(1) In 1956, the socialist transformation was basically completed, and production in agriculture, heavy industry, and light industry all increased.


(2) The state’s construction efforts in 1956 achieved notable results.
The capital construction investment and other expenditures for 1956 were, for the most part, appropriate; however, a portion were either misplaced or excessive. Out of a total budget expenditure of 30.8 billion yuan (at old prices[2]), between 2 and 3 billion yuan was used improperly or overspent, with approximately 1.5 billion yuan of that amount attributable to capital construction projects.


(3) People’s living standards improved in 1956, employment increased, and the general public was pleased. Nevertheless, improvements in living standards must be gradual; promises should not be overextended. Excessively high expectations and goals that cannot yet be realized ought to be openly and repeatedly explained to the people.


(4) The 1957 budget projected equal revenues and expenditures of 30.865 billion yuan (including 215 million yuan raised independently; 30.865 billion yuan at current prices corresponds to 31.765 billion yuan at old prices). Of this amount, 15.726 billion yuan was allocated to economic development, 3.93 billion yuan to social and cultural programs, 5.7 billion yuan to national defense, 2.5 billion yuan to administrative expenses, 842 million yuan to debt servicing, 641 million yuan to foreign aid and other expenditures, 500 million yuan to state material reserves, 500 million yuan to credit funds, and 526 million yuan to the general contingency reserve. Among the economic, cultural, defense, and administrative outlays, total capital construction investment amounted to 12.673 billion yuan (approximately 13.573 billion yuan at old prices), of which 215 million yuan was self-financed. The 1957 budget was balanced but rather tight, and it should be further aligned with actual cash flow.


(5) Given limited financial and material resources, the 1957 annual plan had to be appropriately scaled back in certain areas compared with 1956, so as to ensure priority projects while also meeting the needs of the people. Priority for reductions lay with central-level entities, though local authorities were likewise encouraged to make cuts wherever possible. Even so, overall our development endeavors remained on track: both revenue and expenditure for 1957 exceeded this year’s levels—revenue rose by 2.25 billion yuan, an increase of 8.2 percent, and expenditure grew by 953 million yuan, or 3.2 percent. Any adjustments must be carefully planned to avoid disorderly consequences. When materials are scarce, priority should be given to essential production activities, while maintaining overall balance.


(6) A campaign to increase production and practice economy should be launched throughout the Party and among the entire population. [3] Increased output must be pursued under conditions that guarantee raw material supplies and meet social needs, while simultaneously ensuring quality and reducing workplace accidents. Savings hold great promise and should be pursued without compromising quality or increasing accident rates. In enterprises, institutions, and government operations, extravagance and waste must be firmly opposed, with a focus on frugality and simplicity, and strict economy enforced. In manufacturing and infrastructure construction, it is imperative to conserve raw materials, appropriately reduce costs and project budgets, and rigorously practice economy.


(7) Class antagonisms within the country have largely been resolved, but vigilance remains necessary against the continued activities of a small number of counterrevolutionary elements. The reeducation of bourgeois elements and intellectuals to overcome their outdated ideas and habits should continue as a long-term effort, based on the principle of consolidating unity with them. The proper approach to resolving intra-people’s and intra-Party issues is not through “big democracy,” but through “small democracy.” It should be understood that, historically, all major democratic movements among the people have been directed against class enemies. Printed from the original documents preserved in the Central Archives.
Notes [1] These are key points from Mao Zedong’s remarks at the group leaders’ meeting during the Second Plenary Session of the Eighth CPC Central Committee. [2] Refers to 1955 price levels. [3] On February 15, 1957, the CPC Central Committee issued the “Directive on Launching the Campaign to Increase Production and Practice Economy in 1957.” The directive stipulated that the scale of 1957 construction projects should be appropriately adjusted; specific analyses and re-prioritization were required for projects originally slated to begin in 1957. Projects that could and should be undertaken both this year and next were to be included in the annual plan, while those already under way last year were also to be reassessed, with those still feasible and necessary to continue being incorporated into the current year’s plan. In industrial and agricultural production, as well as in transportation, postal and telecommunications services, and commerce, every possible measure must be taken to broadly launch the campaign for increased production and economy, effectively combating all forms of waste. Administrative overheads were to be drastically reduced, personnel increases strictly limited, existing organizational structures and staffing levels rationally adjusted, certain unreasonable salary and welfare systems gradually revised, and all manifestations of extravagance and waste completely eradicated.