Liu Shaoqi, Deng Xiaoping and economic reform, 1962-65 (the Third Five-Year Plan)

• The retreat from the Great Leap Forward, which had begun in late 1960, speeded up in 1962, when Liu and Deng were put in charge

• As well as allowing the communes to be broken up, they also closed down thousands of inefficient projects that had been set up in the Great Leap and announced more realistic coal and steel targets

• To help with this, there was a relaxation of the persecution of scientists and intellectuals, previously attacked as rightists, but whose contribution was now regarded as desirable

Chen Yun

Much of the more pragmatic approach to economic planning came from Chen Yun, who was mainly responsible for drawing up the Third Five-Year Plan in 1962.

Return to centralised control

• The third plan marked a decisive shift back to centralised control, with production targets being reviewed annually and made more realisti

• Experts were back in favour and financial incentives were restored to encourage workers to greater efforts

• The results were positive across all sectors of the economy: agricultural production recovered to 1957 levels, oil and natural gas production rocketed, and manufactured goods were produced in much greater quantities

Development of nuclear science

• in 1964, Chinese scientists succeeded in exploding China's own atom bomb, having pieced together the documents that the Soviet advisers had hurriedly shredded when they were withdrawn in 1959

• Mao was jubilant, and contemptuously 'thanked' Khrushchev for helping the Chinese to develop nuclear weapons independently by withdrawing

Mao taking back control

• In an attempt to prevent any further drift away from strict communist principles, Mao had summoned a conference of 7,000 cadres in January 1962

• However, the result had not been as he had hoped, because Liu Shaoqi, while praising Mao for his correct leadership, had gone on to imply that Mao should share some of the blame with the other leaders at the centre of government for China's past mistakes

• After Lushan, this was a risky tone to take, but Liu knew he had the approval of the conference and Mao accepted responsibility as chairman of the Party, though he stopped short of admitting any personal mistakes

• This was significant, because it was the first time that Mao's aura of infalibility had been damaged, and for the next few months, he withdrew from public life, leaving Liu, Deng and Zhou in charge

difference of views over how the economy should be run: on the right

-On the right of the Party were Liu, Deng and Chen Yun, who took the pragmatic view that ideological concessions would be necessary to restore the economy: mass mobilisation was no substitute for expertise and planning, and private trade was justified if it motivated people to work harder.

Liu and Deng's pragmatic economic approach continued for the time being, but a political power struggle inside the Party was building up, which would explode in the Cultural Revolution from 1966

difference of views over how the economy should be run: on the left

• On the left, Mao was arguing that continuing revolution should be the key: without mass mobilisation, there would always be the danger of a new bourgeoisie emerging inside the Party and destroying the Bains of the revolution

• Mao returned to the political fray in the summer of 1962 at the annual Party conference, where he went on the attack, demanding to know whether China was going to take the socialist road or the capitalist road, and condemning the revisionism of Liu and Deng

• The result was an uneasy compromise, whereby Liu and Deng outwardly agreed with Mao's analysis of the situation, while continuing to do things their own way

• They criticised rural capitalism, but did nothing to stop farmers owning their own private plots and selling their produce for profit