Dear heroes of labor and model workers,

We welcome you and hold you in great respect. You possess three notable strengths, which play three key roles.

First, the role of leading the way. This is because you have worked exceptionally hard, made many innovations, and your work has become a model for ordinary people, raising work standards and inspiring others to learn from you.

Second, the role of backbone. Most of you are not yet cadres, but you are already the backbone and the core of the masses. With you, it is much easier to advance the work. In the future, you may become cadres; for now, you are the reserve force of cadres.

Third, the role of bridges. You serve as bridges between the leadership and the broad masses. The opinions of the masses are transmitted upward through you, and the ideas from above are passed down through you.

You have many good qualities and have rendered great service, but you must not become arrogant! It is fitting that you are respected by all, yet this can also easily lead to pride. If you grow proud, stop being humble, cease striving, and fail to respect others, the cadres, or the masses, you will no longer remain heroes and models. There have already been such people in the past; I hope you will not emulate them.

Your experiences have been summarized in a document from this conference. That summary document is excellent; it applies not only here but can also be applied in other regions. I will not elaborate further on that. Instead, I wish to speak about our economic work.

In recent years, we have begun to learn economic work, and we have achieved great successes in this area. Yet this is only the beginning. We must, within two or three years, enable the Shaanxi-Gansu-Ningxia Border Region and the liberated areas behind enemy lines to achieve self-sufficiency in grain and industrial goods—either entirely or for the most part, with a surplus. We must ensure that agriculture, industry, and trade all yield greater results than at present. Only then will we have learned more and learned better. If in any place the living standards of the military and civilians have not improved, the material foundation prepared for the counter-offensive remains unstable, and agriculture, industry, and trade do not rise year by year but instead stagnate or even decline, that will prove that the military and political cadres and workers in that place have still not mastered economic work, and that place will encounter tremendous difficulties.

There is one issue that must once again draw everyone’s attention: our thinking must suit the environment in which we currently find ourselves. We are now in a rural environment. This point seems to raise no questions—who doesn’t know we are in the countryside? But in reality, that’s not the case. Many of our comrades, though they live in the countryside day after day and even believe they understand it, actually do not—or at least do not understand it deeply. They do not proceed from the fact that this is a rural environment characterized by an individual economy as its base, fragmented by the enemy, and therefore marked by guerrilla warfare. Consequently, when they address political, military, economic, cultural, or party affairs, or when they handle workers’ movements, peasant movements, youth movements, or women’s movements, their approaches are often unsuitable, or not very suitable. They handle rural matters from an urban perspective, subjectively formulate many inappropriate plans, forcibly implement them, and often run into obstacles. In recent years, thanks to the rectification campaign and the setbacks encountered in work, our comrades have made considerable progress. But we must still pay attention so that our thinking fully matches our environment; only then can our work show results in all respects—and do so swiftly. If we truly understand that our environment is a rural one based on an individual economy, fragmented by the enemy, and thus subject to guerrilla warfare, and if everything we do proceeds from this point, then seemingly slow results that lack dramatic flair will, in reality, prove far from slow. Compare that to approaches that do not start from this point but from another—say, an urban perspective. What would the actual results be? They would certainly not be slow; on the contrary, they would be very fast. That’s because, if we proceed from the latter point and detach ourselves from the reality of today, the issue is not whether efficiency is fast or slow, but that we constantly run into obstacles and achieve no results at all. For example, when we promoted the existing-style military-civilian production campaign, it produced great results—that is clear evidence. But we must also consider: if we want to defeat the Japanese invaders and prepare to capture cities and recover all lost territories, this is not a short-term task. We need to prepare for a protracted struggle. The war of resistance has already lasted eight years; the wealth of the countryside has been ravaged by the enemy and greatly consumed by our side. Yet we must continue to sustain the war and also accumulate strength to prepare for the counter-offensive, so that we can ultimately drive out the Japanese. In the work of sustaining the war and preparing for the counter-offensive, alongside military, political, and cultural efforts, the preparation of material strength is fundamental to all our work. Without this condition, neither current persistence nor future counter-offensives are possible. Yet we are in an environment of individual economy, fragmented by the enemy and marked by guerrilla warfare in the countryside. How can we achieve this objective? We cannot emulate the Kuomintang, which does nothing itself and relies solely on aid from allied countries, depending even for daily necessities like cotton cloth on foreign assistance. We advocate self-reliance. We hope for foreign aid, but we cannot depend on it. We rely on our own efforts and the creativity of the entire military and civilian population. So what approaches do we have? We adopt the method of launching large-scale production campaigns on both the military and civilian sides.

Because we are in the countryside, where human and material resources are scattered, our policy for production and supply is “unified leadership and decentralized management.” Because we are in the countryside, where peasants are individual producers working with backward tools and subject to feudal land rent exploitation, we adopt two measures: reducing rent and interest rates, and organizing mutual aid. Rent reduction boosts the peasants’ enthusiasm for production, and mutual aid increases their productive output. I have obtained materials from various places in North and Central China, and these materials all indicate: after rent reduction, peasants’ enthusiasm greatly increases, and they are willing to organize mutual-aid groups like our labor-exchange teams, where three people do the work of four. If that is the case, 90 million people do the work of 110 million. In some cases, two people do the work of three. If we do not adopt the approach of “forced commands lead to failure through haste,” but instead adopt the approach of “patient persuasion and model demonstration,” then within a few years, it will be possible to organize most or all peasants into mutual-aid groups for agricultural and handicraft production. Once such production groups are formed and become habitual, not only will production volume greatly increase, but all kinds of innovations will emerge, social customs will change, politics will advance, and even production tools will be improved. By then, our rural society will be built on a new productive foundation. If our personnel apply themselves diligently to studying this work and exert the utmost effort to help the rural population launch production campaigns, within a few years the countryside will have abundant grain and daily supplies. Not only can we sustain the war and cope with famine years, but we can also stockpile large quantities of grain and daily goods for use in counter-offensives against the enemy.

We must not only organize peasants to produce, but also organize the troops and their administrative bodies to produce as well. Because it is the countryside, because it is a countryside frequently ravaged by the enemy, and because it is a countryside beset by protracted war, the troops and their administrative bodies must engage in production. Because it is a fragmented guerrilla war, the troops and their administrative bodies can also engage in production. In our Shaanxi-Gansu-Ningxia Border Region, more specifically, the number of personnel in the troops and administrative bodies is disproportionately large compared to the population of the region. If they do not produce for themselves, they will inevitably go hungry; and if too much is taken from the people, the people will be unable to bear the burden and will also go hungry. Thus, we resolved to launch a large-scale production campaign. Taking our Border Region as an example, the troops and administrative bodies need 260,000 piculs of fine grain annually (each picul weighs 300 jin). Of this, 160,000 piculs are taken from the people, and 100,000 piculs are produced by themselves. If they did not produce for themselves, one side—either military or civilian—would inevitably go hungry. Thanks to the production campaign, we now not only avoid hunger but eat well on both sides. The administrative bodies in the Border Region, apart from grain and clothing, cover the majority of their other expenses through self-sufficiency; some units are entirely self-sufficient. Many units also provide part of their own grain and clothing. The Border Region troops have contributed even more. Many units produce all their grain, clothing, and everything else themselves—achieving 100 percent self-sufficiency without receiving anything from the government. This is the highest standard, and it is the first standard, which has been gradually reached over several years.

At the front, where combat must be carried out, this standard cannot be adopted. For the front, a second and a third standard can be set. The second standard is: aside from grain and clothing supplied by the government, everything else—such as oil (five qian per person per day), salt (three qian), vegetables (one to one and a half jin), meat (one to two jin per month), fuel and charcoal costs, office expenses, miscellaneous expenses, educational fees, health care fees, rifle-cleaning costs, smoking tobacco, shoes, socks, gloves, towels, toothbrushes, etc.—all are to be self-produced, covering about 50 percent of total expenses. This can be gradually achieved within two to three years. Some units have already achieved it. This standard can be implemented in consolidated areas. The third standard is for border areas and guerrilla zones, where it may be impossible to reach 50 percent self-sufficiency, but 15 to 25 percent self-sufficiency is possible. Even achieving this is quite good. In short, except for those with special circumstances, all troops and administrative bodies, in the intervals between combat, training, and work, must uniformly participate in production. Beyond collective participation in production during these intervals, troops and administrative bodies should organize specialized production personnel, establish farms, vegetable gardens, ranches, workshops, small factories, transport teams, and cooperatives, and share-crop grain and vegetables with peasants. Every administrative unit and army unit must establish its own household economy. The idle habit of unwillingness to build a household economy is shameful. However, a system of graded personal profit-sharing based on quality must be established, so that those directly engaged in production can receive dividends, thereby stimulating the growth of production. It is also necessary for leading officers to take responsibility, set an example by their own actions, combine the leadership core with the broad masses, and integrate general calls with specific guidance—only then can production work be effectively advanced.

Some say: if the troops engage in production, they cannot fight or train; if administrative bodies engage in production, they cannot work. Such views are mistaken. In recent years, our Border Region troops have undertaken large-scale production, achieving ample food and clothing, while simultaneously carrying out military drills and political and cultural studies. Their achievements there are greater than before, and internal unity within the army and unity between the army and the people are also better than before. At the front, last year saw a large-scale production campaign, yet significant achievements were also made in combat, and a training campaign was universally launched. Because of production, the administrative bodies have seen improved livelihoods, and their personnel work with greater peace of mind and higher efficiency—this holds true in both the Border Region and the front. From this, it can be seen that for troops and administrative bodies in a rural guerrilla-warfare environment, if they have a self-sufficiency production campaign, their combat, training, and work become more vigorous and more lively; their discipline, internal unity, and external unity also improve. This is a product of our China’s protracted war; it is our honor. Once we have learned this lesson, we will not fear any difficulties. We will grow more vigorous year by year, more energetic, stronger with each fight. Only we will overwhelm the enemy; we will never let the enemy overwhelm us. Yet there is one point that must also draw the attention of our comrades at the front. In some places that have been recently liberated and are still quite prosperous, the personnel there, relying on that prosperity, refuse to economize and also refuse to engage in production. That is very unwise; they will surely suffer setbacks in the future. Every place must cherish human and material resources deeply; must never neglect long-term considerations and indulge in wasteful extravagance. In every place, from the very first year work begins, one must calculate for many years ahead—calculate for sustaining the war over the long term, for the counter-offensive, and for construction after the enemy has been expelled. While firmly avoiding wasteful extravagance, we must also strive to develop production. In the past, some places lacked long-term planning; they neither paid attention to saving human and material resources nor to developing production, and suffered greatly as a result. Having drawn this lesson, we must now pay close attention to it.

Regarding industrial products, the Shaanxi-Gansu-Ningxia Border Region has decided to achieve full self-sufficiency within two years in products such as cotton, yarn, cloth, iron, paper, and many other goods.

Originally there was very little, production was scarce, and it was entirely self-planted, self-made, and self-supplied, completely independent of outside sources.

All of this is accomplished through the combined efforts of public, private, and cooperative operations.

For all products, the aim is not only to increase quantity but also to ensure good quality, durability, and wear resistance.

The Border Region Government, the Joint Defense Command, and the Northwest Bureau are paying very close attention to these matters, and this is absolutely correct.

It is hoped that all areas at the front will do the same.

Many places are already doing this, and we hope they achieve success.

In our border region and throughout the liberated areas, it will still take two to three years of effort before we can fully master all economic work.

The day when we achieve self-sufficiency in grain and industrial goods, either entirely or for the most part, with a surplus, will be the day we have completely learned how to carry out economic work in the countryside.

In the future, after driving the Japanese out of the cities, we will also undertake new economic work.

China depends on us to build it, and we must study diligently.