China’s economic recovery

economic recovery
Deng Xiaoping, Liu Shaoqi and Zhou Enlai, who oversaw China’s recovery

Adverse weather and the failed policies of the Great Leap Forward decimated rural China in 1959-61, causing the deaths of some 30 million people. The disaster of the Great Leap Forward generated criticism of Mao Zedong and political divisions within the Chinese Communist Party (CCP). In 1960 pragmatists in the CCP seized control of China’s economic policy and set about rescuing the nation. At the helm of this economic program were Liu Shaoqi and Deng Xiaoping. Together they wound back Mao’s hasty rush toward socialism, eased pressure on the peasantry, imported grain and diverted food resources to save lives. Mao’s People’s Communes were also overhauled and downsized, while peasants were allowed to farm their own small plots and trade at local markets. These reforms ended the famine and facilitated a degree of economic recovery in the early 1960s. Some historians refer to the Liu-Deng reforms (1960-65) as China’s New Economic Policy, a name derived from Vladimir Lenin’s retreat from socialist economic policy in the Soviet Union in 1921.

The men who engineered China’s post-Great Leap Forward recovery were Liu Shaoqi and Deng Xiaoping. Liu, as president of the republic, was the more senior of the two. A member of the CCP since 1921 and a long-standing Mao loyalist, Liu had given the Great Leap Forward his backing. By the Lushan plenum, however, Liu had grown sceptical about Mao’s ambitious policy and the effects it was having on rural China. In April 1961 Liu spent several weeks in his native Hunan province, studying the devastation caused by agricultural collectivisation and the Great Leap Forward. At the end of May he returned to Beijing and delivered a speech, famously attributing the famine to three-tenths natural disasters and seventh-tenths human folly:

“The problem in the past few years was caused by unrealistic grain collecting quotas, unrealistic estimates, unrealistic procurement figures and unrealistic workloads… Was the disaster a natural calamity, or was it caused by people? In Hunan, the people say that three-tenths was natural calamity and seven-tenths was man-made. Throughout the country, quite a few errors have been made while implementing policy… [But] should take collective responsibility rather than blame individual departments or people.”

economic recovery
Liu Shaoqi speaks with peasants in Hunan, April 1961

Horrified by what he had seen in the countryside, Liu began to exert pressure for a change in policy. Backed by Deng Xiaoping, premier Zhou Enlai and party vice chairman Chen Yun, Liu developed a policy to restore China’s gutted economy, while saving face for Mao and the CCP. Grain procurement and allocation were closely examined and adjusted, so more crops reached hungry regions. Grain exports were halted and the government began importing grain from Australia, Canada and elsewhere (China became a net importer of grain in 1961). Mao’s ‘backyard furnaces’ were scrapped and resources were redirected into heavy industry. Advocates of Lysenko were driven from the universities and replaced with research scientists and orthodox agronomists.

economic recovery
A US cartoon from 1961, ridiculing Mao’s People’s Communes policy

The most significant changes, however, were to agricultural production. Liu’s reforms did not abolish the People’s Communes but they were certainly changed. The communes were divided and greatly reduced in size, some of them halved. This downsizing caused the number of individual communes to almost triple, increasing from around 24,000 (1959) to 74,000 (1963). Up to 12 per cent of collectivised land was given over to peasant families, who were allowed to maintain their own small plots. Peasants were allowed to cultivate this land, as well as wasteland or other unused areas, to grow their own vegetables or non-grain crops. They were also permitted to breed and keep their own livestock. Peasant marketplaces were restored and farmers were again allowed to sell surplus produce (though not grain, which had to be sold to the state).

economic recovery
Zhou, Chen Yun, Liu, Mao and Deng at the ‘7,000 Cadres Conference’, 1962

In summary, the Liu-Deng reforms improved the distribution of food, eased the pressures of collectivised state farming and slowed the pace of industrial development until the countryside had recovered. This was done delicately, to avoid the appearance of a back down or disavowal of Mao’s earlier policies. Party leaders were careful to avoid public criticism of the Great Leap Forward or public commentary about its negative effects. In January 1961 the CCP’s Central Committee adopted the slogan “agriculture as the foundation of the economy, industry as the leading sector”. This was vague enough to please Maoists and moderates alike. Liu Shaoqi began to take a firmer line in early 1962, however. At the ‘7,000 Cadres’ meeting of the CCP Central Committee in January, Liu emphasised the role played by “human errors” during the Great Leap Forward. Liu also called for the rehabilitation of ‘Rightists’ expelled or marginalised during the late 1950s.

“[At the 7,000 Cadres Conference] president Liu Shaoqi chipped in, apparently on the spur of the moment, that [the famine] was caused 30 per cent by natural disasters and 70 pr cent by human error. My father was at the conference and when he returned he said to my mother: ‘I fear Comrade Shaoqi is going to be in trouble’. When the speeches were relayed to lower rank officials like my mother, President Liu’s assessment was cut out. The population at large was not even told about Mao’s figures.”
Jung Chang, writer/historian

Were the Liu-Deng reforms successful? They certainly produced improvements in agricultural output and food distribution. Domestic grain production increased from 193 million tons in 1961 to 240 million four years later. This increase was complemented by a rise in net grain imports (3.7 million tons in 1962 and 4.2 million tons in 1963). The government ended the ‘urban food bias’, winding back grain procurements for the cities. With more grain being produced and less of it being seized by the government, the famine dissipated and rural living standards improved. To boost agricultural labour and ease overcrowding in the cities, Beijing encouraged urban dwellers to move to the countryside; between 25 and 30 million people relocated in the early 1960s. Liu and Deng also advanced the political rehabilitation of Rightists who were expelled, marginalised and imprisoned after the Hundred Flowers campaign. Thousands of former party members, experts and intellectuals condemned as Rightists were rehabilitated and accepted back into the fold – though not higher profile victims like Peng Dehuai. Meanwhile, Mao Zedong watched these political and economic changes with concern, considering them an abandonment of his revolutionary mission.

chinese revolution

1. In the wake of the Great Leap Forward and the Great Famine, a group of men led by state president Liu Shaoqi and Deng Xiaoping embarked on reforms to restore China’s economy.

2. With Mao sidelined from power and policy-making, Liu and Deng moved to relax collectivisation, cutting the size of the People’s Communes and increasing their number from 24,000 to 74,000.

3. Most aspects of communal living were abolished, as was Mao’s ‘backyard furnace’ program. Peasants were again allowed to farm small plots of land and sell their produce at market.

4. The government also revised grain procurements and distribution, wound back grain exports and imported more grain from Australia and Canada.

5. The reforms initiated by Liu and Deng alleviated food shortages and ended the famine. There was little public criticism of Mao or the Great Leap Forward until the ‘7,000 Cadres Conference’ of the CCP Central Committee in January 1962.

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