Background
In October 1949 after the defeat of the Kuomintang, the Chinese Communist Party proclaimed the establishment of the People's Republic of China. Immediately, landlords and wealthier peasants had their land holdings forcibly redistributed to poorer peasants. In the agricultural sectors, crops deemed by the Party to be "full of evil" such as opium, were destroyed and replaced with crops such as rice.
Within the Party, there was major debate about redistribution. A moderate faction within the party and Politburo member Liu Shaoqi argued that change should be gradual and any collectivization of the peasantry should wait until industrialization, which could provide the agricultural machinery for mechanized farming. A more radical faction led by Mao Zedong argued that the best way to finance industrialization was for the government to take control of agriculture, thereby establishing a monopoly over grain distribution and supply. This would allow the state to buy at a low price and sell much higher, thus raising the capital necessary for the industrialization of the country.
Read more about this topic: Great Leap Forward
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