Comrade Bo Yibo:
Comments on the On-Site Investigation Report [1]
(December 5, 1964)
[1]
Refers to the briefing titled “Various Aspects of Capitalist Management Practices at the Shenyang Smelting Plant,” submitted on November 12, 1964, by the CPC Liaoning Provincial Committee’s Work Team stationed at the Shenyang Smelting Plant. This briefing was prepared during the work team’s on-site investigation led by Minister of Public Security Xie Fuzhi. The report stated that, over a two-and-a-half-month “Five-Anti” campaign, the plant’s workers had initially uncovered the following serious problems:
First, acts of retaliation and boss-like behavior; second, the privileged status enjoyed by leading cadres; third, disregard for the class line and the employment of undesirable elements; fourth, the adoption of capitalist management practices. Public opinion was most strongly focused on the fourth issue. Workers identified eight specific manifestations of such capitalist management:
(1) Falsification and deception of the state; (2) undermining public interests for the benefit of the enterprise while ignoring the overall situation; (3) exploiting neighboring units for personal gain; (4) buying low and selling high in pursuit of profit; (5) speculative trading through fictitious transactions; (6) prioritizing bonuses and material incentives; (7) conducting scientific experiments solely for fame and profit; (8) reckless and wasteful spending. Capitalist management poses three major dangers: (1) it hinders technological innovation and production development; (2) it corrupts the cadre ranks and the working class; (3) it undermines unity and cooperation. The root causes of these capitalist management practices at the smelting plant are: (1) the influence of old Soviet enterprise models and revisionism; (2) the lingering impact of capitalist—indeed, even feudal—forces; and (3) certain influences from higher authorities. (Mao Zedong appended a note to this sentence: “It is not merely ‘not unrelated’; rather, it constitutes the primary source.”)
[2]
Bo Yibo, then an alternate member of the CPC Central Political Bureau, Vice Premier of the State Council, and Director of the State Economic Commission.

Should this document be forwarded for review by leaders of central ministries and commissions, central bureaus, and party committees of provinces, municipalities, and autonomous regions? Please make a decision accordingly.
(I)
Mao Zedong
December 5th
To Zhu, He, Luo, Chen Yi, Lu Dingyi, Kang Sheng, and Wu Lengxi: Please read it carefully and return it to Bo Yibo.
Just how much of our industry has already become capitalist in its management practices—perhaps one-third, half, or even more—can only be determined through a systematic, step-by-step inspection and transformation. To accomplish this, we must dispatch politically strong work teams in successive phases. Comrade Xie Fuzhi’s report is well worth reading.
Mao Zedong
December 5th
[1]
On December 7, 1964, the CPC Central Committee, via Document No. Zhongfa [64] 775, circulated Xie Fuzhi’s on-site investigation report along with Mao Zedong’s comments thereon to all central bureaus, provincial, municipal, and autonomous regional party committees, as well as to central ministries and commissions and party organizations within state organs.
[2]
Zhu refers to Zhu De. He refers to He Long, both then members of the CPC Central Political Bureau and vice premiers of the State Council. Luo refers to Luo Ruiqing, then a secretary of the CPC Central Secretariat and vice premier of the State Council. Chen Yi was a member of the CPC Central Political Bureau and vice premier of the State Council, concurrently serving as Foreign Minister. Lu Dingyi was a secretary of the CPC Central Secretariat and vice premier of the State Council. Kang Sheng was an alternate member of the CPC Central Political Bureau and a secretary of the Central Secretariat. Wu Lengxi was the president of the Xinhua News Agency and editor-in-chief of People’s Daily at the time.