In 1956 the Chinese authorities accomplished the socialisation of private industry and commerce and handicrafts through the implementation of peaceful redemption and through taking charge of the original private management personnel. In January 1957, Shanghai industrialist Li Kangnian criticised the form of the redemption. He suggested extending the payment term of the fixed rate of interest (dingxi) from 7 years to 20 and changing the mode of payment to bank deposit receipts. In spring 1957 his proposal provoked a lively debate in commercial and industrial circles, whose members hoped to establish their relationship with the state on a contractual basis; they rejected the pressure exerted on them in the name of class conflict and asked for equal citizenship. However, these legitimate demands were severely suppressed during the anti-rightist campaign. The ccp’s propensity to instrumentalise policies made it impossible to achieve the original intention of using precious human resources, while it led to discrimination based on class and shaped a hierarchical society. In fact, the controversy over Li Kangnian’s proposals demonstrated a real confrontation between the patriarchal authoritarian culture of the Chinese Communist Party and the modern contractual culture of industrialists and merchants.
In1956, the number of public–private factories reached 25,000, of which only 444 were large factories with more than 100 workers, but there were over 20,000 factories with fewer than 16 employees. Zhongguo Zibenzhuyi Gongshangye de Shehuizhuyi Gaizao, Shanghai (Socialization of Chinese Capitalist Industry and Commerce, Shanghai) (Beijing: Zhonggong Dangshi Chubanshe, 1993), Volume 1, p. 776.
In1956, Shanghai the Municipal Government appointed more than 10,000 representatives of the state as joint public–private enterprise directors and managers. More than 60 per cent were promoted from the ranks of workers. See Zhongguo Zibenzhuyi Gongshangye de Shehuizhuyi Gaizao, Shanghai, Volume 1, p. 259.
Xue Muqiao, Xue Muqiao Huiyi Lu (Memoirs of Xue Muqiao) (Tianjin: Tianjin People’s Publishing House, 2006), p. 167. See also Li Weihan, Huiyi yu Yanjiu (Memories and Research) (Beijing: Zhonggong Dangshi Chubanshe, 1986), p. 777.