The structure of classes and strata in the period of economic recovery from 1949-1952

The founding of the People’s Republic of China in October 1949 not only completely broke the old state apparatus and established a new republic and people’s governments at all levels, but also transformed the previous economic system and structure through measures such as confiscating bureaucratic capital, changed the structure of classes and strata in Old China, and formed a new social structure. As early as April 1949, the Central Committee adopted the Notice of the People’s Liberation Army and announced: “Factories, shops, banks, warehouses, ships, docks, railways, postal services, telegraphs, electrical lights, telephones, running water, and farms and pastures run by the reactionary Kuomintang government and the big bureaucrats will all be taken over by the people’s governments.” Accordingly, wherever the People’s Army went, the previously mentioned bureaucratic capital was turned over to the people’s governments. By the end of 1949, 2,858 industries and enterprises funded by the bureaucratic capital and 2,400 banks and their branches, such as the Central Bank, Bank of China, Bank of Communications, Agricultural Bank of China, and local banks, were confiscated by the people’s government. More than 30 transportation enterprises, railway vehicles, and ship building and repairing factories under the Ministry of Transformation of the Kuomintang government, as well as dozens of monopoly trading companies such as China Petroleum, China Salt, China Tea, and Sino-American industries, were also confiscated. The confiscated bureaucratic capital was put under the ownership of the whole people. After reform and adjustment, they became the mainstay of the state-owned enterprises and the state-owned economy. Among the confiscated industries and factories, employees alone amounted to over 1.29 million, including 750,000 industrial workers. By the end of 1949, of the total 9.1 billion yuan industrial funds, state-owned industries accounted for 7.09 billion yuan, which was 78.3% of the total amount and already in the dominant position.

In June 1950, the newly-established central people’s government promulgated the Agrarian Reform Law of the People’s Republic of China, which clearly stipulated: “the feudal and exploitative land ownership by the landlord class will be abolished, the land ownership by farmers will be instituted so as to liberate the rural productive forces, develop agricultural prodirction, and open the way for industrialization in socialist China.” Since then, the land reform movement was fully launched in all the newly liberated areas of the country, and by the end of 1952, it had been successfully completed. The land reform enabled 300 million fanners with no land or little land to share more than 700 million mu of land and some production materials, thus realizing the ideal of tillers having their own fields

The land reform completely destroyed the feudal system of exploitation and the landlord class in China. The general line and policy of the land reform movement was “to rely on the poor peasants and tenants, unite the middle and the neutral rich peasants, and eliminate the systems of feudal exploitation step by step and one by one.”⁸ That’s why the political and economic status of poor peasants, lower middle peasants, and tenants were greatly improved after the land reform. The poor peasants, tenants, and some middle peasants became the leading group of grassroots political and local organizations in rural areas and the social foundation of the Chinese Communist Party.

The years between 1949 and 1952 was called the period of national economic recovery in history. During this period, we also launched a campaign to resist the aggression of the United States and aid Korea, the campaign to fight against “three misbehaviors and five evils” (HR3ÎR),⁹ and the campaign to crack down on the hostile forces at home. Through these campaigns and struggles, the hostile forces at home and abroad were severely punished, the people’s political power was established and consolidated throughout the country, the national economy started to develop again, and the order of social life returned to normal. The social classes and strata of New China were reconstructed. The bureaucratic-comprador class and the landlord class were eliminated, and the economic and social status of the working class and the peasantry was greatly improved. They became the leading force and the social foundation of the country. The basic pattern of four classes - the working class, the peasantry', the petty bourgeoisie, and the bourgeoisie was formed.