Under the Agrarian Reform Law of 1950, the property of rural landlords was confiscated and redistributed, which fulfilled a promise to the peasants and smashed a class identified as feudal or semifeudal. The property of traitors, “bureaucrat capitalists” (especially the “four big families” of the Nationalist Party [KMT]—the K’ungs [Kongs], Soongs [Songs], Chiangs [Jiangs], and Ch’ens [Chens]), and selected foreign nationals was also confiscated, helping end the power of many industrialists and providing an economic basis for industrialization. Programs were begun to increase production and to lay the basis for long-term socialization.
These programs coincided with a massive effort to win over the population to the leadership. Such acts as a marriage law (May 1950) and a trade-union law (June 1950) symbolized the break with the old society, while mass organizations and the regime’s “campaign style” dramatized the new.
During 1949–50, policy toward the cities focused on restoring order, rehabilitating the economy, and, above all, wringing disastrous inflation out of the urban economy. To accomplish these tasks, the CCP tried to discipline the labour force, win over the confidence of the capitalists, and implement drastic fiscal policies so as to undercut inflation. These policies brought such remarkable successes that by late 1950 many urban Chinese viewed the CCP leadership as needed reformers. Indeed, numerous capitalists believed them to be “good for business.”
But, beginning in 1951, the revolutionary agenda of the communists began to be felt in the cities. A Suppression of Counterrevolutionaries campaign dealt violently with many former leaders of secret societies, religious associations, and the KMT in early 1951. In late 1951 and early 1952, three major political campaigns brought the revolutionary essence of the CCP home to key urban groups. The Three-Antis campaign targeted communist cadres who had become too close to China’s capitalists. The Five-Antis campaign was aimed at the capitalists themselves and brought them into line on charges of bribery, tax evasion, theft of state property and economic information, and cheating on government contracts. Finally, the thought-reform campaign humbled university professors and marked a turning point in the move from Western to Soviet influence in structuring China’s university curriculum.
The pressures toward national political consolidation and the costly struggle in Korea produced significant consequences. In the several provinces of Manchuria (now called the Northeast), there was a growing concentration of industrial and military presence, as well as an increased presence of Soviet economic advisers and key elements of China’s tiny corps of technicians and specialists. This was a natural development in view of the extensive economic infrastructure left behind by the Japanese in that region and its proximity to Korea. Additionally, Northeast China had long been an area of Soviet interest.
Gao Gang headed Northeast China, and, in addition to his authoritative regional position, Gao also influenced decisions in Beijing. He planned the Three-Antis campaign and took the lead in adapting Soviet techniques to Chinese factory management and economic planning. He promoted these techniques on a national basis when he moved to Beijing in late 1952 to set up the State Planning Commission. Working closely with the head of the party’s Organization Department and other senior officials, Gao allegedly tried to drastically reduce the authority of his potential competitors, notably Liu Shaoqi and Zhou Enlai, both leading members of party and state organs. The ensuing power struggle lasted more than a year, reflecting an underlying fissure in the CCP. Gao himself had long been a man of the rural base areas, while Liu and Zhou were associated far more with the pre-1949 work in the “white areas” (areas outside CCP control). After 1949, base area veterans believed that they received fewer high positions than their struggles in the wilderness had warranted. Within weeks after the National Conference of the party (March 1955) had proclaimed the defeat of the Gao clique, Beijing approved a long-delayed First Five-Year Plan (technically covering the years 1953–57). That summer, active programs for agricultural collectivization and the socialization of industry and commerce were adopted.
The period 1949–52 was marked by changes in Soviet influence in China. The officially sanctioned terms of that influence had been worked out in a visit by Mao to Moscow from mid-December 1949 until the following March and were formalized in the Treaty of Friendship, Alliance, and Mutual Assistance (signed Feb. 14, 1950). Years later the Chinese charged that Moscow had failed to give Beijing adequate support under that treaty and had left the Chinese to face UN forces virtually alone in Korea. The seeds of doubt concerning Soviet willingness to help China had been sown. Moreover, one of the errors purportedly committed by Gao Gang was his zealousness in using Soviet advisers and promoting the Soviet economic model for management. After the purge of pro-Gao elements, steps were taken to reduce direct Soviet control in China that included reaching agreement on the final withdrawal of Soviet troops from Port Arthur (Lüshun; since 1984 part of Dalian) by mid-1955. Moscow proved amenable to these changes, as the death of longtime Soviet leader Joseph Stalin had produced new Soviet efforts to end tensions with the Chinese. The applicability of the Soviet model to China and the degree to which its use might become a pretext for Soviet manipulation of China began to be questioned.
Nevertheless, these potential reductions in Soviet influence were counterbalanced by growing Soviet activity in other fields. The Chinese army was reorganized along Soviet lines, with a greater emphasis on heavy firepower and mobility. Soviet texts and propaganda materials flooded the country. The Soviet Union had earlier extended $300 million in credit (used up by 1953), which was followed by a smaller developmental loan in 1954 (used up by 1956). Under these aid programs, the Soviets supplied the equipment and technical aid for a large number of industrial projects. The Soviet Union also played a major role in Chinese foreign policy, and it appears that China accepted Moscow’s leadership in the international communist movement. Coordinating with the Soviets, Beijing supported revolutionary activity throughout Asia and opposed compromise with neutralist regimes.
The transition to socialism, 1953–57
The period 1953–57, corresponding to the First Five-Year Plan, was the beginning of China’s rapid industrialization, and it is still regarded as having been enormously successful. A strong central governmental apparatus proved able to channel scarce resources into the rapid development of heavy industry. Despite some serious policy issues and problems, the communist leadership seemed to have the overall situation well in hand. Public order improved and many saw a stronger China taking form. The march to socialism seemed to go along reasonably well with the dictates of industrial development. The determination and fundamental optimism of the communist leaders appeared justified, especially in view of the decades of invasion, disintegration, self-doubt, and humiliation that had been the lot of the Chinese people before 1949.
The First Five-Year Plan was explicitly modeled on Soviet experience, and the Soviet Union provided both material aid and extensive technical advice on its planning and execution. During 1952–54 the Chinese established a central planning apparatus and a set of central ministries and other government institutions that were close copies of their Soviet counterparts. Those actions were officially ratified by the first meeting of the National People’s Congress in September 1954, which formally established the Central People’s Government and adopted the first constitution of the People’s Republic of China. The plan adopted Stalinist economic priorities. In a country where more than four-fifths of the population lived in rural areas, about four-fifths of all government investment was channeled into the urban economy. The vast majority of this investment went to heavy industry, leaving agriculture relatively starved for resources. The plan provided for substantial income differentials to motivate the labour force in the state sector, and it established a “top down” system in which a highly centralized government apparatus exercised detailed control over economic policy through enormous ministries in Beijing. Those developments differed substantially from the priorities and proclivities of the Chinese communist movement in the decades before 1949. Nevertheless, the First Five-Year Plan was linked with the transition of China’s rural and urban economy to collective forms.