Since the Communist Party of China has shaped the economy of China through the plenary sessions of the Central Committee and national congresses. The Party plays a leading role in establishing the foundations and principles of Chinese communism , mapping strategies for economic development, setting growth targets, and launching reforms.
Planning is a key characteristic of socialist economies , and one plan established for the entire country normally contains detailed economic development guidelines for all its regions.
Having restored a viable economic base, the leadership under Mao Zedong , Zhou Enlai , and other revolutionary veterans were prepared to embark on an intensive program of industrial growth and socialization.
For this purpose, the administration adopted the Soviet economic model, based on state ownership in the modern sector, large collective units in agriculture, and centralized economic planning. These tasks were not successfully carried out during this time [ citation needed ] , with the combined output of the state-run, cooperative, and joint state-private ownership economies dropping national income from Accumulated investment in capital construction was 55 billion yuan and fixed asset increments reached About large and medium-sized projects were completed and put into production, laying the framework of China's industrialization.
The gross value of industrial products in increased The two major problems that arose during this period were the following: Agricultural production couldn't keep pace with industrial production.
In addition, investments in capital construction in totaled As in the Soviet economy, the main objective was a high rate of economic growth, with primary emphasis on industrial development at the expense of agriculture and particular concentration on heavy industry and capital-intensive technology.
Soviet planners helped their Chinese counterparts formulate the plan.
Large numbers of Soviet engineers, technicians, and scientists assisted in developing and installing new heavy industrial facilities, including entire plants and pieces of equipment purchased from the Soviet Union. Government control over industry was increased during this period by applying financial pressures and inducements to convince owners of private, modern firms to sell them to the state or convert them into joint public-private enterprises under state control.
By , approximately During the same period, the handicraft industries were organized into cooperatives, which accounted for Agriculture also underwent extensive organizational changes.
To facilitate the mobilization of agricultural resources, improve the efficiency of farming, and increase government access to agricultural products, the authorities encouraged farmers to organize cooperative farming, starting in Since traditional family farming practices were not sufficient to bankroll the country's ambitious industrialization projects, party officials encouraged families to pool their farms into small cooperatives in order to increase farm yields.
Unlike the large scale collective farming policies which began in , the cooperatives were successful and popular. Farming families, who previously engaged largely in subsistence farming, now began raising and selling livestock based on the increase in grain surpluses, which was directly responsible for the practices popularity and rapid rate of enrollment.
Central committee planning dictated that from the loosely structured, tiny mutual aid teams, villages were to advance first to lower-stage, agricultural producers' cooperatives, in which families still received some income on the basis of the amount of land they contributed, and eventually to advanced cooperatives, or collectives beginning in with the second Five Year Plan. In the agricultural producers' cooperatives, income shares were designed to be based only on the amount of labor contributed.
In reality, small farming markets that revolved around cooperative surpluses, sprang up across the nation. The land reforms from — increased private land ownership, with typical results increasing land ownership of farmers from just under one acre to approximately three acres.
The cooperative process, began in , accelerated quickly, slowly from to By about In terms of economic growth, the First Five-Year Plan was quite successful, especially in those areas emphasized by the Soviet-style development strategy. A solid foundation was created in heavy industry.
Key industries, including iron and steel manufacturing, coal mining, cement production, electricity generation, and machine building were greatly expanded and were put on a firm, modern technological footing. Thousands of industrial and mining enterprises were constructed, including major facilities. This growth resulted primarily from gains in efficiency brought about by the reorganization and cooperation achieved through cooperative farming. As the First Five-Year Plan wore on, however, Chinese leaders became increasingly concerned over the relatively sluggish performance of agriculture and the inability of state trading companies to increase significantly the amount of grain procured from rural units for urban consumption, and for funding the many large urban industrialization projects.
However, the Great Leap Forward , which diverted millions of agricultural workers into industry, and the great sparrow campaign , which led to an infestation of locusts, as well as unprecedented natural and weather based issues, caused a huge decrease in food production.
Five-year plans of China
Simultaneously, rural officials, under huge pressure to meet their quotas, vastly overstated how much grain was available. Thus, a massive nationwide famine ensued, which was avoidable, but the government continued with its policy.
The Third Plan was originally due early in , but at that time China's economy was too dislocated, as a result of the failure of the Great Leap Forward and four poor harvest, to permit any planned operations.
The Plan contained two comparatively detailed schemes: one was the Preliminary Tentative Plan of the 3rd Five-year Plan — proposed by the State Planning Commission and agreed by the Central Government Work Meeting in May ; the other was the Report Syllabus about the Arrangement of the 3rd Five-year Plan drawn out by the State Planning Commission and agreed by the central government in September The Tentative Plan set out the following basic tasks: [ citation needed ]. The Plan also called for the prioritization of national defense in the light of a possible big war, actively preparing for conflicts and speeding up construction in three key areas; national defense, science and technology, and industry and transport infrastructure.
The outputs of other newly added major products were This plan was more successful than anticipated, with the industrial and agricultural goals exceed by Agricultural gains also exceeded goals, but more moderately, with a 2. According to the Official Portal of the Chinese Government, however, the focus on accumulation and rapid development in this and preceding plans were impediments to long-term economic development.
A first draft of the Plan was developed and agreed upon in September at the 2nd Plenary Session of the 9th Communist Party Central Committee, which stipulated: [ citation needed ] .
12 Principles of Animation (Official Full Series)
In July , the State Planning Commission amended the draft, lowering some of the targets initially set. Steel output was reduced to between 32 and 35 million tons and later further reduced to 30 million tons. The national economy took a favorable turn in and By , all major economic indices had been fulfilled or exceeded, making it the year with the fastest economic growth.
In March , the Ten Year Development Outline was amended because the original version in stipulated that by , steel and petroleum outputs should reach 60 and million tons respectively, and large projects, including 10 steel production bases, nine non-ferrous metal bases, eight coal bases and 10 oil and gas fields, should be built. To achieve these goals, the government would invest 70 billion yuan in infrastructure construction, equaling total national investment over the previous 28 years.
China’s 12th Five-Year Plan - KraneShares
These were impossible targets and ran counter to economic development rules. The Plan put forward suggestions to set up an independent and comparatively complete industrial system and national economic system from to With the implementation of the Plan, considerable success was achieved. In , the gross output value of industry and agriculture reached Gross domestic product for reached billion yuan, an increase of However, during this period, the Chinese economy developed too quickly, and the very high goals triggered the onset of yet another round of mistakes.
The Session emphasized that the development should follow economic rules and proposed readjustment and reform measures, which indicated that national economic development had entered a new phase, one of exploration and development. In April , the central government formally put forward new principles of readjustment, reform, rectification and improvement.
This Plan took some time to draft. It convened a seminar to discuss the compilation of the 6th Five-Year Plan. To that end, the State Planning Commission and related departments also carried out extensive research and calculation work on the compilation of the Plan, and organized related experts to conduct scientific appraisals.
The national planning meeting was again mainly focused on the drafting of the Plan. It was only in December that year that the fifth meeting of the Fifth National People's Congress officially ratified the Plan.
It was a more comprehensive plan compared to its predecessors since it adjusted and set national economic development onto a more stable and healthy track, with general objectives to:. Alternatively, several negative results included a disproportionately high fixed asset ratio, rapid growth in consumption and fiscal over-supply.
All of this negatively impacted the economy's stability and growth. It was the first time in China's history that an all-round plan for social and economic development was created at the start of a new five-year plan.
Under Deng Xiaoping's leadership, this Plan marked the start of a new phase in China's development.
The national economy maintained its growth momentum during this time. Gross national product in reached 5. Outputs of coal, cement, TV, foodstuff, cotton and cotton dresses were the highest in the world, with steel and chemical fiber outputs second, and electricity supply third. Total investment in fixed assets during this time hit 3.
In terms of transportation infrastructure, 5, kilometers of trunk railway, 3, kilometers of double-track lines, and 2, kilometers of electrified railway were built. Road lengths were increased by , kilometers, including 1, kilometers of highway. The throughput of ports increased by million tons and 12 new airports were built.
Output value of the primary industry increased at an annual growth rate of 4. Output composition of the three sectors stood at Significant achievements were also made in the reform of the economic system. The new financial system with tax decentralization at its core, and the new tax system with value-added tax as its main component, were set up. Policy finance and commercial finance were gradually separated.
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A macro regulating system emerged, and the market started to play a more major role in resource allocation. Also mapped out were the beginnings of a dominant public sector. More than 1, cities at county level were opened to the outside world, and 13 bonded zones and other a lot of economic development zones were set up. Major improvements were also made to people's lives.
Retail sales reached 6. Savings deposit balances in urban and rural areas reached 3 trillion yuan, 2 trillion higher than at the end of the previous planning period. Per capita floor space of newly built houses in urban and rural areas reached 4.
At the end of , rural residents' per capita living space was China registered an increase of 50 million in terms of social labor forces, including The population of the extreme poor decreased from 85 million at the end of the s to 65 million in Population control was achieved during this period, with growth rates dropping from Rates of radio and TV population coverage reached It was the first medium-length plan made under a socialist market economy, and a cross-century development strategy.
The basic tasks stipulated in the Plan were to complete the second phase in the modernization drive; to cap population growth at million by ; to quadruple per capita GNP as compared to ; to eliminate poverty; and to speed up the establishment of a modern enterprise system.
Long-range objectives to the year were to double 's GNP; and to continue to build the socialist market economic system. On the environmental front, to increase forest coverage to The Plan also set out to increase the growth rates of disposable income of urban residents and the net income of rural residents to five procent each.