The Industrial Sector 1950-1951

China's pre-war industry comprised but a few segments of heavy industry. Most producers belonged to the light industry sector, and even among these, crucial industries like machine tools, engines, copper and petroleum products were not found at all. Technicians and experts were entirely lacking. Most enterprises were rather small, and were distributed in Manchuria (as the leftovers of what the Russians had not dismantled) or around Shanghai or other cities of the east coast.

In summer 1949 therefore, the advancing Communists tried to preserve of this small base as much as possible, and after the foundation of the People’s Republic encouraged industrialists to return from Hong Kong or overseas states to return to “New China”. In contrast to landlords, moreover, the CPC treated the few industrialists favourably into the mid-1950s in order to win their will to cooperation. One of the first measures was to rebuild and expand the road and railway system, particularly into western China.

A United Nations ban on May 17, 1951 on the export of strategic goods to China increased the country's reliance on technical goods from the Soviet Union.