Confiscation of Bureaucratic-Capital

At the early stage of the founding of the People's Republic of China, the CPC and the People's Government took a profound initiative to liberate and develop the productive forces, which was also one of the three major economic programs of the New-Democratic Revolution. In the late period of the Anti-Japanese War, the CPC put forward the task of destroying bureaucratic-capital.

Mao Zedong put forward in his “On New Democracy” that the big banks and the big industrial and commercial enterprises should be owned by the new democratic state. The slogan of "confiscating bureaucratic-capital" was formally put forward in the “Manifesto of the Chinese People's Liberation Army” issued in October 1947. In December of the same year, Mao Zedong, in his report "Present Situation and Our Tasks", once again proposed that "Confiscate monopoly capital, headed by Chiang Kai-shek, T. V. Soong, H. H. Kung and Chen Li-fu, and turn it over to the New-Democratic state.”

On the eve of the founding of New China, bureaucratic-capital accounted for 2/3 of the country’s industrial capital, 80% of the country's industrial, mining and transportation fixed assets, 90% of the country’s iron and steel, 33% of coal, 67% of electricity, 45% of cement and all petroleum and non-ferrous metals, monopolizing the country's economic lifeline and hindering the development of productive forces. Therefore, confiscating bureaucratic-capital and transforming it into a state-run economy of a socialist nature was an important task for the CPC and the People's Government before and after the founding of New China.

In the first half of 1949, with the advent of the victory of the War of Liberation, the CPC Central Committee successively issued documents such as the “Instructions of the Central Committee on the Taking over Bureaucratic-Capital Enterprises”, the “Instructions to the East China Bureau on the Taking over Cities in Jiangnan”, and the “Instructions on the Experience of Taking over Enterprises in Pingjin”, which set out in detail the guidelines and policies concerning the acceptance of bureaucratic-capital enterprises.

On the basis of summing up the experience of taking over the cities in Northeast and North China during the War of Liberation, the CPC decided to adopt a different approach to the bureaucratic-capital enterprises than to the organs of KMT regime, i.e., instead of breaking up their institutions, they would "maintain their original positions, original salaries and original systems" in accordance with their original organizational structure and production systems, and taking over in their entirety by the Military Management Committee, and then gradually carrying out democratic and production reforms through supervised production.

By the end of 1949 and the beginning of 1950, a total more than 2,800 industrial and mining enterprises, 2,400 financial enterprises and all transportation enterprises affiliated to the KMT government confiscated, marking the basic completion of the task of confiscating bureaucratic capital.

These enterprises became the main component of the state-run economy in the early days of the founding of New China.

On this basis, the State Council issued the “Measures for the Liquidation of Public Shares and Public Assets in Enterprises” in January 1951 and the “Instructions on Confiscating the Property of War Criminals, Traitors, Bureaucratic Bourgeoisie and Counter-revolutionaries” in February 1951, making a thorough inventory and treatment of the bureaucratic-capital hidden in national capital enterprises and the property of the above-mentioned elements. At this point, the task of confiscating bureaucratic-capital was completely accomplished.

Confiscation of bureaucratic-capital was one of the three economic programs of the New Democratic Revolution, but at the beginning of the founding of the People's Republic of China, confiscation of bureaucratic-capital had a twofold character. On the one hand, it was democratic revolutionary in nature as far as the confiscation of bureaucratic bought capital linked to imperialism and against the imperialist-affiliated Chinese bought bourgeoisie is concerned; on the other hand, it was socialist-revolutionary in nature as far as the confiscation of big capital and opposition to the Chinese big bourgeoisie was concerned. Confiscation of bureaucratic-capital destroyed the economic basis on which the KMT clique relied for its survival and enabled the state-run economy to master most of the socialized productive forces in the national economy. The part of the national economy that was the lifeblood of the national economy and was sufficient to manipulate the livelihood of the country was basically in the hands of the new democratic state through the confiscation of bureaucratic capital.

As the main material basis for the development of production and economic prosperity in the People's Republic of China and the leading force of the entire social economy, the socialist state-run economy provided a powerful material means for the state to regulate various private economic components and organized the cause of restoring production, and determined the nature and development of the entire social economy, as well as laying an important material foundation and created favorable conditions for the comprehensive socialist transformation.