After the victory over the Kuomintang the communists proclaimed the establishment of the people republic of china in 1949. The new government was essentially a communist dictatorship. The new government was based on three documents: the original law of the Chinese people political consultative conference (CPPCC), the organic law of the central people governments, the common programme of the (CPPCC). These documents were replaced by a constitution adopted in September 1954. The internal policies of the new communist regime were marked by caution. Efforts were directed to consolidate the communist victory and authority of the people republic.
The Chinese communist government launched a vigorous agrarian revolution to cure china age old problem of landlordism. In 1950 the government promulgated the agrarian reform law which is called for the abolition of the land ownership system of feudal exploitation and the confiscation of land owners holding and farm implements for redistribution of landless peasants. By the end of 1952 some 700millions of land had been re distributed to 300 million peasants.
The new government addressed itself to the most important task of making China self sufficient in food. It proceeded with collectivization of land, gaining from the experience of the Soviet Union in the 30’s. The land programme was divided into three stages the mutual aid period, producer’s co operative and the collectivization itself. The peasants had the right at least in theory to withdraw. In last stages the peasants lost their right of ownership and the theoretical right of withdraw at will.
The communist government took effort to eliminate inflation and restore fiscal stability. To promote financial stability the communist issued a peoples currency in may 1949 and banned the circulation of the foreign currencies as a medium of exchange. Efforts were made to achieve price and wage stabilisation. The wage point system for the payment of workers introduced. A new taxation system involving agricultural, industrial, commercial sales and income taxes were introduced. In 1950 inflation was controlled and the government budget balanced.
In 1958, the regime sought to revolution the existing socio- economic structure by the introduction of communes which were to be the basic unit of the Chinese communist society. These communes were brought into existence by forging together several small cooperative farms. They were also the basic administrative units. The introduction of communes did not bring about a sudden increase in the agricultural production. Finally there was opposition to the communes because of the suppression of every individual and regimentation of life in the communes.
The new regime in China laid great emphasis on industrialisation. In the beginning it followed a mide policy; assign a substantial role to private capital. As the regime gathered strength, more radical measures were introduced. In 1953 the first five year plan was inaugurated. It was a modest plan and it succeed in meeting the target. Despite many shortfall in several spheres, considerable progress was made towards the industrial of the country during the first decade of the communist rule.
The Leap forward movement 1958:
To accelerate the expansion of the economy the government plunged ahead a new drive
called Great Leap Forward movement. It aimed at the increasing of the production of iron, electricity coal. Target were fixed and everyone was urged to participate in industrial production. The result was by 1958 600000 back yard furnaces were spramg up all the over the country. At the end of that year the government announced a boastful list of achievement machine tools had tribled coal and steel had doubled oil increased by 50% and electricity by 40%.