Comrades: Today we are convening two economic construction conferences—one for the seventeen southern counties and another for the eleven northern counties.
Such gatherings dedicated to economic development have never been held before; this is indeed a first.
The current situation is as follows: We have utterly shattered the enemy’s four encirclement campaigns, yet the fifth is already on the horizon.
A great storm of revolution and war is gathering across the globe.
Imperialist powers are feverishly preparing for a world war and for aggression against the Soviet Union.
Imperialism is relentlessly oppressing China: Japan has occupied four and a half provinces and continues to extend its predatory war into Inner Mongolia.
Following its disastrous defeat in the fourth encirclement campaign, the Nationalist government is now plotting a new, fifth one.
Meanwhile, revolutionary struggle and armed conflict throughout China have entered a new phase and are advancing by leaps and bounds.
It is precisely at this juncture that we convene these economic construction conferences, which clearly indicate what we must discuss and for what purpose our economic efforts are directed.
My report today will elucidate precisely this point.
I shall divide my presentation into two parts:  (I) The Crushing of the Four Encirclement Campaigns and the Imminent Fifth  (1) Let me begin by outlining the victories we have achieved in defeating the four encirclement campaigns.
First, there was the massive annihilation of enemy forces.
The fourth encirclement campaign was completely routed.
Over the past year, Red Army units operating in the Central Soviet Area, Eyuwan, Sichuan, Xiang-E-Western Hunan, as well as in the Xiang-Gan, Xiang-E-Gan, and Min-Zhejiang-Gan regions, collectively destroyed more than fifteen enemy divisions.
This triumph surpasses even our earlier successes in repelling the three previous encirclement campaigns.
The enemy’s military strength has suffered an unprecedented blow.
Lower- and mid-ranking officers throughout the Nationalist army now dread confrontation with the Red Army, while among the rank-and-file soldiers, dissent is growing and sympathy for the revolution is deepening.
Second, the Red Army has become both stronger and larger.
It has transformed into an invincible iron force.
Remarkable progress has been made in reorganizing the army, enhancing its military skills, and consolidating its political resolve.
The Red Army’s ranks have doubled compared with earlier times, and we have now established large-scale combat formations.
Third, the Soviet areas have been further consolidated.
During the fourth encirclement campaign, the class consciousness of the working and peasant masses soared, and their enthusiasm for supporting the revolutionary war intensified.
The thorough implementation of the land-reform movement and the vigorous development of workers’ struggles dealt severe blows to feudal remnants within the Soviet zones.
Cultural and educational initiatives among the masses have advanced still further.
Economic construction has entered a new stage of growth, Soviet organs have improved their performance, their prestige among the people has risen, and the banner of the Soviets has captured the hearts of laboring men and women nationwide.
Fourth, the territory under Soviet control has expanded.
The Min-Gan Province was established in the Central Soviet Area; new Soviet zones spanning hundreds of miles were opened in Sichuan; and Comrade He Long led the establishment of a major new Soviet region straddling Hunan, Hubei, and Sichuan.
Fifth, revolutionary activity within the Nationalist-controlled areas has also surged.
Since Japanese imperialism seized four and a half Chinese provinces and the Nationalist government capitulated to imperialist interests by signing a series of treasonous agreements with Japan, mass movements opposing both Japanese imperialism and the Nationalist regime have erupted on a grand scale.
Moreover, the Nationalists’ oppressive policies, widespread massacres, the collapse of agriculture, industry, and commerce, and the intensifying exploitation of workers and peasants by capitalists and landlords have spurred a wave of strike action, tax-resistance struggles among disaster-stricken farmers, rural uprisings, and guerrilla warfare.  (2) Comrades, we have indeed secured momentous victories.
But upon what foundations did these victories rest?
I believe we all understand: first, the Red Army’s indomitable fighting spirit; second, the revolutionary zeal of the broad working and peasant masses in both Soviet and White areas; and third, the Communist Party’s correct leadership.
It was only through these three indispensable conditions that we were able to shatter the enemy’s four encirclement campaigns and achieve the great triumphs just described.
These victories have dealt a crushing blow to imperialist and Nationalist forces.
On the one hand, they have greatly strengthened the revolutionary camp, propelling it forward like an unstoppable torrent.
On the other hand, they have severely weakened the counterrevolutionary forces, driving them to the brink of collapse and compelling them to prepare an even larger offensive in a desperate bid to salvage their dying regime.  (3) Accordingly, the enemy is frantically preparing its fifth encirclement campaign.
To mount this assault, the Nationalist government has been forced to surrender ever further to imperialist dictates.
After betraying Northeast China, Rehe, and North China, Chiang Kai-shek has now concluded secret pacts with the United States, Britain, France, Italy, and other imperialist powers, securing vast sums of money and munitions.
He is redeploying troops, training fresh recruits, and attempting to reconcile rival warlords—though conflicts and clashes among them remain inevitable—and is actively orchestrating the fifth encirclement campaign against the Soviets and the Red Army.  (II) Defeating the Fifth Encirclement Campaign and the Tasks of Soviet Economic Construction  (1) Seizing Every Favorable Opportunity to Crush the Enemy’s Fifth Encirclement Campaign  The Chinese revolution now stands at a critical crossroads: Will imperialism bring about China’s destruction, or will revolutionary war overthrow the Nationalist regime, drive out the imperialists, and transform China into a Soviet republic?
The imperialist-Nationalist alliance has chosen the path of China’s annihilation.
They have resolved to carry out a fifth encirclement campaign aimed at either partitioning or jointly administering the country, reducing its hundreds of millions of people to the status of imperialist cattle and slaves—akin to Indians and Koreans—and turning China into a full-fledged imperialist colony.
This constitutes an immense danger, looming directly over our heads.
Comrades, can we simply stand by and allow this to happen?
No. We must seize the revolutionary opportunity.
Our course is to fight against the imperialist-Nationalist forces, liberate China from their rule, and establish a new, free, independent worker-peasant-soldier Soviet republic.
The key to success lies in utterly smashing their fifth encirclement campaign and securing victory therein.
Once again, this depends on the Red Army, on the masses, and on steadfastly following the Communist Party’s offensive line.
However, we must mobilize every possible resource and strive for conditions far more favorable than those previously available if we are to crush the fifth encirclement campaign and achieve a greater victory than ever before.
To attain this goal, we have much work ahead of us.
We must dramatically expand the Red Army, aiming to recruit an additional one hundred thousand fighters within six to ten months across the Central Soviet Area and neighboring regions, thereby reinforcing each front-line unit so that it may effectively engage Chiang Kai-shek’s hundreds of thousands of White troops.
We must launch a comprehensive and in-depth land-reform campaign, intensifying class struggle in the countryside to fundamentally resolve the land question and eradicate the last vestiges of feudalism, inspiring the broad peasantry to enthusiastically join the revolutionary war.
We must universally enforce labor laws, stimulate workers’ struggles, and further enhance workers’ revolutionary fervor.
Furthermore, we should utilize this year’s elections to reconstitute Soviet organs at all levels—from village Soviets up to the central government—so that the entire Soviet apparatus becomes more robust and capable of organizing and commanding revolutionary warfare.
Attention must also be paid to border regions and newly developed areas, ensuring that revolutionary forces have convenient access to central cities and can rapidly advance toward them.
We should promote cultural activities to raise the political and cultural awareness of the masses, providing the revolution with a powerful ideological tool.
Beyond this, there is another crucial task that we must focus on in this conference: economic construction.
We need to vigorously pursue economic development, regarding it as one of the most fundamental prerequisites for defeating the fifth encirclement campaign—providing the revolutionary war with essential material support.
It is precisely for this purpose that we have convened this economic construction conference.
The urgent demands of the ongoing revolutionary war require the Soviets to mobilize the masses immediately and launch a broad campaign of economic measures.
Why?
Because the entire effort to secure victory in the revolutionary war hinges on:  • Providing the Red Army with a steady supply of provisions and logistical support;  • Improving the living standards of the masses, thereby further stimulating their enthusiasm for joining the revolutionary struggle;  • Organizing and educating the masses on the economic front, harnessing their collective strength for the war effort;  • Strengthening the worker-peasant alliance through economic development, consolidating agrarian expertise, and reinforcing the proletariat’s leading role in the revolution.
All of these objectives necessitate substantial economic construction.
Every Soviet functionary should fully grasp this reality.
In the past, some comrades mistakenly believed that with the revolution in full swing, there was no time for economic work.
Those who advocated for economic construction were often branded as “rightists.”
Others argued that economic development could only proceed after the war’s final victory, confined to peaceful, stable environments—a notion entirely inappropriate for our present circumstances.
Comrades, such views are profoundly mistaken.
Those who hold them fail to recognize that without economic construction, the material conditions necessary for sustained warfare cannot be ensured, leading to chronic shortages and exhaustion.
The enemy’s blockade, coupled with the machinations of profiteers and reactionaries, has severely hampered trade between our Soviet areas.
Salt is exorbitantly priced or unavailable altogether, while grain is sometimes cheap but often prohibitively expensive in spring and summer.
These conditions directly impact the lives of workers and peasants, preventing meaningful improvements in their standard of living.
Does this not undermine the worker-peasant alliance—the very foundation of our revolutionary strategy?
And if workers and peasants become dissatisfied with their circumstances, will this not weaken our ability to expand the ranks of the revolutionary army?
Therefore, the notion that economic construction is unwarranted during wartime is utterly erroneous.
Those who espouse it often succumb to despair, failing to appreciate that diligent economic work is precisely what sustains the war effort.
Only by undertaking essential economic tasks—such as establishing supply lines, developing local industries, and strengthening the economic base—can we provide the Red Army with the material resources needed to deliver decisive blows against the enemy.
It is only then that we can realistically hope to expand the Red Army by a million men, extend our front lines thousands of miles, and enable our troops to march southward without worrying about foraging.
By doing so, we can ensure that the broad masses enjoy a decent standard of living and are eager to join the Red Army and participate in revolutionary activities.
Only in this way can we truly serve the war effort; otherwise, we risk depriving it of a critical advantage.
Such opportunistic thinking is entirely wrong.
Regrettably, many officials in various Soviet organs still do not fully comprehend the importance of economic construction in the context of revolutionary warfare, nor have they taken up this vital responsibility with the requisite urgency.
Consequently, they have not yet exerted their full energy to implement the central government’s call to redouble efforts in this arena.
For example, numerous local governments have failed to prioritize discussions on economic development.
The national economy remains poorly organized; some ministries remain vacant, and others lack the capacity to effectively manage complex tasks.
Cooperative development is still in its infancy, and food distribution mechanisms operate only in limited areas.
Moreover, the broader public has yet to be thoroughly informed about the significance of economic construction, and a vibrant atmosphere of struggle around this issue has not yet taken root.
All of these shortcomings stem from a failure to recognize the importance of economic work.
At this conference, we must first deliver a stern rebuke to such misguided perspectives and firmly reaffirm that economic construction is integral to the revolutionary war effort.
Through intensive discussions and subsequent dissemination of our conclusions, we aim to instill in all Soviet functionaries and the wider working and peasant masses a profound understanding of economic construction’s role in sustaining the revolution.
We will vigorously promote and market approximately five to six million bonds to finance economic construction projects.
We will launch a cooperative movement, encouraging one million people to join cooperatives—fifty thousand in consumer cooperatives and fifty thousand in grain cooperatives.
We will construct granaries and emergency food storage facilities, establishing a food-distribution branch in every county and setting up key distribution centers in major market towns.
This will allow us to balance surpluses and shortages within the Soviet zone, preventing situations where some areas are awash with food while others face scarcity, or where prices fluctuate wildly.
Simultaneously, we will systematically export surplus grain—rather than allowing it to be exploited by middlemen—thus procuring foreign currency to purchase essential supplies from outside the Soviet area.
We will also endeavor to develop agricultural production and handicraft industries.
For instance, tungsten mining holds great promise, given the high demand from imperialist military industries.
We should prepare to open mines employing tens of thousands of workers.
Agricultural tools and lime production are likewise urgently needed to support farming.
From the perspective of import-export trade, grain represents our Soviet area’s primary export commodity.
Approximately three million dan of grain are exported annually, with each person contributing roughly one dan in exchange for essential goods.
This lucrative business is entirely controlled by merchants, who exploit the system ruthlessly.
Last year, for example, farmers in Wanshui sold a dan of grain to traders for five jiao, only to see the same batch resold in Ganzhou for four yuan, pocketing an eight-jiao profit.
Similarly, the three million people under our jurisdiction consume roughly nine million yuan worth of salt each year and approximately six million yuan worth of cloth.
The importation of 15 million yuan’s worth of textiles has long been monopolized by merchants, leaving us powerless to intervene.
Their exploitation is staggering—for instance, a merchant might purchase seven jin of salt in Jiayingzhou for one yuan and sell it in our zone for twelve liang.
Is this not outrageous?
The Soviets can no longer afford to ignore such abuses; our foreign trade bureaus must take decisive action.
How will we utilize the three million economic construction bonds?
We plan to allocate one million to fund Red Army operations, two million to capitalise cooperatives, food distribution networks, and foreign trade agencies.
A small portion will be devoted to promoting production, while the majority will support import-export activities.
Our ultimate goal is not merely to boost production but also to increase exports, thereby earning foreign currency to offset imports of essential goods such as salt and cloth.
We will begin by pooling one million yuan in seed capital contributed by the masses.
Isn’t it absurd to claim that we cannot accomplish anything because certain conditions are lacking?
We have already initiated these efforts and achieved tangible results.
This autumn’s harvest, for instance, has increased by ten to fifteen percent compared with last year, exceeding our initial projection of a twenty-percent rise.
Handicraft production, including agricultural tools and lime, is gradually recovering, and tungsten mining operations have begun to resume.
Papermaking, too, is showing renewed vitality.
The food distribution network has also made significant progress.
Salt supplies are now partially secured.
These achievements demonstrate that we possess a solid foundation for future endeavors.
The notion that economic construction should wait until the end of the war is patently false.
Given the current circumstances, it is impossible to adopt such a stance.
Therefore, let us make it clear: at this stage, economic construction revolves around the central task of the revolutionary war.
The revolution is the paramount priority, and economic initiatives exist to support it, rather than as standalone objectives.
The idea that economic construction should occupy a central position among all revolutionary tasks is equally misguided.
It is incorrect to suggest that the Soviets undertake economic work independently of the ongoing revolutionary struggle.
Only after the civil war concludes can economic development be considered the overarching priority.
Attempts to pursue “peaceful” economic projects during wartime are nothing more than futile daydreams.
What we need now are concrete measures that directly address the urgent requirements of the war.
Each of these undertakings serves the war effort rather than constituting separate, peaceful endeavors.
If any comrade still harbors such misconceptions, they must rectify them immediately.
Without proper leadership and effective methods, it is impossible to successfully launch and sustain economic initiatives on the front lines.
This is a critical issue that we must resolve at this conference.
Upon returning home, comrades should promptly mobilize and guide provincial, county, and district-level officials, particularly those at the township and city levels, along with cooperative members and food distribution personnel, to take action.
These individuals are the ones actually engaged in supplying provisions, organizing cooperatives, and managing import-export trade.
If their leadership falls short, they will be unable to implement sound and effective strategies, resulting in a failure to garner broad popular support and hindering the timely completion of the central government’s economic construction plan for this autumn and next spring.
To conclude, I would like to emphasize the following points to my comrades: First, leadership must actively mobilize the masses.
Provincial and municipal leaders should regularly place issues such as bond issuance, cooperative development, food distribution, industrial expansion, and trade promotion on the agenda for discussion and closely monitor their implementation.
Second, we must energize mass organizations, especially trade unions and poor-peasant associations.
Trade unions should encourage all members to participate in economic construction efforts.
Poor-peasant associations serve as a powerful vehicle for mobilizing the masses to purchase bonds and join cooperatives.
District and township Soviets should disseminate this message widely, making it a central theme of their propaganda work.
Finally, we must build community-based housing complexes to accommodate families displaced by the war.
These structures should be designed as self-contained units, incorporating communal spaces to foster solidarity and strengthen the revolutionary spirit.
We should also urge the masses to purchase the three million economic construction bonds, join cooperatives, improve financial management, and engage in trade—all while actively participating in these transformative initiatives.
Without concerted efforts to organize and educate the populace, the desired outcomes will remain elusive.
Specifically, if the Minister of Finance does not personally oversee economic construction, fail to promote mass organizations, or neglect to convene public meetings for outreach, achieving our goals will prove impossible.
Above all, our approach to mobilizing the masses must eschew bureaucratic rigidity.
Bureaucratic methods are wholly incompatible with revolutionary and economic work.
Such practices should be discarded without hesitation; no one genuinely favors them.
Instead, we should embrace a more grassroots-oriented style—one that resonates with the people, particularly with the peasantry.
Bureaucracy often manifests as indifference or perfunctory responses—deadly forms of inaction that must be combated vigorously.
Alternatively, it may appear as authoritarian commandism, masquerading as diligence.
Yet, in practice, this approach stifles genuine progress.
For example, attempts to forcibly establish cooperatives invariably fail, as they cannot be properly consolidated and ultimately erode trust within the community.
Similarly, aggressive sales tactics for economic bonds, regardless of whether the public understands them, often backfire, as they impose arbitrary quotas and alienate potential buyers.
We must reject such methods and instead focus on persuasive communication, tailored to the specific sentiments and needs of the population, to successfully promote cooperatives and sell bonds, and to carry out all other economic mobilization efforts.
Third, the successful implementation of economic construction requires a cadre of dedicated cadres—not dozens or hundreds, but tens of thousands—who can be organized, trained, and deployed to the front lines of economic development.
They will serve as commanders on the economic front, while the broader masses act as foot soldiers.
Some argue that we lack qualified personnel.
However, this assertion is untenable.
Countless cadres have emerged from the crucible of revolutionary struggle, honed through land reform campaigns and class battles in the countryside.
There is no excuse for claiming a shortage of cadres.
Economic construction is inseparable from the broader revolutionary task.
Only by deepening land reform can we further empower rural classes and encourage more peasants to join the economic front.
Only by rigorously enforcing labor laws can we improve workers’ living conditions, inspire them to actively engage in economic construction, and strengthen their leadership role within the worker-peasant alliance.
And only by conducting transparent elections guided by the principles of the land reform movement can we build a more robust and capable Soviet apparatus—one that can effectively lead revolutionary warfare, coordinate all aspects of the revolution, and manage economic affairs.
Furthermore, cultural and educational initiatives that elevate the political and cultural consciousness of the masses are of paramount importance to the overall development of the national economy.
Lastly, we must not overlook the imperative of expanding the Red Army.
As everyone knows, without the Red Army’s victories, economic blockades would pose an even greater threat.
Conversely, as the national economy flourishes and the lives of the masses improve, there is undoubtedly a corresponding need to expand the Red Army and deploy larger forces to the front lines.
In sum, if we can secure all the necessary conditions—including, critically, this new and vital condition of economic construction—and subordinate them entirely to the overarching goal of defeating the fifth encirclement campaign, then victory will surely be ours.  (Loud applause)