Comments and Revisions on the Guangdong Provincial Party Committee’s Proposals Concerning Fiscal and Industrial Decentralization [1] (March 11, 1958)  I. This document [2] is to be submitted for discussion. Mao Zedong, March 11. Printed from the manuscript.  II. The Guangdong Provincial Party Committee has submitted proposals regarding a five-year freeze on fiscal decentralization and industrial decentralization, requesting a reply. Printed according to Mao Zedong’s manuscript.  III. The above proposals should be considered by the Central Committee. If deemed feasible, they should be promptly finalized, communicated to the relevant departments, and implemented immediately by us, so as to facilitate construction.

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The two proposals listed under (II) and (III) [3] are hereby submitted for instructions from the Central Committee. Printed according to Mao Zedong’s revised version.  Notes [1] Section (I) consists of Mao Zedong’s comments on the CPC Guangdong Provincial Committee’s proposals concerning fiscal and industrial decentralization; (II) is a title drafted by Mao Zedong for the Guangdong Provincial Committee’s proposals; and (III) comprises two paragraphs at the end of the Guangdong Provincial Committee’s proposals, as revised by Mao Zedong, with the portions set in Song typeface representing additions and revisions made by him. [2] Refers to the report dated March 6, 1958, submitted by the CPC Guangdong Provincial Committee to the Central Committee and to Mao Zedong, outlining its proposals on fiscal and industrial decentralization. The main content is as follows: (1) Fiscal decentralization has played a positive role in organizing the Socialist Great Leap Forward. In 1958, Guangdong Province’s capital construction investment increased from the originally centrally allocated 100 million yuan to 150 million yuan, an additional 50 million yuan contributed locally. It is estimated that, following campaigns against extravagance and waste, strict economy, and tapping into production potential, enterprise profits may further increase, thereby allowing for still more investment to be directed toward productive construction. (2) A “five-year freeze” on fiscal arrangements would better stimulate local initiative, enabling regions to more proactively determine the scale and pace of development under the Second Five-Year Plan. Therefore, the Central Committee is requested to consider formally announcing a policy of fiscal decentralization with a five-year fixed period, and approving Guangdong Province’s five-year capital construction investment plan. (3) To ensure that industrial development truly achieves greater speed, higher quality, lower cost, and greater efficiency, with the exception of certain enterprises that must remain under direct central management, those closely linked to local production and construction should be decentralized as much as possible. At present, some factories are overseen by various central ministries, leaving local authorities unable to intervene; these units often operate independently, resulting in considerable waste and far from fully realizing their production potential. We believe that, in principle, industry within a given region should be placed under unified local management. This report was distributed as a document at the Chengdu Conference. [3] See note [2] to this text.