lated nodes of a modern economy. The Chinese Communist party emerged in the 1920s in the midst of a mounting economic crisis caused by foreign intervention and increased landlord influence in the countryside. For more than two decades, it expanded its control over large rural areas by introducing an agrarian program based on the control of rent and usury, and by giving power to peasant associations. On October 1, 1949, the Communist party successfully established a unified national government and economy on the mainland for the first time since the end of the imperial period in 1912. From 1949 to 1952 the emphasis was on halting inflation and ending food shortages and unemployment. The new government initiated a land reform program that redistributed land to 300 million poor peasants into cooperative farms. In 1958 the rural people's communes were established, and these dominated agriculture in China until the early 1980s. The commune was based on the collective ownership of all land and major tools by its members, who produced mainly to meet state planning targets and who were rewarded according to the work they performed, although basic necessities were guaranteed to all members. In the urban-industrial sector, state ownership of property and of industrial and commercial enterprises was gradually extended. Industry grew steadily from heavy investment under the first five-year plan, and the state-owned sector achieved an overwhelming importance. The second five-year plan was introduced in 1958, trying to get China ahead into industrialization. This program was characterized by large investments in heavy industry and the establishment of small-scale versions of such industries as steel refining. The program, however, caused great disruptions in economic management and in rational economic growth, and in 1960 the program had to be abandoned. The Chinese economy then entered a period of readjustment, but by 1965 production in many f...
