A Critique on the Draft Instruction for the Central Committee to Forward the Report of the Finance and Trade Office on Fiscal and Credit Matters [I]

(April 12, 1962)

Deliver immediately to the Premier [2]:

I have read this document, its annexes, and the appended tables [3]. I find them very good and they can be issued immediately.

Keep the annexes and appended tables at my office for future rereading.

Mao Zedong

April 12

[I] Refers to the draft instruction dated April 12, 1962, by the Central Committee of the Communist Party of China, approving and forwarding the March 25 report from the State Council’s Finance and Trade Office on the implementation of fiscal and credit policies in 1961 and how to realize in 1962 the Central Committee’s policy of “balancing the budget in the current year, with a slight surplus.” The instruction states that the Central Committee approves this report from the Finance and Trade Office and agrees with the various measures proposed in the report for balancing revenues and expenditures and eliminating deficits. It requests that arrangements be made immediately according to this directive and resolutely implemented. The Central Committee believes that the current fiscal and economic difficulties are even greater than estimated at the enlarged Central Work Conference in February 1962, a fact that was not fully anticipated at that time. The entire Party must resolve to adopt all feasible measures, including increasing production, enforcing strict economy, cutting expenses for enterprises, institutions, administrative costs, and national defense, and increasing the supply of certain high-priced goods, in order to completely eliminate the deficit and truly achieve a balance between revenues and expenditures. According to the 1962 national budget and credit plan approved this time, the total funds we can use this year are only this much. Each locality and department must, in accordance with the national budget and credit plan approved by the Central Committee, promptly implement it down to every spending unit, assuming responsibility level by level and exercising control at every tier, with expenditures only to be reduced, not increased. The report makes a preliminary examination of fiscal revenues and expenditures over the past four years, revealing the actual situation of inflated revenue figures in the four years' fiscal accounts and annual deficits. This is highly beneficial for understanding the difficulties, summarizing experiences, and improving work. The ranking order proposed in the report for the allocation of funds is to first arrange the circulating funds and credit funds needed for production and circulation, and then to arrange funds for capital construction. This principle is correct.

[2] The Premier refers to Zhou Enlai.

[3] The annexes refer to the March 25, 1962 report from the State Council’s Finance and Trade Office to Mao Zedong and the Central Committee on the implementation of fiscal and credit policies in 1961 and how to realize in 1962 the Central Committee’s policy of “balancing the budget in the current year, with a slight surplus.” The report is divided into three major parts: I. The implementation of the 1961 national budget and credit plan and a brief review of fiscal matters over the past four years; II. The arrangement of fiscal and credit targets for 1962; III. Several opinions on implementing the 1962 national budget and credit plan. There are three appended tables: I. Draft Adjustment Table for 1962 National Budget Revenue and Expenditure Targets; II. Draft 1962 Credit Revenue and Expenditure Plan; III. Draft 1962 Cash Receipts and Payments Plan.