Notes on Two Documents
(April 9, 1953)

The report by Comrades Cheng Zihua and Zhang Qilong concerning the current situation of supply-and-marketing cooperatives and their proposed solutions[l], together with Comrade Deng Zihui’s views on the issues facing these cooperatives[2], are hereby circulated to all comrades attending the Central meeting, as well as to Zeng Shan, Jia Tuofu, and Yao Yilin[3]. Comrades Cheng Zihua and Zhang Qilong are requested to review these documents in preparation for next week’s discussion of this matter.

Mao Zedong
April 9th
[l]
Refers to the report dated March 24, 1953, submitted by Cheng Zihua, Director of the All-China Federation of Supply and Marketing Cooperatives, and Zhang Qilong, Deputy Director, to Mao Zedong and the Central Committee. The report addressed the severe crisis emerging in cooperatives across the country following the readjustment of the commercial sector and the implementation of the new tax system. It noted that, due to some localities’ incomplete and incorrect understanding of the Central Committee’s instructions on commercial readjustment, they had resorted to crude, high-handed, and commandist methods—closing retail outlets without regard to local conditions, unreasonably restricting sales volumes, and reducing product lines. Coupled with the introduction of the new tax regime, these measures led to a widespread decline in cooperative sales, plunging cooperatives into a grave crisis. As a result, cooperatives nationwide were forced to downsize their organizations, laying off or preparing to lay off large numbers of staff, which caused extreme disarray both organizationally and ideologically among cooperative personnel. Cooperative cadres were now generally unsettled. Although the All-China Federation of Supply and Marketing Cooperatives had done its utmost to halt such “streamlining” efforts, the situation remained serious. Moreover, the root causes of this predicament did not lie solely within the cooperatives themselves. Accordingly, the following recommendations were put forward:

1. All levels of Party committees are urged to take note of this grave situation and immediately stop the ongoing “streamlining” of cooperatives; appropriate arrangements should be made for those who have already been laid off.

2. Cooperatives should be permitted to promptly restore retail outlets, business units, and processing departments that ought not to have been closed during the commercial readjustment, and to resume trading at the volume of goods necessary for their operations.

3. Certain erroneous measures adopted by state-owned commercial entities in improperly implementing the commercial readjustment directives—measures that weaken and harm cooperatives—must be halted and prevented.

4. Certain provisions of the new tax system that disadvantage cooperatives while favoring private traders should be swiftly revised.

5. Temporary workers employed by cooperatives should be allowed to remain in their positions.

[2]
Refers to the report dated March 31, 1953, submitted by Deng Zihui, Minister of the CPC Central Committee’s Rural Work Department and Vice Chairman of the State Council’s Finance and Economic Commission, to Mao Zedong, with a copy forwarded to Bo Yibo, Minister of Finance of the State Council. In the report, Deng expressed his view that the document from Cheng Zihua and Zhang Qilong should be transmitted by the Central Committee to local authorities for action, beginning with an immediate cessation of the widespread layoffs and massive closures of retail outlets currently underway in cooperatives, in order to avert their further disintegration. Regarding several fundamental issues pertaining to supply-and-marketing cooperatives, Deng set forth the following observations and opinions:

1. Cooperatives are mass economic organizations of a semi-socialist nature. Their primary task is to integrate tens of millions of individual peasant households with state-owned industry and commerce through supply-and-marketing activities, thereby assisting them in developing production and improving their living standards, strengthening the worker-peasant alliance, and laying the economic, material, and political foundations for national industrialization.

2. The operational policy of cooperatives should, on the one hand, involve the extensive marketing of surplus agricultural products and local specialties on behalf of their members, while, on the other hand, ensuring the timely provision of means of production and daily necessities to those members. They should simultaneously cultivate close ties with state-owned trading companies, export enterprises, and nearby industrial and mining enterprises, and at the same time establish strong connections with small and medium-sized towns as well as local handicraft workshops and factories. Neither of these two aspects should be neglected.

3. Given China’s specific circumstances, the organizational structure of cooperatives should be as follows: (1) County-level and primary-level cooperatives should serve as the mainstay, with greater emphasis placed on enhancing the independent operating capacity of county and district-level cooperatives, so as to truly implement the Central Committee’s directive that primary-level cooperatives provide services to their members, while higher-level cooperatives support lower-level ones. (2) Cooperatives must be allowed to function as an independent operating system, establishing their own wholesale centers and placing orders directly with state-owned industrial and mining enterprises throughout the country; even more importantly, they should collaborate closely with local handicraft industries.

4. A parallel wholesale center system should be adopted, allowing cooperative wholesale centers at all levels to procure and place orders directly from nearby state-owned and public factories, thereby removing the restrictions imposed on cooperatives by trading companies. This constitutes an urgent measure to address the current crisis facing cooperatives.

[3]
Zeng Shan was then Vice Chairman of the State Council’s Finance and Economic Commission and Minister of Commerce. Jia Tuofu was also Vice Chairman of the State Council’s Finance and Economic Commission. Yao Yilin served as Vice Minister of Commerce of the Central People’s Government.

Photo caption:
In April 1953, Mao Zedong visited an art exhibition at the Central Academy of Fine Arts.

In 1953, Mao Zedong viewed ancient Chinese paintings.

Wen Tuan zai chang