Economic - early period

Question 1

Financial stability established

Answer 1

○ May 1949 – yuan introduced

○ reduction of paper money in circulation

○ wages based on prices of flour, coal, rice, cotton cloth & oil

○ Government revenue increased from 6.5 billion yuan in 1950 to 13.3 billion yuan by 1951

○ taxes reformed, prices controlled

○ inflation brought down from 85 000% in 1949 to 15% in 1951

Question 2

National capitalists

Answer 2

• CCP would use resources and expertise of industrialists; some compensation for factories and equipment taken
• banking sector, transport industries, electricity and gas suppliers all brought under direct government regulation
• assets and industries controlled by foreign powers, except the USSR, were nationalised
• Liu Shaoqi, spoke of toleratingsome ‘capitalist exploitation’ if it achieved the right results,
• [We] should let the bourgeoisie exist and developfor several decades.’ -