The Five Year Plans
Every five years, China’s Central Government writes a new Five-Year Plan (中国五年计划, Zhōngguó wǔ nián
jìhuà), a detailed outline for the country’s economic goals for the next five years.
After the founding of the People’s Republic of China in 1949, there was an economic recovery period until 1952.
Starting in 1953, the first Five-Year Plan was implemented. Except for a two-year hiatus for economic adjustment in
1963-1965, the Five-Year Plans have been continuous.
First Five Year Plan 1953-57
Who? ​Soviet Russia helped China by lending them: a loan of $30 million, ​the services of several thousand Soviet
engineers, scientists, technicians and planners, and advice. This led to the economic model China adopted being
closely related to the Soviet model, especially in regards to state ownership and centralization.
What happened?
● China nationalized industry and the banking system. By 1956 there were no privately owned companies.
● New factories and building facilities were opened to boost industrial output
● Farmers were encouraged to collectivise (have the state manage) their farms. By 1957 93.5% of all farms
had been collectivised.
● The Danwei (work units) were created
Was there a rural and urban divide? ​Yes. The First Five Year plan was dominated by industrial targets set by Mao
to out China on par with other technologically advanced nations such as the U.S.A, Britain and Russia. This led to a
neglect in agricultural attention, so, while urban incomes increased by 40% and standard of living in cities rose, the
peasant farmers were neglected and grain output struggled to keep up with the soaring population growth, and
this struggle only worsened as people began to flee the countryside for the clearly better life they would receive
in the cities.
How successful? ​Between 1952 and 1957 industrial output (particularly steel and coal) increased by an average of
19% annually and urban life increased dramatically. Yet, the plan can not be claimed as a complete success due to
the growing divide it opened up between the city and countryside regions of China. While agriculture did not
completely collapse due to the control of the collectives, it is during this period where food production was put
under the strain that would lead to later disasters.
Second Five Year Plan / The Great Leap Forward 1958-62
Who? ​Many view this plan as motivated by Mao’s desire for economic freedom from Soviet models of organizing
the state, which he had began to view as benefiting a bourgeois class of intellectuals. Mao also was afraid of the
rapid growth of new technologies, which he wanted to surpass by emphasizing the importance of manpower in
the plan - this then led to the huge of backyard furnaces with epitomizes the Great Leap Foward.
What happened?
● The plan implemented the commune system. A commune was a type of collective in which hundreds of
households could belong. ​Other features of communal living included collective childcare, nursing homes,
communal kitchens and the banning of cooking at home.
● The price of leaving the commune was high - often public humiliation in one of the ‘struggle sessions’
followed by arrest and potentially even execution.
● The commune system also forced many to relinquish their private property, and further placed land in the
hands of the state, despite the campaign appearing to decentralize power away from the party.
● Life in a commune was also heavily militarized and so focused on work that sleep was often sacrificing for
working more and outdoing other communes in a highly competitive system.
● Because Mao was adamant on doubling China’s steel output under the plan, the growth of backyard
funcances also grew to power the production of the material. This is led to families burning any wood they
could find, destroying the environment in the process and even burning family heirlooms and coffins. To
obtain the iron needed to make steel they also began melting down bikes, metal furniture, and even tools.
However, this shoddy production didn’t even produce steel in most cases, but the useless pig iron.
● Mao also attempted to radicalize agriculture by introducing new methods such as ​the concentrated
sowing of seeds, deep ploughing of the soil, and close cropping - all methods which proved ineffective,
contributing to the huge loss of produce during this period and subsequent famine.
Was there a rural and urban divide? ​No, because the work of previously industrial cities was transplanted to
agricultural communes as every household was pressured into running a backyard furnace. The urban and rural
hardships were also equally horrible for the population, as the lack of food was experienced by both areas of the
country.
How successful? ​The so-called ‘Great Leap Forward’ was in reality an apocalyptic disaster. The country has been
described by​ ​Frank Dikötter​ as ‘dipped into a sea of fire’ due to the harsh reality of the backyard furnaces. But
besides destroying the environment, due to deforestation and constant burning, Mao’s plan for labour-led
industrialization failed to produce enough steel to meet his expectations and was far more costly then a more
mechanical process would have been. Mao’s aim for agricultural growth also failed, as the unpleasant commune
system failed to keep up with production demands, plunging the country into a famine which took the lives of 30
million Chinese people (although the figure is heavily disputed.) The famine also caused Mao to resign as Chairman
of the PRC.
Third Five Year Plan 1962-65
Who? ​After Mao’s retreat from the political stage following the disastrous Great Leap Forward, Liu Shaoqi and
Deng Xiaoping took over economic reform. They were also aided by the pragmatist (someone guided more by
realistic actions then abstract ideas) Chen Yu.
What happened?
● Mao’s extreme production targets were replaced by much more realistic goals, renewed annually to keep
them on track
● The ‘bourgeois’ intellectuals that Mao had targeted were re-employed to at first aid the industrial and
agricultural reconstruction, and then to develop new technologies such as China’s first atom bomb which
was successfully detonated in 1964
● Financial incentives were brought in to encourage workers
Was there a rural and urban divide? ​Not really, as both areas of the country were helped by the realism of Deng
and Liu’s policies.
How successful? ​For the people of China, yes, the plan was successful. For the leaders of China, no, it wasn’t.
While the effects of the plan included a restoration of agricultural production and an increase in industrial
production, therefore pulling the country out of the famine, the plan also amplified tensions at the top of the
party. The policies put ideology up against pragmatism, as for the first time Mao’s position as leader was
questioned and capitalism began to emerge again. This period of tension led to the purges of the Cultural
Revolution.