Instructions Regarding Non-Participation and Withdrawal from Work, etc.
(May 9, 1952)

To all Central Bureaus and Sub-bureaus, with copies forwarded to Provincial Committees, Regional Party Committees, and the Municipal Committees of Beijing, Tianjin, Shenyang, Jinan, Qingdao, Nanjing, Shanghai, Hangzhou, Wuhan, Guangzhou, Chongqing, Chengdu, Xi’an, and other cities where the Five-Anti Campaign has already been conducted:

(1) Comrade Tan Zhenlin’s report of May 5th! One copy; the Hangzhou Municipal Committee’s report of May 6th (2)
[1]
Refers to the report submitted on May 5, 1952, by Comrade Tan Zhenlin, Acting Secretary of the East China Bureau of the CPC Central Committee, to Mao Zedong and the Central Committee concerning new problems arising in the East China region following the Five-Anti Campaign. The report stated:
The achievements of the Three-Anti and Five-Anti campaigns have been substantial, but their adverse side effects must also be carefully addressed. The new situation brought about by these campaigns can be summarized in sixteen characters: “workers losing jobs, finished goods piling up, prices falling, and a reluctance to assume responsibility.” The decline in agricultural product prices has already affected farmers’ funds needed for spring plowing, while the drop in industrial goods prices has undermined the capacity for reproduction. Capitalists are burdened by heavy restitution and tax payments, generally feeling anxious and at a loss as to how to proceed with their businesses in the future. In order to restore capitalists’ enthusiasm for production and management after the Five-Anti Campaign and to harness the positive role of private capital in the national economy, thereby achieving the goals of developing production and revitalizing the economy, attention should be paid to resolving the following four issues:
First, the limits for capitalists’ restitution and tax payments should be set appropriately. Second, the timing of restitution and tax payments must take into account the state of liquidity in the market so as not to impair the working capital required for production and business operations. Third, worker supervision of production should, for the time being, be carried out only as a pilot program. Fourth, after the Five-Anti Campaign, the processing fees and purchase prices for contracted goods must allow capitalists a reasonable profit.
[2]
Refers to the comprehensive report submitted on May 6, 1952, by the Zhejiang Provincial Committee of the CPC to the East China Bureau, the Central Committee, and Mao Zedong, detailing the situation and experiences of the Five-Anti Campaign in Hangzhou.

One copy; the Shanghai Municipal Finance Commission’s report of May 6th 11 1—copies, all of which are now forwarded to you. The Central Committee considers these reports to be correct and requests that all localities carefully study the issues raised therein and follow suit. (2) During the Five-Anti struggle, work teams and workers generally calculated the amount of illegal gains made by capitalists at a very high figure. When finalizing cases, this figure must be reasonably reduced to reflect actual economic conditions, ensuring that most capitalists still have a surplus remaining after making restitution and paying taxes. Comrade Tan Zhenlin suggested that Shanghai had initially calculated ten trillion yuan in illegal gains, an amount exceeding capitalists’ actual income in 1951. They were planning to reduce it to four trillion yuan, proposing either a one-half or one-third ratio. We believe that a one-half ratio is too high, while a one-third ratio is slightly too low; therefore, setting the ratio slightly above one-half would be appropriate. Comrade Bo Yibo reported back to Beijing that Guangzhou’s Xinye Pharmaceutical had originally been assessed at one billion yuan in illegal gains. Through several rounds of proactive reductions on our part, the final figure was set at 3.6 billion yuan—an unexpectedly lenient decision that greatly pleased the capitalists. This ratio is indeed just a bit higher than one-third. All municipal committees are requested to consider the overall situation and, broadly speaking, finalize cases according to this ratio. By doing so, we can fully seize the initiative both politically and economically, rapidly restore and develop the economy, encourage capitalists to rejoin us and regain their enthusiasm for business, and prevent workers from losing their jobs. (3) With regard to the timing of restitution and tax payments, except for a small number of individuals who are genuinely able and willing to make early restitution and those few who should have their property confiscated, it is advisable to postpone the restitution period for the vast majority of capitalists until September or October. Larger amounts may be spread over several years, and a portion could even be converted into state-owned shares without requiring immediate cash payment. Such measures are absolutely necessary to stimulate the market and prevent unemployment. Fines should be imposed only on a very small minority, and prison sentences should be kept to a minimum; Hangzhou’s approach in this regard has been commendable. (4) Each city should, like Hangzhou, arrange for the provincial and municipal party secretaries to personally inspect several major factories and shops, creating a model case to persuade cadres and workers (who need to be appropriately and emphatically convinced), while simultaneously demonstrating to all guilty capitalists our lenient yet serious stance. This will show that our Five-Anti campaign is primarily aimed not at extracting money, but
[I]
Refers to the report submitted on May 6, 1952, by the Shanghai Municipal Committee of the CPC to Chen Yun, Bo Yibo, Li Fuchun, the Central Financial Commission, the Central Committee, and also copied to the East China Financial Commission and the East China Bureau, regarding the post-Five-Anti situation in Shanghai.
[2]
Bo Yibo, who at that time served as Director of the Central People’s Government Savings Inspection Commission.

at transforming society. Hangzhou’s experience is concrete and vivid, well worth studying by everyone. (5) Furthermore, adjustments should be made to urban economic exchanges, and no harsh policies should be adopted in terms of labor compensation. Cadres should be persuaded to actively engage in economic work rather than adopting a passive attitude. These points are all very important. The Tianjin Municipal Committee has also put forward the view that labor compensation should not be excessively strict. It is hoped that all localities will take note of this. (6) Worker supervision of production is indeed imperative, but it should not be implemented too hastily. The Central Committee agrees that, for the time being, such supervision should be carried out only in a limited number of factories and shops as a pilot project, allowing capitalists some breathing space before gradually expanding it in the autumn or winter. (7) Workers’ welfare issues must be addressed, but any solutions must be grounded in realistic economic conditions—not too low, yet not so high as to put us at a disadvantage. (8) In conclusion, the victories achieved in the Three-Anti and Five-Anti campaigns are immensely significant. There is no doubt that these campaigns should be carried out; without engaging in this just struggle, we would surely fail. As we now reach the final stage of settling the Three-Anti and Five-Anti cases, we must adhere to the principle of strictness in dealing with offenders combined with leniency where appropriate—being strict when strictness is warranted and lenient when leniency is called for—in order to bring this struggle to a successful close. We look forward to receiving your opinions on the above points via telegram without delay.
The Central Committee
May 9th