Chapter 25 7.4 Economic adjustment needs to be "severely injured"

The song "Longzhong Pair" won a lot of applause.Chen Yun said that economic adjustment will "severe muscles and bones". In addition to looking for various emergency measures, Chen Yun is still thinking about various ways to implement the adjustment policy and get the national economy out of the predicament. At that time, the "Great Leap Forward" was unsustainable. In January 1961, the Ninth Plenary Session of the Eighth Central Committee of the Communist Party of China officially decided to implement the policy of "adjustment, consolidation, enrichment, and improvement".Facing the difficult situation faced by economic work, although the financial and economic departments have the most direct experience, they are limited in their understanding of the economic construction policy and cannot jump out of the "leap forward" frame. Therefore, they cannot correctly analyze the situation. They only know that the situation is very serious. Difficulties, I was anxious, and I couldn't find a way to overcome the difficulties. I couldn't implement the adjustment policy. I was very passive in my work and was criticized by the central leaders.

Chen Yun also came up with a lot of ideas, such as selling high-priced candies, snacks, fried pork slices, setting up export bases to ensure exports and gain foreign exchange, etc. Although they have played a certain role in improving market supply and returning currency, the overall problem must be solved. These measures alone are not enough. From January 11 to February 7, 1962, an enlarged Central Work Conference was held. The conference was attended by seven responsible cadres from the Central Committee, all central bureaus, party committees of provinces, municipalities, autonomous regions, prefectural committees, county committees, important factories, mines, and enterprises. Thousands of people, so it is also called the Seven Thousand People Conference.One of the important contributions of this meeting is that it has taken a step forward in understanding, initially summed up the experience and lessons since the "Great Leap Forward", analyzed the main shortcomings and mistakes in the work, and pointed out that the current main task of the whole party is adjustment.At the meeting, Mao Zedong emphasized the need to promote democratic centralism, and he took responsibility for the mistakes made in the past few years, which changed the political life of the party and initially liberated everyone's minds and dared to speak out.It laid an ideological foundation for the implementation of the adjustment policy and for the national economy to get out of the serious predicament.

Chen Yun spoke highly of this. On February 8, Chen Yun spoke at a meeting of all cadres in Shaanxi Province, saying that this meeting has achieved a very great victory, so don't underestimate it.As long as we have the courage to carry out criticism and self-criticism, uphold the truth, and correct mistakes, our Communist Party will be invincible in the world. After the meeting of 7,000 people, the financial department reported to the central government that there was a deficit of 200 to 300 million yuan that year, which was a big problem.Liu Shaoqi decided to hold a meeting of the Politburo for discussion.This meeting was held in the West Building of Zhongnanhai, hosted by Liu Shaoqi.This is the Xilou Conference that was severely attacked during the "Cultural Revolution".At this meeting, Chen Yun gave a detailed explanation of his observation of the situation and his thinking on how to get out of the predicament over a period of time.

In terms of assessing the situation, Chen Yun believes that the difficulties are still very serious, mainly manifested in several aspects: The first and biggest difficulty is the decrease in agricultural production and insufficient food. The second major difficulty is that the scale of capital construction that has already been laid out exceeds the possibility of the country's financial and material resources, and is not compatible with the level of industrial and agricultural production at that time. The third serious difficulty is that too much banknotes are issued and inflation occurs.The reference to inflation is very sharp and very jarring.But Chen Yun proceeded from reality and believed that this was the case.He said that although the current inflation is fundamentally different from the hyperinflation before the collapse of the Kuomintang, there is no doubt that it is also a kind of inflation.Over the past few years, commercial inventories have been dug up, prices have risen, a large part of gold, silver and foreign exchange reserves have been used, debts have been owed in foreign trade, and an extra six to seven billion yuan has been issued to make up for the fiscal deficit. is a manifestation of inflation.

The fourth difficulty is that a large amount of banknotes from the cities are being transferred to the countryside. Some farmers have a lot of banknotes, and speculation is developing. The fifth difficulty is that the living standards of urban people have declined.Food, clothing, and supplies are not enough, prices have risen, and real wages have dropped a lot. Seeing the difficult situation clearly is conducive to prescribing the right medicine and finding ways to overcome difficulties.Chen Yun proposed that the 10-year plan should be divided into two stages, the former stage is the recovery stage, and the latter stage is the development stage.

The recovery period, according to Chen Yun's consideration, is roughly five years from 1960. Chen Yun proposed to divide the 10-year plan into two phases. Although no one raised any objections, his suggestion that recovery would take 5 years was considered too pessimistic. Later, he was said to be "rightist and conservative" and discouraged. , has been unfairly criticized.In the end, it turned out that Chen Yun's estimation was astonishingly accurate. In this speech, Chen Yun also put forward a series of specific measures, such as: continue to mobilize the urban population to go to the countryside; on the basis of ensuring that the prices of basic living materials do not rise, take measures such as selling high-priced snacks and candies, return currency and stop currency circulation Increase the supply of soybeans, build more ships to increase the supply of aquatic products, etc., and try our best to ensure the minimum living needs of urban people; increase the supply of rations to farmers who grow cash crops, and increase the production of agricultural production materials such as chemical fertilizers and agricultural machinery. supply and other methods, and use all possible forces to increase agricultural production.

Aiming at the serious imbalance between industry and agriculture, Chen Yun asked the planning authorities to shift their main attention from industry and transportation to increasing agricultural production and curbing inflation, which should be reflected in the national plan.Chen Yun said that increasing agricultural production, solving food and clothing problems, ensuring market supply and curbing inflation are the top priorities at present.The annual production of 7.5 million tons of steel and 250 million tons of coal is also important, but this is a secondary issue.On the premise of not hindering the increase of agricultural production and curbing inflation, it is of course very good to get so much steel and coal; if it hinders, it is okay not to get so much.

To increase agricultural production and curb inflation, it is not enough to rely solely on the State Council's Agriculture and Forestry Office and the Finance and Trade Office. It mainly depends on comprehensive agencies such as the Planning Commission and the Economic Commission to give these matters top priority in the national plan.Chen Yun said that Chairman Mao had long ago proposed that the development of the national economy must be based on agriculture, and plans must be arranged in the order of "agricultural importance".Now, we must study how our planning and economic work can truly embody this spirit.

Chen Yun's speech thoroughly explained the main difficulties faced at that time, the conditions and methods for overcoming them, and made people feel suddenly enlightened.Liu Shaoqi, Zhou Enlai, and Deng Xiaoping all expressed their full approval.Liu Shaoqi also asked Chen Yun to speak more fully at the plenary meeting of the State Council, so that all members attending the meeting of the State Council can understand our economic situation and understand the principles and policies. On February 26, 1962, a meeting of members of the leading party groups of ministries and commissions of the State Council was held in Beijing.Chen Yun further elaborated on the content of his speech on the economic situation and countermeasures at the West Building Conference.His speech was constantly interrupted by warm applause from the audience.The more Chen Yun spoke, the more vigorous he became. He was sweating, so he took off the sweater on his upper body and continued to talk.

The methods proposed by Chen Yun to overcome difficulties are neither rhetoric nor empty promises, but practical, reliable, feasible, and easy to operate.The ministers, directors and other heads of various departments present at the meeting couldn't restrain their joy when they heard this. The three places applauded warmly. After the Xilou meeting and the plenary meeting of the leaders of the party groups of various ministries and commissions of the State Council, the central government decided to restore the central financial and economic team to take charge of economic work. On April 19, the central government made a decision to appoint Chen Yun as the head of the central financial and economic team to take charge of the national financial and economic work.

On March 7, 1962, the Central Finance and Economics Group held its first meeting. Chen Yun gave a speech at the meeting, further concretizing and developing the measures he proposed at the Xilou meeting. Chen Yun's body was very weak at this time, and the doctor asked him to recuperate for a long time.After Chen Yun went to East China for a rest, Liu Shaoqi, Zhou Enlai, and Deng Xiaoping were the main responsibility for leading the implementation of the "eight-character policy" centered on adjustment.Chen Yun also tried his best to do some work. The Central Finance and Economics Group drafted the "Report on Adjusting the 1962 Plan" based on Chen Yun's opinion, suggesting that small enterprises that consume too much coal (mainly 100,000 small blast furnaces) and most of the local construction projects with no future should be "shut down, stop, In order to reduce the number of urban employees by 10 million in 1961 and reduce them by another 10 million in 1962, they will return to rural areas to strengthen agriculture. The production front enables the greatly reduced agriculture to have the strength to support the reduced life of urban workers. After the report was drafted and reviewed and revised by Zhou Enlai, Zhou Enlai asked Xue Muqiao to take the draft to Hangzhou to seek Chen Yun's opinions.At that time, Chen Yun was still very weak and could only talk for 2 hours a day, and the report was completed in 3 days. He fully agreed with the opinions put forward in the draft and asked Xue Muqiao to convey his opinions to the Prime Minister. After the deployment was made according to Chen Yun's opinion, the economic adjustment work soon produced results. In 1962, the development speed of industrial production was 16.6% lower than that of the previous year, the iron output decreased by 4.76 million tons, the steel output decreased by more than 2 million tons, and the capital construction investment decreased by 5.6 billion yuan compared with the previous year.Chen Yun suggested selling high-priced candies and snacks, opening high-priced restaurants, and later selling some high-end high-priced commodities as a supplement, and using this to withdraw currency and stabilize prices.In the next three to four years, a total of 5 billion yuan of currency was withdrawn from the sale of high-priced commodities, which was equivalent to 40% of the total currency issuance of 12.5 billion yuan in 1961, creating conditions for price stability. With the joint efforts of the whole party and the people of the whole country, economic adjustment has achieved great results.At the First Session of the Third National People's Congress held at the end of 1964, Zhou Enlai officially announced that the task of adjusting the national economy had been basically completed and that the entire national economy would enter a new period of development.