Understanding China Jun Yin Jia Xu China’s Plan for Economic and Social Development A Review from the 1st to 14th Five-Year Plan Understanding China The series will provide you with in-depth information on China’s social, cultural and economic aspects. It covers a broad variety of topics, from economics and history to law, philosophy, cultural geography and regional politics, and offers a wealth of materials for researchers, doctoral students, and experienced practitioners. · Jun Yin Jia Xu China’s Plan for Economic and Social Development A Review from the 1st to 14th Five-Year Plan Jun Yin Jia Xu Institute of Xi Jinping Thought on Institute of Party History and Literature Socialism with Chinese Characteristics for of the CPC Central Committee a New Era, Peking University Beijing, China Beijing, China ISSN 2196-3134 ISSN 2196-3142 (electronic) Understanding China ISBN 978-981-19-5903-5 ISBN 978-981-19-5904-2 (eBook) https://doi.org/10.1007/978-981-19-5904-2 Jointly published with Peking University Press The print edition is not for sale in China (Mainland). Customers from China (Mainland) please order the print book from: Peking University Press. © Peking University Press 2022 This work is subject to copyright. 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Neither the publishers nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publishers remain neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore Acknowledgements The translation was completed by Chen Yaping from Tongji University, and has benefited from careful revision by Chen Lin, Matthew Spooner, and Wang Lihuan, from the translating assistance of Chen Songyu, Li Jing, Wang Linyi, and Yu Shiwen at Tongji University, from the expertise of the author Yin Jun, from the initiative for the translation by the Peking University Press in China, and from the editing services of Springer. It is also supported by Tongji University’s Center for Translating China for Global Communication. v Contents 1 Introduction ................................................... 1 1.1 State Governance and Planning System ........................ 2 1.1.1 National Development from a State Governance Perspective .......................................... 2 1.1.2 Typical State Governance Behind China’s Economic Miracle ............................................. 4 1.1.3 The Five-Year Planning System with Chinese Characteristics ....................................... 8 1.1.4 A Brief History of the Rise and Fall of Planning Worldwide .......................................... 18 1.2 The Logic of Governance by Planning ......................... 24 1.2.1 Three Basic Theoretical Questions ...................... 24 1.2.2 What is Planning? .................................... 25 1.2.3 Why Is Planning Needed? ............................. 31 1.2.4 How to Plan? ........................................ 36 1.3 Developing a Planning Theory with Chinese Characteristics ...... 39 1.3.1 A Methodology for Building a Planning Theory with Chinese Characteristics ........................... 39 1.3.2 Taking Axioms of Marxism as the Body, and Making Good Use of Western Learning Systems ................. 42 1.3.3 Learning from Historical Experience and Lessons ........ 43 References ..................................................... 45 2 Five-Year Plans in Exploration .................................. 49 2.1 The CPC’s Planning and Preparation for National Development Before 1953 ................................... 49 2.1.1 The Grand Blueprint of the PRC Relied on Planning ...... 50 2.1.2 Preparation for a Planned Economy: Formation of the State-Owned Economy, Adjustment of the Industry and Commerce, and Establishment of Planning Management Mechanism ................... 53 vii viii Contents 2.1.3 The Drafting of National Economic Plans: Advancing in the Course of Exploration ........................... 59 2.1.4 The Initial Practice of the Planned Economy in Northeast China ................................... 61 2.2 The First Five-Year Plan: An Important Beginning of China’s Transformation from an Agricultural Country to an Industrial Country ................................................... 63 2.2.1 Mao Tse-Tung Pointed Out That the Strategy of Giving Priority to the Development of Heavy Industry Was the “Policy of Great Benevolence” .......... 64 2.2.2 The Visit to the Soviet Union and the Signing of Agreements ....................................... 65 2.2.3 The Establishment of the Working Procedure of “Down Twice and Up Once” in the National Planning System ..................................... 68 2.2.4 “A Five-Year Plan, Being Planned Over Five Years” ....... 72 2.2.5 Unprecedented Investment in Chinese History ............ 75 2.2.6 “The Spring in the History of China Planning” ........... 76 2.3 The Second Five-Year Plan Through Ups and Downs ............ 78 2.3.1 “With All Unfolding at Full Tilt” ....................... 79 2.3.2 Zhou Enlai Said with Concern, “The Preparation of Plans Must Be Based on the Reality” ................. 80 2.3.3 Recommendations for the Second Five-Year Plan Submitted to the Eighth CPC National Congress .......... 82 2.3.4 With the Sudden Change of Situation, the National Economic Construction Was Out of the Sound Development Track .................................. 84 2.4 Adjustments and Eight-Character Policy After the Second Five-Year Plan ............................................. 87 2.4.1 “Don’t Be Ashamed of Mentioning the Mistakes We Have Made: Only by Reviewing and Learning from Them Can We Provide Timely Guidance” ........... 87 2.4.2 “Work According to the Plan, Not in Favor of Subjective Desires and Ambitions” ................... 88 2.4.3 “Now It Is Time to Resolve to Correct Mistakes” ......... 89 2.4.4 “Now a Period to Reinvigorate Both Agriculture and Industry Is Needed” .............................. 92 2.5 The Third Five-Year Plan: From Focusing on Basic Necessities to Preparing for War .............................. 95 2.5.1 “The Plan of Food, Clothing and Life Necessities” ........ 96 2.5.2 The Starting Point for Mao Tse-Tung’s Consideration of the Third Five-Year Plan Was to Prepare for War ....... 97 2.5.3 “I Will Be Too Uneasy to Sleep if the Iron and Steel Industrial Base in Panzhihua Is Not Set Up” ............. 98 Contents ix 2.5.4 To Further Study the Third Five-Year Plan and the Third-Line Construction by Mao Tse-Tung’s Requirements ....................................... 100 2.5.5 The Comprehensive Implementation of the Third-Line Construction and the Formulation of the Third Five-Year Plan ....................................... 101 2.5.6 Strive to Complete the Third Five-Year Plan ............. 103 2.6 The Fourth Five-Year Plan: Exceeding in Three Respects and Adjusting Twice ........................................ 105 2.6.1 The Blind Pursuit of High Speed and High Targets Led to the “Excess in Three Respects” .................. 105 2.6.2 “Why Are We Unable to Do What We Could Do in the Past? I’m Very Upset About It” ................... 107 2.6.3 “In Socialist Construction, Both Production and Technology Work Must Be Done Well” .............. 110 2.6.4 The Fourth Five-Year Plan Was Fulfilled After Twists and Turns ........................................... 114 2.7 The Fifth Five-Year Plan at a Great Historical Turning Point ...... 115 2.7.1 The Economy Was Hit Hard in 1976 .................... 116 2.7.2 Smashing the Gang of Four and Formulating a New Leap Forward Plan ................................... 118 2.7.3 The Third Plenary Session of the Eleventh CPC Central Committee: A Turning Point in History ........... 122 2.7.4 Putting Forward the Eight-Character Policy of Adjusting, Restructuring, Consolidating, and Improving ....................................... 123 References ..................................................... 127 3 Five-Year Plans During Reform and Opening-Up ................. 133 3.1 The Sixth Five-Year Plan: Another Period of Rapid National Economic Growth .......................................... 133 3.1.1 Deng Xiaoping Stressed, “Attention Should Be Paid to Adjustments. Reform Should Be Subordinate to and Conducive to Adjustments Instead of Hindering Them” .............................................. 134 3.1.2 The “Long-Awaited” Five-Year Plan—The Sixth Five-Year Plan Announced to the Whole Society ......... 135 3.1.3 A Significant Transformation in the Planned Economy: The Twelfth National Congress of the CPC Proposed the Idea of a “Planned Economy as the Mainstay Supplemented by Market Regulation” ..... 138 3.1.4 Significant Achievements During the Sixth Five-Year Plan ................................................ 139 3.2 The Seventh Five-Year Plan: Reform, Ups and Downs, and Development ........................................... 141 x Contents 3.2.1 Theoretical Breakthroughs After Adopting a “Planned Commodity Economy” ............................... 142 3.2.2 Where Is the Limit of “Capacity”: The Seventh Five-Year Plan Formulated in Debate ................... 143 3.2.3 The Start of the Seventh Five-Year Plan Was Overheated with Chen Yun Reminding of the Importance of “Staying Clear-Headed” ............ 146 3.2.4 Rectification Proved to Be Effective, and the Seventh Five-Year Plan Was Successfully Fulfilled ............... 148 3.3 The Eighth Five-Year Plan: High-Speed Growth with “Soft Landing” .................................................. 151 3.3.1 Conducting Rectification and Improvement While Developing the Economy in a Sustainable, Stable, and Balanced Manner ................................. 151 3.3.2 “Once We Are Sure That Something Should Be Done, We Should Dare to Experiment and Break a New Path” .... 154 3.3.3 The Central Government Adjusted the Eighth Five-Year Plan After the Southern Talks ................. 157 3.3.4 Macro Regulation and a Soft Landing for Economic Growth ............................................. 159 3.3.5 The Eighth Five-Year Plan: One of the Best Implemented Five-Year Plans Since the Founding of the PRC .......................................... 162 3.4 Completion of the Ninth Five-Year Plan: A New Milestone in the History of China’s Development ........................ 163 3.4.1 The New Domestic and International Environments Fueled New Features for the Ninth Five-Year Plan ........ 164 3.4.2 The First Five-Year Plan Formulated Under the Conditions of a Socialist Market Economy ........... 165 3.4.3 Timely Adjust the Ninth Five-Year Plan in Response to the Asian Financial Crisis ........................... 166 3.4.4 “The Economic Situation This Year Is the Best Ever Since” .............................................. 168 3.5 The Tenth Five-Year Plan: China as an Important Underpinning and Engine of Global Economic Development ..... 170 3.5.1 Take the Strategic Adjustment of Economic Structure as the Mainline ...................................... 171 3.5.2 The Formulation of the Tenth Five-Year Plan: Universal Discussion and Wide Participation ............. 173 3.5.3 The Targets of the Plan Should Give Leeway Due to International and Domestic Uncertainties .............. 175 3.5.4 China Became an Important Underpinning and Engine of Global Economic Development ...................... 177 References ..................................................... 179