Part 1 of 2:

Eighteen Issues Discussed at the Lushan Conference [1]
(June 29 and July 2, 1959)

1. Reading and Study. In view of the fact that many leading comrades and county and commune cadres still do not have a great understanding of socialist economic issues and do not grasp the laws of economic development, and in view of the fact that there is still routinism in current work, we should study diligently. Use one month in August for reading, or implement rotational training for cadres. Without setting a scope, no one will read. Members of the Central Committee, provincial, municipal, and prefectural committees, including county Party secretaries, should read the Soviet textbook *Political Economy* (second edition) [2] over a period of three to six months, or one year. At last year's Zhengzhou Conference [3], it was proposed to read three books. When asked whether they had been read, the answer was that a little had been read, not much, and some had not read them themselves. For county and commune cadres, the ideas from Shandong and Hebei are to compile three books for them: one book on good people and good deeds, collecting examples from last year's Great Leap Forward of those who dared to uphold the truth, did not sway with the wind, made progress in their work, did not lie, did not engage in boasting, and sought truth from facts—for example, Wang Guofan from Hebei and a production team from Heze, Shandong. One book on bad people and bad deeds, collecting examples of those who specialize in telling lies, violate laws and discipline, or commit serious errors in their work. Each province should find a few examples, compile them by province, and each book should not exceed 25,000 characters. The third book is a systematic compilation of various directive documents from the Central Committee from last year to the present (plus those from each province). The three books will total roughly 100,000 characters; reading over 10,000 characters a day, they can be finished in a week. After reading, discuss them; not only read, but also take exams. County and commune Party committee members who can read political economy may also do so. Find ways to give county and commune Party committees a period each year for systematic thinking about problems. We advocate reading so that these comrades do not become like ants on a hot pan, mired in routinism all year and month long, becoming 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 cool them down. With a year of practice behind us, reading again will be even better. To learn from the Soviet Union, we must read the textbook *Political Economy*. The textbook has shortcomings, but it is relatively complete. A shortcoming, for example, is that the first chapter discusses peaceful transition and seizing power through parliament—how could that ever happen? Even in Tibet it was impossible; armed force is absolutely necessary. We should not learn from their shortcomings, but last year we also discarded some good Soviet experiences.

2. The Situation. Is the domestic situation good or bad? The overall situation is still good, somewhat bad, but not yet so bad as to reach the point of "Reporting, master, great disaster is upon us." Are the principles of the Second Session of the Eighth National Congress [4] correct or not? I think we must uphold them. Generally speaking, as a comrade from Hunan Province put it, it comes down to two phrases: "There are great achievements, and there is rich experience." "There is rich experience" is a very clever way of saying: there are great achievements, there are quite a few problems, and the future is bright. The basic issues are: (1) comprehensive balance; (2) the mass line; (3) unified leadership; (4) attention to quality. Among these four issues, the most fundamental are comprehensive balance and the mass line. Attention must be paid to quality; it is better to have less, but better and more complete, with all varieties included. In agriculture, grain, cotton, oil crops, hemp, silk, tobacco, tea, sugar, vegetables, fruit, medicinal herbs, and miscellaneous crops must all be present. In industry, there must be light industry and heavy industry, and within them, all varieties must again be present. Last year's approach of the "two innocents" (small blast furnaces and small converters) did not work; concentrating energy on these "two smalls" caused other things to be lost. Last year saw a Great Leap Forward and a great harvest; this year there is a great spring famine. Now the situation is improving. I have inspected four provinces—Hebei, Henan, Hunan, and Hubei—which can roughly represent the whole country. This year's estimated summer harvest yields 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 is better? Last year at this time, the "communist wind" quickly arose, but it did not last long. After several meetings, it can fully improve. Last year, people's enthusiasm was precious; it was just that there was some blindness in the work. Some say, you had the Great Leap Forward, so why is grain tight? Why can't we buy hairpins? Right now it's not clearly explainable; even the promoters cannot explain it clearly. If it can be explained clearly, then explain it; if it cannot be explained clearly, then brace yourself, hold firm, and go do it. Next year, when goods are more plentiful, it will be explained clearly.

Last year, many things were done walking on one leg, not 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. Within the Great Leap Forward situation, there were certain errors and certain negative factors. Although some problems now exist, they contain beneficial, positive factors. Last year's situation was originally very good, but it carried some blindness, thinking only of the good side and not anticipating difficulties. Now the situation is improving again, blindness has lessened, and everyone recognizes this.

3. This Year's Tasks.
4. Next Year's Tasks.
5. Tasks for the Next Four Years. In industry, agriculture, light industry, heavy industry, commerce, and transportation, we used to walk on two legs, but later we discarded one leg; heavy industry squeezed out agriculture and light industry, and squeezed out commerce. If we had paid some attention to agriculture and light industry at that time, it would have been good. How exactly should these aspects be handled? How should construction be arranged?

Should this year's steel output be set at 13 million tons? If it can be exceeded, then exceed it; if not, then let it be. From now on, the Central Committee should determine the policy, and then hand it over to the professional departments to do the calculations. How much grain is there? Did output increase by 30 percent last year? Should it increase by 30 percent every year from now on? Increasing by 100 billion catties annually, reaching 1 trillion catties will take several years. How much will steel increase next year? An increase of 4 million tons would make it 17 million tons. The year after, increase by another 4 million tons. The slogan of catching up with and surpassing Britain in the quantity of major industrial products within fifteen years must still be upheld. In short, we must act according to our capabilities, leave room for maneuver, and let the lower levels exceed. People's minds gradually become more practical, and subjectivism has decreased. Last year we did a foolish thing: we wanted to achieve in one year targets that were meant for several years, like the grain target of 1,050 billion catties, which probably cannot be reached until 1964.

The past arrangement was heavy industry, light industry, agriculture; this order needs to be reversed. Should we now propose agriculture, light industry, heavy industry? We must study the relationship between agriculture, light industry, and heavy industry. In the past, we worked on the ten major relationships, which meant walking on two legs; "more, faster, better, more economical" also means two legs. Now it can be said that this has not been implemented, or has not been well implemented. In the past, it was heavy industry, light industry, agriculture, commerce, transportation; now we emphasize doing agriculture well, changing the order to agriculture, light industry, heavy industry, transportation, commerce. Proposing it this way still prioritizes the development of the means of production and does not violate Marxism. We will not slacken our efforts in heavy industry; agriculture also contains means of production. If we truly emphasize the priority development of the means of production and properly arrange light industry and agriculture, it may not be necessary to change the order to agriculture, light industry, heavy industry. Heavy industry must serve light industry and agriculture. In the past, Comrade Chen Yun [5] proposed: markets first, then capital construction; first arrange the markets well, then arrange capital construction. Some comrades disagreed. Now it seems Comrade Chen Yun's opinion was correct. We must properly arrange the five aspects of clothing, food, housing, daily necessities, and transportation; this is a matter of whether the 650 million people are settled or unsettled. Once these are properly arranged, they will not rebel. How can we ensure they do not rebel? We must make them live comfortably, speak fewer idle words, and not curse us. This is beneficial for construction, and at the same time, the state can accumulate more. I am in favor of establishing a Third Ministry of Machine Building to manage agricultural machinery and set up an agricultural machinery design institute. Right now, no one is managing these matters; such a large country cannot do without someone in charge. In the past, during the Agrarian Revolutionary War when opposing "Left" deviation, I once said, "Cannons are for killing people, people must eat, and roads are for walking on." Now the cannons are gone, but the second and third points still exist; if we forget these, it is hard to get things done. Now when we talk about taking command, the first should be agriculture, the second industry.

There should be a separate policy for animal feed. Currently, people eat one catty, livestock eat half a catty; after a period, people eat one catty, livestock eat one catty; after another period, people eat one catty, livestock eat two catties; what livestock eat should gradually become more than what people eat.

Agricultural issues: first, machinery; second, chemical fertilizers; third, feed. On the issue of agriculture, light industry, and heavy industry, put heavy industry in third place for four years, without raising slogans or conducting propaganda. Industry must support agriculture; how much chemical fertilizer and how much steel are needed next year to support agriculture should be decided at this conference. Last year it was said that grain output increased by 30 percent, whether it reached 480 billion catties—I still have doubts. This year it is said there will be no increase; I think a slight increase is still possible. From now on, increase by 100 billion catties each year, reaching 800 billion catties by 1962.

Next year's steel target is 17 million tons, forming a saddle-shaped curve. This year it is 13 million tons, over 4 million tons more than last year. The year after, 20 million tons; the year after that, 21 to 23 million tons, which can catch up with Britain. In 1962, 25 million tons—maybe a bit less, maybe a bit more; if more, up to 28 million tons; if less, 23 million tons is also fine. Catching up with Britain refers to major products; too much steel may not necessarily be good.

There are two kinds of activism: one is activism based on seeking truth from facts, the other is blind activism. Of the Red Army's Three Main Rules of Discipline, two are still useful today: "Obey orders in all your actions," which means unified leadership and opposition to anarchism; "Do not take a single needle or piece of thread from the masses," which means not engaging in equalitarianism and indiscriminate transfer of resources. Generally speaking, the people's standard of living has risen, and their cultural level has also risen. There are two kinds of communist style: one is the genuine desire to achieve communism; the other, which accounts for the majority, is when someone is in charge of a matter and all power belongs to him, he calls it "communism," and when it belongs to others, he calls it "capitalism." In Cao County, Shandong, there were instances of grain looting; this is very good—the looting was still too little; if there were more looting, it could draw our attention. Bureaucratism that crushes the people's activism must be rectified.

Part 2 of 2:

Eighteen Issues Discussed at the Lushan Conference
Our country will not perish; socialism cannot be destroyed; Chiang Kai-shek cannot return. If the United States attacks, at worst we will retreat to Yan’an, and we will eventually come back.

VI. Propaganda issues. Last year there was some exaggeration; the four major targets were set too high, making it difficult to publicize them this year, and now we are somewhat passive. How can we turn passivity into initiative? At the Shanghai Conference [1], someone proposed using the opportunity of the National People’s Congress to revise the targets, but this was not done later. Looking back, we missed a bit of an opportunity, but it is not serious. Should the targets be revised or not? It seems better to revise them. But we are still unsure by how much. Should the Standing Committee of the National People’s Congress hold a meeting to revise the targets? In the future, perhaps we should not announce absolute grain figures and can learn from the Soviet Union by not publicizing grain targets. From now on, steel output will not include small converters, and iron output will not include locally produced iron.

VII. The issue of comprehensive balance. One of the important lessons of the Great Leap Forward, and one of its main shortcomings, is the failure to achieve balance. We talked about walking on two legs and simultaneous development, but in practice we still failed to coordinate properly. In the entire economy, balance is a fundamental issue; only with comprehensive balance can we have the mass line.

There are three types of balance: balance within agriculture among farming, forestry, animal husbandry, sideline production, and fishery; balance among various sectors and links within industry; and balance between industry and agriculture. The proportional relationships of the entire national economy are a comprehensive balance built on these foundations.

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

IX. Industrial management issues. Special emphasis must be placed on quality. Can this be resolved in a very short time? We should strive to resolve it within one or two years.

X. Institutional issues.
The "Four Powers" [2] were delegated too much and too quickly, causing chaos and some semi-anarchism. We must emphasize unified leadership and centralization of power. The powers that were delegated should be appropriately taken back, returned to the central government and the provincial and municipal levels. Delegation should be properly controlled. Opposing anarchism does not mean we are now in a state of complete anarchism, but rather that there is some semi-anarchism. Being too rigid is not good, nor is being too flexible. It now appears that we must not be overly flexible.

XI. Cooperation relations. Dividing regions for cooperation has disrupted the original cooperative relationships, promoting the large at the expense of the small. In building systems, factories should pursue comprehensive development, and communes should industrialize.

XII. Public canteens. They should be actively run well. Ration food by headcount, distribute grain to households, allow voluntary participation, and let individuals keep any surplus. Basically, meals should be paid for. Under these principles, run the canteens well; do not let them all collapse in a rush. Maintaining even 20 percent would be fine.

There are two approaches to running canteens nationwide: one is Henan’s active maintenance, and the other is Hubei’s advocacy of voluntariness. In Hubei, most have been disbanded, though some remain, having temporarily returned home. Hubei plans to start small and grow, beginning with 30 to 50 percent and eventually reaching 80 percent. Canteens should be small, with diverse forms, and the supply portion should be relatively small—split 30-70 or 40-60, with some flexibility. Canteens and the supply system are two different matters.

XIII. Learning to manage daily life. This applies to both rural and urban areas. We must leave room for maneuver, live frugally even in prosperous times, and increase production while practicing economy. In Hubei, they lived as if poor times were prosperous, and peasants criticized some cadres for, first, not knowing how to produce, and second, not knowing how to manage daily life. We should live as if prosperous times were poor times. In some places, production is not necessarily much higher than elsewhere, but as long as arrangements are good, daily life is easier. This year, regardless of how much production increases—assuming a slight increase—we should still arrange daily life based on last year’s standard of 480 billion catties or even slightly less. The slogan is: Live as if prosperous times were poor times.

XIV. The "Three Fixes" policy. Fix production, fix procurement, and fix sales. The masses demand its restoration, and it seems it must be restored. The policy will remain unchanged for three years. The fixed amounts should be determined at this meeting. The increased portion will be split 40-60, with 40 percent procured and 60 percent retained, and reductions will be made in case of disasters. Private plots will not be taxed.

XV. Restore rural primary markets.

XVI. Make production teams semi-accounting units. Comrades from Sichuan Province say that having production and distribution within one accounting unit is better, but changing now would affect production. What should be done?

XVII. The issue of the leadership role of rural Party grassroots organizations. Grassroots Party activities have weakened; the Party does not manage Party affairs but only administrative matters.

XVIII. The issue of unity. We must unify our thinking. The assessment of last year is: there were great achievements, many problems, and the future is bright. The shortcomings are only a matter of one, two, or three fingers. Many issues only become apparent over a relatively long period. The enthusiasm of the past period contained a certain degree of blindness. Viewing the issues this way can boost enthusiasm.

[1] Refers to the enlarged meeting of the Political Bureau of the CPC Central Committee held in Shanghai from March 25 to April 1, 1959.
[2] The "Four Powers" refer to powers over personnel, finance, commerce, and industry.