Commentary by the Central Committee on the Report Regarding the Six-Level Cadre Conference of the Shanxi Provincial Party Committee (April 10, 1960) To the Shanghai Bureau, to the party committees of all provinces, municipalities, and autonomous regions, and for information to the central ministries and commissions and party leading groups: The six-level cadre conference held in Shanxi was very successful. The problems brought to light, as well as the principles, policies, and measures adopted to resolve them [1], are all correct. This is a systematic document that provides a serious analysis and appropriate handling of the existing problems within the people’s communes, and it may serve as a reference for various localities. It is hoped that each area will, in light of its own specific circumstances, consider adopting those parts of the document that are applicable. Both this document and its attachments may be published in party periodicals. Printed from Mao Zedong’s handwritten draft. After Liu, Deng, Peng, and Tan [2] have reviewed it, Shang Kun [3] should proceed with its implementation immediately. Printed by Mao from the handwritten draft.

Notes [1] The report submitted by the CPC Shanxi Provincial Committee to the Central Committee and to Mao Zedong on April 6, 1960, concerning the six-level cadre conference stated that our province’s conference was convened at an opportune time and had uncovered numerous problems. First, regarding the transition from basic team ownership to basic commune ownership: Prior to the conference, cadres at the commune level held three different attitudes—some actively sought to create conditions for the transition; others rushed ahead with it prematurely; while still others adopted a passive, wait-and-see approach. Through study and discussion at the conference, there was unanimous recognition that the timing of the transition depended on the level of productive development and the degree of mass consciousness. A general consensus emerged that the following five conditions must be met before proceeding: (1) Significant advances in production, such that the average income of commune members equals that of industrial workers employed by county- or city-run enterprises; (2) Substantial growth in the commune-level economy, with the output value of commune-owned enterprises accounting for more than half of the commune’s total output value; (3) Roughly balanced economic levels among the various management districts under conditions of overall economic upswing; (4) Initial realization of mechanization or semi-mechanization, with most large and medium-sized agricultural machines owned by the commune level; and (5) A relatively high level of consciousness among the masses, accompanied by a contingent of capable and politically aware core cadres within the management districts. Based on these criteria, it was concluded that the current conditions throughout the province were not yet ripe for transitioning from basic team ownership to basic commune ownership. Therefore, in order to gain experience, it was deemed necessary to organize a number of pilot projects in a planned and controlled manner. At present, the provincial committee has approved thirty-four communes to serve as pilots. Second, concerning the development of the commune-level economy: Last year, seventy percent of the communes included plans in their 1960 programs for developing commune-owned enterprises that involved “one equalization and two adjustments”—namely, (1) requisitioning without compensation; (2) purchasing at low prices without equivalent exchange; (3) making payments in the form of promissory notes rather than cash; (4) imposing levies to fund the development of commune-run enterprises; (5) arbitrarily seizing land from management districts; and (6) forcibly conscripting labor from management districts. Following deliberation, the conference pointed out that there are three key criteria for determining whether an action constitutes “one equalization and two adjustments”: namely, if it hinders productive development, involves unequal exchange, or lacks voluntariness. The direction for developing the commune-level economy should be large-scale, public, and innovative. The main sources of funding for expanding the commune-level economy are fourfold: (1) Profits generated by commune-owned enterprises; (2) Accumulations regularly drawn from management districts as prescribed; (3) State loans; and (4) State investment. As for the means of production required to develop the commune-level economy, the primary sources are fivefold: (1) Self-reliance; (2) Ordering from the state; (3) Placing voluntary, mutually beneficial orders with management districts; (4) Requisitioning a certain amount of labor, as stipulated, to cultivate orchards, forests, and other areas; and (5) first transforming a particular management district into a directly affiliated enterprise or institution of the commune. Third, concerning distribution issues: The conference identified several matters worthy of attention: (1) Excessive accumulation at the management-district level; (2) Overly high rates of accumulation extracted by the commune from the management districts; and (3) Insufficient cash received by individual commune members. In response, two guiding principles were put forward: (1) Except in priority areas, commune members’ incomes must increase compared with the previous year, and where necessary, the proportion of accumulation may be appropriately reduced; and (2) The rate of accumulation extracted by the commune should be lowered, while the savings funds of the management districts should see an increase over the previous year. Fourth, regarding financial management and the conduct of cadres within the people’s communes: In the past, wasteful practices had been quite common—(1) Excessive non-productive construction and procurement; (2) Frequent entertaining through banquets, gift-giving, and hospitality; (3) Wasteful use of labor and destruction of existing buildings; and (4) Arbitrary expansion of staffing levels. Moreover, instances of corruption had also increased, and some cadres exhibited extremely poor conduct. The conference resolved to reiterate the following prohibitions: No entertaining; no gift-giving; no construction of auditoriums by communes for a period of three years; no arbitrary increases in staffing; communal administrative expenses must not exceed established limits; and communal management costs must not exceed one-thousandth of the commune-level income. In addition, a draft regulation on commune financial management was formulated. Fifth, concerning rural public canteens: Currently, approximately sixty percent of canteens are operating well, thirty percent are functioning adequately but require further consolidation, and ten percent remain unstable. Participants expressed keen interest in the experience of having the party secretary personally oversee the operation of the canteens, ensuring that lower- and middle-income peasants hold a majority on the canteen management committees, implementing a system of household-specific grain quotas coupled with centralized storage, and so forth. [2] Liu refers to Liu Shaoqi. Deng refers to Deng Xiaoping, who at that time served as General Secretary of the CPC Central Committee and Vice Premier of the State Council. Peng refers to Peng Zhen, then a member of the Political Bureau of the CPC Central Committee and Secretary of the Secretariat. Tan refers to Tan Zhenlin, who at that time was a member of the Political Bureau of the CPC Central Committee, Secretary of the Secretariat, and Vice Premier of the State Council. [3] Shang Kun refers to Yang Shangkun, who at that time was an alternate member of the Secretariat of the CPC Central Committee and Director of the General Office of the CPC Central Committee.