The industries referred to in Li Fu-chun's report came to a total of 141 projects. It may be inferred from his report that the assistance extended by Soviet Russia to the Peiping regime is not all for the five-year plan. It started in 1950 when Soviet Russia helped the Chinese Communists to restore the industries despoiled by her at the end of World War II and will stop at the end of the year 1959—a total of ten years.
Therefore, the so-called five-year plan of the Chinese Communists is in reality a ten-year investment plan for Soviet Russia in China. The 141 industrial projects are not all new enterprises started with Soviet assistance, though there are quite a number of new constructions. What Soviet Russia has been doing is to wrest the control of the industries from the Chinese Communists and integrate them in her industrial system in accordance with her own needs.
Spread over a ten-year period, Soviet Russia's aid to the Chinese Communists averages only 14 industrial projects a year. The scale of the assistance may be gauged by that the Russians did to the Chinese Communist electric power industry in Manchuria in the four years from 1950 to 1953. It consisted of only three projects: (1) repair and restoration of the Hsiao Ho-man Hydroelectric Plant, (2) installation of a 50,000-kw. generator at the 2nd generating plant of Fushun, and (3) installation of one 25,000-kw. generator and two 6,000-kw. generators at Fuh Hsin Power Company. For an immense industrial area like Manchuria that has suffered power shortage through Russia's own act of despoliation during the short period of her occupation of Manchuria after Japan's surrender, her attempts at restitution are far from generous.
An examination of the five-year plan will readily reveal the real objective of the Chinese Communists. In fact, the Communists themselves take no pains to hide their objective, for they say in their propaganda: "Without heavy industries, there will be no modern armament industries, and it will be impossible to build a strong national defense."
From what we know, the 141 industrial projects are mostly expansions and rebuilding or restoration of the old industrial plants. New constructions are far less than the Communists would like the world to believe. The aid from Soviet Russia, as has been pointed out above, is in reality far from generous, and is always given under onerous terms, it being her long-term policy to dominate China's economic developments.
According to the White Book published in 1949 by the Ministry of Foreign Affairs of the Republic of China, Soviet Russia's traditional policy toward China is aggressive in nature, and her economic designs on China are of long standing. Most of the 141 projects in which she pledged to help the Chinese Communists to rebuild had been demanded of the Government of the Republic of China while it was on the mainland. Russian representatives sought control of these industries through an offer to help in their development, similar to the aid they are extending to the Chinese Communists. But the Government realized it was a trick of the Russians and turned down their offer. After the Government's removal from the mainland, they made the same demand on the Chinese Communists, and what they could not obtain from the National Government was readily given to them by Mao Tse-tung.
In October, 1954, the Soviet and Chinese Communists announced in a joint communique the addition of 15 new projects to the original 141, thus raising the total to 156, for which Soviet Russia undertook to increase the supply of equipment to the value of 500,000,000 rubles. Of the 156 industrial projects, the following 137 are known to us:
I. Armament Industry
A. New Projects
1. Taiyuan Aircraft Manufacturing Plant
2. Chin Yuan War Chemistry Works, Shansi
3. Tsingtao Naval Yard
B. Rebuilding or Expansion
4. Taiyuan Arsenal
5. Hanyang „
6. Shengchi „
7. Nanking „
8. Harbin „
9. Changchun „
10. Shengyang „
11. Chungking „
12. Chengtu „
13. Lui-Ta (Port Arthur and Dairen) Arsenal
14. Heilungkiang Arsenal
15. Shui Mo Kou Arsenal, Sinkiang
II. Machine Industry
A. New Projects
16. Changchun Automobile Works No.1
17. Taiyuan Heavy Machine Works
18. Harbin Turbine Works
19. Harbin Zinc Smelter Works
20. Yuiling Textile Machinery Works
B. Rebuilding or Expansion
21. Dairen Chinese Shipbuilding Co. Dockyard
22. Wuchang Shipbuilding Co.
23. Kiangnan Dock, Shanghai
24. Shengyang Machine Works No.1
25. „ „ „ No. 2
26. „ „ „ No. 3
27. East Shanghai Dockyard
28. Heilungkiang Machine Shop No. 2
29. Shengyang Feng Chin Tool Works
30. Shengyang Cable Works
31. Harbin Meter and Cutlery Plant
32. Harbin Electric Meter and Instrument Works
33. Shengyang Heavy Machinery Works
34. Fushun Heavy Machinery Works
35. Shengyang Transformer Works
36. Shanghai Turbine Works
37. „ Zinc Smelter Works
38. „ Machine Works
39. „ Machine Tool Works
40. Harbin Farm Implement Works
III. Chemical Industry
A. New Projects
41. Lui-Ta Potassium Chlorate Plant
42. Hulutao Ammonium Sulphate Plant
B. Rebuilding or Expansion
43. Shengyang Chemical Works
44. Dairen „ „
45. Chinhai „ „
46. Northeast Cement Works No. 8 (at Kiamutze)
IV. Non-Ferrous Metal Industry
47. Wen Chuan Wolfram Mine, Sinkiang
48. Chi Shan Manganese Mine, Sinkiang
49. Chin Ho Copper Mine, Sinkiang
50. Ho An Zinc Mine, „
51. Yeh Chun Zinc Mine, „
52. Peh Yin Chuang Copper Mine, Kao Lan, Sinkiang
53. Tai Pao Shan Copper Mine, Szechwan
54. Shih Chin Shan Copper Mine, Hopei
55. Fushun Aluminum Works No. 301
56. Kochiu Mine of the Yunnan Tin Co.
57. Shengyang Smelting Works
58. Tungchuan Copper Works, Yunnan
59. Hsiangtan Manganese Mine, Hunan
60. Shih Kwang Shan Antimony Mine, Hunan
V. Iron and Steel Industry
A. New Projects
61. Seamless Steel Tube Plant of the Anshan Iron and Steel Works
62. Wan Te Shan Iron Mine Plant of the Anshan Iron and Steel Works
63. Ta Shih Tou Iron Mine Plant of the Anshan Iron and Steel Works
64. Chih Tao Kou Iron Mine Plant of the Anshan Iron and Steel Works
B. Rebuilding and Expansion
65. Anshan Iron and Steel Works
66. Anshan Iron and Steel Works No. 8 Blast Furnace
67. Anshan Iron and Steel Works No. 6 Blast Furnace
68. Anshan Iron and Steel Works Rolling Mill
69. Anshan Iron and Steel Works Sheet Mill
70. Anshan Iron and Steel Works No. 1 Steel Works
71. Anshan Iron and Steel Works No. 2 Steel Works
72. Anshan Iron and Steel Works No. 1 Rolling Mill
73. Tangshan Iron and Steel Works
74. Central China Iron and Steel Co., Taiyeh Iron and Steel Works
75. Paotou Iron and Steel Works
76. Peng Chi Iron and Steel Works
77. Ma An Shan Iron Mine
78. Lung Yen Iron Mine
79. Chungking Iron and Steel Works No. 101
80. Chungking Iron and Steel Works No. 102
81. Tientsin Metal Strip Branch Plant
VI. Electric Power
A. New Projects
82. Sian Power Plant No. 2
83. Chengchow Power Plant
84. Chungking Power Plant No. 507
85. Tihwa Power Plant
86. Liuchow „ „
87. Paotou „ „
88. Yih Li River Hydroelectric Station, Yunnan
89. Yellow River Hydroelectric Station
B. Rebuilding and Expansion
90. Fushun Power Plant No. 2
91. Fuh Hsin Power Plant
92. Dairen Power Plant No. 2
93. Harbin Power Plant
94. Ho-Man Hydroelectric Station
95. Northeast High Pressure Thermal Station, Changchun
96. Chengtu Power Plant
97. Tungchow Power Plant
98. Tientsin Power Plant
99. Shih Lung Chang Hydroelectric Station, Yunnan
VIII. Petroleum Industry
A. New Projects
100. Lanchow Refinery
101. Chinchow Synthetic Oil Plant
B. Rebuilding and Expansion
102. Shihmen Oil Wells
103. Shensi Yen Chang Oil Wells
104. Northeast Petroleum Plant No.1 (at Fushun)
105. Northeast Petroleum Plant No.2 (at Fushun)
106. Northeast Petroleum Plant No.5
107. Northeast Petroleum Plant No.7 (At Dairen)
108. Northeast Petroleum Plant No.7
VIII. Coal Mining
A. Rebuilding and Expansion
109. Fushun Coal Mine
110. Kailan Mining Administration
111. Tatung Coal Mine, Shansi
112. Hsi An Coal Mine Central Pit, Liaotung
113. Ho Kang Coal Mine Northeast Pit, Sungkiang in Manchuria
114. Ho Kang Coal Mine Hsin An Tai Feng Pit
115. Fuh Hsin Coal Mine Hai Chow Open Seam, Liaohsi, in Manchuria
116. Fuh Hsin Coal Mine Hsin Chiu Open Seam
117. Fuh Hsin Coal Mine Hsin Chiu Pit
118. Fuh Hsin Coal Mine Ping An Pit, Liaohsi
119. Chiao Shin Coal Mine Ta Ma Chrln Pit, Honan
120. Feng Shan Coal Mine, Pei Tai Ku Pit and Cleansing Plant; Hopel
121. Hwainan Coal Mine, Pa Kung Shan Hsieh Chia Chi No. 2 Pit, Anhwei
122. Chi Hsi Cheng Chi Ho Coal Mine, Sungkiang
123. Tung Hua Coal Mine, Liaotung
124. Tung Chin Coal Mine, Shensi
IV. Light Industries
A. New Projects
125. Harbin Jute Mill
126. Kiamutze Paper Mill
127. Wuhan Meat Processing Plant
128. Chengchow No. 1 Textile Mill
129. Han Tang Textile Mill
130. Chengchow No. 2 Textile Mill
131. Shihchiachuang Textile Mill
132. National Textile Mill No. 1, Sian
133. National Northwest Textile Mill No. 2, Hsienyang
134. National Textile Mill No. 3, Sian
135. National Textile Mill No. 4, Sian
136. Siangtan National Textile Mill
B. Rebuilding and Expansion
137. Chengchow Oil Cracking Plant
The reason why not all of the 156 projects are known is that some of them may be classified as armament industry plants while others may be still in the planning stage.
Next let us examine the distribution of the various industries. Chinese industries were formerly concentrated in the Southeast, especially in Shanghai, owing to the facilities of ocean transportation. The defect of such a concentration was that the industries were too far separated from the places where raw materials were produced. As soon as the Chinese Communists gained control of the mainland, they started a propaganda campaign to induce people to transfer the industrial plants to the areas where the needed raw materials were produced. As early as 1950, they had a plan for the removal of the industrial plants to the interior and had actually forced some private industries to move to designate areas.
In the case of heavy industries, the Communists plan to concentrate them in three areas—Manchuria, North China and, above all, the Northwest. For strategic reasons, the Communists regard the coastal areas as expendable and make every preparation to build up the interior where any decisive war in the future would be fought. They realize that in a war in which their fate is to hang in the balance it would be hard for them to defend the territory south of the Yang-tze River. Therefore, they plan to move all the basic industries to the west of Tungkwan and north of the Yellow River. They would make their last stand in an area where they could be supplied with foodstuffs from Szechwan and from the fertile district in the Yellow River bend; iron and steel from Taiyuan and Paotou; coal from Tatung, Ping Ting Shan and Shuan Ping Cheng; and petroleum from Shihmen and Yen Chang. It will thus be seen that the distribution of the Communist industries is guided more by strategic than by economic considerations. It is in no case intended for the elevation of the people's livelihood. There are unmistakable indications that the Chinese Communists will gradually expand their industries northwestward till they are integrated with the Russian industries in the Far East and subordinated to Russian needs. The future concentration of industries on the Communist-controlled mainland will thus be west of the Peiping-Hankow Railway up to the borders of Sinkiang.
To give effect to their plan for the integration of the Russian and Chinese Communist industrial districts, the Peiping regime is rushing to completion the Lanchow-Sinkiang and Lanchow. Paotou railways to be connected with two other lines now under construction—the Lanchow-Urumchi-Alma Ata line and the Tsining-Ulan Bator line. The Lanchow-Urumchi-Alma Ata line is to connect with the Russian Turksib Railway at Alma Ata; the Tsining-Ulan Bator line will connect the Peiping-Suiyuan Railway with the Trans-Siberian Railway through Outer Mongolia. Following is a brief description of the various industrial areas in the Communist five-year plan:
Manchuria
According to a report submitted by Kao Kang (now purged) to the "First Congress" on March 31, 1950, Manchuria produced in the preceding year 49% of the coal produced in the entire country; 87% of pig iron; 93% of steel products; and 78% of electric power. Its railroad mileage; was 42% of the total. This was after the plundering of the Russians after World War II. In 1948, at the time of the Communist occupation, important production in Manchuria dropped 20% from the record of 1943.* Therefore, if the Manchurian industries had been restored to their former productive capacity, their percentage of the total would have been higher. In their rebellion against the Central Government, the Chinese Communists used Manchuria as their base. As Manchuria is contiguous to the Russian Maritime Province and as Port Arthur and Dairen are both under the domination of Soviet Russia, there is good reason for the Chinese Communist desire to rebuild the place. Therefore, at the 7th session of the 2nd Central Executive Committee of the Chinese Communist Party held in 1949, a resolution was adopted to built up the industries in Manchuria again. But rebuilding work had hardly started when the Korean War broke out, and the plan for rebuilding was temporarily suspended. After the Korean armistice the Communists wanted to develop Manchuria as an important industrial center. Of the 156 projects aided by Soviet Russia, the majority are in Manchuria. The target is to revive the scale of industrial operations at the time of the Japanese occupation. Much of the planning and distribution is patterned closely after the Japanese plan for Manchuria, the high lights of which follow:
A. Shengyang District—The important Shengyang industrial district is surrounded by three suburban industrial districts—Fushun with its coal mines, Pengchi with its iron mines and Anshan with its steel works. Practically all the industries under development in this area are included in the 156 projects receiving Russian aid.
B. Harbin District—The important objective is to make Harbin the center of the machine-making industry.
C. Chinchow District—The important industries in this district are the Fuh Hsin Coal Mine, Chinchow Synthetic Petroleum Plant, and Hulutao Ammonium Sulphate Plant.
Port Arthur and Dairen District—Most of the industries in this district are enterprises, jointly operated with Russia. Included in the 156 Russian-aid projects are the Dairen Chemical Works, Dairen Chinese Shipbuilding Co. Dockyard and Dairen Power Plant No. 2.
D. Antung District—In this area are the Sui Tou Hydroelectric Station and the Tung Hua Coal Mine, neither of which is included in the Russian-aid list.
E. Changchun District—This is an important area for electric power. Worth mentioning is the Northeast High Pressure Thermal Station, which is included in the aid projects:
Northwest
In Manchuria, the Communists are mainly concerned with restoration of the old industries; but in the Northwest, they are launching new projects. The new industrial districts in this area are planned by the Chinese Communists with long-range objectives. In this area are the following districts:
Shensi-Kansu Petroleum District—Projects in this district include the development of the Shihmen and Yen Chang oil wells and construction of a refinery and power plant at Lao Chiun Miao, Chiu Chuan, in preparation for its future development as an oil-producing district.
Lanchow Light Industry District—The plan calls for the development of light industries to supply the local needs, especially those of the workers that are expected to grow in number with the development of industries in the North west.
Kwang Chung Textile District—This includes the cotton-producing province of Shensi. The Communists have recently completed the National Northwest Textile Mill No. 1 at Sian, and the National Northwest Textile Mill No. 2 at Hsienyang. Their present plan calls for the establishment at Sian of National Textile Mills Nos. 3 and 4. All the four mills are included in the 156 aid projects. There are also in this district several private-owned mills that are taken over by the Communists as "joint enterprises." According to the Ta Kung Pao (March 13, 1954) the number of spindles in this district increased from 94,000 in 1949 to 300,000 in 1954 and that of the looms from 1,400 to 8,000.
Shensi-Kansu Coal District—There are two coal mines of a moderate scale in this district, none of which is included in the aid projects. The object is to supply the local power and industrial plants with coal.
Sinkiang Non-Ferrous Metal District—All the companies for the development of the non-ferrous metals are enterprises jointly operated with Russia and form important items in the aid projects. Already operating are the Wen Chuan Wolfram Mine, Chi Shan Manganese Mine, Chin Ho Copper Mine and Ho An and Yeh Chun Zinc Mines.
North China
Though the Northwest figures prominently in the Communists' long-range planning, it is greatly handicapped by its inaccessibility and sparsity of population. Its natural resources are limited to petroleum and non-ferrous metals. To meet their immediate requirements, therefore, the Communists are planning to develop the North China area. Of the fifteen projects in the revised plan (from 141 to 156), the majority were made for North China
A. Peiping and Tientsin District—The import ant industries in this district are the Shih Chin Shan Copper Mine and Tanshan Iron and Steel Works, both of which are included in the 156 projects.
B. Chengchow Light Industry District—Efforts are made by the Communists to' develop a light industry district here with the cotton and wheat produced in Honan and the neighboring provinces. Included in the 156 projects are four new textile mills, namely, two at Chengchow, one at Han Tan and one at Shihchiachuang.
C. Taiyuan District—This was and still is an important industrial district. The most important project is the Tatung Coal Mine.
D. Paotou District—This district was not listed in, the five-year plan when it was drafted by the Communists in 1953. But during that year, a geological survey team discovered that the iron mine in Paotou is one of the biggest in the world. The thickest part of the deposit is several hundred meters in depth and the total is estimated at 2,500,000,000 tons. Most of the projects in this district are included in the revised plan of the Russian aid projects.
Southwest
In their five-year plan, the Communists earmarked 50% of the total investments in this area for the construction of highways and railroads. The two important districts in this area are Chungking, where there are many existing establishments, and Yunnan, with its tin and copper mines. The Communist plan calls for the development of Yunnan as an important source of non-ferrous metals. In its agreement with Soviet Russia on economic aid, the Peiping regime undertakes to expand the Kochiu Tin Mine.
Central South
In the Wuhan district, the Communists are trying to restore the Hanyang Steel Works to operation and expand the Taiyeh Iron and Steel Works. In Canton and the Pearl River estuary, the Communists are making investments for sugarcmaking, filature and paper-making. In Hunan Province, the Communists started in 1953 the building of a large textile mill in Hsiangtan for utilizing the cotton grown in the province, which is estimated to be about 500,000 piculs per year. The mill has 20,200 spindles and 1,050 automatic looms. The provinces of Kwangsi, Hunan, Kiangsi and Kwangtung were formerly the largest producing area of non-ferrous metals. But in their five-year plan, the Communists pay scant attention to them because they are "too close to the frontline of national defense."
East China
Shanghai and its environs are the center of light and machine industries. There are in this region two thirds of the spindles and looms of the entire country. Shanghai alone has one third of the machines and equipment. But the Communists have little intention of developing this area. On the contrary, they are continually sending equipment and skilled workers to Manchuria and the Northwest.
A. Anhwei District—The principal industries in this district are the Ma An Shan Iron Mine and the Hwai Nan Coal Mine, both of which are included in the Russian aid projects.
B. Shantung District—The principal industries in this area are coal and iron mines at Tse Chuan and Po Shan.
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*See Ta Kung Pao, Hongkong, September 27, 1952