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China - 3rd Five-Year Plan 1966-1970

The Proletarian Cultural Revolution superseded the Third Five-Year Plan in the way the Great Leap Forward superseded the Second Five-Year Plan in 1958. After the Great Leap collapse in 1960, China traversed a painful retrenchment which it terms the "readjustment" of 1961-63 and has secured an initial recovery which it terms the "upsurge" of 1964-65. China is thus in a position to renew planned development. Peking had been drawing up the Third Five-Year Plan since at least 1962, and at the end of 1965 appeared on the verge of announcing it at a National People's Congress. But political differences then intervened.

The plan that had been drawn up was a grim, if ambitious, one. It demanded that China postpone rapid social and economic progress to secure itself as the new base for world revolution, safe from external military and economic aggression and from internal subversion. To this end, it accepted a modest annual economic growth of 4 to 5 percent, based on an annual expansion of 2 to 3 percent in agriculture and 5 to 7 percent in industry. It asserted that its real achievement would lie in implementing certain "revolutions" or changes in Chinese society as follows: (1) farm development and population control would realistically secure China's minimal food needs; (2) heavy military investments, particularly in advanced weapons, would advance China far toward the status of a world power; (3) a heavy investment in autarky, stressing technological growth and the "filling out" of industry, would secure an independent and modern industrial base; and (4) "political and cultural revolutions" would secure the necessary commitment to this hard course from the party and from society.

As China approached the Third Five-Year Plan period, it had made progress on all but the last of these goals. The first three goals depended essentially on China's small corps of highly trained technicians, and their efforts, in the research programs and on about 10 percent of China's farmland, have achieved concrete and observable results. But these programs have not touched much of Chinese society, nor have they provided significant employment to the huge numbers of recent graduates turned out by China's expanded education system. The recent successes, then, have generated little sense, of dynamism or hope in Chinese society.

Emigrants who claim to have been privy to Party briefings have reported that the annual industrial growth has been projected in the Third Five-Year Plan at 5 to 7 percent. While the credibility of these reports is uncertain, they are consistent with the present policies and posture. These growth rates would match industrial plant construction, even if it is increased somewhat. Moreover, one of Peking's top planners has stated the intention to hold the urban population at 110 million for the indefinite future but presumably through the Third Five-Year Plan. In this case, industrial labor policy might reasonably be presumed to project annual increases in industrial employment of perhaps 2 to 3 percent combined with increases in industrial labor productivity of 3 to 4 percent. This growth rate is also consistent with discussions of industrial policy in the Chinese press which seem to argue that technical and organizational change, rather than plant exansion, will constitute the major influences on industry in the immediate future.

Industry, like other sectors, had its own revolution to complete in the Third FiveYear Plan. It is argued that industry has reached a stage of development where the complete vertical integration of output in individual plants has become obsolete and inefficient, requiring instead increasing plant specialization and interchange of products, and involving quality control and standardization of products. When this process is sufficiently -advanced, it was argued, it will secure a marked increase in industrial efficiency and productivity. But to promote this process, it will be necessary to permit some industrial slack and to maintain adequate inventories, or otherwise individual plant managers will resort to inventory hoarding or subsidiary parts production to assure fulfillment of plant targets. These arguments suggest a deliberate intent to restrain the rate of industrial growth over the Third Five-Year Plan.

The Four Modernizations was the core of a development strategy aimed at turning the country into a relatively advanced industrialized nation by the year 2000. The modernizations are those of agriculture, industry, science and technology, and national defense. The concept was embodied first in the Third Five- Year Plan (1966-70), launched in earnest by Zhou Enlai at the Fourth National People's Congress (1975), and adopted as the official party line at the Third Plenum of the Eleventh Central Committee (December 1978).

The year 1966 opened blandly enough. The economy of Communist China was continuing its steady recovery but with no sign of genuine economic momentum. Industrial production was continuing to increase, but Chinese buyers were continuing to scour the grain markets of the West. There were rumblings in the official press about the resurgence of a capitalistic spirit, especially in agriculture (private plots) and trade (petty merchandising), but the leadership did not seem ready to sacrifice vital food supplies for ideological purity. In similar fashion, the regime seemed willing to continue with the import of modern chemical plants and other industrial facilities from Japan and Western Europe and to allow foreign technicians to enter the country to install the new equipment. Economic policy still seemed to reflect the sober and pragmatic spirit of 1961-65.

As in the 1950's, Mao found economic development becoming the preserve of technical bureaucracies and touching only a small share of China's population. His lieutenants and much of the Party were increasingly convinced that improved techniques rather than revolution would secure China's future. The "socialist education campaign," the counterpart of politics to the economic program, was being carefully circumscribed at every turn to prevent social disruption, and accordingly was ineffective. As the Third Five-Year Plan (1966-70) approached, Mao apparently believed he had to take drastic action to change China's political course before it became irretrievably congealed.

In 1966 Chairman Mao precipitated the Cultural Revolution. The political charges that have been aired, particularly since the Eleventh Plenum of August 1966, suggest that a counterview was strongly held in the Party leadership which argued that the kind of commitment that Mao sought simply could not be secured in the critical period to 1970 and that a determined effort to obtain such a commitment would so disrupt Chinese society as to threaten all of the other goals. In addition, it is likely that a number of the leaders opposed the. rationale of the plan, but it is doubtful that any were so bold as to attack it frontally.

Mao, of course, is having his way. He was elevated to top Party rank and gathered around him a clique of loyal, fanatic men (plus Mao's wife), which is attempting to consolidate and exert power. Secondary and higher schools have been closed, preparing for major educational reform which is to increase indoctrination, limit promotion to students of worker/peasant origin, and reduce graduates' expectations of their social prospects. Most of the idle student bodies have been organized in Red Guard units and have been given the exhilarating task of policing society, attacking any sign of privilege or possessions in the name of egalitarianism, and fanning latent Chinese xenophobia presumably for later translation into the "world view." The Red Guards have also, with high level approval, attacked and criticized Party officials, a move apparently aimed at creating tensions which force a commitment of support, or at least inhibit organized resistance, from important Party elements.

The Third Five-Year Plan (1966-70) was mentioned by Chou in December 1964 and by People's Daily in January 1966 but had disappeared from public notice during the Cultural Revolution.

The economic planning of the early 1960s, when economic survival was in question, was challenged with some justification during the Cultural Revolution for subordinating politics, social change, and national power to exaggerated requirements of economic growth and efficiency. The Third Five-Year Plan growth targets were very conservative, enabling Chou En-lai to claim they were "substantially fulfilled" despite the Cultural Revolution disruptions.

New railroad construction activity began to revive again in the mid-1960's when the Chinese initiated preparations for a Third Five-Year Plan (1966-70). This revival, however, was also interrupted in 1967-68 by the upheavals of the Cultural Revolution. These disruptions slowed down the construction of railroads that had been previously planned, the completion of work on railroads under construction, and the reconstruction of main trunk lines. Once the furor of the Cultural Revolution had died down the scope and intensity of railroad construction increased significantly.