ABSTRACT
The Third Plenary Session of the Eleventh CPC Central Committee, held in the
winter of 1978, put forth the initial proposal to carry out economic restructuring
and reform, including opening up to the outside world and invigorating the domes-
tic economy. The Government Report of the National People’s Congress held in
the spring of 1979 then presented the guidelines of “adjustment, reform, rectifi ca-
tion, and improvement.” The Report modifi ed the economic plan of that year and
decided to reduce investment in fi xed assets by RMB 9 billion. This money was
to be used to improve people’s living conditions, with RMB 6.5 billion for a price
rise in agricultural products and RMB 3.5 billion for a wage increase. In reality,
however, investment in fi xed assets did not decline. It went up by RMB 3.1 billion
over the course of 1978. In addition, wage and price rises also exceeded the Plan,
so that a defi cit of RMB 17 billion was incurred. Despite that, the Central Party
Committee and State Council did not waver in their determination to carry out
adjustment and reform. In 1980, we continued to reduce planned investment.
