DEVELOPMENT OF CHINESE COOPERATIVES, FROM OCTOBER 1949 TO OCTOBER 1950

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000600390713-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: October 19, 2011
• Sequence Number: 713
• Publication Date: June 20, 1951
• Content Type: REPORT

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INFORMATION FROM
FOREIGN DOCUMENTS OR RADIO BROADCASTS CD NO.
COUNTRY China
SUBJECT Economic - Cooperatives
HOW
PUBLISHED Weekly periodical
WHERE
PUBLISHED Shanghai
DATE
PUBLISHED 12 Oct 1950
LANGUAGE
DATE OF
INFORMATION 1950
DATE DIST. 9j Jun 1951
NO. OF PAGES 5
SUPPLEMENT TO
REPORT NO.
THIS IS UNEVALUATED INFORMATION
TRIO DOCUMENT CONTAINS INFORMATION AFFECTING THE NATIONAL DEFINES
OS THE UNITED STATES WITHIN THE MEANING OF ESPIONAGE ACT S
U. S. .. SI AND 31, AS AMENDED. ITS TRANSMISSION OR THE REVELATION
OE ITS CCOMTENTS IN ANT MANNER TO AN UNAUTHORIIED PERSON IS PRO'
NINITED NT LAN. REPRODUCTION OF THIS FORM IS PRONISITED.
DEVELOP?N&NT OF CHINESE COOPERATIVES,
FROM OCTOBER 1949 TO OCTOBER 1950
Lo Ch'ien-ying
Under the leadership of the government and the Chinese Cummxnist Party,
cooperatives in China have made great progress in the past year, especially
in the old liberated areas, where land redistribution has been carried out
successfully. According to incomplete estimates for the first quarter of
1950, the cooperative membership in major regions is as follcras: the North-
east, 8,740,000; North China, 6,160,000; East China, 4 million; and the total
for the Northwest, central ani South China, and Inner Mongolia, 1,200,000.
The present total membership is about 20 million for the country as a whole.
This is almost four times the membership in April 1949.
There are about 34,000 local cooperatives in rural areas and 3,000 con-
sumers' cooperatives in the cities. Cooperative members include 22 percent
of rural population in the Northeast, but only 9 percent in North China. In
both regions cooperative members include 33 percent of the urban population.
In villages where there is effective politicalz-,paganda, 60 - 80 percent of
the residents have joined the cooperative societ.es. For instance, there is
one cooperative society for every three villages in Kirin and Heilungkiang
provinces, and in Chang-chih Esien in Shansi, and Chiao-tung Hsien in Shantung.
The spread of cooperative organizations all over the country is due mainly
to the successful completion of the land redistribution program and the respon-
sible leadership of the government and the party. Credit for assistance should
also be given to government-owned enterprises. One factor in the rapid spread
of the cooperative system is the plan to promote cooperatives in both directions,
from above and from below. The directing and supervising organizations have
been gradually established from above downward, while the basic cooperative
societies have been promoted upward from the people. In 43 cities and 81-5
hsiens in China, there are centralized or federal cooperative organizations.
STATE
ARMY
Ching-_hi Chou-pao, Vol XI, No 15, 1950.
CLASSIFICATION CONFIDENTIAL
Y NAw NSRe DISTRIBUTION
AIR FB I F
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Only in eight out of 167 hsien in the Northeast and 19 out of the 336 in
North China do hsien or local cooperative societies have yet to be organized.
Out of the 428 hsien in East China, 239 have local cooperatives, while in
East China as a whole there are 88 district, 9 special district, 16 provin-
cial, and 4 administrative-region level cooperatives and supervisory bodies.
Undoubtedly, as the number of cooperatives increase, the cooperative system
will become an indispensable part of the people's economy.
From the financial viewpoint,, the total assets of all the cooperatives
in the nation amount to 370 billion yuan. In the Northeast, the total assets
equal 1,676,400,000,000 Northeast Yuan and 90 percent of these assets are
owned by members. Although these assets seem small., yet the business volume
is great. For instance, the total value of all the cooperative purchasing
and marketing transactions in the past year amo mteib 9,190,000,000,000
Northeast yuan or the equivalent of 1,300,000 tons of kactliang. This con-
stituted. 40 percent of the total trade volume last year within that area, at
the equivalent of 3,260,000 tons of kaoliang, or 14 percent of the total needs
of the people in that area. The figure for the first quarter of this year was
9,770,000,000,000 Northeast yuan, which exceeds last year's total. Thus, the
total value of cooperative business transactions in the first quarter of this
year equaled 927 million cat.ties of millet and was 82 percent of that of last
year. The East China area also had a total business value of 800 million
catties of millet in the first quarter of 1950..
Heilungkiang Province, though sparsely populated, already has 2,047
cooperatives with 1,420,000 members As organization, membership, and shares
have grown, cooperatives in Heilungkiang have contributed greatly to the
.commodity trade between the rural and urban regions. True to the orderly
adoption of %% contract system and the close contact between the cooperatives
and the publicly owned. enterprises, in Heilungkiang alone the business volume
.in the first quarter of 1950 went up to 1,608,200,000,000 Northeast Yuan, which
is 82 percent of last year s total, or 26 percent of the total community
transactions.
Cooperatives have proved to be a great help to farmers in that area. In
the first quarter of the farming season, cooperatives provided farmers with
2,249 new farm machines, 2,322 head of livestock, 4,080,000 catties of seed.,
and 6,990,000 cattles o' feed. Cooperatives in Nan-ho Hsien purchased
18,800,000 catties of unsold soybeans, thus increasing the farmers' productive
capital by about 30 billion Northeast yuan.
In distributing goods for the government, the cooperatives have become
an indispensable help to the government-owned enterprises in Heilungkiang.
In fact, cooperatives accounted for 43 percent of the total goods distributed
by the government, 45 percent of the foodstuff purchased, and. 50 percent of
the native products sales. All these transactions on behalf' of the government
are included in 12,282 contracts amounting to 923.9 billion Northeast yuan,
and constitute 70 percent. of the total business handles by cooperatives in the
province. Through the contract system, commerce in general and the cooperative
business in particular, have been greatly enhanced. As the total value of
business volume done by cooperatives on behalf of the government increased
14 percent over that of the fourth quarter of 1949, the cooperatives' financial
conditions have been greatly .improved. For example, the total capital of all
cooperatives in Eeilungki.ang has risen 63 percent over what it was at the end
of last year, with an accumulated surplus of 100 billion Northeast yuan. In
short, as the individual cooperative society improved its organization and
business under a well-integrated. plan, the cooperative system as a .hole has
become the center of rural economic activities,
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CONFIDENTIAL
In North China, as a result of the leadership and support given by the
government, the party, the government-owned enterprises, and banks, coopera-
tives there showed great progress. There were 13,291 local cooperatives up
to March 1950, an increase of 50 percent over last year; a membership of
1,210,316, which amounted to a 350-percent increase; and share capital
equivalent to the value of 4,200,000 catties of millet, 470 percent over last
year. According to still incomplete estimates the total purchases and sales
in 1949 amounted to 524,870,000 and 629,960,000 catties of millet, respectively.
Purchases for the first quarter of 1950 were 82.27 percent above the 1949
total, and the total business volume of all cooperatives in North China was
14.2 percent of the total business of that area from January to July 1950.
This indicates clearly that cooperatives have made rapid progress in the North
China area. Some business as well as political aspects of cooperative activi-
ties may, be sunanariaed as .foilows :
1? Stepping up economic recovery by improving the purchasing power of the
people; In cooperation with the government's farm credit policy, cooperatives
make loans to far18ers in the form of farm implements, machinery and livestock.
In coordination with the government trade policy, cooperatives distribute
foodstuffs, fertilizer, salt, coal, and cloth in exchange for farm products,
native products, and others? They also collect straw, eggs, and Chinese drugs
on behalf of government-owned companies for export purposes. In addition, they
seek to improve contact with cooperatives in the Northeast and Inner Mongolia
in the straw and. pepper trade. In short, cooperatives have done much to increase
the people's earnings.
2. Direct aid to farmers during tge farW.ng season; Last spring, coopera-
tives distributed farm machinery ani tools totaling 1,641,262 units, 31t312,429
catties of relief seed., and 86,)28,668!catti4+of fertilizer. By making advance
purchases of cotton, cooperatives have greatly increased cotton production.
3. Giving relief to stricken areas, By supporting the handicraft indus-
tries, cooperatives bring great relief to famine-stricken people. It is
estimated that for supplementary handicraft industries, such as weaving, reed-
mat weaving, and gathering soil alkali, etc., relief payments of about 80,000,000
catties of kaoliang were rec.ei.ved. Forty other supplementary handicraft
industries also received payments equivalent to 68,285,081 cattier of millet,
an amount sufficient to feed 1,000 people for a month. Moreover, cooperatives
organized shipping facilities and payments to these reached 6,942,936 catties
of millet, according to the estimate of the Tyang-eban Special Administrative
District. All these activities have not only helped the government to carry
out its promise that no one shall starve, but also have expanded the coopera-
tive business tremendously.
4. Support of the government's economic policy; Cooperatives collected
517,000 piculs LO-ne picul equals 133.3 pounds of cotton from August 1949 to
February 1950 for publicly owned companies, which equals 45.7 percent of total
government collections. The Chanar Native Products Company received. 61 percent
of its purchases of Chinese drugs from cooperatives last year. In Hopeh and
Pingyuan, cooperatives exchanged government-owned millet for wheat with the
farmers. In return for 75,450 catties of wheat, 110,983 catties of millet and
corn were distributed at the ratio of one catty of wheat for 1.6 catties of
millet or corn. Thus, cooperatives have helped the government as well as the
farmers in giving the latter price supports.
Another example shows how cooperatives can help small producers and
support the government. To collect cotton for government-owned companies, a
contract was signed between the North China. Federation of Cooperatives and
the North China Cotton Yarn and Cloth Company. Further detailed agreements
were worked out on local levels between these two parties. As a result, not
GONFIDENTIA
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UQNFl1ENTLAL
only was the government's price regulation (fixing the ratio of one catty of
cotton at 10 catties of rice) carried out successfully, but punctual delivery
and higher quality were also assured. As a matter of fact, requirements, such
as the one that impurities should not exceed 1.5 percent, that moisture con-
tent be less than 11 percent, etc., were fully carried out.
In the East China area, there are 11,780 cooperatives with 4,060,000
members. (Approximately 5,000 production units organized under the relief
program last spring are not included here.) These cooperatives supplied part
of the daily necessities, thus saving for the people about 11.2 million yuan in
middlemen's profits. The number of cooperatives has shown a great increase in
the East China area, where the famine situation is at its worst. Accordingly,
cooperatives there are concentrating their efforts on relief work. If the
last quarter of 1949 is taken as a base period with the number of cooperatives,
membership, and capital as 100, respectively, then in the first quarter of 1950,
the number of cooperatives was 145.52, membership, 143.92, and capital, 186.67.
Cooperatives in the famine area made up 73.9 percent of the total increase in
number of cooperatives and 62.1 percent in membership? The total value of
business transactions was 30,008,000 yuan, or 69.99 percent of the total
cooperative transactions in the East China. area.
Cooperatives. in the East China area also purchase wheat, cotton, silk,
tea, and native products, and. distribute industrial goods to the rural area.
Thus, cooperatives in that area have done their best to stimulate trade and
help the government to check inflation.
it is clear from the data covering the major regions that cooperatives
have been growing since last year and are now becoming an indispensable power
in the people's economy. In fact, cooperatives in general have made a very
great contribution in eliminating middlemen's exploitation, protecting small
producers, relieving high costs of living, supporting government policies,
and bringing relief to famine areas.
However, as a result of the lack of a definite policy for cooperative
development, the absence of uniform laws and regulations, and inexperience in
management, most cooperatives are having far from normal growth. Some are
merely owned and run by the government, while others are dependent completely
on government support instead of being self-sufficient. Many consumers'
cooperatives operated by governmental offices are run for profit rather than
serving the members first. There are still others which are capitalistic
stores or workshops aiming at profit sharing. Still worse are those which
engage in speculation in the name of cooperation. Very few cooperatives hold
democratic elections. Some of them even withdraw business plans or financial
reports from open discussion in general meetings. Consequently, extravagance
and corruption are found in many cooperatives, because they are not being
supervised by -the members.
These are the shortcomings in the course of cooperative development which
most be. and will be, corrected..
Under the leadership of Liu Shao-ch`i, vice-chairman of the Central
People's government, and Po I-po, head of the Committee of Finance and Econom-
ics, the cooperative workers al over the nation held a conference for 22 days
in dyne 1950. After discussions and self-criticism of their past errors,
either in their thinking or in practice, these representatives became more
familiar with the nature, function, policies, and practices of the cooperative
system. Therefore, they passed. resolutions concerning the draft of the
Cooperative Law for the People's Republic of China to be forwarded to the
government. In addition, they accepted a constitution for the National
Federation of Cooperative Societies and drafted constitutions for cooperatives
on the different levels.
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OONFIDENTI4J.
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