Mao's Great Famine (13 page)

Economics dictated that the pressure should be kept up in the early months of 1959. While Mao was concerned about cooling off the frenzy with which collectivisation had been pushed through, he was never given any reason to doubt that there had been an upsurge in agricultural production. In a joint report that was sent to him, the top economic planners Li Xiannian, Li Fuchun and Bo Yibo confirmed that ‘when it comes to grain, cotton and edible oils, output has increased hugely compared to last year as a result of a Great Leap Forward in agricultural production, and we only need to carry out our work and earnestly resolve any problems that may arise in order to get ahead’.
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According to the planners, the biggest problem was that the countryside was not sending enough food to the cities. The amount of grain procured for the urban population, which had swollen to some 110 million people, had increased by a quarter in the second half of 1958, reaching a total of 15 million tonnes.
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But it was not enough. In December Peng Zhen, the bald and vigorous mayor of Beijing, rang the alarm bell, followed by central planner Li Fuchun. Nanning and Wuhan, he noted, had no more than a few weeks of reserves, while Beijing, Shanghai, Tianjin and the province of Liaoning had procured barely enough to last for another two months. At least 725,000 tonnes should have been stored in December, but a mere quarter of that amount had actually been delivered, with large shortages from provinces such as Hubei and Shanxi. All three cities, as well as Liaoning, were placed under special protection, and provinces that declared a surplus – Sichuan, Henan, Anhui, Shandong and Gansu – were required to transfer an extra total of 415,000 tonnes. Insufficient grain was not the only problem, as many cities did not get enough meat to last for more than a day or two, with provinces such as Gansu and Hunan remitting a mere fraction of the hogs required. Vegetables, fish and sugar were also tight.
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Not only were cities given a privileged status, but exports were granted top priority too. As we shall see next, China spent vast amounts of money buying foreign equipment in 1958. Then, in the euphoria of the autumn harvest, more orders were placed for 1959. As the bills were coming in, the reputation of the country hinged on its ability to meet foreign commitments. From the end of 1958 onwards, Zhou Enlai, with the support of his colleagues and the backing of the Chairman, relentlessly pressed the countryside into fulfilling ever greater procurements for the export market. To ensure that the cities were fed and foreign contracts were honoured, no retreat on the ground was possible.

10

Shopping Spree

If the glittering path to communism was to be found in mobilising the masses, large quantities of industrial equipment and advanced technology were nonetheless required to help China transform itself from an agricultural country into an industrial giant. From the moment Mao returned from Moscow, where he had boasted that China would overtake Britain in fifteen years, Beijing started buying liberally from its foreign friends. Steel mills, cement kilns, glass factories, power stations, oil refineries: entire plants and equipment for heavy industry were purchased. Cranes, lorries, generators, motors, pumps, compressors, harvesters and combines, all were imported in unprecedented quantities. Deliveries of metal-cutting machine tools (not including complete factories) rose from 187 units in 1957 to 772 in 1958, planting and sowing machines from 429 units to 2,241, tractors from 67 units to 2,657, lorries from 212 units to 19,860.
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Supplies of rolled ferrous metals, aluminium and other raw materials jumped, while the amount of transportation and communications equipment was also revised sharply upwards.

Most of this came from the Soviet Union, on which China had depended for economic and military help since May 1951, when the United Nations had imposed an embargo on strategic imports. Trade restrictions had been enforced after the United States had branded China an aggressor state in the Korean War. In the 1950s China signed a series of agreements with Moscow for the construction of more than 150 turnkey projects, to be built and handed over in a ready-to-use condition. In January 1958, in order to propel the Great Leap Forward, a further contract provided for an expansion of economic and military assistance. In August 1958 another forty-seven complete sets of equipment for industrial plants, to be built with Soviet technical aid, were agreed upon – in addition to some 200 already signed up to in earlier years. In February 1959 another agreement further widened economic and scientific co-operation, including thirty-one additional large industrial plants: this brought the number of industrial enterprises, factory shops and other plants to be installed to about 300.
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Beijing also pressed Moscow for early delivery. In March 1958 military veteran Zhu De enjoined the Russians to hasten the completion of the two steel combines at Baotou and Wuhan.
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A similar plea was made to S. F. Antonov, the Russian chargé d’affaires in Beijing, by one of Zhou Enlai’s personal envoys in July.
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Such was the pressure of the Great Leap Forward that entire branches of Soviet industry had to reorganise their production system in order to meet urgent demands and mounting orders for a whole array of commodities, often for delivery ahead of schedule.
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Imports from the Soviet Union rose by an astounding 70 per cent in 1958 and 1959, as shown in Table 1. Where imports were 556 million rubles in 1957, by 1959 they stood at 881 million, of which some two-thirds consisted of machinery and equipment. China also relied on the Soviet Union for large imports of iron, steel and petrol. While Beijing depended on Moscow for half its oil, machine parts and heavy industrial equipment, a large proportion also came from other countries in the socialist bloc, East Germany in particular. In 1958 Walter Ulbricht agreed to build sugar refineries, cement factories, power plants and glassworks, sharply increasing the level of exports to China.
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Imports from East Germany climbed to 120 million rubles, an amount which was followed by a further 100 million in 1959.
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But it was not merely the volume of imports which underwent drastic change during the Great Leap Forward. In pursuit of the best equipment to power its way to communism, Beijing dramatically changed the structure of foreign trade with an overture to Western Europe, made possible by a gradual collapse of the embargo imposed by the United States. Washington was unable to maintain pressure on its allies, as Britain was keen to enter China’s huge market and vigorously campaigned to eliminate the system of export controls from 1956 onwards. Purchases from Britain doubled from £12 million in 1957 to £27 million in 1958 and £24 million in 1959, while West German imports soared from DM 200 million in 1957 to DM 682 million in 1958 and DM 540 million in 1959.
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All of these imports were industrial in nature, but Mao was also dogged in his pursuit of the most advanced military equipment. Starting in 1957 the leadership in Beijing focused on extracting from Moscow as much military equipment and ‘new technology’ as possible. Zhou Enlai wrote to Khrushchev in June 1958 requesting aid in building a modern navy. Two months later, during the shelling of the offshore islands of Quemoy and Matsu in the Taiwan Strait, he asked for the latest technology in aerial surveillance. In May 1959 a purchase order was submitted to the Russians for strategic material related to ‘defence and aviation equipment’. A reminder followed in September 1959, with Zhou Enlai pointing out that Beijing planned to spend a total of 165 million rubles in 1960 on Soviet military equipment.
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Just how much Beijing spent has remained something of a mystery, since the published statistics perused by foreign observers did not include ‘invisible’ items such as military supplies. However, archives from the Ministry of Foreign Affairs now provide a clear overview of imports from Moscow of both ‘special goods’, meaning military equipment, and ‘new technology’: as Table 1 shows, these two groups ballooned to over 200 million rubles in 1959, representing close to a quarter of China’s imports from the Soviet Union.

China also had to discharge its debtor’s obligations towards the Soviet Union. The amount lent by Moscow to Beijing between 1950 and 1962 stood at 1,407 million rubles.
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Even before China dramatically increased loan repayments after the rift with the Soviet Union in the summer of 1960, the debt-service instalments must have amounted to more than 200 million rubles a year. China’s limited foreign currency and gold reserves meant that both debt and actual imports had to be paid for in kind through exports, straining its limited resources. The basic trade pattern was the exchange of credit, capital goods and raw materials for rare minerals, manufactured goods and foodstuffs. Pork, for example, was bartered for cables, soybeans for aluminium, grain for steel rolls. Since the amount of rare metals such as antimony, tin and tungsten was limited, Beijing’s shopping spree meant that more foodstuffs had to be extracted from the countryside to pay the bill (see Table 2). Over half of all exports to the Soviet Union consisted of agricultural commodities, ranging from fibres, tobacco, grain, soybeans, fresh fruit and edible oils to tinned meat. The value of the rice exported to Moscow alone trebled from 1957 to 1959, as Tables 2 and 3 indicate. The brunt of the imports, in other words, fell on the farmers.

Who was the architect of foreign trade in China? In a planned economy imports and exports were normally controlled by annual trade agreements, as the increase in external trade was designed to match the projected growth of the economy. There was thus a direct relationship between the rate of capital investment, the volume of foreign trade and the size of the harvests. The overall economic plan, agreed by the central leadership, determined the volume and structure of imports, which in turn set the level of exports from the country. Trade plans were prepared by the Ministry of Foreign Affairs, which then delegated the import and export to corporations dealing in a defined range of agricultural and industrial products.
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In the bureaucratic maze of communist China premier Zhou Enlai retained overall supervision of foreign trade. He was keen on enhanced economic relations with the rest of the world, not only the Soviet Union but also countries outside the communist bloc. Economic development, according to Zhou, could be achieved only with adequate capital, technology and expertise, all of which had to come from abroad. A close ally of Zhou Enlai, foreign trade minister Ye Jizhuang was also in favour of dramatically increased exports, which could be used to pay for imported machinery and industrial plants. But in 1957 Zhou reined in the enthusiasm of his delegate, sounding a cautious retreat in foreign trade. In October 1957 Ye had to explain to a foreign trade delegation that the population had suffered from the volume of food exports, in particular edible oils, which had led to serious shortages. Zhou Enlai had decided that the volume of trade with all countries would have to be cut in 1958.
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