Amendments to the All-China Federation of Trade Unions’ Directive on Strengthening Trade Union Work in Capitalist Industrial Enterprises and to the Central Committee’s Draft Commentary〔1〕 (July 1953) I. To strengthen trade union work in capitalist industry, it is essential to implement the policy of utilization, restriction, and transformation. The “transformation” referred to here does not yet mean the final step of abolishing capitalists’ private ownership of the means of production and turning such enterprises into socialist ones. Rather, it signifies, while recognizing capitalists’ limited and incomplete private ownership, a gradual transition of capitalist enterprises into state-capitalist enterprises—namely, capitalist enterprises under the administration of the People’s Government, linked in various ways with the state-owned socialist economy, and subject to workers’ supervision. Such capitalism is no longer the kind that existed before the liberation; it primarily produces for the needs of the state and the people, and capitalists can no longer pursue profit at all costs. Of course, workers still help generate a portion of profits for the capitalists, but this portion accounts for only about one quarter of the enterprise’s total earnings. The remaining three-quarters constitute the main share of profits, which are used for the state (in the form of income tax), for the workers (through welfare funds), and for expanding the enterprise’s equipment (through reserve funds—this latter category includes a small element intended to yield profits for the capitalists). Therefore, this type of capital

ism is no longer capitalism in the ordinary sense; it is a special kind of capitalism—new-type state capitalism—which possesses certain (albeit varying degrees of) socialist characteristics. It must be pointed out that, at present, not all—or even the majority—of capitalist factories have reached this stage; that goal has yet to be attained and will require several more years of effort. Nevertheless, it is certainly achievable. II. The “four-way distribution of surplus” ratio specified in the directive is appropriate for most capitalist industrial enterprises. However, if in some factories the capitalists’ share exceeds the ratio set forth in the directive, as long as their income derives from legitimate business operations rather than from illicit practices such as usury, bribery, smuggling, speculation, or fraud, such an arrangement may still be permitted. In enterprises where the capitalists’ share falls short of this ratio, any attempt to raise it to the prescribed level must first be thoroughly explained to the workers and obtain their consent before being put into effect. Printed according to Mao Zedong’s revised text. Notes 〔1〕 Part (I) of this document consists of Mao Zedong’s amendments to the All-China Federation of Trade Unions’ directive on strengthening trade union work in capitalist industrial enterprises. This directive was submitted by the Party Leadership Group of the ACFTU to Mao Zedong and the CPC Central Committee on July 14, 1953. Part (II) comprises Mao Zedong’s revisions to the draft commentary prepared by the Central Committee for forwarding the ACFTU’s directive on strengthening trade union work in capitalist industrial enterprises; the draft bears the date July 20, 1953. Text printed in Song typeface represents additions made by Mao Zedong.