chapter  5
29 Pages

Socialist Transformation of the Urban Economy

WithChu-yuan Cheng

This chapter analyzes the general guidelines pursued by the Chinese Communist leaders to carry out the socialist transformation, the process of the transformation, and its impact on general economic development. In mapping the strategy of transformation, the Chinese Communist government classified the national economy into five sectors: the socialist state sector, the sector of individual peasant and artisan ownership, the capitalist sector, the state capitalist sector, and the semisocialist cooperative sector. Under the influence of Liu Shaoqi, the Chinese Communist Party Central Committee adopted a moderate program that envisaged the completion of socialist transformation within three five-year plans. The large-scale development of the state sector of the Chinese economy began in 1949–1950 with the confiscation of all “bureaucrat capitalist enterprises.” The process of the socialist transformation of private ownership in the urban areaswas conducted circuitously in three stages: utilization, restriction, and transformation.