The guidelines and basic policies defined by the Party in this historical period were correct and led to brilliant successes.

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.

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.