Lesson 5: Three major transformations

Cooperative agriculture and handicrafts

After the land reform, peasants were given land, and agricultural production was restored and developed. However, agriculture in China was still run by one family in a fragmented manner. At that time, poor peasants lacked production tools and capital, and it was difficult for each family to solve the problem of water conservancy, resist natural disasters, use the arable land rationally, and use advanced mechanized farming tools. This affected the development of agricultural production, and agricultural products could not meet the needs of national industrialization. The peasants also had the demand for mutual cooperation. For this reason, the state carried out socialist transformation of agriculture, mainly by organizing the scattered individual farmers and guiding them to join agricultural production cooperatives, so as to follow the socialist path of collectivization and common prosperity.

The superiority of agricultural cooperativization prompted peasants to join cooperatives enthusiastically. Agricultural cooperativization started with the principle of voluntary and mutual benefit, and was gradually promoted through typical demonstrations. It went through three stages, from agricultural mutual aid groups, primary agricultural production cooperatives to advanced agricultural production cooperatives, and in 1955, the climax of agricultural cooperatives was set off nationwide. In the following year, the majority of farmers in the country joined agricultural production cooperatives.

In 1956, more than 90% of the individual handicraftsmen joined the handicraft production cooperatives.

Public-Private Partnership

Capitalist industry and commerce, an important part of the social economy in early New China, once suffered serious difficulties, and the People's Government helped private industrial and commercial enterprises to overcome the difficulties and achieve development by adjusting them. However, there were also negative aspects in private industry and commerce that were not conducive to the national economy and people's livelihood. Some private industry and commerce owners disregarded the interests of the state and the public for profiteering, and even resorted to various unlawful means to seriously disrupt the economic order, and the people's government had to fight against them many times. With the recovery of the national economy and the strengthening of the state economy, the public-private partnership economy emerged and developed. In order to make the transition from a private economy to a socialist public economy, the socialist transformation of the capitalist industry and commerce by the state from 1954 onward gradually developed into a public-private partnership of enterprises, in which both the public and the private sides jointly operated the enterprises, with the representatives of the public side taking the leading position. Under the influence of the climax of agricultural cooperativization, the socialist transformation of capitalist industry and commerce in early 1956 saw the climax of industry-wide public-private partnership.

In the process of transformation, the state implemented the policy of redeeming the means of production possessed by the capitalists, i.e., paying fixed interest on the capital of the capitalists at the time of the industry-wide public-private partnership. This redemption policy, which achieved a peaceful transition, was an innovation in China's socialist transformation.

By the end of 1956, the state basically completed the socialist transformation of agriculture, handicrafts and capitalist industry and commerce, and realized the transformation of private ownership of the means of production to socialist public ownership. The basic socialist system was established in China. This was the most profound social change in China's history. China has since entered the primary stage of socialism. In the late stage of socialist transformation work, there were also shortcomings such as too hasty demands, too rough work and too rapid changes.

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