties of resource allocation as prescribed in bourgeois
economic thinking. The communes, which affected the allocation of
resources only in the last few months of 1958, were supposed to re-
duce the organizational tangles associated with the do-or-die mobi-
lization of resources under the "leap forward" program. It should
be noted, however, that the communes were a powerful force for both
good and evil. The communes, because of the greater breadth of their
control over resources, could make grosser mistakes -- as well as
achieve more striking successes -- in the allocation of resources.
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The chairman of a commune, for example, could put people on a
flood-control project when rice was standing in the field unhar-
vested. The chairman of an AFC could not be induced to do this
nearly so readily under the old system, and if he did, the conse-
quences would be less widespread. An example of dubious allocation
of raw materials is the case of the backyard blast furnaces which
used as much as 5 tons of coking coal per ton of crude steel, com-
pared with the 1 ton of coking coal required in modern mills.
In the process of "tidying up" communes, the communes were
ordered, as described in C, below, to switch their allocation of
manpower between agricultural and nonagricultural activities from
50-50 to 80-20. Even taking into account the fact that these ratios
are benchmarks rather than fixed standards imposed on every single
commune, it would appear that a more blunt instrument for allocation
of labor resources could hardly be devised, because under a rational
system of allocation some remote communes should have a 99-1 ratio
whereas other communes that contain plentiful industrial raw materials
should have a 50-50 or even smaller ratio.
It is therefore evident that sometimes the communes have ag-
gravated the difficulties in allocation of resources, difficulties
encountered previously when the regime embarked on the "leap forward"
program. In spite of these difficulties the communes on balance in-
creased total output in 1958 above what it otherwise would have been.
They introduced a shot of adrenalin into the mobilization program and
brought about a considerable intensification of the degree to which
resources -- both hmsn and nonhuman -- were worked. It is true that
many of the gains are of a once-and-for-all nature, notably the in-
crease in the hours of work and the pace of work, but nonetheless the
communes appear to be for the long run an effective instrument for
carrying out the economic policies and plans of the regime.
Within the commune itself the possibilities for bettering the
allocation of labor, raw materials, and other resources are limited
by the nature of directives imposed from above. To achieve a rational
use of resources by the communes, the central leadership will have to
produce plan directives which take into account the considerable varia-
tion in resources among communes. To the extent that a mobilization
psychology is considered necessary from time to time to spur enthusiasm
for the regime, the rationR1 use of resources will be sacrificed to a
considerable degree, but, judging from the experience of the last 4
years, the regime is willing to pay the price.
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C. On Agricultural Production
Although much credit is given communes for the bumper harvest
of 1958, the specific programs to help agriculture, such as increased
irrigation and application of fertilizer and improved techniques of
planting and cultivation, were already being carried on before the
commune movement began. The record harvest of winter wheat in 1957-58,
for example, was achieved before communes were established. The mo-
bilization of men and materials under the commune structure, however,
did supply new impetus to the measures already in operation.
The smalgamation of many ATC's and supporting rural institu-
tions under central control as well as the release of still greater
numbers of workers through the establishment of public service fa-
cilities gave communes control over unprecedentedly large and mobile
gangs of workers. Hours of work and pace of work greatly increased
along with numbers of workers, but so great were the tasks in pro-
duction and construction that shortages of labor in rural areas re-
placed the surpluses of 1957. The intensity with which labor was
driven in 1958 is illustrated by the warnings given local authorities
toward the end of the year to allow peasants sufficient rest to pre-
vent serious fatigue or illness.
Communes, by their very nature, have deemphasized the indi-
vidual and the household in the production process. It appears now,
however, that in order to increase the agricultural sideline occupa-
tions that were passed by during the "leap forward" program --
especially the raising of livestock and the growing of vegetables
and other subsidiary food products -- more productive latitude will
be given individuals and households. In a turnabout typical of
Chinese Communist economic policy, small plots of land, fertilizer
and feed supplies, and flexibility in work assignments are being
given households which raise hogs and other livestock under a policy
started in May 1959.
In the early period of communalization a rough rule of man-
power allocation within communes was 50 percent to agriculture and
50 percent to industry, construction, transportation, commerce, and
other nonagricultural activities. The assignment of millions of
peasants to making iron and steel and digging coal, along with the
heavy labor requirements of large-scale projects in irrigation and
flood control, often resulted in unharvested or poorly harvested
crops and a drop in subsidiary agricultural production. Alarmed at
this trend, Premier Chou En-lai at the National Peoples Congress in
April 1959 called for the assignment of at least 80 percent "of the
manpower available in the countryside" to agriculture.
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Communes constitute a more effective instrument of economic
control over agriculture, not only in the mobilization of labor but
also in the introduction of more efficient methods of cultivation,
Irrigation, and use of fertilizers. Under preceding collectivist
and semicollectivist organizations, Chinese agriculture was subject
to gradual changes, but the commune system like a gigantic battering
ram has broken down resistance to technological change in response
to the leadership's drive for more and more change, faster and faster.
Eventually -- when the future development of the economy of Communist
China permits the allocation of more complex capital equipment to
agriculture -- the communes should prove to be an excellent instru-
ment for the mechanization of agriculture.
Communes have encouraged the "leap forward" technique of a
highly concentrated effort on a small area with resulting yields that
are astounding if true. The success of the highly touted experimental
plot campaign of 1958 was apparently responsible for the adoption of
the revolutionary policy to reduce sown acreage to one-third its for-
mer size and to concentrate an all-out productive drive on this re-
duced area. This system was put into operation to some extent begin-
ning with the winter wheat crop of 1958-59, but there were complaints
in April and May 1959 that the acreage sown to wheat was insufficient
after all and should really have been much greater. In June 1959 the
policy was officially abandoned. This policy was foolish from the
start in view of the existence of a huge rural labor force whose po-
tential was becoming more and more fully mobilized under the commune
system.
The experience of 1958 in agriculture -- when the production
of basic food crops increased 20 percent, but the production of vege-
tables, meats, and other subsidiary foods at best held their own --
suggests that (1) the "mobilization psychology" of the communes is
best suited for large, relatively simple crops compared with subsid-
iary agricultural production, and (2) attempts to obtain diversified,
balanced agricultural production under the commune system will en-
gender further, limited concessions to private enterprise until the
commune system is well enough organized to control efficiently the
allocation of labor in detail.
D. On Industrial Production
In 1958, industry which came within the commune system re-
portedly produced approximately one-third of the nation's pig iron,
about 40 percent of its coal, one-quarter of its steel, and consider-
able quantities of agricultural tools and equipment, fertilizer, and
insecticides. Quality was the big problem; for example, the steel
produced by the many small and inefficient blast furnaces was almost
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universally low in quality. As management and technical skills im-
prove, small-scale rural industrialization should meet many of the
local requirements, especially of agriculture, where quantity is more
important than quality at this stage of economiq development. Com-
mune industry will not, however, supplant larger scale enterprises in
the production of products or equipment where higher quality and lar-
ger investments are required; but if large-scale industry will not
come to the commune, the commune will come to large-scale industry,
which may well be organized under communes once the rural areas are
digested. In order to avoid in the future the disruption of tra-
ditional peasant activities caused by the vigorous Channeling of
off-season agricultural labor into commune industrial activity in
late 1958, a more careful allocation of manpower will be required,
with important agricultural activities granted priority. It seems
inevitable that -- instead of the development of the all-purpose
communal man who can drop his manure dipper and pick up his wrench
at the local farm implement plant -- there will be a tendency to
develop specialists in certain industrial operations who will grad-
ually lose contact with their original agricultural pursuits.
Many of the so-called industrial enterprises of communes are
merely the small and relatively crude handicraft activities which
have been carried on for many years. Labor, low-quality raw ma-
terials, and some simple equipment were all that were required. Some
of these activities will not vary much even when the general level of
technology advances, but others will tend toward increased scale, the
use of more complex plant and equipment, and the use of raw materials
of higher quality and greater variety. Potentially the communes af-
ford the chance for rural areas to provide a large part of their own
needs for agricultural tools and supplies, construction materials,
and manufactured consumer goods. At the same time, the building up
of industry in the communes should help reduce the problems formerly
caused by the migration of large numbers of peasants to the cities.
E. On the Accumulation of Real Capital
To the extent that the communes live up to their promise of
providing an effective system of economic organization, they will
bring about substantial increases in agricultural and industrial
production and thereby greatly speed up the accumulation of real
capital in the economy. Historically, one of the great economic
missions of the countryside in the Communist scheme of things has
been to supply a margin of product over and above consumption, this
margin being necessary to feed and clothe the growing urban popula-
tion, to finance the import of machinery needed for the industrializa-
tion program, and to support a large military establishment. The
communes are an excellent instrument for maximizing the margin between
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the output of the countryside and its consumption because (1) the
greatly increased intensity with which the labor force of the coun-
tryside is worked results in more output and (2) the greatly in-
creased control exercised by the commune over individual consumption
results in limiting increases in consumption to the level necessary
to maintain labor's productive efficiency and to reward hard work
(in this connection, the previous situation in which peasants in rich
APC's Shared fortuitously in the returns from land and capital is
being eliminated under the communes).
F. On the Distribution of Income
One of the most revolutionary features of the newly estab-
lished communes was the institution of a "free supply" system. The
regime ordered free grain and other commodities -- the type and
amount depending upon local conditions -- to be issued to all peasants
regardless of their productive efforts, and it appeared that the sys-
tem was to be applied more widely once the communes had become better
organized and had established additional public service facilities
such as messhalls, dormitories, and tailor shops. This new method of
distribution was heralded as the first step in realizing the Communist
ideal of "to each according to his need." The loss of incentive
which immediately followed, however, forced authorities to revert to
the previous distribution system under which the distribution is based
on productive effort. In those cases in which basic supplies continue
to be issued without money payments, it is now clear, first, that the
issue will be contingent upon the individual's being productively em-
ployed (or grudgingly admitted to be useless), and, second, that the
receipt of these supplies will be taken into consideration in setting
cash wage payments.
The natural endowments of the former APC's -- especially
climate, topography, and soil -- varied considerably. With peasants'
income reflecting such conditions, it was impossible for the members
of many APC's to achieve more than a bare subsistence standard of
living. The basic conditions of communes also vary considerably, but
to a lesser extent because of their larger size. With ownership of
equipment and control over production more highly centralized than be-
fore, with certain basic supplies and services available to all, and
with recent plans to aid poorer communes through state budgetary al-
locations, the productive effort of the individual member becomes the
major criterion for determining the monthly wages and bonuses.
With the advent of communes, the advantages of urban over
? rural living conditions have been reduced. Food shortages and severe
rationing in cities during the first half of 1959 have occurred in
spite of a claimed bumper harvest in 1958. It is believed that the
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rural population has benefited considerably more than the urban pop-
ulation from the estimated 20-percent increase in the production of
basic food crops in 1958 and that congestion and delay in transporta-
tion caused by the demands of the "leap forward" program on the
nation's inadequate transportation network have prevented adequate
quantities of grain from reaching urban areas. The shortage of sub-
sidiary food products -- for example, vegetables and meat -- caused
by competing demands for the use of peasant labor has greatly cur-
tailed the supply of these products in both rural and urban areas.
In spite of the recent improvement in the relative position of rural
areas, it will probably require communalization of urban areas and
a considerable period of time before the basic superiority of living
conditions in urban areas will fade away.
G. On Economic Self-Sufficiency
An important economic question is whether or not the commune
is inherently a self-sufficient economic unit. A related question
is whether or not the policies of the regime call for an all-out ef-
fort to achieve economic self-sufficiency in the communes. The mono-
lithic structure of the commune organization itself -- its tightly
knit control over all facets of human activity and human existence
within a given geographical area -- is a giant step toward self-
sufficiency. The fact that for generations the rural areas of China
have raised their own food, sewn their own clothes, and fashioned
their own tools and utensils is another important basis for self-
sufficiency. And as for present-day motives for economic self-
sufficiency, the specter of atomic warfare makes attractive the idea
of a society the central nervous system of which is composed of sec-
tions of ganglia, each section capable of an independent existence
when cut off from the central brain. This point was raised by the
regime itself during the Taiwan Straits crisis of 1958.
The major factor in Communist China's economic situation that
runs counter to the idea of self-sufficiency in the communes is the
general necessity for each commune to specialize in a type of output
for "export" to other parts of the economy for use in the industrial-
ization program -- for example, a "cotton commune" might have as its
reason for being the ability to supply raw cotton for use in the mills
of Shanghai. Perhaps a compromise on the issue of self-sufficiency
will come about -- namely, a policy that each commune is expected to
take care of the daily needs of the people but will depend on the out-
side for at least the complex types of capital equipment and indus-
trial products and will in turn send out ever-increasing supplies of
foodstuffs and raw materials for the support of the industrializa-
tion program. Evidence of such a compromise is the present policy
of becoming self-sufficient in vegetables but dropping production of
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industrial products -7 like native steel -- in cases where local raw
materials and technical skills are wanting.
H. On the Growth of the Population
An economic aspect of long-run importance is the opportunity
potentially afforded by the communes for control over the rate of
growth of population. The communes constitute a highly efficient
mechanism for circulation of information on birth control. The birth
control program, which was being strongly emphasized 2 years ago, is
now, however, proceeding quietly, completely overshadowed by the "leap
forward" campaign for production. Because the Party line is currently
one of regarding the huge population of mainland China as an economic
asset, there are no immediate prospects for a reinvigoration of the
birth control program. Even if the regime does not wish to take ad-
vantage of the control over the growth of population afforded by the
commune, the recasting of family life under the commune system -- the
taking of women out of the home, the mobilizing of men in work gangs
for distant projects, the communal raising of children, the separa-
tion of the aged from the family (in the new "happy homes"), the
establishment of communal eating facilities, and the receipt of in-
come by individuals rather than by heads of families -- will have
its own nonofficial influence on the rate of growth of population.
V. Current Problems and Future Course of Communes
One problem faced by the commune is how to restore or replace the
output of small-scale industry and commerce that has been disrupted
or neglected during the decade of Communist control of China. During
the "leap forward" the mobilization of large gangs of workers for
concentrated work on large irrigation projects or on main crops has
adversely affected production of subsidiary foodstuffs such as vege-
tables and meat, and the taking of women from the household and giving
them full-time jobs has meant a loss of their traditional domestic
production and the necessity for establishing communal laundries,
tailor shops, and other service facilities. The commune indeed
has control over the entire range of economic ,activity in the local
area, but the putting into effect of this control requires time and
skill. Meanwhile, shortages of some subsidiary foodstuffs and de-
ficiencies in locally provided services continue.
Part of the economic difficulty in establishing new systems of
production under the communes concerns the effect on craftsmanship
of the decline of individual control over production and the decline
in individualism in general. Some reports on the communes suggest
that a new all-purpose worker is being developed, one who works on
crops for a season and then is transferred to a flood-control or
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irrigation project for a few months, with his evenings being usefully
employed perhaps in stoking small blast furnaces. This new type of
worker is a wage earner, not a peasant who keeps the remainder of his
crop after the landlord and tax collector have taken their shares;
neither is he a skilled construction or industrial worker nor a crafts-
man. Although these opinions are largely conjectural, the point is
that the commune system would seem to face a continuing difficulty in
maintaining quality in those instances in which individual craftsman-
ship and individual control over production have heretofore been im-
portant. Over the long run, division of labor and acquisition of
technical skills in communes probably will be encouraged, but that
part of craftsmanship which depends on the craftsman's identifying
himself with his own product will be hard to restore.
The communes have a problem in establishing a system of distribu-
tion of income among the people of the commune. One aspect of the
problem apparently has been greatly simplified, because the commune
itself will ultimately be the single point at Which taxes are accounted
for and collected by the central government. The counterpart of taxes
paid to the central government will be the real goods that flow out
of the commune and that are not requited by a flow back in.*
Once the central government's share is taken, the remaining com-
mune income goes for investment and consumption. Ordinarily invest-
ment and consumption are thought of as competing alternatives, but one
feature of economic activity in 1958 and early 1959 was that invest-
ment was increased by increasing the hours of work and the pace of
work. The member of the commune did not sacrifice his meager consump-
tion in order to provide a higher level of investment; instead, he
sacrificed rest and leisure.
Investment is usually said to have priority over consumption, and
indeed one of the purposes of the communes is to regulate the flow of
foodstuffs and other goods in such a way that individuals or local
groups cannot withhold too large a share of goods for their own use.
"Too large" by Communist standards means larger than necessary to
maintain a reasonably contented and reasonably well-nourished working
force. Distribution of income will be carried out on a pragmatic
basis under the communes but will remain a problem for the indefinite
future because the economy of Communist China is not yet strong enough
* Total inflows and outflows of all communes taken together do not
balance off to zero, because (1) the communes are in rural areas, and
it is the function of the rural areas to provide a "surplus" to sup-
port the industrialization program, and (2) the central government's
use of resources to maintain a large military establishment is sup-
ported by net outflows from the communes.
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to provide appreciably higher levels of consumption and still carry
out the industrialization and military programs.
The communes are now in an experimental stage. The degree of op-
position to their formation and to their consolidation varies from
area to area, but it should be noted that the communes are well suited
for the isolation and containment of resistance. The major economic
problem in one area may be lack of fertilizer for the fields; in
another, poor transportation. Some communes are rich in resources,
some poor. The final form taken by communes probably will not be
standardized but will reflect varying local conditions as well as
the varying local experiences of the first years of operation.
The extension of the system of communes to urban areas appears
to be an inevitable development. As in the case of the rural com-
munes, however, the regime can and will adopt any particular set of
rules of the game and still call the resulting organizations "com-
munes." One important economic difference between rural and urban
communes is that urban communes would be in a vastly different posi-
tion with regard to self-sufficiency in food, although some attempt
might be made to include portions of the neighboring countryside in
urban communes. A second major economic difference between urban
and rural communes is the difficulty of enforcing upon urban people
the same level of consumption and the same kind of consumption pat-
tern that exist in rural communes. The leaders of Communist China
are not under the same economic pressure to form communes in the
urban areas as they have been in the rural areas, although they ap-
pear ideologically committed to introducing the system eventually.
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APPENDIX A
CHRONOLOGY OF THE ESTABLISHMENT OF PEOPLES COMMUNES IN COMMUNIST CHINA
BY MAJOR EVENT
JULY 1958 - JUNE 1959
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Date
29 July-5 August 1958
4-10 August 1958
17-30 August 1958
30 August-1 September 1958
August - early October 1958
26 August-7 September 1958
September 3958
September 1958
4 September 1958
6-8 September 1958
10-29 September 1958
16-28 September 1958
Participants
Hsin-yang (Honan) District Committee,
Chinese Communist Party (CCP).
Mao Tse-tung.
Enlarged meeting of CCP Politburo.
Kwangtung CCP, Rural Work Department.
Chu Te.
Honan CCP, Rural Work Department.
Mao Tse-tung.
Li Hsien-nien.
Jen-min Jib-pan (Peoples Daily).
Supreme State Conference.
Teng Hsiao-p'ing, accompanied by Li
FU-ch'un and several other members
of the CC, CCP.
Liu Chao-chi.
Event
CCP conference at Wei-hsing Com-
mune in Sui-p'ing Hsien, Ronan.
Tour of Ronan, Shantung, and
Hopeh; visited communes.
CCP conference in Pei-tai-ho,
Hopeh.
CCP conference in Canton,
Kwangtung.
Tour of northwest provinces
(Sinkiang, Tsinghai,?Kansu).
CCP conference.
Tour of Anhwei and East China;
visited communes.
Tour of Honan and Hopeh;
visited communes.
Published "Draft Tentative
Regulations for Wei-hsing
Commune."
15th Meeting.
Tour of northeast provinces.
Tour of Honan and Kiangsu;
visited communes.
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Relation to Commune Movement
Field conference on control of peoples communes. Provided details on
organization and structure of communes based on experience of Wei-hsing
model commune. 32/
First widely circulated publicity on communes. Mao commented on welfare
facilities of communes. 13/
Resolution on the establishment of communes in rural areas adopted by
Central Committee (CC), CCP.111/
Studied problems in operating peoples communes. 35/
Encouraged the development of communes as best form of organization to
promote industrialization and for transition to Communism. 3g
Discussed consolidation of peoples communes. 11/
Recommended that communes distribute wages, food, and clothing on an
individual basis in order to weaken the family system. 24/
First clear statement that future pattern for commune development would
be "one commune for one hsien." Two main types of communes described:
hsien commune and hsien federation of communes. 357
Published as model for development of all communes throughout the
country. i.t.2/
Endorsement of the commune movement by both CCP and non-Party leaders
at highest government levels. 111/
Recommended establishment of urban communes, called for reduction in
cultivated area and concentration on raising unit-area output.1E/
Recommended introduction of welfare services in communes -- schools
should be boarding schools and free food supply system should be set
up after autumn harvest.
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Date
10-19 October 1958
15-23 October 1958
20 October 1958
27 October-4 November 1958
27 October-5 November 1958
27 October-4 November 1958
October 1958
28 November-10 December 1958
10 December 1958
Participants
Representatives from eight provinces of
north and northeast China and Peking
(lopeh, Honan, Shansi, Shensi, Shantung,
Liaoning, Kirin, Heilungkiang). T'an
Chen-lin, Li Hsien-nien,-and Liao Lu-yen
attended.
Representatives from eight provinces of
north and northeast China and Peking
(Hopeh, Honan, Shansi, Shensi, Shantung,
Liaoning, Kirin, Heilungkiang). T'an
Chen-lin, Li Hsien-nien, and Liao Lu-yen
attended.
Shantung CCP Committee, and area, munici-
pal, and hsien committees.
Representatives from seven provinces of
south and southwest China (Kwangtung,
Kwangsi, Hupeh, Hunan, Yunnan, Kweichow,
Szechwan). T'an Chen-lin attended.
Representatives from five east China
provinces and Shanghai (tiangsu,
Chekiang, Anhwei, Fukien, Kiangsi). Liao
Lu-yen attended.
'Representatives from five north and
northwest provinces and autonomous
regions (Inner Mongolia, Kansu,
Tsinghai, Sinkiang, Ninghsia).
Representatives of financial depart-
ments of twenty provinces.
Eighth Central Committee, CCP.
Eighth Central Committee, CCP.
Event
CCP conference of rural work de-
partments and provincial and
municipal committees in Sian,
Shensi.
CCP conference on finance and
trade in Sian, Shensi.
CCP conference.
CCP conference in Canton,
Kwangtung.
CCP Autumn Agricultural Confer-
ence in Nanking, Kiangsu.
CCP Autumn Agricultural Confer-
ence in Hu-ho-hao-t'e, Inner
Mongolia.
National conference in Tientsin.
Sixth Plenary Session in
Wu-ch'ang, Hupeh.
Adopted "A Resolution on Some
Questions Concerning Peoples
Communes."
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Relation to Commune Movement
Consolidation of peoples communes in rural areas, "leap forward" in
agriculture, socialist education movement, organization of peoples
communes. 1112/
Discussed the changes in financial and commercial work required by the
distribution system of communes. 142/
Discussed consolidation of peoples communes. 1L6/
Discussed problems related to agricultural production, distribution of
1958 income, and collective welfare in communes.
Discussed major problems involved in establishing communes in rural
areas. Lei
Discussed major problems involved in establishing communes in rural
areas.
Discussed the financial management of culture and education in
communes. 22/
Communes were one of the three agenda items (see the following item). 21/
The most significant document yet produced on the ideological, economic,
and sociological background and progress of communes. Called for halt
of urban communes and generally toned down the speed of the transition
to Communism. 22/
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Date
20 November-11 December 1958
20 December 1958
20 December 1958
21 December 1958 - 5 January 1959
24 December 1958.
25 December 1958 - 1 January 1959
1 January 1959
Participants
Directors of financial departments and
bureaus; Li Helen-mien a key speaker.
Central Committee, CCP, and State
Council.
State Council, 83rd Plenary Session.
500 delegates from outstanding basic
financial and trade units in pro-
vinces, municipalities, autonomous
regions, and communes.
Chao Han in Jen-min Jib-pan
Delegates from "Advanced Agricultural
Units." Liu Shao-ch'i, Chou En-lai,
Chu Te, Teng Hsiao-p'ing, Li Helen-
nien, T'an Chen-lin, Teng Tzu-hui,
and Liao Lu-yen attended.
Delegates from "Advanced Agricultural
Units."
Event
National conference in Wu-han,
Hupeh, convened by Peoples Bank
of China.
Adopted "A Resolution on the Work
of Improving Rural Finance and
the Trade Control System in Keep-
ing with the Development of
Peoples Communes."
Approved "Regulations Governing
a Number of Questions in the Work
of the Credit Departments of
Peoples Communes and the Question
of Working Capital in State-
Operated Enterprises."
National conference in Peking on
work of Party's basic level or-
ganizations in finance and trade
departments. Convened by CC,
CCP, Department of Finance and
Trade.
Article, "Government and Commune
May Be One but Party and Commune
May Not Be One."
National conference in Peking.
.National conference in Peking.
Proposed a "Ten-Point Program"
for 1959 agricultural tasks of
peoples communes.
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Relation to Commune Movement
1959 financial work discussed -- to aid in strengthening financial
management of communes. 22/
Details concerning financial and trade work of communes; introduced the
concepts of the "two transfers," "three unifications," and "one quota"
system. 214/
Established concrete regulations governing commune credit work and re-
lations between communes and higher level banks, among other
measures. 22/
Discussed implementation of resolution to improve rural finance and trade
management (see entry for 20 December 1958, above). Planned to
strengthen financial and trade work in communes in 1959, with emphasis
on accumulation and distribution. 5?_/
Although Party committees on some communes have merged with administra-
tive committees of a similar nature, the principle of "decision by the
Party committee work by all quarters" must be enforced -- that is, all
work on communes must be absolutely subordinated to the Party. 51/
Reviewed achievements of 1958 and planned work for agricultural "leap
forward" in 1959. Ly
Called for improvement and consolidation of communes and development of
production based on the resolution of 10 December 1958. 52/
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Date
2-13 January 1959
13-26 January 1959
16 January 1959
16 January 1959
20 January 1959
9 March 1959
15 March 1959
14-26 March 1959
Participants
Leading Party and government officials
charge of agricultural work in prov-
inces, municipalities, and autonomous
regions.
Event
in National conference of agricul-
tural work in Peking convened by
Ministry of Agriculture.
Officials of rural work departments of
all provinces, municipalities, and
autonomous regions; chairmen of "a
number of" communes. T'an Chen-lin and
Teng Tzu-hui attended.
Leading officials of provincial, munici-
pal, and autonomous regional agricul-
tural and trade departments. Li Haien-
nien and T'an Chen-lin attended.
Li Hsien-nien in Hung Ch'i (Red Flag).
Representatives from provincial, munici-
pal, and regional peoples banks; cen-
tral government finance and trade de-
Partments; and Hunan Provincial Depart-
ment of Finance.
All communes in Hupeh Province.
Hung Ch'i.
Heads of financial departments and
bureaus.
National conference in Peking,
convened by CC, CCP, Rural Work
Department.
Ceremony held in Peking for sign-
ing agreements concerning the
production and marketing of farm
'produce in 1959.
Article, "How to View the Improve-
ment in the Finance and Trade
Control System in Rural Areas."
Conference in Rain-hum Hsien,
Hunan.
Reported in Jen-min Jih-pao to
have reinstituted a modified
form of the labor-point system
for determining monthly wages
of farm workers.
Editorial, "To Each According to
His Work."
. National conference in Peking.
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Relation to Commune Movement
Called for all communes to became self-sufficient in vegetable production
and to draw up plans to insure vegetable supplies to nearby cities.
Discussed agricultural production management in communes. Called for
commune industrial priorities in furnishing production materials to
agriculture and in processing agricultural raw materials. 2/
Discussed the Wu-han Resolution of 10 December- 1958, rural developments
under communes, and measures to strengthen and improve commune manage-
ment and administration, with particular emphasis on "leap forward"
efforts of 1959. ?1./
Contracts to be increasingly Important in guiding communes in planning
their production and commercial activities, helping to bring commune
production more fully under the national system of economic plan-
ning. ?i/
Attempted to explain the financial and trade control resolution adopted
on 20 December 1958. 2/
Discussed financial controls for hsien and communes. Studied experience
of Hsin-hua Hsien in placing financial work on a "planned basis." Li/
The institution of this new system was praised by the Jen-min Jih-Pao
as an effective means of overcoming the lack of incentives which
proved to be a drawback in the original wage-supply system of the com-
munes. It is a retreat part way back to the system used by collective
farms. 2/
Called for implementation of principles
work" and "the more one works the more
tion. Reflects the need for continued
production for an indefinite period --
lective ownership.
of "to each according to his
one gets" in commune distribu-
direct incentives to increase
the period of socialist col-
Decided that financial departments should vigorously support the con-
solidation and improvement of communes. Called for state budget
appropriations for investment in communes. 2/
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2-5 April 1959
18 April 1959
21 April 1959
15 May 1959
20 May 1959
5 June 1959
Date Participants Event Relation to Commune Movement
Eighth CC, CCP. Seventh Plenary Session in Discussed the further "tidying up of communes" for "a period of time."
Shanghai. This appears to be an indefinite extension of the consolidation period
which was scheduled for completion in April. Z./
Chou En-lai. ,Speech at First Session of the Claimed that a manpower shortage exists in rural areas and that "no less
Second National Peoples Congress, than 80 percent of the manpower available in the countryside" should be
in Peking. _engaged in agriculture. Called for reduction of administrative and
service personnel in communes.
Li Hsien-nien. Speech on 1959 budget at First Plan to allocate 1 billion yuan for investment in commune economic con-
Session of the Second National struction. Li called it "a financial subsidy given to the communes by ,
Peoples Congress, in Peking. the state," to be allocated primarily to communes and brigades with
"poorer economic conditions" to enable them to "catch up with the
better-off communes." Li said that communes must still rely mainly
on their own accumulations for expansion. 12/
Hung Ch'i Essay, "Production Contracts Should Called for the formation of production contracts between the top
Be Established on a Realistic administrative layer of communes and the production teams and members.
Basis." Emphasized that production target in contracts must be realistic --
10 to 20 percent below the highest levels possible -- thus creating
Incentives to overfulfill contracts and receive bonuses. This is
further evidence of concern over peasant incentives. 11/
Jen-min Jih-pao Editorial on planned increase in Stressed need for increasing hog production, advocating equal emphasis
hog production, on individual and collective efforts. Communes should assign land for
raising fodder (up to 0.2 mou per hog), furnish all aid possible, and
guarantee profits to individuals and households who raise hogs.
Admission -- as in 1956 -- that a switch to collective hog raising does
not guarantee a significant increase in hog numbers. 12/
Hsin-hua Jih-pao (New China Daily). Editorial, "How to Do a Good Job in Called for income distribution in communes to be based on actual income
Mapping Out the Tentative Plan in summer of 1959 rather than on plan for entire year. 40 to 60 percent
for Remuneration This Summer." of total income should be distributed to members, and more than 90 per-
cent of members should have higher income than in summer of 1958. Pro-
duction expenses, seeds, and rations should be set aside for second
half of 1959. Rations issued should comprise 30 to 40 percent of
members' consumption; wages should be determined by work accomplished.
Article is ambiguous but may be a reversion to a system similar to that
of AFC's. 21/
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APPENDIX B
CHRONOLOGY OF THE ESTABLISHMENT OF PEOPLES COMMUNES IN COMMUNIST CHINA
BY AREA
APRIL 1958 - JuNE. 1959-
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Area
Date
Peoples
Communes (PC)
Formed
Former
Agricultural
Producer
Cooperatives
(An)
Peasant
Households
(PH)
Average Number
of PH Per PC
Remarks
China
20 April 1958
31 August 1958
15 September 1958
22 September 1958
27 September 1958
29 September 1958
30 September 1958
20 October 1958
Early November 1958
1
8,694
10,000
9,106
23,397
26,425
26,578
27
234,110
640,000
700,000
9,369
37,000,000
112,240,000
121,936,350
127,000,000
(4,256)*
4,797
4,614
(4,778)
First known PC established -- Wei-hsing (Sputnik) PC, Sui-p'ing
Hsien, Honan.
30 percent of all PH in PC (8 are hsien PC and 11 are hsien
federations of PC).
In all provinces.
8 provinces completed setting up PC.
9 provinces completed setting up PC.
90 percent of all PH in PC; also some nonagricultural households.
98.2 percent of all PH in PC; also some nonagricultural households.
Including some nonagricultural households.
99.1 percent of all PH in PC.
Anhwei
1 September 1958
322
2,340,000
7,268
One-third of all PH in PC.
17 September 1958
400
30 September 1958
1,054
7,219,244
6,849
All PH in PC.
Chekiang
5 July 1958
1
4
2,071
First PC in Province -- Hung Ch'i (Red Flag) PC, Chu-chi Hsien.
3 September 1958
101
In 86 hsien and shih (municipality).
30 September 1958
761
5,697,412
7,487
All PH in PC.
Fukien
3 September 1958
130
Some based on state farms.
30 September 1958
622
2,672,839
4,297
95.1 percent of PH in PC.
Heilungkiang
29 August 1958
52
In 4o hsien and shih; 45 percent completed.
13 September 1958
718
9,779
(2,154,000)
3,000
97.4 percent completed.
27 September 1958
Completed.
30 September 1958
718
1,946,478
2,710
All PH in PC.
30 December 1958
692
Decrease of 26 PC, or 4 percent, in 3 months.
Ronan
20 April 1958-
1
27
9,369
First known PC established in China -- Wei-hsing PC, Sui-p'ing
Hsien, Hsin-yang Special District.
31 July 1958
208
5,376
(1,664,000
8,000
All AFC in Hsin-yang Special District in PC.
23 August 1958
993
(6,789,000)
6,837
31 August 1958
1,378
38,473
(9,922,000)
7,200
99.98 percent of PH in PC.
2 September 1958
The first province with nearly all PH in PC.
27 September 1958
Completed.
30 September 1958
1,285
10,272,517
7,994
All PH in PC;
23 December 1958
1,242
8,000
6 single-hsien and 95 hsien federations of communes (believe all
rural PC in province are in hsien-type communes).
23 December 1958
94
97 percent Of urban population in 94 PC; average urban PC has
* Figures in parentheses represent data derived from other entries in Appendix B.
4,590 people.
C-0-N-F-I-D-E-N-T-I-A-L
Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP79R01141A001500020002-0 _
Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP79R01141A001500020002-0
C-0-N-F-I-D-E-N-T-I-A-L
Area
Date
Peoples
Communes (PC)
Formed
Former
Agricultural
Producer
Cooperatives
(APC)
Peasant
Households
(PH)
Average Number
of PH Per PC
Remarks
Hopeh
31 July 1958
15 August 1958
7
62
Set up in Chang-pei Helen following merger of hsiang and of 218
small AFC into 62 "joint" APC.
Hsu-shul Haien -- all AFC in PC. Then merged 20 hsiang and then
(town) into larger units in order to expand size of PC.
28 August 1958
109
Ch'ang-chia-k'ou Special District,
28 August 1958
141
6,850
Shih-chia-chuang Special District.
1 September 1958
716
Nearly all peasants in 107 hsien and shin in PC.
2 September 1958
15
In suburban Tientsin; merger of 352 AFC and fishery cooperatives.
12 September 1958
951
42,100
(8,403,000)
8,836
99.5 percent of all PH in PC.
12 September 1958
The third province with nearly all PH in PC.
27 September 1958
Completed.
30 September 1958
951
8,402,639
8,836
All PH in PC.
Hunan
9 September 1958
40
30 September 1958
1,284
8,172,440
6,365
All PH in PC.
By October 1958
1,800
50,000
Planned total when completed.'
26 December 1958
1,100
"More than 1,100 PC in Hunan." ? ?Although not a specific figure, it
may indicate considerable consolidation of PC.
-Hupeh
Late August 1958
Movement began.
17 September 1958
218
30 September 1958
729
6,040,000
8,286
96.1 percent of PH in PC.
27 February 1959
77
If accurate, may reflect high development of single hsien and hsien
federations of communes. Hupeh had 71 hsien and 5 municipalities
as of 25 October 1958 -- a possible correlation with claimed com-
munes.
Inner Mongolian
27 August 1958
392 AFC formed into PC in T'ung-liao Helen.
Autonomous Region
1 September 1958
50
10 September 1958
266
"Framework erected" for 269 additional PC.
30 September 1958
812
1,561,023
1,922
98.6 percent of PH in PC.
12 January 1959
682
Decrease of 130 PC, or 16 percent, in a little more than 3 months.
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C-0-N-F-I-D-E-N-T-I-A-L
Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP79R01141A001500020002-0
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C-0-N-F-I-D-E-N-T-I-A-L
Area
Date
Peoples
Communes (PC)
Formed
Former
Agricultural
Producer
Cooperatives
(APO)
Peasant
Households
(PH)
Average Number
of PH Per PC
Remarks
Kansu
2 September 1958
13
90
(19,500)
1,500
In the suburbs of Lan-chou.
6 September 1958
183
17 September 1958
65
50,000
(769)
Han-nan Tibetan Autonomous Region
29 September 1958
773
2,000,000
(2,587)
.In
30 September 1958
794
2,006,389
2,527
All PH in PC.
20 October 1958
157
310,000
(1,975)
In Ning-hsia Autonomous Region , 95.91 percent of PH in PC.
Kiangsi
2 September 1958
All PH in 32 hsien and shin jolted "in a few days."
17 September 1958
Peasants in half the province's hsien have joined PC.
30 September 1958
1,240
3,720,000
3,000
92 percent of PH in PC.
November 1958
1,191
23,000
4,020,000
. (3,375)
99 percent of PH in PC.
Kiangsu
1 September 1958
268
On a trial basis.
3 September 1958
All PH in 32 hsien and shin in PC.
30 September 1958
1,490
9,127,234
6,126
99.4 percent of PH in PC.
17 October 1958
"Practically all" PH in PC and the whole population in the militia.
Kirin
2 September 1958
40
In 30 hsien and shin; 50 more are planned.
30 September 1958
1 January 1959
481
403
7,000
1,914,547
3,980
All PH in PC. .
May indicate amalgamation (consolidation).
Kwangsi Chuang
26 August 1958
256
3,067
(640,000)
2,500
All AFC in Liu-chou Special District in PC.
Autonomous Region
9 September 1958
828
66 of 74 hsien and shin "basically completed!' commune movement.
15 September 1958
913
Generally 1 hsiang to 1 PC.
30 September 1958
784
4,041,944
.5,155
All PH in PC. (May indicate consolidation if preceding entry is
accurate.)
Kwangtung
August 1958
Most hsien had started setting up experimental PC.
26 September 1958
. 103
Hainan Island -- 95.2 percent.of PH in PC.
29 September 1958
117
2,245
.(679,000)
5,800
128 state farms were included, with 43 serving as "foundations" for
PC. Average PC includes 1 hsiang.
30 September 1958
803
7,905,553
9,845
All PH in PC.
8 November 1958
790
25,450
98.5 percent of PH in PC.
April 1959
770
Rural population of 35,000,000 in PC.
Kweichow
5 September 1958
26
160
In outskirts of Kwei-yang.
6 September 1958
100
In hilly, minority areas -- set up or "being set up."
30 September 1958
2,194
3,101,205
1,413
94.5 percent of PH in PC.
30 November 1958
1,806
Decrease of 388 PC, or 18 percent, in a 2-month period.
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C-0-N-F-I-D-E-N-T-I-A-L
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C-0-N-F-I-D-E-N-T-I-A-L
Area
Date
Peoples
Communes (PC)
Formed
Former
Agricultural
Producer
Cooperatives
(APC)
Peasant
Households
(PH)
Average Number
of PH Per PC
Remarks
Liaoning
May 1958
9,783 small AFC merged into 1,412 large APC; original 2,954 hsiang
were merged into 1,226 hsiang, of which 83 percent had only 1
large APC.
June 1958
1
First PC in province -- T'ai-yang-sheng (Sunrise) PC, Kai-p'ing ?
Haien.
24 August 1958
28
6 September 1958
1,392
9,600
(2,923,000)
2,100
The second province with nearly all PH in PC.
8 September 1958
All 15,000,000 peasants in PC.
30 September 1958
428
3,264,579
7,627
Number of PC decreased through amalgamation of existing PC. (May
be a trend?)
Peking
2 September 1958
19
Set up in 3 ch'u (ward) -- F'eng-t'ai, Hai-ting, and Shun I.
11 September 1958
56
1,680
464,000
(8,286)
All peasants in Peking area in PC.
30 September 1958
56
663,124
11,841
All PH in PC.
Shanghai
21 September 1958
1
74
22,297
First PC in suburban Shanghai -- Ch'i I (July First) PC. Merged
6 hsiang and 1 chen.
30 September 1958
23
256,000
11,130
All PH in PC.
Shensi
Mid-August 1958
1
First PC in province -- in P'ing-shun Hsien.
24 August 1958
170
5,017
In 15 hsien and shih of Ch'ang-ch'ih in Special District.
2 September 1958
All peasants in 24 hsien in PC.
4 September 1958
Movement completed in 43 hsien.
10 September 1958
890
20,000
All peasants in PC within 1 month. Average size of PC is 2,000 PH
in hilly areas; 10,000 PH in plains areas.
30 September 1958
975
3,483,564
3,573
All PH in PC.
31 January 1959
696
Decrease of 279 PC, or 29 percent, in 4 months.
Shantung
20 August 1958
1
First PC in province -- Mei-jen PC, Li-ch'eng Haien (established
shortly after Mao's visit.)
31 August 1958
120
220 more PC in "process of formation."
9 September 1958
1,000
All PH in 58 hsien and shih in PC. Militia units in all PC.
22 September 1958
1,556
50,000.
All peasants in PC; eighth province to report completion of com-
mune movement.
30 September 1958
1,580
11,347,989
7,182
All PH in PC.
Shensi
2 September 1958
20 September 1958
1,673
31,000
3,232,900
(1,932)
Movement completed in 37 hsien and shih,
99.2 percent of PH in PC; ninth province to "basically complete"
the commune movement.
30 September 1958
1,673
3,232,904
1,932
All PE in PC.
C-0-N-F-I-D-E-N-T-I-A-L
Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP79R01141A001500020002-0
Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP79R01141A001500020002-0
C-0-N-F-I-D-E-N-T-I-A-L
Area
Date
Former
Agricultural
Peoples Producer
Communes (PC) Cooperatives
Formed (APC)
Peasant
Households
(PH)
Average Number
of PH Per PC
Remarks
Sinkiang Uighur
Autonomous Region
4 September 1958
6 September 1958
17 September 1958
100
First PC in region -- Hung Ch'i (Red Flag) PC.
PC being set up on a "trial basis."
Movement "progressing smoothly."
30 September 1958
389
625,151
1,607
59.3 percent of PH in PC. 80 percent of PH in "agricultural areas"
in PC.
12 January 1959
98 percent of PH in PC.
Szechwan
May 1958
First PC in province -- Tung-feng (East Wind) PC; P'i Hsien.
2 September 1958
The "first groups" of PC have been set up.
30 September 1958
4,827
13,676,988
2,833
99.1 percent of PH in PC.
Tsinghai
30 August 1958
6 September 1958
61
94
(231,000)
2,454
All AFC in 5 of 11 hsien and shih in agricultural areas in PC;
more than 50 percent of PH in province. ,
All PH in agricultural areas in PC. Other groups also joined --
for example, handicraft workers and small merchants.
30 September 1958
144
245,624
(1,706)
All PH in PC. ,
16 January 1959
190
Approximate figure.
Yunnan
4 September 1958
56
Set up on a "trial basis."
30 September 1958
275
1,137,148
4,135
31 percent of PH in PC. (The province with the least progress in
the nation by the end of September.)
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C-0-N-F-I-D-E-N-T-I-A-L
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