Economic and Financial Problems (Excerpt)


December 1942


The spirit of the comrades in Yan'an County is entirely the spirit of Bolsheviks. Their attitude is positive; in their thinking and actions, there is not the slightest trace of negativity. They are completely unafraid of difficulties, and like dragons and tigers full of life and vigor, they can conquer all difficulties.

Let us see how fully the Yan'an comrades are imbued with a sense of responsibility in their work: "In 1942, the distribution of agricultural tool loans was delayed for a period—how much wasteland could have been reclaimed if it had been done one day earlier!" "It is essential to seize the time and resolve various issues swiftly; a delay of one day means less wasteland reclaimed!" "Formulate production plans for each farming household." "Tight leadership and strict inspections play a decisive role in fulfilling tasks." This spirit, compared to those who sigh and groan at the first sign of difficulty, who shrink back and hesitate, and to those who handle matters carelessly, muddle along, and do things perfunctorily, is truly as different as heaven and earth!

Under this spirit, there is nothing the Yan'an comrades do that is not based on seeking truth from facts. They fully understand the emotions, demands, and various specific conditions of the masses in Yan'an County under their leadership. They are completely integrated with the masses, and they conduct excellent investigation and research work. Consequently, they have learned the Marxist art of leading the masses, and they are entirely free from subjectivism, sectarianism, and stereotyped Party writing. How does this situation compare with those subjectivists who handle problems not based on the demands of the masses but on subjective imagination, and with those bureaucrats who completely neglect investigation and research, working for three or five years yet knowing nothing about the actual situation at the lower levels? Is it not again a case of one being in heaven and the other on earth! We hope that all comrades in the Border Region will possess the same spirit as the Yan'an comrades, the same work attitude, the same integration with the masses, and the same approach to investigation and research, thereby also learning the Marxist art of leading the masses to overcome difficulties, so that our work will be victorious wherever it goes. Among the comrades in the various counties of the Border Region, there are quite a few who are like or nearly like the Yan'an comrades. We hope that the exemplary experience of these comrades can be rapidly extended to all counties, districts, and townships.


All public-sector economic undertakings consist of the following three parts: (1) the salt industry, industry, and commerce operated by the government; (2) the agriculture, industry, and commerce operated by the army; and (3) the agriculture, industry, and commerce operated by Party and government organs. These directly guarantee the supply of the means of subsistence and the operating funds for Party, government, and military personnel. According to the calculations for 1942 and the budget for 1943, the supply from this sector exceeded the supply provided by the people to the government in the form of taxes (including public grain). Therefore, public-sector economic undertakings have become a major foundation of the two primary sources ensuring our financial supply, and their importance is self-evident.

Our attention to the construction of public-sector economic undertakings has both historical and current reasons. During the civil war, the Central Committee of the Communist Party of China established some public-sector industry and commerce in the Jiangxi Soviet Area to meet the needs of the war. At that time, to supplement insufficient food supplies, various organs and schools were also mobilized to grow vegetables and raise pigs. At that time, only the army had no experience in production. At that time, because the peasants in Jiangxi were relatively well-off, we did not yet need to solve the grain problem with our own hands. These are the historical reasons.

Since the War of Resistance began, we have been in a very special position. The Kuomintang government initially provided our army with only a very small amount of pay, and then cut it off completely. The Border Region was also blockaded, forcing us to engage in production for self-support to sustain the needs of the resistance. These are the current reasons.

Since the War of Resistance began, our attention to the construction of public-sector economic undertakings started in 1938. At that time, in the army, due to insufficient funds, a production movement was initiated. However, at that time, we only ordered some units to try growing vegetables, raising pigs, gathering firewood, making shoes, and other productive activities, with the sole purpose of improving the soldiers' lives, without yet attempting to solve the general financial supply. Later, we saw that the soldiers involved in these trial efforts achieved results; they indeed managed to accomplish a great deal of production work in their spare time from education, their lives indeed improved, and because their lives improved, the phenomenon of desertion also decreased. Seeing these results, we universally applied this experience to the troops remaining to guard the Border Region, with the Rear Headquarters issuing orders for all units to learn and do likewise. But this was still for the purpose of improving life, not for solving general needs. On the government side at that time, attention began to be paid to establishing a few small factories, but as for the organs and schools, we had not yet asked them even to grow vegetables or raise pigs.

In 1939, the Kuomintang promulgated the "Measures for Restricting the Activities of Alien Parties," and the relationship between the Kuomintang and the Communist Party was no longer what it had been. The number of organs and schools in the Border Region also increased. Although there was a small amount of external financial assistance, it could no longer be distributed adequately, and we found ourselves under the severe threat of financial supply problems. For this reason, we were forced to think of mobilizing everyone to engage in a movement for economic self-support. At that time, at a cadre mobilization meeting, we posed the question thus: Should we starve to death? Should we disband? Or should we use our own hands? No one approved of starving to death, and no one approved of disbanding, so let us use our own hands—that was our answer. We pointed out this simple truth: How have human beings lived since ancient times? Haven't they survived by using their own hands? Why do we, the descendants of humanity, lack even this bit of wisdom? At that time, we also pointed out: In a feudal society, it is very common for an exploited peasant family of three, four, or even seven or eight members to rely on the production of a single laborer. Such a family not only has to maintain its own livelihood but also has to pay 50 to 80 percent of its output in rent and taxes to others. Why are we not even as capable as such a peasant family? Our army consists entirely of laborers; there are no women, no elderly, no children, and no heavy burden of rent and taxes. Why would the matter of going hungry still occur? We have a power organ like the government; why can we still not solve the problems of our own clothing, food, shelter, and necessities? Let us examine the reason why human beings from ancient times to today's poor peasants have been able to survive, and survive differently from wild beasts: it is nothing more than that they have two hands and they extend those hands—by using tools. Let us then examine ourselves: it turns out that each of us also has two hands, and we too can extend our hands—by using tools. This examination is very important; in this way, our problem was immediately solved. In short, we were convinced that we could solve the economic difficulties, and our answer to all questions in this regard was the four words: "Use our own hands."

At this time, the task we proposed was different from that of 1938; it was no longer merely to improve life, but to meet a part of our general needs. The scope of mobilization was no longer limited to the army; rather, all troops, organs, and schools were to engage in production without exception, and a call was issued to launch a large-scale production movement. The "Song of Reclaiming Wasteland" was sung at that time, and the "Production Cantata" was also created then. This call mobilized not only tens of thousands of Party, government, and military personnel and students but also the common people of the Border Region. That year, the common people reclaimed as much as one million mu of wasteland. This call also spread to North China, where many units of the Eighth Route Army fighting on the battlefield also engaged in production during lulls in the fighting. This was the first stage of our production-for-self-support movement, encompassing the three full years of 1938, 1939, and 1940. During this stage, the government's industrial construction took a step forward, and the army, organs, and schools developed agricultural production.