I. Economic Issues

Economic development does not advance in a straight line, smooth and steady at all times. Sometimes it progresses a bit more, sometimes a bit less; sometimes the horse runs a bit faster, sometimes a bit slower; sometimes we mount the horse, sometimes we dismount. Such situations are entirely possible. First, because we lack experience; second, because our economic development must adapt to the prevailing circumstances. For instance, in the past, economic development may have been pushed a bit too fast because of the war situation at the time. If war were imminent, it would be necessary to develop heavy industry more. Economic development proceeds in waves, with ups and downs, one wave following another—that is, there is balance and disruption, and after disruption, balance is restored. Of course, the undulations of these waves must not be too great, and we must not suddenly swing back to opposing conservatism. However, it is inevitable that development advances according to the law of wave-like motion. If we acknowledge this, then a bit of rash advance this year is not so terrible, and doing a bit less next year is also nothing serious. On the whole, our First Five-Year Plan is correct.

The 165 projects are key projects determining the development of China's industry and agriculture. These had to be undertaken, but they were carried out a bit too hastily. The First Five-Year Plan has now been implemented for four years. The overall situation is good: production has advanced, workers' incomes have increased somewhat, and the people's livelihood has improved a little. Although there is some tension in society, it is still bearable. The achievements in capital construction are also quite good—many factories have been built, and many products that we could not produce ourselves in the past can now be made by us. The backward situation of the past, where we had to rely on foreign countries for everything, has begun to change. A certain foundation has been laid in industry. Therefore, it should be affirmed that the First Five-Year Plan is correct. Of course, there have been mistakes, mainly due to insufficient experience, and there may be mistakes in the future as well. Hence, we cannot say that by summarizing our four years of experience in economic development, we have fully grasped the laws of economic development and will make no more mistakes. That is impossible.

The central projects of the First Five-Year Plan number 165, while the total number of above-norm projects is 800. Most of these were undertaken by ourselves; only over 150 were designed with Soviet assistance, and some others with the help of fraternal Eastern European countries. The majority were designed by ourselves. Who says we are incapable? Although we undertook quite a number ourselves, the large projects were designed with Soviet help, while the small ones we did on our own. If we could handle all the large ones ourselves, that would be fine. It seems that if the First Five-Year Plan has shortcomings and mistakes, the biggest shortcoming and mistake is lack of experience. In building factories, we have only the skeleton but no flesh. That is to say, we set up the factory buildings, machinery, and equipment, but we did not correspondingly build the ancillary facilities—sewers, roads, postal and telecommunications services, teahouses, restaurants, dormitories, theaters, and so on. In reality, to truly build an industrial city, it is impossible not to include these. The Northwest now faces many difficulties and is under great strain because the cities have no foundation. Factories have been set up, but there are no barbers, no tailors, roads are lacking, vehicles are insufficient, and supplies cannot be transported in. Therefore, in developing industry, it is not enough to design only the factories themselves; many ancillary service facilities and welfare amenities for the factories must be planned for simultaneously. In the past, we did not include these in our plans. The investment funds for our 800 projects themselves were sufficient, but once development proceeds, the required funds will inevitably increase, and we did not plan for these. This will be a very big loophole. The problem is not great this year, but it will be serious in the future. If we do not now discover the issue of the relationship between the skeleton and the flesh in factory construction—if we only build factory buildings, machinery, and equipment without building ancillary facilities—factories will be established, but many problems will arise. Although we have made subjectivist mistakes in construction, it is impossible to avoid making any mistakes at all, because we lack experience. By making mistakes, we can learn what can be done and what cannot be done, and thereby gain lessons. The main thing is to correct the mistakes. Do not pour cold water; protect the enthusiasm of cadres and the masses. It is under this premise that we should criticize shortcomings in our work. Regarding matters that the masses demand but cannot be accomplished for the time being, we must openly tell the masses and explain to them repeatedly and clearly.

In the future, when drawing up budgets, we should do so twice a year, with discussions at a plenary session of the Central Committee and a session of the National People's Congress, and finalize decisions after three rounds of deliberation. Because the budget is a framework, the speed of economic development is mainly determined by the budget. Comrade XXX put it very well in a conversation: Now, whether a particular year's plan is rash or not depends on how much fiscal revenue and expenditure there is that year. In the future, to maintain a steady and reliable pace of development, handling the budget well is a very important issue. That is why the Central Committee has brought it up for discussion at the Second Plenary Session—it makes sense and is meant to get everyone concerned about this issue. Discussing it once is not enough; we need to convene another plenary session of the Central Committee and a session of the National People's Congress to discuss it. The result of doing so will make our budget more accurate and, at the same time, place our economic development on a fully reliable foundation.

Responsible comrades of provincial and municipal Party committees and central ministries must take charge of finance, economics, and planning. At present, most are not doing so, and this shortcoming must be quickly corrected. After the reforms have been completed, Party committees at all levels must engage in construction. If Party committees do not take charge of finance, economics, and planning, how can construction be done well? If Party committees are laymen, they have no way to lead. To become experts, they must delve deeply and take charge. The Central Committee has now shifted to taking charge of finance, economics, and planning work.

The issues of grain and pork are very serious. This year, although national grain output has still increased, the area affected by disasters is very large. Because we did not tightly control grain sales, much more has been sold in the past half-year, and waste has been considerable. Everyone must carefully study the grain problem to see how to ensure supply without causing problems, without waste, and without excessive sales. The supply of pork and non-staple foods is very tight. These are not simple problems. Particularly regarding the issue of agricultural product prices, Comrade Deng Zihui sent a telegram from Fujian. He mainly argued that the purchase prices of agricultural products are too low, especially grain prices, so peasants are unwilling to produce grain. He advocates raising grain prices. At the same time, the Central Committee advocates raising the purchase price of live pigs somewhat. Now, to solve the grain problem, on the one hand, we must economize and tightly control sales to prevent excess; on the other hand, we must make peasants willing to produce more grain. This is closely related to solving the supply of non-staple foods, especially pork. Because if peasants are unwilling to produce grain, there will be no feed, and pigs cannot be raised. If there is more grain, and we raise the price of live pigs a bit, developing pig farming will be somewhat more reliable. In short, the prices of agricultural products must be set appropriately. Some comrades hope to quickly level the price scissors between industrial and agricultural products. This is impossible. Because the current situation of the price scissors is such that, taking national income as 100, the price scissors account for 30 percent, while the direct tax burden on peasants averages only about 10 percent nationwide. If we now demand the complete elimination of the price scissors to achieve exchange of equal value, national accumulation will be affected. However, if the price scissors are too large, making it unprofitable for peasants, that is also wrong. In short, under the condition of not affecting national accumulation, it is entirely necessary to gradually narrow the price scissors between industrial and agricultural products to improve the peasants' livelihood.

In any case, in our economic development, we must advocate "building the country through diligence and thrift, and struggling arduously." When we spend one jiao, we must not accomplish only eight fen worth of work; we must accomplish one jiao and one fen or one jiao and two fen worth of work. In times of difficulty, some of our comrades now think of asking the state for money to solve difficulties. Of course, this is sometimes necessary; but there should also be another method: in times of difficulty, not relying on money, but relying on our exemplary role and arduous struggle can also solve problems. Why do I say this? It is said that when building factories in Lanzhou, the office building was erected first, but there were no workers' dormitories, so now the workers have to sleep in sheds.

In carrying out economic development, we must also rely on newspapers. We must make newspapers play a very good role in economic development and in all work. We must manage newspapers well. When there are difficulties, we can explain them clearly to the masses, raise their consciousness, and have everyone endure some hardship now to build the country. After construction is completed, life can improve somewhat. If we only raise living standards without raising the masses' consciousness, problems will still arise. For example: the living standards of the Hungarian people have not risen much, but they are not very bad either. However, because there was no education and the people's consciousness was not raised, the ideological influence of the petty bourgeoisie and the bourgeoisie was very great, leading to major turmoil.

Furthermore, in the future, we should emphasize more sharing weal and woe with the people. First, we must propagate that cadres in leading organs should play an exemplary role; only then can we ask the masses to struggle arduously. Building socialism is an arduous task; only through arduous struggle can socialism be built. Therefore, we must emphasize production. Only when production rises can the people's livelihood possibly improve gradually. We must emphasize the arduous struggle of cadres in leading organs and carry forward the past style of hard work and plain living. At the same time, we must call on the people to share weal and woe with us.

II. The International Situation

In the current international situation, the places where problems have arisen are the Middle East and Eastern Europe. At first glance, these do not seem to be good news, but they can also be said to be good news. Because the occurrence of the events in Poland and Hungary indicates that there are problems and contradictions. Since there are problems, they must be exposed. The outbreak of events makes the problems clear and distinct. Once they are clear, we can find the causes, take measures, improve shortcomings and mistakes in our work, and solve the problems well, enabling Poland and Hungary to become more consolidated. Viewed from this perspective, it is good news. Therefore, if there are problems, they will eventually erupt. It is better for them to erupt sooner rather than later. Problems that erupt earlier may be smaller and easier to solve. "Failure is the mother of success." After failure, the positive side is that we can gain experience and lessons. If we truly draw lessons from failure, we have gained something, and that is good. For instance, the events in Poland and Hungary educated the revolutionary people of Poland and Hungary, educated the Soviet Union, and also educated us. Problems will continually arise; even in communist society, problems will still occur incessantly. The word "revolution" will probably never be removed from the dictionary. What is revolution? It means that where there are contradictions, there is struggle; the method of resolving contradictions is called revolution. Revolution today refers to eliminating classes. In the future, the content and nature of revolution may be somewhat different, but where there are contradictions, there is struggle, and to resolve contradictions, struggle is necessary. In this sense, the future will be consistent with the present and the past. After classes are eliminated in the future, the nature of contradictions may differ from the past, but contradictions will still exist. For example, in China today, class contradictions have been basically resolved. The current principal domestic contradiction is between the advanced social system and the backward productive forces. Generally speaking, this contradiction is originally non-antagonistic, but if it is not handled well, it could become an antagonistic contradiction.

III. Sino-Soviet Relations

At present, within the socialist camp, the Soviet Union's leading position cannot be shaken. If the Soviet Union's leading position were shaken, it would plunge the entire socialist camp into even greater chaos. We support the Soviet Union not for any other reason, but primarily because we are all communists, opposing imperialism and capitalism, and we share a common purpose. Since the Soviet Union can play a greater role, why shouldn't we support it? Of course, supporting the Soviet Union does not mean blindly supporting everything. In fact, we have never blindly supported everything. We do not adopt things that are unsuitable for China's conditions. The principles, policies, and lines of our Chinese revolution and work have all been independently determined and formulated by our Party in accordance with China's characteristics and conditions. It should be said that it is appropriate for the Soviet Union to hold the leading position in the socialist camp, because the Soviet Union was the first country in the world to build socialism, and its industry has a foundation. The Soviet Union still has much advanced experience. Although the Soviet Union had some shortcomings in the past and some of its practices were not entirely appropriate, these can all be corrected. There is nothing perfect in the world. In the past, some of our comrades one-sidedly regarded the Soviet Union as perfect in every way; now, they have swung to the other extreme and see nothing good at all. This is a manifestation of one-sidedness.

Marxist-Leninists must not take a one-sided view of problems. Things can be divided into the true, the good, and the beautiful on the one hand, and the false, the evil, and the ugly on the other, and these are mutually opposed. In our assessment of the Soviet Union, we cannot say that everything was good in the past, nor can we say that everything is bad today. In fact, recently the Soviet Union has made considerable efforts and great improvements in many areas of work and in international relations, and it is moving in a good direction. This shows that the Soviet Union is basically good—it was good in the past, it is good now, and it will be even better in the future. Of course, it also has shortcomings; some problems are not handled appropriately, and there are also some theoretical errors.

From the very beginning, our Party has learned from the Soviet Union. The mass line, political work, the dictatorship of the proletariat, and so on were all learned from the October Revolution. At that time, Lenin emphasized mobilizing the masses, organizing soviets of workers, peasants, and soldiers, and so on, rather than relying on administrative orders. Lenin sent Party representatives to carry out political work. The problem arose in the later period of Stalin after the October Revolution. Although he was still engaged in building socialism and communism, he abandoned some of Lenin’s principles, deviated from the Leninist path, and became divorced from the masses, among other things. Therefore, by learning from the practices of Stalin’s later leadership and applying them dogmatically in China, we suffered some losses. Now the Soviet Union still has some advanced experience that we can learn from. However, there are some things we cannot do exactly like the Soviet Union, such as the socialist transformation of capitalist industry and commerce, agricultural cooperativization, and the ten major relationships in economic construction—these are all Chinese approaches. In future socialist economic construction, we should mainly proceed from China’s conditions, circumstances, and the characteristics of the era we are in. Therefore, the slogan of learning from the Soviet Union should still be raised, but we must not apply things blindly, dogmatically, or mechanically. Similarly, we can also learn certain good things from bourgeois countries, because every country has its strengths and weaknesses, and we mainly learn from the strengths of others.

Stalin had a tendency to deviate from Marxism-Leninism, specifically manifested in his denial of contradictions. To this day, the influence of Stalin’s views has not been completely eliminated. Stalin was a materialist and a dialectician, but in practice he was a subjectivist. He placed the individual above everything else, denied the collective, denied the masses, and engaged in personality cult—more precisely, personal dictatorship. This is anti-materialist. Stalin also talked about dialectics, but in practice he was metaphysical. For example, in the *History of the Communist Party of the Soviet Union (Bolsheviks)*, when discussing dialectics, contradictions were placed last. It should be said that the most fundamental issue of dialectics is the unity of opposites in contradiction. Because he was metaphysical, he developed one-sided views, denied the internal connections of things, and viewed problems in isolation and statically. To speak of dialectics is to view problems in terms of the unity of opposites, and thus it is comprehensive. Life and death, war and peace—these are opposites and contradictions, yet in reality they also have internal connections. Therefore, sometimes these opposites can achieve unity. When we understand problems, we must not see only one side; we should analyze comprehensively and penetrate to their essence. In this way, when evaluating a person, we cannot say that they are entirely good at one moment and then utterly bad at another, without a single redeeming quality. Why is our Party correct? It is because we understand and resolve all problems based on objective conditions, which makes our approach relatively comprehensive and not absolutist. Secondly, the mass line was regarded by Stalin as tailism. He did not recognize the benefits of the mass line and used administrative methods to solve many problems. But we Communists are materialists; we recognize that the masses create everything and are the masters of history. There are no individual heroes; only when the masses unite is there strength. In fact, after Lenin’s death, the mass line was forgotten in the Soviet Union. While opposing Stalin, they also did not properly recognize and emphasize the significance of the mass line. Of course, recently they have begun to pay attention to it, but their understanding is still not deep enough. Furthermore, class struggle and the dictatorship of the proletariat were emphasized by Lenin. At that time, the main difference between Lenin’s Third International and the Second International was that Marxists emphasized class struggle and the dictatorship of the proletariat, while opportunists refused to acknowledge them. One of the lessons from the events in Poland and Hungary is that, in addition to shortcomings in their work and other factors, after the victory of the revolution they did not properly mobilize the masses to thoroughly eliminate counterrevolutionary elements. That is to say, they did not seriously exercise dictatorship over counterrevolutionary elements, allowing them to exploit gaps and create disturbances. Another issue concerns relations between countries. We have always maintained that countries should treat each other as equals. Countries, large or small, each have their own strengths. All fraternal countries share common goals, so we must unite, treat each other as equals, and must not harbor any sense of superiority. Since the Zunyi Conference, our Party has independently implemented policies, independently determined its course, maintained an independent position, and acted according to China’s conditions. After the founding of the People’s Republic, we proposed "leaning to one side," which meant that politically we must unite with the countries of the socialist camp. Socialist countries stand on one side; we cannot have one foot on the socialist side and the other on the Western capitalist side. Thus, "leaning to one side" shows that we have resolutely separated ourselves politically from the bourgeois countries, dispelling all illusions about the Western countries. China cannot take the capitalist road, cannot compromise with imperialism, but must resolutely oppose imperialism and capitalism.

Sino-Soviet relations must be handled well. There must be no wavering regarding the leading position of the Soviet Union; otherwise, it would be very detrimental to our socialist camp. It must be affirmed that the Soviet Union is generally good, and within the socialist camp, the Soviet Union must be the leader. On this point, we must strengthen education both inside and outside the Party and explain it clearly.

IV. The Question of Great Democracy and Small Democracy

In recent years, some people both inside and outside the Party have demanded the implementation of great democracy. In fact, the formulation that great democracy should be practiced among the people is mistaken. What exactly is meant by great democracy? Great democracy is used to deal with enemies. Looking at our history, Chen Sheng and Wu Guang raising their banners to resist the Qin Dynasty, Wang Mang deposing the infant emperor to usurp the Han, the Yellow Turban Uprising during the reign of Emperor Ling of the Eastern Han, Cao Cao, Liu Bei, and Sun Quan contending for supremacy during the Han-Jin transition, Hong Xiuquan and Yang Xiuqing launching the Jintian Uprising in the Qing Dynasty—these were all methods of great democracy. Our method of carrying out revolution to overthrow Chiang Kai-shek was also a method of great democracy. The recent demonstrations against the British and French aggression in Egypt were also great democracy. It should be said that we are in favor of great democracy, but it must be made clear: great democracy is used to deal with enemies and to oppose the ruling class; it cannot be used among the people. Similarly, imperialism and class enemies also use the methods of great democracy against us. The recent events in Hungary demonstrated that imperialism and counterrevolutionary elements used great democracy to oppose the Communist Party and the people. However, some of our comrades do not understand this principle. In fact, we have always used great democracy to deal with enemies. It is only now, when domestic class contradictions have been basically resolved, that we do not use great democracy to deal with the bourgeoisie, nor do we wish to use it. Instead, we use the method of rectification—gentle breezes and light rain, that is, methods of ideological education. But before class contradictions were resolved, we always used great democracy against hostile classes.

Of course, great democracy can also be applied to deal with bureaucratic elements. When serious bureaucracy exists, leading to detachment from the masses and causing great losses and harmful consequences in work, and when the masses reach the point where they can no longer endure it, why shouldn’t they use great democracy to oppose bureaucratic elements? In Chengdu, some students went on strike. Because their problems were not resolved, they wanted to go to Beijing to petition, advancing in two groups—one train reached Baoji, and another reached Zhengzhou. When the Second Ministry of Machine Building learned of this, they sent people to dissuade the students and send them back. They should have been allowed to come to Beijing. You made mistakes and refused to admit them, and when people came to Beijing to petition, you blocked them. You couldn’t persuade them, so we admitted our mistakes to them. By not letting them come, were you afraid of a bad impression? Or afraid of adding to our troubles? Actually, there is nothing to fear. Whether they come or not, the impression remains the same—it won’t increase if they come, nor will it change if they don’t. If they really came, even if we were very busy, we would receive them and admit our mistakes to them.

Petitions by the masses that are justified should be fully permitted. In the future, we may consider adding a clause to the constitution: allowing workers to strike. This would be beneficial for correcting bureaucratic tendencies in factory leadership. Because when workers strike, it puts pressure on factory directors, who will no longer dare to just sit in their offices giving orders but will have to go among the workers and see things for themselves. If we are not vigilant and do not correct bureaucratic tendencies, the result may be the formation of a special stratum, detached from the people, and ultimately overthrown by the people.

We are in favor of great democracy. If it were used to solve problems now, I’m afraid democratic personages, university professors, capitalists, and some people within the Party (such as bureaucratic elements) would not approve. Because once great democracy is implemented, the masses will rise up to settle accounts and "rectify" them. After all the previous political movements, these people have already been rectified enough. If another round of great democracy comes, they will have to be rectified again. One can imagine they would not welcome it. In fact, although great democracy is used against enemies, it can also be used against bureaucratic elements. However, we need not fear it. The key is that as long as we do our work well, earnestly overcome shortcomings, and correct mistakes, the masses will only support us and will not resort to great democracy to oppose us.

V. The Question of Minority Nationalities

We must unite well with the minority nationalities. We cannot regard this issue as too simple. Over the past few years, although we have done some work and resolved some problems concerning minority nationalities, there are still quite a few issues today. At the same time, the national question will persist for a very long time. It seems that as long as we do our work well, the problems may be fewer. Some of the problems in the relations between Poland and the Soviet Union, and between Hungary and the Soviet Union, also involve national questions that were not properly resolved. In China, the national question in the Tibet region has also not been completely resolved. Therefore, the Central Committee has repeatedly called for attention to this issue. We must not think that uniting the minority nationalities is an easy matter. First, we must oppose Han chauvinism and earnestly unite the minority nationalities.

In our work on nationalities, there have been some shortcomings in the past. We must have confidence in correcting them and not fear opposition from others. It is precisely because there are shortcomings that people oppose them; once the shortcomings are gone, the opposition will cease. The situation of the Chinese Communist Party differs from that of parties in other countries. Our Party cadres are homegrown—some from the Northern Expedition period, some from the Agrarian Revolution period, some from the War of Resistance Against Japan and the Liberation War period, and some from the construction period. Moreover, they have all gradually matured through struggle. Not only that, our Party’s leadership is also entirely correct, and our army is loyal and reliable. Therefore, we should have confidence and not fear rebellion. We must achieve the state of "letting the winds and waves rise while sitting steadily in the fishing boat." We must not be pessimistic or fear great democracy. However, we must earnestly correct our mistakes and resolutely overcome bureaucracy; otherwise, it will be dangerous.

VI. The Question of Rectification and Reorganization

We are going to carry out a large-scale rectification movement, mainly targeting subjectivism, bureaucracy, sectarianism, corruption and waste, as well as the coercive and commandist work style of lower-level cadres. In January next year, the Central Committee will issue a directive on this issue, defining the methods and content of the rectification, mobilizing the entire Party to prepare well, and then beginning after July. Before July, the main task is preparation and personal self-examination. If mistakes have already been corrected before the rectification, then there is no need for further rectification. For those who have not yet corrected their mistakes, if the problems are of a general nature, we will still adopt educational methods. Only those with relatively serious mistakes who have not corrected them will be subjected to focused criticism. The purpose of rectification is to correct mistakes. If mistakes are corrected without rectification, isn’t that even better? The Central Committee’s intention is that this rectification must be carried out thoroughly. It should not be a passing gust of wind, nor a campaign-style movement, nor a sudden attack, nor should it damage vitality. That is to say, we will not adopt the method of great democracy with its violent storms, but rather the method of small democracy with gentle breezes and light rain. We will make full ideological preparations in advance to achieve the goal of raising the ideological consciousness of cadres and correcting shortcomings and mistakes in work.

In past rectifications, there were some practices of great democracy, and especially because time was limited, things were done somewhat simply and crudely, which ended up harming some good people. This time, we have ample time and must ensure the approach of "curing the sickness to save the patient." This applies not only to our own cadres but also to the transformation of some bourgeois and petty-bourgeois elements. In all cases, we should use the method of small democracy, patiently carrying out persuasion and education to raise awareness, correct mistakes, and improve work. We should achieve both protection and struggle, so as to unite all forces that can be united to serve the cause of socialism.

In peacetime, it is advisable to reduce the number of troops to some extent and carry out reorganization in a thorough manner. At the same time, the staffing of local institutions must also be drastically cut. Everyone must be mentally prepared for this. There is now a very unhealthy tendency: whenever work is mentioned, the first thing people ask for is staffing and personnel, and they believe that the larger the establishment and the more people there are, the better the work can be done—as if work cannot proceed otherwise. In reality, this is not the case. Often, the larger the establishment and the more people there are, the more it increases our bureaucratism. Some comrades nowadays, when doing their work, seldom consider how to improve work efficiency, bring into play the initiative and enthusiasm of the masses, and tap into potential forces in all areas. On the contrary, they constantly demand a certain number of staff and personnel at every turn. Therefore, the Central Committee has made up its mind this time to thoroughly change this situation. The armed forces must be greatly streamlined, and the staffing of local institutions must also be drastically reduced.

At the same time, we must oppose the pursuit of special privileges by leading cadres. At present, the salaries received by senior cadres are far too disproportionate compared with the living standards of the people. In the future, consideration may be given to reducing some of these salaries and abolishing special treatment, so as to integrate with the masses, work hard and persevere, and never become detached from the people. It seems that the special treatments worth reconsidering are, first, material supplies, and second, excessive security guards. We must pay close attention to these, make changes, and set an example ourselves, so as to call upon the people to work hard and persevere, and share weal and woe with them.

The rising tendency toward the pursuit of comfort within the Party is due to the erosion and influence of bourgeois and petty-bourgeois ideology. We must strengthen ideological education to criticize and overcome this unhealthy tendency. (End)