First Five year plan 1951-56

Years of war before

From the initial revolution, Warlord years, Japanese invasion, Civil war, and now the Korean war China was completely destroyed by wars. Infrastructure was in ruin and all the money was gone.

Preparations for the first plan

All foreign businesses and most heavy industry like coal, steel and electricity had to be nationalised along with banking and agriculture to ensure the government had enough control to enact it’s plans. The renminbi (yuan) had to be introduced to cut inflation from 1000% to just 15%.

The Sino-Soviet treaty 1950

Mao spent months in Moscow to secure this treaty from Stalin. It gave the Chinese a loan of $300 million with 50% interest, Soviet advisors the Chinese would have to pay for themselves, a list of all Comintern agents active in China, confirmed Soviet military protection, returned the Manchurian railway and training to 38,000 Chinese workers. It got the Soviets all of China’s remaining bullion, the Outer Mongolia region, confirmed that the USSR would not assist with the invasion of Taiwan.

Targets of the plan

Achievement of self-sufficiency, expansion of all areas of heavy industry, a focus on automobile and transport industry with the building of the Wuhan Bridge.

‘Patriotic savings campaign’

Consumer goods were purposefully left out of the plan so money would be saved in state banks that could then be used to fund the new construction projects around the country.

Successes of the First Five Year Plan

Most industries reached their targets, 9% annual growth rate, new currency dropped inflation, coal production doubled, electricity tripled, steel numbers quadrupled; 1,175,000 bicycles produced, urban living standards improved, urbanisation, Sino-Soviet treaty provided expert guidance, Wuhan bridge was built, Steel rice bowl provided job and food security for urban workers.

Failures of the First Five Year Plan

Cadres inflated figures, Many workers remained illiterate so they could not install new machinery, Soviet interest was a big problem and loans had to be paid with grain or industrial produce at times, Anti-campaigns wiped out Chinese intellectuals, Lack of consumer goods limited improvements in quality of life