8. New China has not been in existence for very long, and our successes are still preliminary. Our Party has made mistakes owing to its meagre experience in leading the cause of socialism and subjective errors in the Party leadership's analysis of the situation and its understanding of Chinese conditions. Before the "cultural revolution" there were mistakes of enlarging the scope of class struggle and of impetuosity and rashness in economic construction. Later, there was the comprehensive, longdrawn out and grave blunder of the "cultural revolution." All these errors prevented us from scoring the greater achievements of which we should have been capable. It is impermissible to overlook or whitewash mistakes, which in itself would be a mistake and would give rise to more and worse mistakes. But after all our achievements in the past 32 years are the main thing. It would be a no less serious error to overlook or deny our achievements or our successful experiences in scoring these achievements. These achievements and successful experiences of ours are the product of the creative application of Marxism-Leninism by our Party and people, the manifestation of the superiority of the socialist system and the base from which the entire Party and people will continue to advance. "Uphold truth and rectify error"-this is the basic stand of dialectical materialism our Party must take. It was by taking this stand that we saved our cause from danger and defeat and won victory in the past. By taking the same stand, we will certainly win still greater victories in the future.

The Seven Years of Basic Completion of The Socialist Transformation

9. From the inception of the People's Republic of China in October 1949 to 1956, our Party led the whole people in gradually realizing the transition from new democracy to socialism. rapidly rehabilitating the country's economy, undertaking planned economic construction and in the main accomplishing the socialist transformation of the private ownership of the means of production in most of the country. The guidelines and basic policies defined by the Party in this historical period were correct and led to brilliant successes.

10. In the first three years of the People's Republic, we cleared the mainland of bandits and the remnant armed forces of the Kuomintang reactionaries, peacefully liberated Tibet, established people's governments at all levels throughout the country, confiscated bureaucrat-capitalist enterprises and transformed them into state-owned socialist enterprises, unified the country's financial and economic work, stabilized commodity prices, carried out agrarian reform in the new liberated areas, suppressed counter-revolutionaries, and unfolded the movements against the "three evils" of corruption, waste and bureaucracy and against the "five evils" of bribery, tax evasion, theft of state property, cheating on government contracts and stealing of economic information, the latter being a movement to beat back the attack mounted by the bourgeoisie. We effectively transformed the educational, scientific and cultural institutions of old China. While successfully carrying out the complex and difficult task of social reform and simultaneously undertaking the great war to resist US aggression and aid Korea, protect our homes and defend the country, we rapidly rehabilitated the country's economy which had been devastated in old China. By the end of 1952, the country's industrial and agricultural production had attained record levels.

11. On the proposal of Comrade Mao Zedong in 1952, the Central Committee of the Party advanced the general line for the transition period, which was to realize the country's socialist industrialization and socialist transformation of agriculture, handicrafts and capitalist industry and commerce step by step over a fairly long period of time. This general line was a reflection of historical necessity.

1) Socialist industrialization is an indispensable prerequisite to the country's independence and prosperity.

2) With nationwide victory in the new-democratic revolution and completion of the agrarian reform, the contradiction between the working class and the bourgeoisie and between the socialist road and the capitalist road became the principal internal contradiction. The country needed a certain expansion of capitalist industry and commerce which were beneficial to its economy and to the people's livelihood. But in the course of their expansion, things detrimental to the national economy and the people's livelihood were bound to emerge. Consequently, a struggle between restriction and opposition to restriction was inevitable. The conflict of interests became increasingly apparent between capitalist enterprises on the one hand and the economic policies of the state, the socialist state-owned economy, the workers and staff in these capitalist enterprises and the people as a whole on the other. An integrated series of necessary measures and steps, such as the fight against speculation and profiteering, the readjustment and restructuring of industry and commerce, the movement against the "five evils," workers' supervision of production and state monopoly of the purchase and marketing of grain and cotton, were bound to gradually bring backward, anarchic, lop-sided and profit-oriented capitalist industry and commerce into the orbit of socialist transformation.

3) Among the individual peasants, and particularly the poor and lower-middle peasants who had just acquired land in the agrarian reform but lacked other means of production, there was a genuine desire for mutual aid and co-operation in order to avoid borrowing at usurious rates and even mortgaging or selling their land again with consequent polarization, and in order to expand production, undertake water conservancy projects, ward off natural calamities and make use of farm machinery and new techniques. The progress of industrialization, while demanding agricultural products in ever increasing quantities, would provide stronger and stronger support for the technical transformation of agriculture, and this also constituted a motive force behind the transformation of individual into co-operative farming.