On the Evolution and Changes of Individual Economy and Countermeasures

How individual economy remains in existence and moves forward [in our country] is a tortuous experience. In 1952 the absolute majority of China's farming population were individual peasants. And there were 8.83 million individual [or self-employed] laborers residing in cities and towns. The sector of individual economy made up 72 percent of the entire national income. Through the socialist transformation in 1956, individual peasants rapidly moved onto the path of cooperativization, and individually owned industrial and commercial operations in urban areas also switched to cooperative economy. In consequence, the individual economic sector plunged to only 7.1 percent of the national income, and individual laborers in cities and towns were reduced to a measly 160,000. During the three years of adjustment, the ranks of individual laborers bounced back to over 2 million. An even more "leftist" policy was enforced in the period of the Cultural Revolution, which brought individual economy in town and country to all but extinction. By 1978 the self-employed laborers in cities and towns had shrunk to the skeleton size of 150,000. Family-operated sideline productions and free trade were almost abolished in the countryside, and small handicrafts such as service trades, repairs, and supply of sundry articles were drastically cut back.