The Six Changes Policy
The Six Changes Policy refers to the series of economic related reforms initiated in China in 1965 by the Chinese Government, headed by Mao Zedong. The policy was intended to quickly raise economic output and maintain economic stability, particularly during the economic downturns of the late 1960s. The policy was patterned after the Soviet Unions Five Year Plans and was designed to be a comprehensive approach to increasing economic activity, both in the short and long-term.
The Six Changes Policy had a number of components, including the liberalization of foreign trade, adjustment of land distribution, the establishment of industrial zones and the reorganization of the agricultural sector. The policy was intended to encourage growth by providing access to foreign capital, removing bottlenecks in production and output, and providing for equitable allocation of resources.
The Six Changes Policy was put into effect officially in 1966, after considerable debate within the Chinese government. Initial reports were positive, and it was estimated that the policy enabled China to double its annual economic growth rate during the first half of the 1960s. However, the policy was dogged by issues of corruption, inefficiency and mismanagement.
The liberalization of foreign trade was intended to attract foreign capital investments and to increase the amount of exportable commodities. In theory, this should have led to an increase in imports and enabled China to boost its economic output. However, foreign trade liberalization faced a number of problems, particularly with the pricing of imported commodities. Additionally, the lack of infrastructure often made it difficult to transport goods from the interior of China to its ports.
The reorganization of the agricultural sector was intended to improve the productivity of Chinese farms. In 1965, the Chinese government passed legislation that set maximum limits for land holdings in rural areas, reformed the rural cooperative movement, reintroduced traditional farming practices and increased wages for farm workers. The reform also provided for the guaranteed purchase of surplus production and the use of tractors and other machinery in agricultural production.
The establishment of industrial zones intended to promote the growth of domestic manufacturing, by providing access to capital, technology and markets. In theory, it should have enabled China to quickly increase the production of consumer and industrial goods, ultimately raising GDP and GDP per capita. However, the industrial zones often lacked adequate infrastructure and basic services, such as roads, electricity and adequate sanitation. Additionally, many of the foreign investments proved to be green-field investments, meaning that the investments were in creating new operations and not in purchasing existing facilities.
The Six Changes Policy had far-reaching effects on China’s economy. While its immediate effects were positive, the policy often failed to produce the sustained growth necessary for China to become an industrialized nation. The policy ended up adding to corruption and inequality in China, with many of the benefits of the policy accruing to those in positions of power instead of to the everyday Chinese worker. Additionally, while the policy attempted to redistribute land, it failed to adequately provide for farmers and their families, often leading to increased levels of poverty in rural areas. The long-term effects of the Six Changes Policy were far less positive, as it was unable to provide the needed sustained economic growth that would have enabled China to continue its economic development.
