I. Reading books.
In view of the fact that last year many leading comrades, and cadres at the county and commune levels, still did not have a great understanding of socialist economic problems and did not understand the laws of economic development, and in view of the fact that there is still routinism in the work at present, it is necessary to read books properly.
Use the month of August to read books, or implement rotational training for cadres.
If no scope is prescribed, people will not read.
Members of the Central, provincial, municipal, and prefectural Party committees, including county Party committee secretaries, must read the Soviet *Political Economy Textbook* (Third Edition).
The time frame is three to six months, or one year.
Last year at the Zhengzhou Conference, it was proposed to read three books. When asked if they had been read, it was said that a little had been read, but not much, and some had not read them themselves.
For cadres at the county and commune levels, the idea in Shandong and Hebei is to compile three books for them: one is a book of good people and good deeds, collecting examples from last year's Great Leap Forward of those who dared to uphold the truth, did not bend with the wind, made progress in their work, did not tell lies, did not exaggerate, and were realistic and pragmatic, for example, Wang Guofan in Hebei, and a production team in Heze, Shandong.
One is a book of bad people and bad deeds, collecting examples of those who specialize in telling lies, violate laws and discipline, or have made serious mistakes in their work.
Each province should find a few examples and compile its own book, with each book not exceeding 25,000 characters.
The third book is a systematic compilation of the various directives and documents issued by the Central Committee from last year to the present (plus those of each province).
The three books will total around 100,000 characters. Reading more than 10,000 characters a day, one can finish in a week.
After reading, there will be discussions; not only reading, but also examinations.
Members of county and commune Party committees who are able to read political economy can also read it.
Find a way to give county and commune Party committees a period of time each year to think systematically about problems.
We advocate reading books so that these comrades will not be like ants on a hot pan, bogged down in routinism all year round, making themselves very busy and chaotic. We must give them time to think about problems.
Right now, these people are all ants on a hot pan; we need to take them out and let them cool down a bit.
After a year of practice last year, reading books again will be even better.
To learn from the Soviet Union, one must read the *Political Economy Textbook*. The textbook has shortcomings, but it is relatively complete.
For example, a shortcoming is that the first chapter talks about peaceful transition, seizing political power through parliament. How could such a thing happen? It is impossible even in Tibet; there must be armed forces.
We should not learn from their shortcomings, but last year, some of the good experiences of the Soviet Union were also discarded.

II. The situation.
Is the domestic situation good or bad? The overall situation is still good, with some bad aspects, but not so bad as to reach the level of "reporting to the master, something terrible has happened."
Is the policy of the Second Session of the Eighth Party Congress correct? I think we must adhere to it.
Generally speaking, as a comrade from Hunan province said, it is two sentences: "There are great achievements, and there is rich experience."
"There is rich experience" is said very cleverly. In reality, it is: there are great achievements, there are quite a few problems, and the future is bright.
The basic problems are: (1) comprehensive balance; (2) the mass line; (3) unified leadership; (4) paying attention to quality.
Among the four problems, the most fundamental are comprehensive balance and the mass line.
We must pay attention to quality, preferring to have less, but better and more complete, with a full variety.
In agriculture, there must be grain, cotton, oil, hemp, silk, tobacco, tea, sugar, vegetables, fruit, medicine, and miscellaneous crops.
In industry, there must be light industry and heavy industry, and within each, there must be a full variety.
Last year's approach of the "two smalls" (small blast furnaces, small converters) was not good; it concentrated energy on these "two smalls" while abandoning everything else.
Last year there was a great leap forward and a great harvest; this year there is a great spring famine.
The situation is now improving. I have looked at four provinces: Hebei, Henan, Hunan, and Hubei, which can roughly represent the whole country.
This year's summer harvest estimates are generally on the low side, which is a good phenomenon.
Comparing the situation at this time this year with the situation at this time last year, which situation is better? At this time last year, the "communist wind" blew up very quickly. This year it will not blow; it is better than last year.
By May Day next year, things can completely turn for the better.
The people's enthusiasm last year was precious; it was just that there was some blindness in the work.
Some people ask, you had a Great Leap Forward, why is grain tight? Why can't one buy hair clips? It is not clear now, and even the promoters cannot explain it clearly.
If you can explain it, then explain it; if you can't, then just brace yourself and carry on.
Next year, when there are more things, it will be explained clearly.
Last year, many things were done by walking on one leg, not on two legs.
We criticized Stalin for walking on one leg, but after we proposed walking on two legs, we ended up walking on one leg instead.
The Great Leap Forward situation contained certain errors, certain negative factors.
Although some problems exist now, they contain beneficial, positive factors.
Last year the situation was originally very good, but it carried some blindness, only thinking of the good aspects and not thinking of the difficulties.
Now the situation has improved again, there is less blindness, and everyone has come to understand.

III. This year's tasks.
IV. Next year's tasks.
V. Four-year tasks.
In the aspects of industry, agriculture, light industry, heavy industry, commerce, and communications, in the past we walked on two legs, but later we discarded one leg. Heavy industry squeezed out agriculture and light industry, and squeezed out commerce.
It would have been good if we had paid some attention to agriculture and light industry at that time.
How exactly should these aspects be handled? How should construction be arranged? Is this year's steel output target to be set at 13 million tons? If it can be exceeded, then exceed it; if it cannot, then let it be.
In the future, the Central Committee should determine the policy, and then hand it over to the operational departments to do the accounting.
How much grain is there? Was last year's increase in production 30 percent? Will it increase by 30 percent every year from now on? To increase by 100 billion jin annually, reaching 1 trillion jin, will take several years.
How much will steel increase next year? An increase of 4 million tons would be 17 million tons.
The year after next, another increase of 4 million tons.
The slogan of catching up with and surpassing Britain in the output of major industrial products within fifteen years must still be upheld.
In short, we must act according to our capabilities, leave some leeway, and let those below surpass the targets.
People's minds are gradually becoming more practical, and subjectivism has decreased.
Last year a foolish thing was done, which was to try to achieve the targets of several years in a single year, like the grain target of 1.05 trillion jin, which probably cannot be reached until 1964.
In the past, the arrangement was heavy industry, light industry, agriculture. This order should be reversed. Should we now propose agriculture, light industry, heavy industry? The relationship between agriculture, light industry, and heavy industry must be studied.
In the past, we worked on the Ten Major Relationships, which is walking on two legs. "More, faster, better, and more economical" is also walking on two legs. Now it can be said that this was not implemented, or not implemented well.
In the past, it was heavy industry, light industry, agriculture, commerce, communications. Now, we emphasize doing a good job in agriculture, changing the order to agriculture, light industry, heavy industry, communications, commerce.
To put it this way is still to prioritize the development of the means of production and does not violate Marxism.
We will not relax on heavy industry; there are also means of production in agriculture.
If we truly attach importance to prioritizing the development of the means of production and arrange light industry and agriculture well, it is not necessarily required to change the order to agriculture, light industry, heavy industry.
Heavy industry must serve the market first, then capital construction, and serve light industry and agriculture first.
In the past, Comrade Chen Yun proposed: arrange the market well, then arrange capital construction.
Some comrades did not agree.
Now it seems that Comrade Chen Yun's opinion was correct.
The five characters of clothing, food, housing, articles for use, and transport must be well arranged. This is a question of whether the 650 million people are stable or not.
Once they are well arranged, they will not rebel.
How can we ensure they do not rebel? It is to make their lives comfortable, so they will gossip less and not curse us.
This is beneficial to construction, and at the same time, the state can accumulate more.
I approve of establishing a Third Ministry of Machine-Building Industry to manage agricultural machinery and to set up an agricultural machinery design institute.
Right now, nobody is in charge of these things. For such a large country, it won't do to have no one in charge.
In the past, during the period of the Agrarian Revolutionary War, when opposing "Left" deviation, I once said, "Cannons are for killing people, people need to eat, and roads are for feet to walk on."
Now the cannons are gone, but the second and third points still exist. If we forget these, it will be difficult to get things done.
Now, when we talk about what takes command, the first should be agriculture, the second should be industry.
There must be a separate policy for animal feed.
Right now, for every one jin a person eats, livestock eat half a jin; after a while, for every one jin a person eats, livestock should eat one jin; after another while, for every one jin a person eats, livestock should eat two jin. The amount livestock eat should gradually become more than what people eat.
The problem of agriculture: first, machinery; second, chemical fertilizer; third, animal feed.
On the problem of agriculture, light industry, and heavy industry, put heavy industry in third place for four years, without raising a slogan or doing propaganda.
Industry must support agriculture. This meeting must decide how much chemical fertilizer and how much steel will be needed to support agriculture next year.
Last year it was said that grain output increased by 30 percent. I still have doubts as to whether it reached 480 billion jin.
This year it is said there will be no increase; I think a small increase is still possible.
In the future, increase by 100 billion jin each year, reaching 800 billion jin in 1962.
Next year's steel target is 17 million tons, forming a saddle shape.
This year it is 13 million tons, an increase of over 4 million tons from last year.
The year after next, 20 million tons; the year after that, 21 to 23 million tons, which can catch up with Britain.
In 1962, 25 million tons; it might be a little less, or it might be a little more. If more, up to 28 million tons; if less, 23 million tons would also be good.
Catching up with Britain refers to major products; too much steel is not necessarily a good thing.
There are two kinds of enthusiasm: one is enthusiasm that is realistic and pragmatic, the other is blind enthusiasm.
Of the Red Army's Three Main Rules of Discipline, two are still useful now: "Obey orders in all your actions," which means unified leadership and opposing anarchism; and "Do not take a single needle or piece of thread from the masses," which means not engaging in egalitarianism and indiscriminate transfer of resources.
Generally speaking, the people's standard of living has improved, and their cultural level has also improved.
There are two kinds of communist style: one is genuinely wanting to practice communism; the other, and this is the majority, is that when things are his to manage and all power belongs to him, he calls it "communism," but when it belongs to others, it is "capitalism."
The phenomenon of grain-seizing appeared in Cao County, Shandong. This is very good; they seized too little. Seizing more could have drawn our attention.
We must rectify those bureaucrats who trample on the people's enthusiasm.
Our country will not perish, socialism cannot perish, and Chiang Kai-shek cannot come back.
If the United States attacks, at most we will retreat to Yan'an, and we will come back in the future.

VI. The problem of propaganda.
Last year there was some exaggeration, the four major targets were set too high, making it difficult to do propaganda this year, and we are now somewhat on the defensive.
How to turn this into taking the initiative? At the Shanghai Conference, someone proposed using the opportunity of the People's Congress to change the targets, but this was not done later.
Now it seems we have lost a bit of an opportunity, but it doesn't matter.
Should the targets be changed or not? It seems it would be good to change them.
But it is not yet certain what to change them to.
Perhaps the Standing Committee of the People's Congress could hold a meeting to change the targets.
For grain, should we stop announcing absolute figures in the future? We can learn from the Soviet Union and not publicize grain targets.
In the future, steel from small converters will not be counted, and iron from indigenous furnaces will not be counted.

VII. The problem of comprehensive balance.
One of the important lessons of the Great Leap Forward, and its main shortcoming, was the failure to achieve balance.
We talked about walking on two legs and simultaneous development, but in reality, we still failed to give due consideration to both.
In the entire economy, balance is a fundamental problem. Only with comprehensive balance can there be a mass line.
There are three kinds of balance: the balance within agriculture among farming, forestry, animal husbandry, sideline production, and fishery; the balance within industry among various departments and various links; and the balance between industry and agriculture.
The proportional relationships of the entire national economy are a comprehensive balance built on these foundations.

VIII. The problem of the mass line.
Does the mass line exist? To what extent?

IX. The problem of industrial management.
We must particularly emphasize the problem of quality. Can it be resolved in a very short time? We should strive to resolve it within one or two years.

X. The problem of the system.
The "four powers" were decentralized a bit too much, too fast, causing chaos and some semi-anarchism.
We must emphasize unified leadership and the problem of centralization of power.
The decentralized powers should be appropriately taken back, taken back to the two levels of the Center and the provinces and municipalities.
Decentralization must be appropriately controlled.
Opposing anarchism does not mean that there is complete anarchism now, but that there is some semi-anarchism.
To speak too rigidly is not good, but to be too flexible is also not good.
As it seems now, we cannot be too flexible.

XI. The problem of cooperative relationships.
Coordination by designated regions has, on the contrary, disrupted the original cooperative relationships, promoting the large at the expense of the small.
In building systems, factories must develop comprehensively, and communes must industrialize.

XII. Public canteens.
They must be actively run well.
Fixed rations per person, distributing grain to each household, voluntary participation, and surpluses belong to oneself.
Meals should basically cost money.
Under these principles, run the canteens well. Do not let them all collapse in a rush; it would be good even to maintain 20 percent.
There are two ways of running canteens in the country: one is Henan's active maintenance, the other is Hubei's advocacy of voluntarism.
Hubei's have basically been disbanded; some have not been disbanded but have temporarily gone back.
Hubei plans to go from few to many, starting with 30 to 50 percent, and reaching 80 percent in the future.
Canteens should be small, of various forms, and the supply portion should be smaller, a three-to-seven or four-to-six split, which can be more flexible.
Canteens and the supply system are two different things.

XIII. Learn to manage daily life.
This includes the countryside and the cities. We must leave some leeway, live frugal lives on rich days, and increase production and practice economy.
Hubei has lived rich lives on poor days. The peasants criticize some cadres for, one, not knowing how to produce, and two, not knowing how to manage daily life.
We should live frugal lives on rich days.

In some places, production may not be much more than elsewhere, but as long as arrangements are made well, life is better.
This year, regardless of how much production increases—it is estimated to increase a little—we will still arrange our lives according to last year's standard of 480 billion jin, or perhaps a little less.
The slogan is: Live rich days as if they were poor days.
14. The policy of the three fixes.
Fixing output, fixing procurement, fixing sales; the masses demand their restoration, and it seems they must be restored.
The policy will not change for three years. How much to fix should be decided at this meeting.
The increased portion will be split four-six: four for state levy, six to be kept. In case of disaster, it will be reduced accordingly.
Private plots will not be taxed.
15. Restore rural primary markets.
16. Make the production team a semi-accounting unit.
Comrades from Sichuan Province say it is better for production and distribution to be within one accounting unit; changing it now would affect production, so what is to be done?
17. The issue of the leadership role of the Party's grassroots organizations in the rural areas.
The activities of grassroots Party organizations have been weakened; the Party does not manage the Party, only administration.
18. The issue of unity.
We must unify our thinking. The assessment of last year is: there were great achievements, there were quite a few problems, the future is bright.
The shortcomings are only a matter of one, two, or three fingers.
Many problems take a relatively long time to become apparent.
The enthusiasm of the past period contained a certain blindness.
Looking at the problem this way can arouse enthusiasm.