(August 6, 1952)
One issue I would like to address is the so-called reduction in military expenditure.
Has our armed forces been weakened? On the contrary, they have been strengthened. What, then, does this “reduction” in military spending really mean? It stems from an overall expansion of the national budget: certain items that were previously included under military expenditure are now being reallocated elsewhere. Why are they no longer classified as military costs? Because they simply do not belong there. For example, military factories fall under industrial development, yet they were historically counted as part of military construction. Similarly, cultural and educational activities within the army—excluding military training itself—should be funded through the national education budget; however, they too were previously charged to the military purse. This particular item amounted to 100 billion yuan (2) (last year’s military budget was 580 billion yuan, which would suggest this year’s figure should be 480 billion yuan). Last year it was still included in the military account, but this year it has been moved out. Now, with 540 billion yuan allocated to military expenses, the actual amount has not decreased at all.
Moreover, a three-anti campaign targeting corruption, waste, and bureaucracy—dubbed the “tiger hunt”—has led to substantial savings by eliminating unnecessary expenditures.
Why has the military managed to free up such a large sum of money? Another factor is that, following land reform, local armed forces have been reduced by nearly one million personnel.
Currently, dozens of divisions—comprising over 400,000 troops—have been reassigned to work on water conservancy projects for the People’s Liberation Army.
This is part of Mao Zedong’s speech delivered at the sixteenth meeting of the Central People’s Government Committee on August 6, 1952.
[2]
Refers to the old Chinese currency; ten thousand old yuan equaled one new yuan.

On the Issue of Reduced Military Spending
These include engineering corps, railway engineers, architectural engineers, forestry and reclamation units, rubber plantation regiments, and so forth. For instance, among the 300,000 workers involved in the Jingjiang River Diversion Project, 100,000 were PLA soldiers. Of General Cheng Qian III’s three divisions, two are currently engaged in water conservancy construction. Furthermore, we are now doing our own building rather than contracting it out; instead, we are utilizing the PLA’s construction engineers.
Although the size of the People’s Liberation Army has diminished, its equipment has been significantly upgraded, with the procurement of modern weaponry. In this sense, peace is more securely assured, because as our military strength grows, so too does our capacity to safeguard peace.
On August 9, 1952, Mao Zedong listened to Li Na tell stories at Xiangshan, accompanied by Li Min and Mao Yuanxin.
[l]
Cheng Qian, a Kuomintang military commander, rose up with his forces in Changsha alongside Chen Mingren in August 1949.
At the time, he served as Vice Chairman of the People’s Revolutionary Military Commission of the Central People’s Government and Governor of Hunan Province.
In August 1952, Mao Zedong was photographed together with Mao Yuanxin.
Archival photo
On August 9, 1952, Mao Zedong issued an order from the Central People’s Government promulgating the Outline for the Implementation of Regional Ethnic Autonomy in the People’s Republic of China, which holds great historical significance for strengthening unity, friendship, and cooperation among all ethnic groups in our country.