Directives on Trade Union Work and Revisions to the Draft of the Central Committee’s Endorsement [I]
(July 1953)

In strengthening trade union work in capitalist industry, it is imperative to implement the policy of utilization, restriction, and transformation. The transformation referred to here does not yet mean the final step of transformation that abolishes the capitalists’ private ownership of the means of production and turns them into socialist enterprises. The transformation referred to here means, under the condition of recognizing the capitalists’ restricted and incomplete private ownership, gradually turning capitalist enterprises into state-capitalist enterprises, that is, capitalism under the management of the people’s government, linked in various ways with the state-operated socialist economy, and subject to workers’ supervision. This kind of capitalism is no longer the capitalism that existed before liberation; it produces primarily to meet the needs of the state and the people, and the capitalists can no longer seek profit exclusively. Of course, the workers must still produce a portion of the profits for the capitalists, but this portion of the profits accounts for only about one-quarter of the total enterprise earnings. The main part of the earnings, accounting for about three-quarters, is produced for the state (income tax), for the workers (welfare funds), and for expanding enterprise equipment (accumulation funds, which contain a small component of profits produced for the capitalists). Therefore, this kind of capitalism is no longer capitalism in the ordinary sense, but a special kind of capitalism, namely, a new type of state capitalism, which possesses certain (with several situations of varying degrees) socialist character. It must be pointed out that at present, not all or the vast majority of capitalist factories have reached this stage; they have not yet done so. Several more years of effort are still needed to reach this stage, but it can certainly be achieved.

The ratio of “dividing the fat among four parties” pointed out in the directive is suitable for the majority of capitalist factory enterprises. However, if the capitalists’ income in certain factories exceeds the ratio pointed out in the directive, it may also be permitted as long as their income is derived from legitimate operations and not from the “five poisons” or other illegal acts. For factory enterprises where the capitalist side’s income falls short of this ratio, reaching this ratio must be implemented only after clearly explaining the matter to the workers and obtaining their consent.

[I]
Part One consists of Mao Zedong’s revisions to the directive of the All-China Federation of Trade Unions on strengthening trade union work in capitalist industrial enterprises. This directive was submitted by the Party Group of the All-China Federation of Trade Unions to Mao Zedong and the Central Committee of the Communist Party of China on July 14, 1953. Part Two consists of Mao Zedong’s revisions to the draft endorsement by the Central Committee for transmitting the directive of the All-China Federation of Trade Unions on strengthening trade union work in capitalist industrial enterprises. The date on this draft endorsement is July 20, 1953. The text printed in Song typeface represents passages added by Mao Zedong.