RESTORATION AND DEVELOPMENT OF NORTHWEST CHINA ECONOMY, 1950 - 1951

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700040286-9
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 9
• Document Creation Date: December 22, 2016
• Document Release Date: October 27, 2011
• Sequence Number: 286
• Publication Date: February 12, 1952
• Content Type: REPORT

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`1*11% UM I IA[
CLASSIFICATION I~COONNyFIIDENTTIAL "?'
CENTRAL IN ELLIGENgEA AGjNCY REPORT
INFORMATION FROM
FOREIGN DOCUMENTS OR RADIO BROADCASTS Cp NO,
LANGUAGE
SUBJECT Economic
HOW
PUBLISHED Daily newspaper
WHERE
PUBLISHED Sian
DATE
PUBLISHED 8 Apr 1951
COUNTRY
rwn oocr11IT colr401 Uroll?nol unrn1l nl lmll?a Ilmn
0l TIl 1IIrt0 SAnr 11n0I Till 101110 Ir IOr1IIOQ ACT II
I. I C.. 11 ?10 I1. ?I ?101011. ITS A?01IIILII LI THE IIr11?nOI
or I I comet a ur 1?1101 ?1 Y01YTI011n1 n1100 a r1o-
IumO IT LU. IIPI00u000I Imr roll roll II r0IIIIIA0.
Conferences on finance, agriculture and forestry, water conservation, animal
h
were held In usbandry, industry, labor, trade, banking, transportation, and cc.;peratives
Northwest Chinac Military 5 and Administrative Committee. The respective highlights departments of the
reports and resolutions, as passed by the Third Session of the Northwest China
Military and Administrative Committee, are as follows:
RESTORATION AND DEVELOPMENT
OF NORTHWEST CHINA ECONOMIC 1950 - 1951
During 1950, the economic conditions in Northwest China showed
three definite trends. The outbreak of the Korean War created tempo-
rary speculative trends which were brought under control by placin
tighter controls on government cash payments g
and a temporary freezing
of bank credits. Production recovery was made in agriculture and in
various industries. Transportation and telecommunication systems were
restored or expanded. Trade with the Soviet Union was increased.
During 1951, efforts will be made to increase oil, power, coal,
textile, cement, and wool production. Food crops will be increased by
884 million catties aboca 1950. The cotton acreage is slated to be
expanded by 500,000 mou to reach the goal -_P 4,839,000 mou. A number
of canals end reservoirs will be repaired to bring an added 500,000
mou of land under cultivation. Forest areas will be increased by
57,615 mou above those of 1950. Animal protection measures will be
intensified. In railway construction, the section between Tien-shui
and Kan?ku of the Lung-Hai Railway is expected to be opened, at least
for the transport of construction materials during 1951.
NAVY
AIR
CONFIDENTIAL
DISTRIBUTIDN
DATE OF
INFORMATION 1951
DATE DIST. I? Feb 1952
NO. OF PAGES 9
SUPPLEMENT TO
REPORT NO.
THIS IS UNEVALUATED INFORMATION
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I. BASIC ECONOMIC CONDITIONS IN 1950
A. Three Decisi-1Trends
The economic conditions in 1950 were characterized by three decisive trends,
each cf which was marked by drastic government
f
re
orm. In March 1950, the
nation's finances began showing signs of stability as a result of the improved
budgetary system, increased revenue
and
;
a slight budgetary Surplus. In June,
the relations between public economy and private industry and the relations be-
tween public economy and private indu
t
__
s
ry
d
through control of sales After theyoutbreakgofethee Kore roduction
War,
applied tighter controls on government
nt
h
. cas
Yments once a
froze ban
credits, Consequently, the speculative trends a temporary result
War, were brought under control- of the Korean
rea^
Production Recovery
ARrlculture
Ninety-.nine percent of the arable land, 123,920,000 mou (including the
3,190.000 mou reclaimed by the people and the army), was cultivated in 1950.
Food acree.,le constitutes 91,2 percent of the total cultivated acreage with an
output of 13,390,0)0.000 catties. an increase of 1,210,000,000 catties or about
10 percent ,bove 1949, twice as much as the amount stipulated in the original
plan. Cotton acreage was 4,340,000 mou, an increase of 610,000 mou above 1949.
But the cotton crop failed to reach the quota set because of damages due to
drought and insect pests in areas south of the Great Wall. The winter wheat
acreage increased 2,500,000 mou over 1949. Acreage for flax, vegetable oil
plants,iuCar plants also showed a general increase.
2- Water Conservancy
Sixtynine channels of old canals serving an area of 3.8 million mou
were restored and reconditioned, while 15 new canals were constructed to serve
730,x,00 mou. In addition, 20 small canals and dikes and l,O?'-9 wells were com-
pleted with government assistance. The people received 415 units of modern
irrigation equipment on loan,, Surveys were made and research done for the
purpose of improving irrigation methods In A-)rthvest China,
3. Forestry
In 1950, 32 forest stations and 312 forest conservation teams were
organized, and 6..1. million trees were planted in government-owned forests and
39.9 million trees were planted in private forests.. Railways and construction
projects were allotted 38,259 cubic meters of lumber, twice as much as the
estimate amount Forest surveys covered an area of 44 million mou. Experi-
ments with rainy season planting were found to be satisfactory,
4. Animal. Husbandry
Livestc-.k raising was hindered under the former regi-:,,e. In the past
10 years the total livestock population has been reduced in number by 40 percent.
In Ningxia horses have decreased 70 percent, cows and camels 50 percent, and
sheep 30-40 percent in the past 10 years, The same holds true in Sinkiang and
Kinsu. However, the downward trend has been arrested since the liberation. In
1950, 127 epizootic diseases prevention agencies have been set up, and 1,480,000
cubic centimeters of various vaccines and 2,390,000 cubic centimeters of serums
have been produced. In the entire area, 1,929,400 head of livestock received
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treatment or examination. In Kansu, during the 9 years preceding the liberation,
oily 160,000 head of livestock were treated or examined as compared with 620,000
head in 1950,. Preventive measures were taken against epizootic. diseases through-
out most of the area,
5 Mining aid Other Tndustriea
O9l;1 2 percent of the notion's Industries are located in Northwest China,
Once they were corrupt and backward, but since the liberation production has been
re?tored and costs have been reduced. For instance, in the oil-producing area of
Yu-men, the extraction of crude oil increased 38 percent '.hove 1949
cent above the T)eak of . ] n .and was 23 per-
ye,a- of 94 r,n=~~+-A nova., 15.9 pereen+ above 1 199L9
ar:d s s 10 percent. above the production peak in 1947. the kerosene output increased
59 percent ,lr; ?:N 1349 or 26 percent above the Weak year 1944 The ano,e
,Ire e:rtrscto^_ from of percent
pe'roleum increased from the former 36 percent to 5.3 5 percent
by means rf using the improved Dobb's cracking process, in 1950, 17 oil wells were
.._1ed with, a t.Otul depth of 6,025 meters, and some new oil deposits were discovered.
Ct!tor .rn p:oduction increased a3.45 percent and cotton cloth 33
per-,eat above 19=9, Productii'lty increased 19 2 percent per spindle, or 29 1,,07
percent nor loom, in terms of cotton yarn. Production costs for textiles drop-
ped an average of 20 percent The government -owned Northwest China No 2 Textile
Company added 4,200 spindles A new plant with 50.000 spindles is now under
Co. 1r1.rtion
cower ;m:reared 6.2 percent in i95G over 1949. IIecsuse coal
cor...um).tie?c in'he power plant was 33,5 percent less and power leakage 53.8 per,
cent less tan in the previous period, power supply costs dropped about 50 per-
cent A :.wer plan? was expanded to 2,145 kilowatts, a 50 percent increase in
capacity 5nv power plants1 with a ombined rapacity of 1,500 kilowatts, are
nearing completi.-,h _n Sian
I.? een+'ral, production in the machine industry increased 24.4 percent
an compared wile 19,+9, while costs dropped 23.12 percent. Mary new machines
were added and shops were reconditioned. The productive efficiency of the coal
industry increased 100 percent based on the 1949 figures. The salt production
plan was completed with productive. efficiency twice that of the preliberation
period, and with costs four times lower Productive efficiency in chemical,
leather, and other industries was raisea from 20 to 40 'ercent.
Pri"'ately owned textile, f our, match, paper, and coal industries also
showed increases in production For instance, cloth production at the Shen-hsin
Textile Company increased 60 percent, as compared with the beginning of 1950;
flour production in Shensi and Kansu provinces increased 45 percent in the second
half of 1950 as compared with the first half. In the second half of 1950, pri-
vately produced coal '_ncreaced 69 percent over the first half of 1950 while
sales were doubled. The cutput of the machine industry rose 7 8 percent and the
output. of the handlcrafts industries rose 10.3 percent in 1950.
6, Transportation
Railroad transportation showed some progress in 1950. Between the two
terminals, Taying and Pao-chi, of the Lung Hai Railway line, the number of freight
carloads increased 63.322 percent, a round trip was shortened from 3._9 days in
December 1949 to 2 13 days in 1950 and speed was increased from 9 kilometers
per hour in the preliberation period to 14.8 kilometers in 1950, Railway con..
etrucainn and repair also made noticeable progress in 1950, On the T-ien-Pao
sertinn :,f the line; 4,&90,000 cubic meters of earthwork and stonework for the
railway bed were completed., and 2.810,000 cubic meters In Tien-Lan section of
the line.
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There are 21.523 kilometers of national aria provincial highways in North-
weat China. Scme of these highways were destroyed by Chiang's troops, but 1,523
lilometers of provincial highways were restored in 1950. At presen`, 13,991
kilometers, including 4,063 kilometers of national highway, have been opened.
The populace together with th ermy restored 500 kilometers of the Tsinghai-Tibet
highway which starts at Hsi-- ng and extends .estward along the Yellow River,
and replr_ed 167 kilometers of the highway from Hsi-ning to Chang-yeh, and 191
kilometers of the Sinkiang -Tibet highway,
There are ','7 poet offices in Northwest China which represent an in-
1resae I,,f:.~7 , percent over 1949. and 2,331 pcatel stations, an increase of
_- nt Ma' rvlce distances amounted to h8,1400 kilometers, a 28.9
Fer:enr. invr-ate --?e 1949 Postal services receipts increased 115 percent in
'O There 180 telephone?telegraph offices,
? ~ r /providing connections with
hiae-e outside of northwest China The service charges are lower
to n,her areas
This field .n-;.udes the adjustment of labor relations,.unemploymeet
re~?ef, and inspection of the safety and sanitary facilities in mines and
factories in 9ia.i, Lan Thou, Pao-chi, and Urumchi, the government handled
77, casep of laoc?f dieocrtee, sponsored 388 labor-management
inns irvnlvi consultative meet
tows 34,000 workers, initiated 39 r-ollecti- contracts and 22 tempo-
rary lab,,: contracts rover:ng 1j,C00 workers, and gav_ relief C5 ictance -o 11,000 unemployed workers During the second half of 1950r
theer
cafe'y and sanitary facilities in 75 private and public plants were'inspected,
Aa a r:?nsequence. the mortality rate in mines and factories has decreased. For
inetan-.e the death rata in the A kan?then Coal Mine of Kansu decreased ~9 per.-
c.en. A certain amount. of confusion with regard tc labor relations has also
been - -soled
'?'';lr. -Ind -,ommer,_e
T-ade Sandlid by the Sate
ernment -rade aa.nlla'ioie Tur?haied 800,000 piculs of cotton.
:.8,0.000 cattle; of fr~:'3tuffs. 13.220,000 catties of worsted yarns, 800,000
pie es f s tr :kips and hi.9e_. ,
720,000 pieces of dried casings, 280,000
cat-le:; of bristLc>, an ?1 @,r
M,. ~.G 00 catr.ies cf misce:.lsueous native products.
ey paw opt: _f or the=_c curcr13s - were equivalent to 200 mi111on yards of fine
whirs ,,;'?'li the other hand, these trade orgenizatoonsold L' ?million yards
cf :loth. jh.:5p bare; _,f :nt.ton yarn. 870,000 cattier, -if-tea, i?..6 million
oaths, of foodstuffs. and 11 4 million Chinese feet of aattre coarse clot,
mr..s.: abe^_rt?ed app
tatio r.ox;mately 740 billion yuan from the money in ciztu
Inc of the bases of the new 30'ernmentF- forelgr, trade policy is
ka-D_q Cal egtaiio~ ;~ Ac a recult_ the Kou-1o tribe, who had recreated to Fa-yen-
engage in trade with the new government
T e- import trade with the USSR, which is of great importance to the people
of Sinkiang, was carried out successfully in accordance with the provisions of
the import plan in the Sino Soviet Friendship Agreement (machines and instru-
ments Cons-itute 77 percent, daily necessities 22 percent), The export plan
was only 82 percent completed because the collection of certain native products
was delayed The number of business firms .n the five capital cities of North-
west China rose 10 percent above 1949 or 20 percent above the preliberation
period
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CONF:DENTIAL
People's Yuan circulate in most of Northwest China except for the remote
mountainous districts where the silver dollar is still permitted to rem-in in
use. Bank deposits in the area amounted to 69.07 percent more in December 19c0
than in December 1949, The amount of loans was 7.7 times the 1949 figure, and
this money was invested mostly in agriculture, irrigation projects, and livestock
raising, The amount of money exchanged with other areas during 1950 increased
100 times over the figure for 1949 Prices in Sian, Lan'-chou, Hsi-ni.ng, Yin-
Ch'rian, Yen-an. and Nan-cheng rose only 767 percent over 1949, as the result
of a balanced. budget, active trade, and efficient credit control,
D Standard of Living
Recruits ut for mi1.'tary service was suspended in 1950. The agricultural
`ax was reduced to a point where it constituted 12,5 percent of the total agri??
cult,irai production of Northwest China in comparison with 15 percent in 1949,
The p-i-phasing power of the farmers was greatly improved. For instance, it
took 500 ca`ties of foodstuffs, woolens, skins and hides, on the one hand, and
i~du: t,-:al goods on the ether, it is estimated that public purchasing power
nrcreas-d560 p.:-cent ,ter the preliberation period. It can be safely said
that h andard of _ ving in 1950 was better than in 19119
:-renal .ih et!^r.
The genera: sltuat:nn in 1951 seems to indicate that the Korean War will
cOrt'nue, and Tibet: will not yet. have been liberated Moreover, epizootic
dlseaee epidemire and famine ;till prevail in some districts in Northwest China
whii.a the ecenomi- strength of the rural areas has not yet been removed But
we are hooe:'u'_ be?:ause the work accomplished in 1950 has laid the foundation
for further p'oerecs Sccial order hae been restored, land reform covering
m.,.: lion ttoplr ha, been in operation since the winter of 1950, and the rent-
relortioc movement, in??olling :2 miI.ion people, is well under way.
1' Aar:cu.1ture Forestry, and Anima' Husbandry
The ag;icul.u_a; objectives for 1951 are to increase the production of
food cii ,tton The food cr-p should be increased 884 million celties over
1950 to r-ccii a total of 14,420,000.00o catties The total cotton acreage is
51a-' to rpanded by 500.000 mout? reach the goal of 1,839,000 mou. With
regard h, ??ttcn 256,000 more p_-u,_ should be raised in 1951 in order to
rear! the p-es. robed rota' of .7L7,000 piculs.. Other ;.roducts such as oil
seeds. flax, tobacco, tea. kcr-eagy; etc , will also be boosted according to
actual icci_ conditions
?'o achieve the above goals, we must pursue those policies which are
designed tc increase the rrcduictiv+_ty of .labor, such as permitting the grower
to retain his own products, recognizing free borrowing and free lending among
the people, allowing freedom of employment, offering relief benefits through
the production program, distributing the tax burden equally, instituting a
rational rate for commodity exchange, etc,. Moreover, we should expand all
types of cooperatives :.n the whole area.. Thirdly) we should educate the farmers
lu agricultural techniques so that they will readily accept technical advice
and assistance
.. 5 -
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1. Water Conservancy
In the field of water conservancy, restoration and expansion are equally
Important. IrriMoreover, technique and
should bemwoorkedeortshould
districcts where at
the hneeddfor
food is more pressing. Thus the 1951 irrigation projects will include the re-
pair of the Ching-hui, Chlh-nu, and Pao-hui canals in Shensi, and the Huang-hui
Canal n Kansu; repair and extension of the Lo-hui Canal in Shensi, the Huang-
yang-ho and Po-chi canals in Kansu, and the Hung-yen-ch'ih and Ho-p'ing canals
In Sinkiang; the construction of the new Yo-hui Canal in Shensi, and the Pei-
r_h'uan, Shen-kcu,and Tung-yuan canal, in Tsinghai; construction of the flood-
control w,rks i.i the Chan Ho, Pah Ho, and Feng Ho in Shensi, the Pin-lin Canal
of the Yellow River in Ningsia, and the Wu-1u=mu-chi Ho in Sinkiang, and the
,L-alnage of the Erh-hua, Ch'ing-shut-kou, Chung-kan-kou, and Tang-lai canals
in Ningela. All these projects are expected to bring an additional 500,000
mou of land under cultivation. The government also expects to provide 4,000
water wheels and 1,500 wells for the farmers.
2. Forestry
The 1951 forestry policy is designed to protect
the forests, expand
of forestation in cer*sin districts, as well as to institute sounder
methods
of conservation. The government should mobilize the people for the protection
of the nation's forests. Part of the forests, totaling 790,000 mou in Kansu,
Tsi.,ghai, and Sinkiang, will be closed for conservation. A forestation will
be emphasize0 as a means of soil conservation. A forestation for soil conser-
vation will be carried out in the Ching Ho, Wei Ho, Lo Ho, Wu-ting Ho, and
Huang Shul valleys. Forest acreage will be increased 57,615 mou in accordance
with the 1951 plan. Under the regulations on lumber supply, Northwest China
will supply 120,000 cubic meters of lumber. A plan has also been submitted
with provisions for making surveys in the 3.8 million mou of forest land in
the southern Chin-ling, Tieh-min, Ch'i-lien Shan, T'ung-kuei, and Tien Shan
mountains.
3. Animal Husbandry
Under the 1951 plan, targets for livestock raising ar- as follows
sheep 6.3 percent Increase over 1950, goats 8 percent, cows 2.5 percent,
donkeys 8 percent, horses 1.5 percent, mules 2.5 percent, and camels 0.5
percent. Manufacturing of various serums and vaccines will be increased as
follows: serums L million cubic centimeters, -accines 1.7 million cubic centi-
meters, and solution for detecting glanders 4,350 cubic centimeters. Preventive
inoculations against rinderpest, anthrax, septicaemie, etc. will be given to
some 22,396,000 animals and ey,000 neau of horses will be inspected for
glanders. Finally, everything must be done to stop the spread hoof and mouth
disease which Is current in most of Northwest China.
C. Industry, Mining, and Transportation
1. Petroleum Industry
Based on the 1950 production, crude oil in the Yu-men oil-producing
district is slated to be increased by 24.6 percent, gasoline by 57.6 percent,
fuel oil by 162 percent, and lubrication cil 100 percent over 1950. Kerosene
will be reduced 6.8 percent in 1951 to produce more gasoline. More refineries,
power plants, and oil depots will be built. Twenty seven teams will be sent
to make geological surveys. In 1951, 15 oil wells will be tested while 7 wells
will begin to produce.
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2. Power Supply
The total power supply will be increased 89 percent above 1950 with
lower costs and cheaper prices. Power plants producing a total of 8,380 kilo-
watts will be set up in Sian, Lan-chou, and Sinkiang. The Northwest China
Military and Administrative Committee will assist the Central People's Govern-
ment in constructing two power plants in Sian, each of which will have a
capacit, of 6,000 kilowatts. The governments will also make a survey for build-
ing an hydraulic power plant somewhere in Lan-thou.
3. Machine Industry
The northwest China Machine Manufacturing Plant will equip 50 ad-
ditional macn:ne tools, expand its building, and increase production in 1951.
Coal Industry
A production increase of 54.56 percent above 1950 is planned for the
coal industry. Machinery and other facilities will be expanded in the A-kan-
chen Coal Mine of Lar-chou, Pa-tao-wan roal mine of Sinkiang, and Ta-lung
Coal Mine in Tsinghai. The coa? m:r.es n She - i one Ningsiu will be reorganized.
The survey of the coal mines In distri:es south of the Great Wall will be con-
tinued for the purpose of applying large-scale production methods.
5. Cement Industry
Production will be ^ni'tained at the 1950 level. A larger cement
plant will be built at Lan c;ou
6. Textile Industry
Cotton yarn production will be increased by 18 percent above 1950,
and cloth 57.87 percent, Production of cotton yarn is expected to be increased
from 0.91 pound per spindle per 20-hour period which prevailed in 1950, to
one pound per spindle per 20-hour period in the second half of 1951.
7, Woolen Industry
Production of woolen fabric will be maintained at the i^''0 level while
wo.il output will be increased to 280 percent above the 1950 level. There are
plans to expand the wool- ing and processing facilities In Tsinghai Wool-
Washing plant, the newly estabi.shed Ningsia Wool-Washing Plant, and the Ian-
chou Woolen Company. A woolen manufacturing plant of 50,000 spindles and 1,000
looms will be built in Hsieri?yang, while a new building for the No 2 Woolen
Manufacturing Plant with a capcity of 20,00^ spindles will be set up and the
No 1 Woolen Manufacturing Plant will be enlsrw.ed to a capacity of 21,000 spindles
and 258 looms. Construction of buildlug_for he Stnkia- Woolen Manufacturing
Plait of 15,OC?O spindles is well under way.
According to the plan for 1951, the government's investment in the
industries in Northwest China amounts to 18 percent of the total investment for
the country as a whole. This is double the present value of industrial invest-
ment in that area. Plans for local. industries will be made by the respective
local governments.
Emphasis will be put on further imnrovement of the railways. First,
the Ta -ying -- Pao-chi section of the Lung-Hai Railway should be improved.
Second, we must continue to improve the Pao-chi -- Tien-shut section to make
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it suitable for locomotives of' 1.6 meters width. Third, we must continue to
build the T'Ien-shut -- Lan-chou section. It is expected that in 1951. the
rail line from T'ien-shut to Kan-ku can at least be used to transport con-
struction materials. Major construction work in that line west of Kan-ku will
also begin during 1951.
With respect to highway reconstruction emphasis will be given to the
Improvement of the national highway system connecting Northwest China to South-
vest China, especially the Shensi-Szechwan Highway and Shansi-Shensi Highway,
Provincial highways, country roads for horse and donkey carriages, river trans-
portat.on, etc., should be improved by the respective local authorities in
cooperation wth the neonle.
D Trade ands in ante
1. Trade Policy
The trade policy of the government 1s designed to restore agricultural
and industrial production. The essence of that policy is to expand the domestic
market for native goods, to encourage cooperatives, and to stabilize prices so
as to assure proper profits to producer, middleman, and consumer. ('ommercial
regulations will oe strengthened to eliminate speculative activities.
2, Trade Volume
The expected profit froru state trade in various commodities is placed
at two 'o six times as much as 1950. The ?'olume of tea to to handled by the
state will amount to nine times that of 1950. Taking 1950 as a basis, the in-
crease in state purchases of commodities ill be as follows,,. cotton 110.88
percent, cloth 171.88 percent, cotton yarn 110 percent, foods 213.47 percent,
coarse domestic cloth 185.5 percent, various domestic products 733.25 percent,
wool and woolen cloth 96.71 percent, animal skins and hides 263.18 percent,
casings for making sausages 85.64 percent, bristles 92.85 percent, and Tzu-
yang tea 1L2.86 percent. The purchase of miscellaneous goods for 1951 will
amount to 3o billion yuan. The total capital to be invested will be 148.42
percent of 1950.
:;ale plans, taking 1950 as 100, are as follows, fine clothnt '250.15 percent,
coarse domestic cloth 147.19 -ercent., cotton yarn. 279.6 perce, ;oodatuffs
223.06 percent, industrial equipment 470 billion ;van, and miscellaneous goods
170 billion yuan. Profit rom sales is expected to be 326.42 percent greater
than in 1950. it is estimated for 1951 that the value of the incoming goods
from other areas ;tr.c]uding otton darn, cloth, tea, industrial appliarces
and equipment., and miscellaneous goods) will amount to 890 billion yuan, while
that of the outgoing goods to other areas (consisting mostly of raw materials
as cotton and wool will amount to 1.3 trillion yuan. To accomplish such an
enormous task, we must expand our trade, increase capital turnover and eliminate
wastage.,
The government plans to develop purchasing and marketing cooperatives as
the prcncipai forms of cooperatives in the rural area, and consumer cooperatives
as the nrin:teal form in the city, The 1951 marke'ing volume of' foods, cotton,
skeins and hides, native cloth, drugs, and other domestic products will reach
2220 billion yuan. in turn cooperatives will supply their members with cotton,
cotton yarn, cloth, coal, salt, and other daily necessities e_sounting to 160
billion yuan. Cooperatives will also sell fertilizer to the people amounting
to 13 billion yuan and distribute foods, cloth, coal, salt, sugar, soda, and
kerosene at cheaper prices to 60,000 members.
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3. Control of Financial Market
Major tasks are (1) to strengthen the leadership f various banks in
the financial market, (2) to implement monetary control, and
(3) to enable
the banks to assume the function of the nation's treasury. All banks in Ncrth-
vest China will increase deposits from 76-133 percent abov? 1950. Under such a
plan, government deposits are expected to increase 68-121 percent, while private depo-
31c8 use expected to increase 300-400 percent above 1950. Loans are to be
increased 100 percent, coney transfers 150-200, insurance 100 percent above 1950.
111. FUNDAMENTAL PRINCIPLES FOR FULFILLING 1951 PLANS
The chief weaknesses in the work of 1950 were inconsistency between pol cy
and order, inaccurate estimates and planning, wastage, lack of coordination
between related divisions, low efficiency, and corruption. These were the
veaknesses that commonly prevailed in most of the government agencies.
The following steps should be taken to assure the fulfillment of the 1951
plan: carrying out self-criticism on all levels of government organization,
training cadres of technicians to teach thoroughly the real meaning of our
policy, strictly forbidding corruption, improving the auditing system, and
finally, improving the leadership.
CONFIDENTIAL
Declassified in Part - Sanitized Copy Approved for Release 2011/10/31 :