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China - 5th Five-Year Plan 1976-1980

Unlike the Fourth Five-Year Plan, the fifth plan has rarely been cited in either Chinese or English publications. Several studies used the targets set forth in the Ten-Year Plan as the Fifth Five-Year Plan's targets for their economic development analysis. It is believed that the Fifth Five-Year Plan (or its outline) was developed under the leadership of Zhou and Deng. In 1974 and 1975, while Zhou suffered a long illness, Deng took care of the daily routines of the State Council and gained power. The ideological difference between Mao and Deng had already long existed. For years, Deng was under Zhou's protection.

The year 1976 saw the deaths of the three most senior officials in the CCP and the state apparatus: Zhou Enlai in January, Zhu De (then chairman of the Standing Committee of the National People's Congress and de jure head of state) in July, and Mao Zedong in September. In April of the same year, masses of demonstrators in Tiananmen Square in Beijing memorialized Zhou Enlai and criticized Mao's closest associates, Zhou's opponents. In June the government announced that Mao would no longer receive foreign visitors. In July an earthquake devastated the city of Tangshan in Hebei Province. These events, added to the deaths of the three Communist leaders, contributed to a popular sense that the "mandate of heaven" had been withdrawn from the ruling party.

After the death of Zhou on January 8, 1976, Deng Xiaoping was, once again, exposed to criticism from the radicals. Deng, the logical successor as premier, received a temporary setback after Zhou's death, when radicals launched a major counterassault against him. In April 1976 Deng was once more removed from all his public posts, and a relative political unknown, Hua Guofeng, a Political Bureau member, vice premier, and minister of public security, was named acting premier and party first vice chairman.

The newly selected Premier, Hua Guofeng, assessed the national economy between 1974 and 1976 and termed it as being on the brink of collapse. For political reasons, he attacked Deng's pragmatic economic ideas. In a speech delivered at the Banquet in Honor of King Birendra of Nepal, Premier Hua Guofeng said that great victories had been won in the struggle initiated and led personally by the great leader Chairman Mao. Hua criticized Deng Xiaoping's counterrevolutionary revisionist line and repulsed the Right deviationist's attempt to reverse correct verdicts. Other published criticisms on Deng's economic ideas in 1976 included (1) "Grasp the Crucial Point and Deepen The Criticism of Deng Xiaoping," People's Daily, editorial, Peking, Aug. 23, 1976; (2) Li Chang, "Deng Xiaoping's Total Betrayal of Marxism," Red Flag, No. 5, 1976; and (3) Kao Lu, "Comments on Deng Xiaoping's Economic Ideas of the Comprador Bourgeoisie," Red Flag, No. 7, 1976. The English version of Li Chang's article was printed in Peking Review, June 18, 1976. The death of Mao terminated the second purge of Deng and marked the end of the Cultural Revolution.

Hoping to stay in power for a decade, Hua prepared an economic development plan for 10 years rather than the traditional 5-year period. The Ten-Year Plan (1976-85) was prepared in accordance with Zhou's concept of the four modernizations and Mao's policy of high-speed development. A new feature of the Ten-Year Plan was a more open and liberal attitude toward foreign trade and investment in China. According to the Ten-Year Plan, the annual growth rate of gross agricultural output for the period 1978-85 was planned to range from 4 to 5 percent, and the target rate of growth of gross industrial output was set above 10 percent. In these 8 years (1978-85), State revenues and investments for capital construction were both planned to equal· the total for the 28 previous years. The shares of new investment expenditures going to industry, agriculture, and conununications were planned at 54.8, 11.0, and 13.5 percent, respectively. Compared with the investment shares set in the First Five-Year Plan, the share of industry decreased by 3.3 percent and the share of agriculture increased by 5.9 percent.

By July 1977, at no small risk to undercutting Hua Guofeng's legitimacy as Mao's successor and seeming to contradict Mao's apparent will, the Central Committee exonerated Deng Xiaoping from responsibility for the Tiananmen Square incident. Deng admitted some shortcomings in the events of 1975, and finally, at a party Central Committee session, he resumed all the posts from which he had been removed in 1976. The slogan "Agriculture is the foundation of the national economy" was included in the plan. The Ten-Year Plan called for an 85-percent mechanization in all major processes of farm work, including improved water conservation, and an increase in the area of cultivated land. According to the plan, by 1985, the country would produce 400 million tons of grain. Only 284.5 million tons was produced in 1975. · This meant that the annual growth rate for grain was targeted at 3.47 percent. On the basis of the 1982 production figure, 353.43 million tons, the planned target for the 1985 grain output seemed attainable.

In industry, the plan called for substantial strengthening of the national defense and basic industries, and for rapid expansion of output of power, fuel, raw materials, and semifinished products. More specifically, the State planned to build or complete 120 large-scale projects, including 10 iron and steel complexes, 9 nonferrous metal complexes, 8 coal mines, 10· oil and gas fields, 30 power stations, 6 new trunk railways, and 5 key harbors. These projects were very costly and had proved to be beyond China's financial capabilities. According to Deng's estimate, China was about $300 billion short of the capital needed to finance the Ten-Year Plan. The shortage of capital forced the Chinese leadership to drop its idealogical opposition to borrowing from abroad and to set up incentive laws and regulations governing foreign investments in China. Since the targets were too high, the plan could not be fully implemented.

More than 100,000 construction projects of different sizes were launched within 1 year after Hua's announcement of the Ten-Year Plan· in February 1978. The rate of capital accumulation in 1978 was officially given as 36 .6 percent of the national income, and investment spending amounted to as much as Y61.97 billion, or approximately $36.0 billion at the prevailing exchange rate. Even with this high investment spending, many projects could not be fully financed. Due to the lack of modern technology, material, and available funds, many projects failed to be completed on schedule and resulted in a huge waste of human. and capital resources.

Facing these problems, the Third Plenum of the Eleventh CCP Central Conunittee decided to significantly revise the Ten-Year Plan in December 1978 and introduced the new eight~character program. In addition, they susbstituted a new 3-year adjustment plan (1979-81) for the Ten-Year Plan. Under the 1979-81 adjustment plan, capital expenditures and planned ·output targets were lowered substantially compared with those in the Ten-Year Plan.

Overall, the economic results during the period of the Fifth Five-Year Plan were good. The annual growth rate for the gross value of. industrial and agricultural production was 8.0 percent. The annual growth rates of agriculture and industry were 4.9 percent and 9.2 percent, respectively. National income increased from Y250.5 billion ($161.6 billion) in 1979 to Y366.7 billion ($24.6.1 billion) in 1980. The annual growth rate of agriculture was higher than that of the Fourth Five-Year plan period. The increase in the growth rate might have resulted from the new agricultural policies implemented during 1976-80. The share of agriculture in gross value of industrial and agricultural production declined slightly from 25.6 percent in 1975 to 24.6 percent in 1980. For the same period, the share of light industry rose from 30.9 percent in 1975 to 35.4 percent in 1980. The decision to increase consumption goods, which was made at the Third Plenum, seemed to contribute to the increase in the share of light industry. The abandonment of the Ten-Year Plan apparently did not have any adverse effects on economic growth.



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