FINANCE AND ECONOMICS SECTION OF 1952 CHINESE PEOPLE'S HANDBOOK

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700190013-5
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 34
• Document Creation Date: December 22, 2016
• Document Release Date: August 24, 2011
• Sequence Number: 13
• Publication Date: June 14, 1954
• Content Type: REPORT

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STAT
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I'II{AtiCE AND ECONOMICS SECTIOiC OF 1952 C.iiI2IIi9!/ PivOPL'S HAi:~DOOK
(Comment: The following is the full te:ct of the section cn
finance aad economics of the 1952 Jen-min Shou-ts'e (1952 People';
Handbook), published by the Shanghai Ta ?~un^ Pco, July 192. Fu:
convenience, the report is divided into four sections: Peoples
Victory Bonds; Currency; Trnde and Commerce; and i3ankin3, 47ages,
and Insurnnce. Sources given by the handbooL a:?e included -in tiffs
renort.J
,~edemptlon of Principal and Inte e t
(The following was published 2) Janua.y 1';51 icy t'.c Mini.s':_,? n.?. F'.;;anrc?.
Article 8 and a were co_rectad n:.tended ;~ Jamtsry 1"5': by the J?iinie~~, ?,
Finaaca.) - ..
P^tdcle 1. Ir. accor3artc^ it+:h :artScle
Re;~~laticas Peo:, - ~ . ?n .., 5 u. t'.t~ : ec_ ie ~ G 'dicr,o- v an ;~
~ ? - l,onds :riff i;c re.leeaed :;om 1951 to 1?i55 in five
'nearly payments. One repayment rill ue taadc Bari: ;;ca_? to holders citeser. by lot.
I?ots will be drawn on _ .'ebrttpry each year in 1'eiuin~- s,:d w;ll ba bsse?:i on `.ire
last twr chlracters o'? t?!r? serial numbers of the boru;.
Article 2. The .'eople's Bank cf China wil?. bo responsible for th~? r?tu_1
redemption of, and interest payments on, ti:oo,: bordt, on fire basis of 1:he rtl.?a-
bers drawn, which xi 1' '.:c anro.utced b?
,~ the t?tinistry o: Finance.
Article j. ;3ach year from i~51 to 1, 55 ceder.:~;:ion pa}rten`_~ wi.11 'oe nude
31 Idarch-30 Se?>teR~oct? Lv'titc Yeonle's yaac oS cuiy area. Up to 3o Se,,r.e~aber
1`)55, redesptior. pa;,x:ents an3 intcrert rc;, collect^-~ d,r~inn, ti:r? nay~neut uc?ri:,u
un:.;t be collecte3 in the neat crest ne -
ho]ders may' r= ?.=. Pon i.ite benefr_ o_ the buod_
^"t co_leche 'iris:i"^.,,;rcnt period xili. uc extet~lm:.' a z:onths f'?r `hc,;c :;~1~ do
~ t' clr? gents (final Q:;te will be i?;.:rcir 156). t?' co!lertion
hrl, nottitim heel uric, the gia, off' ~.... itolricr a:?eJ.^ori'^_'`e1 and ne ~x~~^aer.t tu:1
l,e mazer. ~ '
Article !F, ?;7hen a bocci rutabrr 1..: 'uee_; .,:
;rill stcn oa tt,at nsioer n ,,, . ~~,: r _"t, -:r '~"s` pair,:,::u:
ti.at- year. ' the ., - ~.._ _.,;?... _- -.,, i2.;;' (?i ._?~.:?:.a1 0.
Article 5. 3elch t.i;:,e redPmnt;o;: i;- c--~ i,e :::::c? ~ue bord'no13^r :r7.1. r
ceive pnyment nt the fecal People's 9enL. IP in':~rest ?ouucr.r arcs misri::,'
t ire period up to ti;e time the bona _-. to Se rclc~are;i, ,crest v: i.]_'. nn'.: c~. . ~..
If interest r.;u~ors :o_~ later in':crest ua}:atlas ~ ~ mi;,in; a~ time ~. .rCec.;_,
floc., na amount equivalent to the mis:.i:,: ,ter?ns1. c~.~upons must b_ dedu`?,?~
the redemption payments. y~ "O`~
lac People';; i3ani: trill. ;sae affiiavits tc .pn,.
th_s deduction ha?- hers- ~ to u..,r., _ 'i'??'
coupons are recovered Lte? and?t~med otem? toy .. sin,; _ni,e:?esi co.l,,or..-.. I~ these
:iurJba::::, t.ZO dedu_tions - e wi_l i,e
T'C1lU.u..u .,, ?l,c; ., .'. iu:lulil c'r. ?._~ ~
Article v. The interact co,tn0lrs on t..a bonds zu.,t be preccn':? 1 ;o :~u?r_
ment of fire interest due. However, rite entire bond :.;zest be prese:rc.ei' r.. ;he
bank; the bondholder must not _emove i;he co:lpons.
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issued in China (excluding the Ilortheast)Vranybelredeemed innan~loca111'coplesn
Bahl; and will be paid for in JDiP (Jen-min-p'iao) at the rates set by the central
People's Bank of China.
Article 8. Bonds issued or redeemed in Sinkiang will be evaluated in J1?tP
at rates announced by the Sinkiang branches of the Peo_rle's Bank in accordonce
with exchnngc rates fixed by the Sinkiang Provincial People's BanY?.
Article 9. For the convAnience of the bondhoader, if bonds issued in
Sinkiang are removed 'to the Northeast or to another part of Chi:ra, all 1JCa1
People's Baius and Northeast People's Banks are designnted as erci:ange bars
and the branch banks at Lan-thou, Sian, Peiping, Tientein, Shangha.t, and
tiukden are designated as pavinC ba.,ks. Payments will be in accor:9ance with
rates in Sinkiang. Paying bari;s may make direct payments; exchange barilcs must
:-ubmit the bonds to paying; banns, which will return a d,ait fot tl:e proper amount
to the exchange bank for payment to the bondholder. iTnen a bordhcl.der from
Chinn. (excluding the Northeast) moves to Sinkiang or to the Ilortt:east, he shall
use the Ti-hua People's Ban]: ot? the Mu3;den People's Barr_?; as a pay~.nr. ban':.
These banks will make pay-rent; in terms of rates announced by the r.r_ra_?al
People's Bank of China. In both Sinkiang an3 the Northeast, all local People's
Banks wil'_ be .xchange banks functioning under the saga system descri'o?~d
above.
Article 10. Exchnn~e of and aaycents for these bonds are e~;empt iron
rrsts.^e attd draft fees, out si.eciai. teleF:ri,:t draft lees a_?c? pa;rable by the
boruiholder .
Article 11. Taese bonds mist be submitted to procure payment.
Article 1~, These bonds are poi-. subject to profits taxes.
Explanatory Notes:
1. These regulations shall be ir_ effect from 151 tc 1755. EacP: yi'~:?
part of the issue will be redeemed b;; drawing lots, until five such rc?
demptfons Its a been compi.:~ted? The rttmber of lcl;~ drawn each ti;ae is cal-
culated as a percenl:a?e of the bonds subscribed; therefore, tite lots will he
numbered accordingly. One hundred lots will be prepared, each contaiain,c troro
numbers (running from O1 to CO) correspondinrf to the t:;o ~e??in~ n,;-~~,~_,~~;
on the bonds. Each lot rencesents all those bcc:ls having: the same gat two s,.rin1
numbers. Thus, one lot rcprcacnts one percent of all the bonds. Ec;ardlc;s
of the number of a'r?ares represent,e3 by eaci: sin e bond (,1, 10, 100, cr JO
shares), all bonds matciu.n~ the au^.ber Trill be :ederm~u s :en t.
drawn. he ^c~bc:? _ .
2. P.t th~? time of the drawin? the 100 lots will ba placed in 1;en r.~n-
tainera in numerical order; lots O1 to 10 iri the first, en3 so cr: up is lo`~
91-00, which go in the tcntl: _ontair:er. If 10 :ercent of file torch are t.~ be
redeemed, one lot will be dram ;rum each container; if e0 percent, t:~^ ?.;iL
to dratm from each coutainer.
3. "vllten a rx-??? ?a~e of 15 or 25 is needed, lots will be drawn to nee
which containe*~ will be ysed for the five extra lots. A special set of lots
numbered 1 to 10 w~u be used Yon this preliminary drawing.
~. At the Fourth drawing for thie issue, 25 lots ::i:ould be d~?a:,:, ^
remainder of 55 lots. It will be a:?ranmed so that ~ r~., ~
5 co:~i,ainers have 5 lots. Three lots will be dracrn5frornata~nersc~,t~~.r~, lsa?ltard
6 lets and 2 lots will be dawn from each contnira_? tri~'? ~: ,-
tainer gill then have 3 lots, totaliu~ 30 lots, whicl: w11 be the ps~rn,:tix cf
bonds redeemed b~? th^ fifth d:a;%in~.
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5. );ach time a lot is drawn, a record should be made an the sect n:~d
retained by the main office of the People's Bank.
6. The only official numbers will be those announced at the sctaal tine
of drawing and reported by the DSinistry of Finance.
7? The date of the drawinG will be 1 February each year in orde^ to
Yacilitate transmittal of the numbers to all villages and rural areas and to
overseas bondholders so that all may redeem their bonds within the time '_init.
Chart of Principle Redemption and Interest Payments (in shares)
D
Remaining
No of :,hares
Principle
ate
Shares
Redee:~ed
Interest
and Interest
31 'gar
51
100,000,000
10,000,000
5,000,000
'_5,x,00,000
31 t.far
52
90,000,000
15,000,000
h,5oc,coo
1,,Soc coo
31 bile 53
'r 5,c~oo,ooc,
20,ooo,coo
3,750,000
23,7~~.,~,oo
31 !~=~
5~+
55,000,000
25 000 000
~ ,
=',150,000
.>I)O,vOJ
31 r.'lar
55
30,000,000
3o,oro,on0
1,500,000
3z ?oo,oc0
Total
100,000,000
17,500,000
117,500,000
The infor
taation R'.+en a
bcvF i based
on "Arti
le
f th
Fi
P
'
Victory Bond Issue, 195n," ,:assed oy the
c
s c
e
rst
eople
s
'.'_::a 3cssicn of the Govcrruce:a .'al-
ministration Council, a: reported b?r tae
L's inaun i;e?:~s Arercy 16 Dece*.icer 1y4
v r:
t , v:a
]u,077
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Year
1950
Month
Sep
21,OOv
21,232
'~,~~%7
23,6Fx?
'3,.)1~
-'3: ~ ~5
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21, 72~~
21,6;6
21,267
1,174
21-,250
21,32G
27..430
22,401
2~,3~3
L2,593
22,46
22,333
22,485
22,741
2 .. G1~4
,, ~ S, 7`~l
~~ ten,.
J i J'..;-
J ~-3. i
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x_`~??
Dionth
Period
Value (yuan)
1951
Plov
1
- ~4 ,,,) -
?
21F,735
3
24, C,o3
Dec '
l
24,060
2
~!, 067
1952
JAa
,
_
.`
~1E,752
i~ ab
?
-
~
2!:,733
'h,?~ll
Liar
1
3
.-: -,
-;'r;
;4 uoG
71
?!4 , 6U,?
~?'
1
,i+ ~3
i 7?-
?? ?'~17
3
h r:n?
? zI. c"~;;cx
A. Provisiona?. $egulaP.ious :.tr. iiur.diin; Cffeases Aaia:;; t;;le _1v:'uac:.. L'uz?rc.^.cy,
Goverr.:aer.~ ;dministr~tion Co~:rci_, l~ .lord laj.
/lrticlc _. T~osc articles.. ?e dr_vr. x~ _sp,~c'_~ -
clsi?ency rnd to .,.ab'..l.i:.~ t!ic _~.:', -: q? to Y ,?.. ~ ,.........._ ., .,
Ar`_clc ,_. As ref 1
ca:?r^nc crr~_ ., .. the ;.. ,__ ~icles, nai:~ .rs' c,l..,, :c_- ~. n?.. the
y ._ suc?? b;; the Pao;,' c 3 ~.~ . : i ..._ ~y.
~+rticle 3. Countcrfei`.ir ~ ;
are rnini.ahabte b~? death for '_e. lr s aed r - ot, u i i'en Ir-.
are serious. '.then cirewutanc::c ... :.. ,._ios, ?,:ni::icac,.,. ~ :'i1 'ue _~def1-
nite imp:,?ison;a::nt, or 7-1 i _. ., _ ~ . ,. _.._
the co>n?tt.. + _ter's _trow._`? ~ .... t _,tc?1 :e_ir. '1' ~-,
countc:rr._,-a]utionnry ?n -,o , y- V ?~
me rnu?i::habla by flea~a ~ 1 ~?; r? _ ltrt~ ', 1 c i
? J' , ]
off^nrlers ?when t;te circu7s:an^c.. ,mac ;~__.~,..:. t,h_.. :.I:e ~ a~,~,
se:?ious, the ofi'enses a:? uuni: llau].c by i?~;;:?ao:.t?~ert of j-_j ?:;ec r.^, _... i,y c.r-
ficcAti01? .,^.f all fJl? k'Ll?t`Of 'elte 7:?O'.,'_~ ~ r Of file CrlYlinL1.
Article ?'F? In cases of intent ~o COltnterfeic, =,~,r '.?::;c; ; ,,;? ;;~.iol:~
offenders are cub,ject to puniah:aea` b^ Icatit oz indefinite ;tam:;conr.:ezi? i,cs_.
serious offenders ccty be i;..prisoncl for 3-15 years. I,^^. all. ea.es? _... rI Hart
of the property of the offender silrll be confiscatc:l. ^!:nse ?lc ;~1a:1 t
r..lter currency, to deal in currency, or t? pass COll17tC1'1'Oit moue. -
;,,; p,an-
i^,hea b,? imnrisorment of 7-15 years And confiscat._.,:: or ??n,,r_, ??, i.hc case of
leaders and serious offenders. Less oe~L'r,s o_'e:::;:~, ,:;,.:- =,_ l,?.
urisonment of 1-1V yzars ~d it; fire; . ,, , - ~ i;
' Li.?ht of ca- ;'call uc ~. -bL: ?r,^
fine? o:? loc., than one ;?c^_ hbw~. '
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~~++ ci rumors or any other attempt to destroy
faith.in the curreucy shall be punishable by fines or less titan 5 year:' im-
prisonment. If this violation is cotmaitted with counterrevolutionary intent,
the punishment will be 5-15 years' imprisonment. Leeders and serious offend-
ers will receive indefinite prison sentences ant al] or part of their property
will be confiscated.
Article 6. Those vho urtiutowingly rcceiae counterfeit or altered currency
and notice this after _?ec~Lpt should report ti:e Sect to the local People's IIenk
or Public Security Agency. If such currency is circulated with the knotaed~e
th^t it is counterfeit or altered, the offense is punishmble b;; less tl?tn one
year labor, fines, or rentonetration.
'rticle 7. Unsuccessful attempts to commis the offences listed above
will l.2 regarded as light offenses unless the aim is counterrevolutionary, in
which cane the offense will be dealt with as outlixed above.
Article 8. Ary ofi'ender who surrenders voluntarily twill receive a re-
duced or suspended sentence. If, after sm?renderin~, the u^fender assi,;ts
the authorities, no ]t'utishc:eta will be given.
?.rticle 9. Counterfeit or altered ctu?re.^.c?:' w11_. 5e _cn?icate3. :+il
machines, material^, or othe_? objects usel in -riolaL'oa o. these a.iicles twill
be confiscated. This art_cle does not apply .f these objects belong to a
third party who is unnws?;r+ ci' their ille;;al use.
Article 1C. iur se.~.ota ?riolations o: these at?ticlc,,,e;cept Article 6,
the offeader may forfeit hs political rights.
Article 11. Titc^,c articles are in effect, as oi' the day of prcnulgatior.?
II. Rel;ulaticns Prehib~tinr Entry or Removal o? iational Cur:?enc? (Govern:ncn::
Admirisr,~atioa Couacil t?diet, e bfa:?cit 1~?51
Article 1. These ~_;ilo.tiors harc Leer es_~~-~
the nation_1 cn^ren:r? and ;, , r ~_ail~? cra,;a uo t;o stabilise
? ~ protect I;,1_ -~l'?on;r;;~: Of t,11C r~cn_n?r.
Article 2. 1?'rr the r,ur~ose xf these rc^
the tlrti;:~;:, nat._ora_ currency means
currency issued by t::e !'copie's 3atil: of C!d
by the Central People's Govertiaert. `` `~'" =?ca1 cu.:?ency mtthori~rd
Article 3. The '~ransport':nr, o: n^tioa:_: cn:?,.ec?: -
bouzu]aries is forbidden. n11 c~.trrency sr. ta,u:t ~ .':: the nations:
p~.,._ ..._:??a1.i be roar': seed.
Article !~. Those ;rho transpo.t nation^.l ? __ _ ..
the intention of harmin;; the national f'_:mncal ~ ~? ~` ""' the i:ordcr ?,rith
counterfeit or altered ,eonlc's ? ""o'?> ?=' tltosc who ;:au~~le
i Ci1L':.'C:1Cy _IiGi t??~~,.~ ~.tnt ... ?.1;x11 br
castod b the _ ~, ?? taken into
Y Y ?^.ani niu; rnd erresting aCorcy :.n1 s_ ,, , i i
to the local co -?- - shn-- be rei'erred
arts for dicposition.
Article j. hatiottnl currency gill be co:r'isca~rd ?.: a'1 r..ail. If ;uch
ctsrency is intended for ille~l use o_^ is su s_:~cte1 t:o be cotL?terfeitr:3
a.Ltered, tho e.?caztining nCency should join tr_t;: the cotc?ta of the originating
point of the ct.?~il for disposition of the case.
Article 6. These :n?tic~es are in effect ns of tits day of pro:;al ration. .
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C. Government Administration Council Orders Concernin Recall of Local Currex?~
Issued by Northeast Bank and Inne^ ldo+rpolia Peo le s B~nlc
To unify the currency system, it ha^, been decided to recall t:.e locni cca?-
rency issued ty the Ilprtheast Bank ar:d the People's Bsnk o_ Inne^ I?Iongolia.
Article 1. As of 1 April 1951, fife People's Bart{ of China shall replace
with J6IP all local currency issued by t;ie ltortiieast Bank and tha People':: 3an;;
oY Inner Mongolia. The rate of exclan~a will be based or. existing market
prices; each x.50 yuan of local Iortheast or Inner !?fonroliaa currency will be
exc:ran~ed for 1 Jt?IP 7uan.
Article 2. As of 1 A_oril 1951, s11 prices, accounts, and agreeclents in
the Northeast and Inner Mongolia will. use JhlP as the uni~. All arrangements
and al;reements made before 1 April 1y51 will be recalculated in J!'D -h^_ basis
of the exchange rate fixed in these rc~r:latioas.
Article 3. As of 1 April 1951, the Iiorthcast Dank and the People's Bank
of Inner Aion~olia rorill be reo:?~anized as branches of the People's Bank of Chira.
20 !?Sarch 1?51, C`;airman Chou En-lai
Editorial ncte by Hsin-hua Y+.ici1=12o edito_? - T::c :?atc of exchange be-
tween JMP snd the currency of the Northeast and Inne= Mongolia is fixed at 1 to
:?5. This was fixed on th?. basis of n weighted calculation of ruirlcet conditions
of important interarea ::cmtsodities in the two renresentati.ve areas of biukden
and TiertRin and ~1 snal;/si^, of exchange rates at the ,joint office cf the People's
Bank and the Northeast 3anY. of Shan-hai-kuzn. The following principles were also
considered:
1. After the ratr_ of exchange is fixed, it should not cause fluctur.tions
in the value of any corncodity.
2. There is increased :_ecessity for watching the inequalities c?~r.arodity
flow between the twv cu?eas. ?
3? The nee rates mn;t be beneficial to the mutual devolopn~nt of produc-
tion reconstruction enterprises in the two areas.
D. Government Administration Council Orders Concernin:? Issue in Sinkiang,
of JMP in Uighur LanRUaRe to Renlece Silver Yuan idotes Issued by SinlcianEr
Bank -
To unify the currency system ~.:, t:o ob^,erve 'he -??ators o? the mi;:or;.ties
of Sinlr3ang, the silver yuan notes issue3 b?? `.he S:.:iaarg Prvvi rc; al Ban}: shall
be replaced with J!?B? pr9.rt'ed in Uighur. S?eciflc regulations arc as follows:
1. As of 1 October 1')51 and within n fi::e:i ..sr~od, the People's Bat:lc oi'
China shall recall the sil.vc?r yvuan n:;tes iscuc? i:y the Sinkian;; Provincial 5nnk
and replace them with Jlr3 printed in Uighur acripc. The rate o~' exchr_age will
be based on present mar':"; pr_cea; one Sinki.an;; ;il~rer yuan note will be e:c-
changed for 350 JI+II' yunu.
2. The JhIP notes in Uighux? will be negotiable thsou;hout. ';'.-:e country an4
JMP notes not benring Uighur script will be negotiable in Sinlcia:~.
3? As of 1 October 1951, all prices, accounts, and al;reemen;;s will use
JMP as the legal currency unit. All arrangements and agreements n;:dc before
1 Octc~'rer 1951 will be recalculated in JMP at the rate of exchanr;a ii:ted in
tuese regulations.
chairman Chou L.n-lei, 21 Sept.eci,^r 19 j1
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.... .. III. TRADE AND COb4.fERCE .
A. Development of Private State and ('ooperative Trade
The following table gives the breakdown (in percent) of total commercial
trade for 1950-1951,
?2~ 1951
Private commerce. ~4 vg
State-operated commerce 14 1
9
Cooperative society commerce
Total
100 l0U
The above data were giv=n in an article entitled "Achievements of Chinese
People's Economic Reconstruction in the, Past Two Years," by Sung Shao-wen in
the Peiping Jen-mi~Jih_pao, 6 October 1951? The article continued as follows:
"After the expansion of industrial and agricultural production, the amount
of trade rapidly increase4. Althougn sate, private, and cooperative trade all
showed an increase, 1951 cond_tions indicate that the -?~lume of private trade
greatly increased faster than that of state-controlled trade. Cooperative tr^"
greatly increased in 1951, to the advantage of the broad masses. State-ope:a~,.~.1
trade, in wholesale handling of important industrial and agrical.tural commodities
(food, cotton, cloth, coal, salt, petroleum, etc.), has attained a leading posi-
tion in the markets; however, in retail trade suet: strength is lacking or is
very slight. Although cooperative trade showed some growth, in view of the
over??all expansion of trade cooperative trade still,hows only s small increase.
Thus, in order to Hatch the recovery and development of industrial and agrirul_
tural production through ,joint development of public, privnte, and cooperative
trade, and to. guarantee the stabilization of important commodity items, co-
operative and state-operated trade must carry out more retail trade operations."
B. List of State-Operated Special ^ompanic.
All companies in the following list excerpt two (as nc .d) are located in
Peiping.
Mana er
Date of I'oundinl;
Chon IC'ang-m:.n
1 1?fa~
50
Chen Ch'i-,fang
1 Dfar
50
Li Nan-sheng -
1 Apr
50
Fan Ya?rg-mir.
T
'
i fi
20 Jan
50
s
s
sin-te
Liu I
10 Mar 5C
1 pion
50
Li Ju-hsiu
1 Apr
50
Chao Chung-te
L1 K
1 Apr
51
uang-chun
Ti
K'
10 Mar 50
ng
o-chi .n
7 Apr 50
Chen Ch'eng-chung*
30 Moy 49
Wu Chueh-neng~
Ch
Nov 47
ang Hsuan-wen
to blay 50
Chang Hua-tong
l0 t~3r 50
Lu Hsu-chang
1 Dfar 50
* Located
'x-* Located
in Shanghai
in Tientsin
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C. Marketing of Local Product
The following is from?ar. article by K'ang Wei ettti.?led "Restuae of Chitta
Local Products Sales Por 1950,? Peiping Jen-min Jih-oao 24 Februa. t
~ J _J~1.)
The most important task of ct?rrent economic activity is to hasten the re-
covery and development of industrial and agricultural production ty marketing
local products, increasing the fa~^mers' buying power, and stimula~ing urban-
rural trade. The Peoples Government is especially attentive to this work. In
1950, all local branches of the China Local Products Company of fire Ministry of
Trade were already relying on cooperative and organized private trade to carry
out local products marketing, and had achieved definite successes.
Produ~?tion of local and special products is exceptionally flourishing and
distribution is wide. About 2,000 different comr:c,dities are contributing to a
large share of the farmers' income. In the Southwest, for example, income from
local products is 35-40 percent of total agricultural income. Local products
occupy n similar position in Inner M^ngolia. In 1?.model villages in :dorth
G'~tna, prewar income from local ?nd secondary products totale' 28 .',et?cent of
the yearly agricultural income. i;crtheast local products accoun+: for :Wore than
26 i~;cc::t of the value of all agricultural Production. ?n all of Chirs, local
Products account for about 30 percent of the total value of a~ricaltural pro-
duction.
In '-950, the trade organs of the People's Government undertook an energetic
program of marketing local products. According to incomplete statistics, in one
year the local products r_ompanies bought more than 'a70 million catties of local
products and Put more t}utn 925 billion yuan into circulation. This stimulated
the rural economy, -raised rite fa:?mer?s' buying power, and supplied raw materials
for industrial and agricultural production. At the same time, a large volume of
this meu?ketinp, was han;lled by the cooperatives, thus developing and strengthen-
ing them.
Increase of purchasing cannot be separated ?rom sales promotion. There are
two sources for the sale of local products: re.g,.lar domestic demand and export
for foreign exchange. In 1950, all local products companies handled a total of
more than 190 million catties of commodities, carrying out sales which caused
interarea.local products to be exchanged ot: a large scale. In addition, a large
amount of local products was handled by private merchants. Accordiro to statis-
tics of the local products companies, exports of local products totaled ma e
than 100 million catties. Commercial items handled by the local products com-
panies consisted chiefly of ahtmi:w, peach seeds, cassia bark, and }.andiczsft
products.
The critical aspect of han37.ing local ?roduc+,s i;: 1950 was sales. Only a
positive sales policy can open up markets, expand capital, and increase buying
power. Before Mnp this aspect was not clearly understood by.locnl products
?offices. A5 s result, local products acctm;uln`ed ir. all areas, impeding currency
totallcapital movinglinitheuPame peeiodimelhas moeeunha~eQypereffectedtpur-
chasing and even caused farmers to leave some local products in the fields. Hut
from May on, following the All-China Local Products t~,anagement Conference,
clearer understanding of the need for encouraging sales resulted in an over-
all develo~aent of local products sales. All areas developed a mtmber of
methods for stimulating sales, including the following: examina?ion of local.
needs ant measurement of sales by buying power; maintenance of close contact
with agencies concerned; opening new markets and reviving old mar:cets; and en-
couragement of sales by local agents and 'sellers.
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Also, because the volume of local products i:; large, the rnmber of tei? nts
varied, markets widely separate3, and producing areas scattered, it is necca.
sary to use all available means of stimulating sales, to organize a united
effort, and to rely on the united action of the state-operated trade organs
and the cooperatives to effect n selling and buying netwo:?k.
In organizin
i
g pr
vate commerce, experience shows that it is necessary
(1) to hold local product^, conferences or various kinds of discussion meetings
to eliminate private considernticnr. a?r3 to dra?.+ up trade agreements; (2) tp
organize point buying and selling, concentrate capital, an3 increase i'te com-
bined strength; and (3) to institute small-scale control. by state-operated
trade agencies ir. cyder to stimulate more marketing '~~ private agencies. If
all areas cooperate with pri?^.te trade agencies. the power of these agencies
should increase.
Finally, a crucial phase ir. encotLraing sales is control of market prices
of :Local products; it is elso the most, effecti?re ?.r;,?? of ^aiding production.
Characteristics of local production a_ `"
often involves transportation uroblems.? yThus y i.s cumoarsome, seasonal, and
transportation, and sellin, w?rile cortrollinz i,ruduct.Lon,
control the P i~rofits ~:: imlcrtanl:, zt i:; more inrparl,an`. to
of fire pricepdifierentialstbetwe~n '~:1c bacdt;cin~pnrea:-sinr~t~derJto1g-l fixing
long-distance transportatior, o- stimulate
stimulate and regttla,te prcrd::ction.ard~cen?anise ~ ~ qualityeandlvaluelofytheR
local products. In 1j0, much e:cneriot~cc. ?.aas obtained in this field, al-
though several poor results were produced :rilich require attention.
(The following '- i_?om an article entitled "Ruuld Develoment. of Rural-
Urbar. Cotmnodity Flow in ire Pact 'Year," publishc3 by the Information Service,
Ministry of Trade, in t:c .Tientsin CL?in-;ru Jih-pao, 19 January 1952,
fn 1951, under the direct lea3ersnin and coacr~te organization of all
levels of the People's Government, fcr the purpcse of expanding r,rral-,rrb17
cormnodity *?lo?:, all regions held local
lecting and exchanging experiences. idany areas al.noeheldel.ocalepeoducts ex-
positions and conducted actual trading nct,i'ri`y ar such conferences and ex-
positions. Under t?te gttidancc of the ;rate-one:?aterl trade agencies, all areas
carried out definite price policies, ort;anizcd acrd developed private trade,
organized long-distance and traveling marketing teams, set up local products
marketing warehouses, formed area cielegntions composed of public and private
individuals, set up jointly-operated trade concerns and shops in r?sal areas,
organized credit markets, and made. f+.i17 use of .Coca] meetings anal confec?erces
to develop the flow of local prod,tcta.
All economic units are strivitrg to cooperate witi; Chis local products-
trading activity; financial agencies have reduced sane tn:.es and sitrplified
tar. collection; and tare Ministry of Railways; it;rs ^educed freight rates 20-
50 percent on several items in ludirtg i'resh i'ish, persicxtons, shwa-cha,
huang-chin, cltih-mu, chaff-hu, rhubarb, ana s?,~eet; potatoes, Tite backs have
stimulated the inte_est nqd faith of privets, trade in the credit c.nd bills of
exchange of ^,ome lacai-products enterprises.
r1a a result. of the active leadership o1' the 2ecnle's Go:arnrnent attd the
mutual cooperation of all economic agencies in carrying out a unified organ-
izing operation, in the past half year it itas been possible to d?velop the
flow of good; and to e::pand sales of rural products. Thus, we have i.acreased
the farmers' buying power, stimulated the social economy, improved markets, and
attained great success in destroying the plans of the US and its sa~,erlites iu
their blockade. With all areas carrying out these organizing acti~.ities, local-
productc sales are rising, old tr~dc ~~ +-?? ;are bein;* revivei u?ri new ones
opened, and a new trade and economic systemFis being founded.
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been fixed amountin V+, - `- ~ ~'~~ r"??''` ur;rc+c:ies, franc agreements nave
pw itions in Central~SouthvChittatandlEant China,nagreementscand`actual salesx
totaled more than 1,400,000,000,000 yuan, At the I1ert'rwest conference, more
than 500 agreements WPl?P ~i.,..va ~......,-.___
local """"""'g ""'+? L++s++ i2v icittds of s.iow-moving
products and totaling 250 billion Yuan in value. Kisngsi, Honan, Hunan,
Kwangtung, and Kwangsi exchanged trade amounting to 'T, ].05,000,000,000 Yuan.
Peiping sent a group of commercial representatives tc cities in z4 provinces,
where they signed 360 agreements valued at 126,087,970,000 yuar..
The Ilorthwest Department of Trade organized a trade inspection team in
May which signed 128 agreements in Central South Chine and East Ghina cover-
ing 283 commodities valued at more than 67 billion. Yvan. At the same time,
trade connections were set ua with such distant place:; as Kirin, Fukien,
Yunnan, Kweichow, and Sikang. The South Chiz~ Area promoted sales of mnngosteen,
split rattan. local cloth, rush mats, chinaware, betel Hula, t'ou-ts~ai, dates,
and other slow-moving local nroduct.s. The ful.L calve wis more than 130 billion
;,van. Hopeh Province purchased from tl:e Central-Seuth China Area products which
that wren had never marketed before, for instan_e, 400.000 cattier of blac'r.
dates. All the other provinces and mutticiiut].ities set u5 trade networks,
signed agreement, and traded large q,~ntiti~-s of commouities. On a national
sca12, marketing of local products war e:?mande3 and ~ produce was soli
thus giving slow-Belli;:g local products n new nears of recovery.
After local producto received an organized sales promotion in all regions,
more t}San OU percent of the local products were sold !.local products represent
ab~;:;; 25 percent of the income of China's
farmer an average income of about c0 OGO 390 mil]ion i'armers), Ewing each
yuan frori t is source. This clearly
shows the rise of ru~a1 harchnsing power an3 the increase in meeting the needs
of the farmers. The city cf T'a-ho in fIonan increased by five times the num-
ber of iron wheeled rants in 1951 over iy50. In iiopeh, Shih-chin-Chuang held
a rural-urban trade conference in May 1951 at which the sale of farm implements
exceeded tha+, nt a similar corfcren:e in 1950 by 25 times. As the farmer's
life improves, his need for industrial goods increases. In 1950, Tientsin
matches were n slow-moving item, but in 1851 production increased 300 percent
and there was still a shortage.
Also, the farmers suffered from loan, feudal owpressiori in tyr_ past and
ha3 no opportunity for cultural study. Iiow, dr_;,und. has increased for cultural
items. Through government policies to ea-r.end education of t!te masses, cultural
items ,are selling everywhere. In 1~i5U, the average monthly nroduc:,ion of foun-
tain pens was 110,000 dozen but in 1951 the ;:rodu~tion was 400,000 dozen in
July and August. In Juan-k'ou-ts'un ir, Soul:. Anhwei every fang family in this
tea area has bought an average of two fountzin o_ns.
Opening up the flow oi' woods and increasi;tg; sales of doves*.ic tnari!ets
have offset the blockade. !?fany export coys:odities which formerly went to im-
perialist nationa now have found domastic markets. At the same time, n;at:y do-
mestic suUstitutes have been fou.^.;1 i'or indusLria? raw materials .previously im-
ported.
All thin clearly shows that, ir, China, whore the land is vast and goods
are ample and where the small farm economy occuoios the advaniageous position,
the broad expansion of commodity flow and the organized sale of farm products
are the keys to an active socialist economy and the first requisites for na-
tional industrial'.zation. This also clearly show.^, our power to break the US
blockade and to insure the daily st-engttaning of our oxr independen~ economy.
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D? 1m octant Local Products of th Admini trat>.ve Arens
(The'fullowing information is from a Iisin-hug News Agency Report, 26 Jan-
uary 1950.)
ivurtheast -- Excluding ivportant export item:; and industrial .aw materials
such as cotton and hemp, Northeast products include fruits, gunny bags, rued
mats, soda, and willow strips, totaling-105 varieties of local products.
(The following information is from t}te S1:^.n~itai Ta Kunf; Pao? 23 h;a.y ly9G.
liorth China -- Hump; plaited grass for hats, sunflower s~teds, relons, to-)
bacco, Lactua thunbergiana, huai-r..i [epiphyte oa scphora7] noodle-, soda, mush-
rooms, seaweed, persimmon cakes
root , citestnut;s, jujube fruit, hoar;;-chit.:, ]icrrice
peonies; Siler divericatum, chaff-hu, Pc]y;;ala tenuifolia, ,jujube saeus,
wu-this-p'i [a liquor], chu-ling [a 'tn;;t,s], epi:edra, tans-shen, Fhermnania
glutinosa, huai-yao, a^,bestos, sulfur, a1LUa, a
stone. ? ^n~ e, g;,~tsun, mica, and soap-
Northwest China -- Fungus, raising, ?each stones, music o~t~s., licorice
root, rimbarb, Ligusticum acutilobtmt, anlreL'ca Rivalaria pir.un, crude lncaue=,
RzPer, and sulfur. '
r,ast China -- Hemp, tobacco, Erar;s for 1>.ats, rtrav hats, noodles, Lactua
titunbergia, dried bamboo shoots, bamboo rrticle, ,
jujube fruit, walnuts, elmond fresh gist?er, rosin, capsicum,
p>.ts, persirzton cakes. dried fruits, sweet po-
tatoes, hill haws, mushrooms, dr~e:i lichees, clte~r.??nts, honey ?iates, dates.
Pachyma coca, Magnolia offi.,.inalis, ts'un tun;, Adcao:%ho??a p~~ -,n-,i :~.;:.,,
alum, fo-shih, mandari Gran es - nn. ,r
olives g , o~Bes, Po:a'1os, eonles, nears, lor}uats, Icmegrana~s,
, Paper, tsunz-n?i, ualr :.ats laces; emtrowc:??. ha^~^.
agar-agar. ' - ~ -----..,;, eau
Central-South Cltirs -- Tohaccp, oWl, ,!iu~u iur Hats, main, noodles,
dc?ied bamnoo ::hoots, lotus seeds, _renper, ginge:?, baitboo artic]os, persi-.mnons,
cassia bark, gingkoe fruit, honey date;, rsuaiu?octas, sulfur gypsum, arsenic,
porcelain, paper, rush mats
bean c , grass Hato, ^ttnay ba};;;, fish, :,:;ng-coal and
ekes.
Southwest China -- hemp? raw lacquet~,pressed ve~e;;ables, tobacco, wa:c,
galls, Captis ,japonica, and musk.
(The following information is front the Tientsia Chin,~ou Jih?ttao, 12 Sep-
tember 1951.) __ _
Inner Mongolia Autonomous Area - ]:aotiang; rcillet;, buc}crheat, beans.
? mules, sheep, pigs, animal oils, butter, cream, goats};ins, sheepskins, civet
skins, i'ox skins, badger skins, otter;, equine!;, ;u;-tzu ;l:inc, rabbit sklns,
sb4ep wool, cr+,mel uool., chickens, i'roaen fieh. ;Weep casings, pheasants, licorice,
Sile~ divericatum, peo,;tes, scu~ella~ia, sc:}~onin, hemp thread, }temp, linen,
ao,.a, soda ash, ,;aitpccer, sodium sa:tate, s?slt, ? c-sal-;rin lcasein?], hides
a;rd leather, musiu?ooms, hazelnuts, hug-lien?ra, powdarel Lean:;, melc.t.^>, noodles,
Lactua thunbergia, ?t,u?nips ?
E. Expositions of Loca~ Products
(The following information is taken i~:om an article ertitled "T};,. lmpor-
LacalBProductsoBureau,9Ministry foTrade -.Ypositions," by Wu Chi.en?!tua, of: the
Jih-ray, 21 December 1951.) , Published in the Tieat~!:- C!tin-pu
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In 1951, all areas energeticai.ly promoted sales of local products .in
ccai'ormity :+ith the important
oal
f
g
o
strengthening domestic sales and
stimulating rural-urban economy. By September, the leadership of tl:e party
and the government hod sponsored a series of local products conferences
from the heron level down to admini :t,?p+;.... .._
'_ccal - - ?-~~=? 1~+~-1 u~,~i some areas !.old
b+u