Education is a highly principled matter that affects the entire intellectual community; it constitutes a revolution. For thousands of years, education has been separated from labor. Now, the goal is to integrate education with labor—this is a fundamental principle. Broadly speaking, there are three key principles: the integration of education and labor, Party leadership, and the mass line. Everyone understands the mass line, so there are no issues there. As for Party leadership, there probably aren’t many problems either these days. The central issue, therefore, remains the integration of education and labor. Even the Soviet Union is now considering reforms in this area and is currently drafting a document to address it. After all, as Marx taught, in socialist countries education must be combined with labor.  I visited two universities and several large factories in Tianjin, where students were engaged in practical work. Simply sitting in classrooms reading books is not an effective approach. What are books, after all? They are merely ideological constructs written by others, which young, inexperienced individuals are expected to absorb. This focuses entirely on ideology while obscuring other essential aspects of life. If schools establish factories, factories set up schools, schools operate farms, people’s communes run schools, or if we promote work-study programs or part-time work-and-study arrangements, then learning and labor can be effectively integrated. This represents a major reform.

Regarding finances, I have some data: total fiscal revenue over the eight-year period from 1950 to 1957 amounted to 170 billion yuan. Starting this year, under the Second Five-Year Plan, projected revenues are expected to reach approximately ×× billion yuan. You can see that 170 billion was accumulated over eight years, whereas ×× billion could be achieved within just five years. This is quite noteworthy. In the first year of that eight-year span, 1950, revenue was a meager 6.5 billion yuan. The following year, 1951, it rose to 13.3 billion, and in 1952 it reached 14.8 billion. Both of those years exceeded 10 billion. By 1953, the inaugural year of the First Five-Year Plan, revenue surged to 22.3 billion; in 1954 it stood at 26.5 billion, in 1955 at 27.2 billion, and in 1956 at 28.7 billion. Overall, those four years saw modest growth, but annual receipts never broke through the 20–30 billion range. It was only last year that we surpassed 30 billion, reaching 31 billion. Previously, for four consecutive years, figures hovered around 20-something billion, yet last year alone they jumped to 31 billion. This year, we may achieve ×× billion. From 31 billion, there has been a significant leap to ×× billion. Next year should be somewhere between ×× and ×× billion—perhaps even directly to ×× billion, without intermediate steps. I am referring here to the third ledger, where ×× billion is a plausible figure. Last year’s 31 billion lasted only one year, and this year’s ×× billion will likely also be short-lived. Without further increases, next year’s revenue could suddenly jump to ×× billion. Whether this target can be met remains to be seen; it is merely a projection, and actual results might exceed these estimates. Even more substantial growth is anticipated the following year. Over the five-year plan, total revenue would average ×× billion annually. This figure is worth noting. Another number deserves attention as well: capital construction investment. In 1950, it was pitifully low at just 1.1 billion yuan; in 1951 it rose to 2.3 billion, in 1952 to 4.4 billion, in 1953 to 8.3 billion, in 1954 to 9.1 billion, and in 1955 to 9.3 billion—still quite modest. Then, in 1956, wasn’t there a “leftist” surge, with investment jumping from 9.3 billion to 14.8 billion? Some argue this was a mistake, a case of rash advancement. Consequently, in 1957, spending was slightly reduced, falling from 14.8 billion to 13.8 billion—a decline of 1 billion, resulting in a “saddle-shaped” pattern. This year, however, capital outlays stand at 26.8 billion, meaning next year we should easily reach ×× billion. Over the preceding eight years—from 1950 through 1952—the cumulative investment in capital construction totaled only 8 billion yuan. Yet the First Five-Year Plan allocated less than 50 billion yuan, specifically 49.2 billion. Under the Second Five-Year Plan, current projections suggest ×× billion this year, with another ×× billion expected next year. Thus, a single year’s allocation already equals the total for the entire previous five-year period. Given that the 50 billion originally intended for the First Plan was used to build so many factories, nearly half of those resources ended up wasted: projects meant to be completed in one year dragged on for two, and facilities that could have served two purposes were built for just one. Therefore, next year’s ×× billion can effectively serve as ×× billion (representing a doubling of original plans), thanks to the lessons learned during the Anti-Rightist Campaign and the Rectification Movement, which helped dispel superstitions and dismantle outdated regulations. These two campaigns constitute two major turning points.

Furthermore, the people’s communes represent a momentous development. It appears that by around September, the basic framework for establishing communes will largely be in place. The momentum is strong, virtually unstoppable; urging caution would be futile. Clarifying certain details and solidifying this structure will require time during the winter and spring months. Effective and proactive leadership is crucial, along with a welcoming attitude. A defining feature of the people’s communes is their large scale, a novelty that has emerged in recent months.

Another important focus is industry. For eight or nine years, our efforts have primarily centered on revolutionary tasks rather than industrial development: land reform, suppression of counterrevolutionaries, participation in the War to Resist US Aggression and Aid Korea, the Three-Anti and Five-Anti Campaigns, the Rectification Movement and the Anti-Rightist Campaign, public-private partnerships, and collectivization—all of these fall squarely within the realm of revolution. We were so preoccupied with these matters that local authorities, beyond these initiatives, also devoted considerable attention to agriculture, conducting experimental field trials starting last winter. Once this shift occurred, progress began to accelerate. Now, we need to rebalance our priorities: with only two hands, we must simultaneously advance both agriculture and industry. When I speak of “focusing” or “intensifying,” what does that mean? If the grip is loose, nothing is truly secured—you cannot even properly hold a cigarette, a biscuit, or a box of matches. To develop industry, we must tighten our grip, concentrating particularly on steelmaking and mechanical engineering. With these two sectors strengthened, most other challenges can be addressed. Steel serves as the raw material, while machinery encompasses a wide array of equipment: coal and mineral excavators, oilfield drilling rigs, power-generating machines, construction tools, textile machinery, transportation vehicles (essentially cars, ships, and airplanes—after all, flying itself is a form of machine operation), as well as agricultural machinery such as tractors, plowing implements, harvesters, and rural transport vehicles, plus electrical equipment for rural electrification. Despite three years of intensive effort, mechanization in rural areas remains limited. It is only in the final two years of the ×th Five-Year Plan that widespread mechanization is expected to take shape. Therefore, our immediate priorities are steel production and mechanical engineering. Without steel, there is no material base for manufacturing machinery. Every type of machine—from mining and oil refining to power generation, chemical processing, construction, agriculture, and transportation—requires a foundational machine tool: lathes, milling machines, grinders, planers, and drills. These are the core components. Today, we possess over 20,000 such machine tools; with continued development, this number could grow to more than 50,000. Currently, we are working toward exceeding 80,000. This refers specifically to machine tool production. Isn’t there talk of producing ×× ten-thousand units next year? In fact, our aim is to manufacture ×× ten-thousand units next year, followed by another ×× ten-thousand units the year after. Should we succeed in achieving these targets, our nation’s Second Five-Year Plan would see the creation of over one million machine tools. At the time of liberation in 1949, China had only about 80,000 machine tools, and even those were in poor condition. By the end of this year, we will have amassed 260,000. Since Zhang Zhidong’s time, we have gradually built up this stockpile, culminating in the 260,000 units we possess today. Of these, 80,000 were inherited from the Nationalist government. Subtracting that legacy from our current total leaves us with 180,000 units developed over the past nine years. However, comrades, next year will mark a departure from both the 80,000 and the 260,000 figures—we aim for ×× ten-thousand units this year and another ×× ten-thousand units the following year. Together with the existing 260,000, this would bring our total to ×× ten-thousand units. At that point, when negotiating with foreign partners, especially the United States, we will be in a much stronger position.