The Chinese Economy Under Maoism: The Early Years, 1949-1969

261 Pages·26.618 MB·English

by  Nai-Ruenn Chen, Walter Galenson

CHINESE ECONOMY
U N D E R
MAOISM

CHINESE ECONOMY
U N D E R
MAOISM
The Early Years, 1949-1969
Nai-Ruenn Chen and Walter Galenson
~~ ~~~~~~n~~~up
LONDON AND NEW YORK
First published 1969 by Transaction Publishers
Published 2017 by Routledge
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711 Third Avenue, New York, NY 10017, USA
Routledge is an imprint of the Taylor & Francis Group, an informa
business
Copyright © 1969 by Nai-Ruenn Chenn and Walter Galenson
All rights reserved. No part of this book may be reprinted or
reproduced or utilised in any form or by any electronic, mechanical, or
other means, now known or hereafter invented, including
photocopying and recording, or in any information storage or retrieval
system, without permission in writing from the publishers.
Notice:
Product or corporate names may be trademarks or registered
trademarks, and are used only for identification and explanation
without intent to infringe.
Library of Congress Catalog Number: 2011025003
Library of Congress Cataloging-in-Publication Data
Chen, Nai-ruenn, 1926-
[Chinese economy under Communism]
The Chinese economy under Maoism : the early years, 1949-1969 /
Nai-Ruenn Chen and Walter Galenson.
p.cm.
Originally published: The Chinese economy under Communism.
Chicago : Aldine Pub. Co., [1969]
Includes bibliographical references and index.
ISBN 978-1-4128-4274-7 (alk. paper)
1. China--Economic conditions--1949-1976. I. Galenson, Walter,
1914-1999. II. Title.
HC427.9.C52168 2011
330.951’055--dc23
2011025003
ISBN 13: 978-1-4128-4274-7 (pbk)
Contents
Preface lX
ONE The Economic Heritage 1
Agriculture
Handicrafts
Economic Modernization and Foreign Investment
Characteristics of Modern Industry in China
Foreign Trade
Human Resources
TWO Alternative Paths to Economic Development 33
The Resources for Development
The Chinese Strategy for Development, The First
Phase, 1952-1957
The Great Leap Forward
Development Policy Since the Great Leap
THREE Development of the Industrial Sector 50
The Soviet Assistance Program
The Growth of Industrial Output
The Pattern of Industrial Expansion
Handicraft Production
The Choice of Techniques in Manufacturing
The Location of Industry
The Fuel and Mineral Industries
The Electrical Power Industry
Transportation
The Construction Industry
Manchuria
Conclusions
FOUR Agriculture 87
The Agricultural Contribution to Economic Growth
Agricultural Production During and After the
Great Leap Forward
Agricultural Development Policy
Current Agricultural Policy
FIVE Population and Employment 127
Population
Nonagricultural Employment
Employment in Agriculture
Unemployment
Professional and Scientific Manpower
vi The Chinese Economy under Maoism
SIX The Control and Allocation of Resources 143
Economic Reorganization
Mobilization of Savings
National Economic Planning
The Use of Markets and Prices in Resource
Allocation
SEVEN Conditions of Life and Labor 166
Pre-Communist Conditions
Aggregate Measures of Living Standards Since 1949
Urban Living Standards, 1952-1956
Urban Living Standards Since 1956
Rural Living Standards
State Welfare Benefits
Organization of the Labor Market
The Rural Wage System
EIGHT Foreign Economic Relations 198
Control and Organization of Foreign Trade
Trends in Foreign Trade
The Commodity Composition of Foreign Trade
Direction of Foreign Trade
The Balance of International Payments
The Chinese Foreign Aid Program
NINE Prospects for the Chinese Economy 215
Economic Growth Since 1952
China and India Compared
Future Policy Alternatives
An Optimum Economic Policy for China
Bibliography 230
Index 241
List of Tables
1-1 Indexes of the Annual Average Volume of China's Foreign
Trade, 1864-1936 23
1-2 Estimates of Chinese Population, 1910-1936 27
1-3 Occupational Distribution of the Chinese Population, 1933 28
11-1 Resources of China, India, and the Soviet Union at the
Outset of the First Five Year Plans 35
11-2 Rates and Patterns of Investment in China, India and the
Soviet Union During Their Respective Five Year Plans 38
111-1 Indexes of Chinese Industrial Output, 1949-1959 56
111-2 Indexes of Industrial Production for China, India, and the
Soviet Union, for the First Seven Years ofTheir Respective
Planning Periods 51
111-3 Conjectural Estimate of Chinese Gross Value oflndustrial
Production, 1957-1965 59
111-4 Industrial Output in China, by Product, 1952-1957 62
111-5 Increases in Output of Selected Chinese and Indian Indus-
trial Products for Specified Periods 64
111-6 Output ofSelected Industrial Products in China, 1957 to 1959 64
111-7 Estimated Output of Selected Industrial Products in China,
1960--1966 66
III-8 Gross Value of Handicraft Production in China, 1952-1957 67
111-9 Structure of Chinese Handicraft Production, 1954 68
111-10 Some Technological Ratios in Chinese Industry, 1952, 1957,
and 1958 71
111-11 The Industrial Structure of Manufacturing Industry in
China, by Province, 1952 and 1957 74
111-12 Output of Mineral Products in China, 1949 to 1959 76
111-13 Indexes of Construction Output in China, 1950 to 1958 83
IV-1 Agricultural Production Indexes for China, 1949-1957 89
IV-2 The Ratio of the Growth of Agricultural Product to the
Growth of Total Product in China, 1952-1957 92
IV-3 The Ratio of the Growth of Agricultural Net Product Per
Worker to the Growth of Total Net Product Per Worker in
China, 1952-1957 93
IV-4 Estimates of Grain Production in China, 1949-1957 94
IV-5 Harvest Conditions and Annual Rates oflndustrial Growth
in China, 1952-1957 95
IV-6 The Supply of Cotton and the Production and Sale of
Cotton Textile Products, 1952-1957 96
IV-7 Estimates of Grain Output in China, 1957-1967 98
IV-8 Estimates of Cotton Production in China, 1957-1966 102
IV-9 Estimates of Sown Acreage in China, 1952-1965 107
IV-10 A Comparison of Average Crop Yields in China with
Selected Countries, 1952 to 1957 108
viii The Chinese Economy under Maoism
IV-11 Consumption of Chemical Fertilizers in China, 1952-1967 114
V-1 Estimates of the Population of Mainland China, 1964-1965 128
V-2 Employment in Chinese Industry, 1952-1957 132
V-3- Nonagricultural Employment in China, 1952 and 1957 133
V-4 The Structure of Nonagricultural Employment in China
and the Soviet Union 134
V-5 Estimates of Nonagricultural Unemployment among
Urban Males in China, 1949-1960 136
V--6 Professional, Technical, and Related workers as a Propor-
tion of Total Population and of the Economically Active
Male Nonagricultural Population, China and Selected
Countries 141
VI-1 Pre-War and Post-War Rates of Investment in China 154
VI-2 Sources of State Budgetary Revenue in China, 1950-1959 155
VII-I The Structure of Household Expenditures in Pre-Commu-
nist China 168
VII-2 Net Domestic Product of the Chinese Mainland, 1952-1965 169
VII-3 Estimated Personal Consumption Expenditures, 1952 to
1957 170
VII-4 Food Grain Availability of the Chinese Mainland, 1949-
1965 171
VII-5 Money and Real Earnings of Chinese Workers and Em-
ployees, 1949-1965 172
VII--6 The Structure of Family Expenditures of Wor~ers and
Employees 175
VII-7 Data Relative to Clothing Availability, 1952 to 1956 177
VII-8 Family Expenditures in Pre-Communist China 180
VII-9 Relative Income and Expenditures of Workers and Em-
ployees versus Peasants in Communist China 184
VIII-I Chinese Foreign Trade, 1950-1965 201
VIII-2 Commodity Composition of Chinese Imports, 1955-1963 204
VIII-3 Commodity Composition of Chinese Exports, 1955-1963 205
VIII-4 Direction of Chinese Foreign Trade, 1950-1965 207
VIII-5 Distribution of Chinese Imports from Non-Communist
Countries, 1961-1963 208
VIII--6 Distribution of Chinese Exports to Non-Communist
Countries, 1961-1964 209
VIII-7 The Balance of International Payments of China for the
Period 1950 to 1964 210
VIII-8 Yearly Balance of International Payments of China, 1950
to 1964 211
VIII-9 Chinese Aid Commitments to Foreign Countries, 1953-
1965 213
IX-1 Selected Economic Indicators for China, 1933-1965 218
IX-2 Selected Indicators of Economic Growth, China and India,
1951-52 to 1964--65 220
IX-3 Projected Estimates of Per Capita Grain Output in 1980 224
Preface
Twenty years have elapsed since the Communists gained control of the
Chinese mainland. During that period, a number of cataclysmic events have
taken place, bound up with the Communist conception of how to move the
country into modernity in the shortest possible time. After purging their
opponents, real and fancied, the leaders of the new regime collectivized
the huge agricultural sector and embarked upon a rapid industrialization
program, which culminated in the Great Leap Forward and its aftermath
of economic depression. This was followed by the Cultural Revolution, a
drama that is still being played out at the present time.
It was our purpose, in writing this book, to provide a balanced summary
of the economic consequences of the Chinese path to development. It was a
difficult task on several counts. The huge size and the economic backwardness
of the country would have made summary hazardous under even the best of
circumstances. The rapidity with which basic institutions changed was
another obstacle. The greatest difficulty, however, was that of securing
information. During the first decade of their power, the Communists issued
a relatively small amount of statistical information of dubious quality, but
which nonetheless could be exploited if due care were taken. For the past
ten years, however, virtually no quantitative data of any importance have
come out of China.
Despite these difficulties, it is our belief that we have been able to provide
a meaningful picture of the Chinese economy in transition. This achievement
we owe in considerable measure to the work of a small band of scholars who
have produced careful analyses of particular sectors. We relied heavily on