'A helpless choice': Liu Hongsheng's Zhanghua company in the throes of socialist transformation

By October 1953, when the Central Committee of the CCP formally decided to embark on the transition to socialism, the Chinese government already had overall control of the national economy. The newly announced 'General line of transition to socialism' heralded the incorporation of private industry into the national production plan, but it triggered all kinds of struggles in the course of public-private joint management. This paper takes a micro-level approach based on the study of one private company, Liu Hongsheng's Zhanghua Woollen Textile Company, from the perspective of the private enterprise itself. Despite its lofty ideals of eliminating private ownership, the Communist Party of China had to accommodate its policy to the reality that the recovery of the national economy required the input of the private economic sector. The paper argues that the capitalists supported the CCP's policy on the surface, but did their best to seek the development of their own enterprises. The CCP made concessions, but the basic thrust of its strategy remained geared towards the demise of private entrepreneurs. Even an influential 'national capitalist' like Liu had to hand over his enterprises.