Rebirth: I am in Jin-Cha-Ji

Deng Zhihui pointed out the biggest problem with credit unions: ownership is too complicated.

Wei Hongjun also nodded.

The government can't regulate credit cooperatives, nor can it disregard them. Regulation is meaningless, as they are, after all, mass cooperatives. However, if regulation is neglected, various other problems will arise as credit cooperatives expand.

This creates a paradox.

The government is having a tough time with the rural credit cooperatives. "Go on."

"Secondly, because the ownership of credit cooperatives is chaotic, various departments are able to intervene, yet they lack the authority to do so. As a result, numerous units and individuals are involved, yet no one department is held accountable. Currently, some rural credit cooperatives are facing problems. Originally intended for rural areas, these cooperatives have been used by some local governments, leveraging their administrative power to interfere in their internal affairs and misappropriate their funds. This situation arises because rural credit cooperatives lack clear ownership and status. Local governments' misappropriation of credit cooperative funds faces no oversight from any department. Even if problems arise, they can shirk responsibility, as there are no regulations prohibiting local governments from using credit cooperative funds. As a result, some credit cooperatives are nominally credit cooperatives, but in reality, they have no funds at all."

“I’ve discovered this problem too.”

This problem also occurred in several local rural credit cooperatives investigated by Wei Hongjun.

This applies not only to grassroots government agencies but also to shareholders of credit cooperatives. They can blatantly embezzle funds from credit cooperatives because credit cooperatives do not have clear regulations on fund use like national banks.

Deng Zhihui nodded and said, "In the several counties I've researched, this problem isn't very serious, but there are signs of it. If left unchecked, it will definitely become serious. Rural credit cooperatives are originally rural funds, and their scale is not very large. If they are misappropriated by local governments, other units, or individuals, then the funds needed to develop rural agricultural product processing industries will be nowhere to be found."

Both of them smiled bitterly.

In order to develop rural industry and commerce, the two people were looking for funds and found the Rural Credit Cooperative.

But who could have imagined that rural credit cooperatives would have so many problems.

"Third: Currently, credit cooperative funds are primarily used for policy and welfare purposes. Funds are primarily used to address farmers' temporary cash shortages and provide emergency relief. However, as rural credit cooperatives have developed, many have seen their funding scale grow, gradually becoming bank-like. These rural credit cooperatives, in addition to considering policy and welfare benefits, must also consider fund utilization and commercial profitability. However, national policy has a vague definition of rural credit cooperatives and pays little attention to their profitability."

"Credit cooperatives are not welfare institutions; they are part of the rural cooperative economy. Furthermore, rural credit cooperatives don't receive government funding, so if they can't make a profit, they can't survive."

Deng Zhihui expressed his views.

Rural credit cooperatives are not civil affairs institutions or welfare units. Although they were established in their early years for the purpose of mutual assistance, they have now evolved into banks with financial attributes.

We cannot ignore the issue of profitability.

Wei Hongjun said, "For agricultural product processing plants in rural areas to develop, we need to allocate funds to rural areas. Without capital investment, it will take a long time for rural industry and commerce to develop. However, my country's current focus is still on industrialization, and the government cannot provide more financial support. Therefore, credit cooperatives are currently the fastest and most convenient channel for us to raise funds. Moreover, for many years to come, all the funding needed in rural areas will need to come from credit cooperatives. Therefore, we cannot exhaust the resources and must ensure that rural credit cooperatives are profitable. Only by ensuring that rural credit cooperatives are profitable can we sustainably support the development of the rural economy."

Although the central government currently has the concept of commercial banks, there are actually no completely professional commercial banks.

China's current financial institutions are primarily the People's Bank of China, the Agricultural Bank of China, and the China Construction Bank. However, the predecessor of the Agricultural Bank of China merged with the People's Bank of China once before, and the newly established Agricultural Bank of China was established to support the development of rural cooperatives. The China Construction Bank raised funds for China's industrialization and oversaw their use.

Overall, there are currently no professional commercial banks in New China.

This applies to all state-owned banks, and rural credit cooperatives fall even further outside the commercial banking category. However, as financial institutions, with the exception of central banks like the People's Bank of China, all other banks must be profitable. This applies to both the Agricultural Bank of China and the China Construction Bank.

Although it is a policy bank, it also has to consider profitability.

You can't say that you are responsible for your own profits and losses, but you are not allowed to make a profit from loans.

Therefore, it is necessary to transfer part of the funds of rural credit cooperatives to the commercial sector.

"Fourth: As part of the rural cooperative economy, rural credit cooperatives should have their own autonomy. However, the current situation is that credit cooperatives lack sufficient autonomy. They perform tasks that government agencies perform, yet they fall under the umbrella of cooperative enterprises. As a result, credit cooperatives are neither government agencies nor enterprises, lacking any autonomy at all. Their work is more about following government directives, like a welfare institution. If you want to use credit cooperative funds, you must give them sufficient autonomy."

Luo Weilin said out his summary.

Wei Hongjun and Deng Zhihui exchanged views, both expressing considerable approval of Luo Weilin's conclusion. However, afterward, Deng Zhihui sighed and said, "Rural development over the next few years will depend on the financial support of rural credit cooperatives. However, rural credit cooperatives face numerous challenges, and resolving them requires more than just the Rural Affairs Department. The Department can only provide guidance on the work of rural credit cooperatives, but lacks any other authority."

The problem with rural credit cooperatives is that there is no clear ownership and the state's role is unclear.

So what's needed now is to resolve this issue. And this issue can't be solved by the Rural Affairs Department alone. After all, rural credit cooperatives are currently under the leadership of the People's Bank of China.

Therefore, resolving the credit cooperative issue requires joint discussions between the Ministry of Finance and the People's Bank of China. Once a reform plan is developed, it must be submitted to the central government for final approval by the Chairman.

Wei Hongjun thought about it.

He said, "I think this matter must be discussed with Comrade Zhou Bin. The Ministry of Finance and the People's Bank of China should also send representatives to discuss it. We must come up with a plan to reorganize the credit cooperatives. The funds needed for rural industrial and commercial development in the next few years will not be a small amount, and it is definitely not something that the current scattered rural credit cooperatives can provide."

"Vice Premier Wei, are we going back to Beijing?"

Luo Weilin spoke.

The research work is now almost finished.

Wei Hongjun shook his head and said, "It wasn't easy for us to come out. When we came out, we agreed with the Central Committee that we would have three months, so we must make good use of those three months. In addition to the issue of credit cooperatives, we also need to look at how to guide the development of industry and commerce in rural areas. We should also discuss how to let credit cooperatives help rural industry and commerce. At the same time, send a telegram to Comrade Zhou Bin, inviting him to come to Wuhan with cadres from the Ministry of Finance and the People's Bank of China. Let's discuss the reform of credit cooperatives together."

Wei Hongjun was originally planning to return to Beijing.

Because the purpose of leaving Beijing this time has been achieved.

But news from Beijing dissuaded Wei Hongjun from returning to Beijing. While Wei Hongjun and his team were out of Beijing conducting research, the long-hidden union issue finally surfaced. Historically, the emergence of union issues within the Central Committee stemmed from a report written by Deng Zhihui during his tenure as director of the Central-South Bureau. At the time, the Central-South Bureau oversaw numerous factories, both state-owned and private. Deng Zhihui, while in charge of the Central-South Bureau, encountered numerous such issues and wrote a report to the Central Committee on union issues, sparking debate within the Party. However, Deng Zhihui had already been promoted to the Central Committee to oversee rural affairs, so the union issue was swept under the rug.

But the union issue remained a major concern. Just after Wei Hongjun and his team left Beijing, a conflict broke out between workers and the government in Shanghai. Following this, Shanghai Municipal Party Secretary Zhan Tong and Shanghai Mayor Ke Qingshi directly took the Shanghai Federation of Trade Unions hostage, harshly criticizing it and demanding its reorganization.

However, the Shanghai Municipal Party Committee and Municipal Government suppressed the Shanghai Federation of Trade Unions, drawing harsh criticism from Li Lisan, Chairman of the All-China Federation of Trade Unions. Li Lisan criticized the Shanghai Municipal Party Committee and Municipal Government for arbitrarily interfering in the work of the Federation of Trade Unions and for using administrative power to suppress the workers' movement. However, Shu Tong and Ke Qingshi were not ones to accept criticism docilely; they directly criticized the All-China Federation of Trade Unions. They believed that this problem arose precisely because the All-China Federation of Trade Unions failed to promptly adjust its functions after the founding of the People's Republic of China. They criticized the All-China Federation of Trade Unions for continuing to lead the workers' movement in New China with an attitude of opposing the reactionary regime of Chiang Kai-shek.

The two sides criticized each other back and forth.

The All-China Federation of Trade Unions used the Workers' Daily as a platform, while the Shanghai Municipal Party Committee and Municipal Government used the Liberation Daily as a platform to criticize each other. Conflicts between them were normal. After the founding of the People's Republic of China, conflicts and disputes between central government ministries and local governments frequently occurred. However, conflicts in the workplace are normal, and everyone can sit down and resolve them.

But this time, the All-China Federation of Trade Unions and the Shanghai Municipal Party Committee and Government escalated the situation. Because they relied on their control over the newspapers, they engaged in a quarrel in the papers. Eventually, the matter reached the central government.

Comrade Xiuyang harshly criticized the All-China Federation of Trade Unions and the Shanghai Municipal Party Committee and Municipal Government. Instead of discussing the conflict internally, they directly criticized each other in the newspapers they controlled. This meant that before a resolution had been reached within the Party, a storm had already erupted, bringing internal conflicts into the open. This was a serious violation of Party discipline.

While Comrade Xiuyang criticized the All-China Federation of Trade Unions and the Shanghai Municipal Party Committee and Government, he also supported the views of Comrade Li Lisan of the All-China Federation of Trade Unions, criticizing the Shanghai Municipal Party Committee for suppressing the trade unions and the workers' movement. If no one else is involved, this matter can be resolved quickly under Comrade Xiuyang's coordination and mediation. At that time, Li Lisan and Shu Tong can be disciplined within the Party.

Unexpectedly, as soon as Comrade Xiuyang expressed his opinion, he was attacked by Gao Gang, who was in charge of the Secretariat. Gao Gang supported the Shanghai Municipal Party Committee's opinion and criticized the All-China Federation of Trade Unions for being conservative and failing to keep pace with the development of New China. Their work style still reflected the model of the workers' movement in old China, which was completely contrary to the socialist transformation of New China. Consequently, Comrade Xiuyang and Gao Gang engaged in a heated debate over the union issue.

When Gao Gang jumped in, the conflict was no longer just between the All-China Federation of Trade Unions and the Shanghai Municipal Committee, but rather escalated to a question of the central government's approach to trade union issues. This was a question of political philosophy, and neither Gao Gang nor Comrade Xiuyang gave an inch.

When it comes to Comrade Xiuyang and Gao Gang's positions, some concessions can be made on personnel issues. But on issues of political line, concessions are absolutely unacceptable. While concessions on personnel issues may seem cowardly, they won't have many aftereffects. However, concessions on political line issues will have a very serious chain reaction.

From the Secretariat meeting to the Politburo meeting, the views of both sides were extremely sharp. Comrade Xiuyang agreed with the opinion of Li Lisan, Chairman of the All-China Federation of Trade Unions. While there was no fundamental conflict between the factory and the union, there was a conflict of specific positions. The union should protect the interests of workers, and state-owned enterprises should balance public and private interests. It cannot be said that state-owned enterprises do not have conflicts between the factory and the union. After all, the factory and the union have different specific positions.

Comrade Gao Gang's opinion is that the interests of the factory and the union are aligned, and that they should not be separated or conflicts artificially created. The union should prioritize the workers' immediate welfare and represent them in supervising the factory, but this should not lead to the view that the union's specific positions differ from those of state-owned enterprises and the government. Contradictions regarding workers' welfare and rights are internal conflicts and can be resolved through coordination. It is wrong for union cadres to emphasize that they represent the workers, that their specific positions are inconsistent with those of the factory, and that they are in opposition to the factory.

Comrade Xiuyang and Comrade Gao Gang are currently at loggerheads.

Historically, the Chairman supported Gao Gang's opinion. He believed that the All-China Federation of Trade Unions' positioning of trade unions would alienate them from Party leadership. Furthermore, the Federation of Trade Unions' stance would lead to a standoff between factory management, the Party committee, and the trade union, disrupting production. Workers are the masters of the factory, and this needs to be established within the factory's own system, rather than relying on the old model of a labor movement led by the union to secure workers' interests.

Compared with history, the consequences of this problem are more serious now.

When the union issue arose, Gao Gang had not yet arrived in Beijing. Gao Gang and Deng Zhihui first clashed over the union issue, and later Gao Gang clashed with Li Lisan, chairman of the All-China Federation of Trade Unions. Comrade Xiuyang, from a high position, was able to handle the issue calmly. Therefore, in the end, a simple self-examination was all that was needed.

The person who was affected and took full responsibility was Li Lisan, Chairman of the Federation of Trade Unions. But now it is different.

Gao Gang, already a member of the Politburo Standing Committee, had a direct dispute with Comrade Xiu Yang within the Central Committee. This was a matter of political philosophy between two central leaders. Regardless of who lost, the outcome would significantly impact their political reputations. The consequences would be far more severe than in history.

If Comrade Xiuyang loses this time, it will seriously shake his position in the Central Committee. He had been gradually rising to second place in the Central Committee since the Seventh National Congress. However, since the Land Reform Movement, he has suffered several setbacks on important policies, which have affected his position and prestige within the Party.

The central government was currently arguing fiercely about the trade union issue, and Wei Hongjun didn't want to get involved. It just so happened that he was out of Beijing on a research trip, so he could avoid the debate.

Of course, Wei Hongjun was more worried about Deng Zhihui.

Given Deng Zhihui's personality, if he were in the central government, he would definitely get involved. As long as Deng Zhihui wanted to get involved, Wei Hongjun would be unable to stop him. Wei Hongjun relied heavily on Deng Zhihui for his work in the countryside and did not want him to be involved in this matter.

It’s better to stay out and conduct research and prepare for the development of rural industry and commerce.

So Wei Hongjun refused to return to Beijing.

Instead, Zhou Bin and his team were sent south to Wuhan to discuss the credit cooperative issue. Wei Hongjun, still concerned about Deng Zhihui's concerns about Beijing, said, "Mr. Deng, before Comrade Zhou Bin and his team arrive, I'd like you to sort out what specific types of agricultural product processing plants should be developed. Then, we'll conduct a statistical analysis to see which factories nationwide can provide the machinery and equipment needed for agricultural product processing plants. We should first establish these channels, and then create a table to share with each rural cooperative. If we don't do this well, it will be difficult for the rural cooperatives to resolve these issues on their own."

"it is good."

Deng Zhihui nodded.

Not to mention rural production cooperatives, even many grassroots county and township governments have difficulty finding these factories. They want to solve this problem, and they don't know how long it will take.

Wei Hongjun said to Luo Weilin, "Please organize the data from this investigation. It will be useful when you report to the Central Committee later."

"Yes."

After making the arrangements, Wei Hongjun called Zhou Bin.

Wei Hongjun briefly briefed Zhou Bin on his credit cooperative research and discussed the Ministry of Rural Affairs' plans to develop agricultural product processing plants. He expressed his desire to discuss credit cooperative reform with Zhou Bin, the Ministry of Finance, and the People's Bank of China. Zhou Bin agreed with Wei Hongjun's suggestion and pledged to bring officials from the Ministry of Finance and the People's Bank of China to Wuhan as soon as possible.

Chapter 954: Issues of Consignment Sales and Grain Sales

"After the free market for agricultural and sideline products was liberalized, a rather unexpected situation occurred."

Arrived in Wuhan.

It is impossible for Wei Hongjun and Deng Zhihui not to meet with the cadres here.

For Wei Hongjun and Deng Zhihui, Wuhan is home to numerous old comrades and colleagues. Wei Hongjun's comrades are largely due to the fact that many of the cadres in the Wuhan Military Region are former subordinates of Wei Hongjun. This is not to mention the current positions of Wang Qiuyun as commander of the Wuhan Military Region and Luo Renfa as political commissar. As for Deng Zhihui, he presided over the Central South Bureau for several years.

Although it's not advisable to meet with local cadres too frequently during the research period, the central government is wary of factionalism.

But after all, they are comrades who have been in the revolution for many years, so it is reasonable for them to meet.

At the end of 1954, the Central Committee finally transferred Li Xiannian, the former Secretary of the Hubei Provincial Party Committee. Upon his transfer to the Central Committee, Li Xiannian officially served as Secretary of the Secretariat, First Deputy Director of the Planning Commission, and First Deputy Secretary of the Party Group. With Li Xiannian's departure from Hubei, all the leaders of the local Central Committee had moved to the Central Committee.

After Li Xiannian left Hubei, Wang Renzhong became the Secretary of the Hubei Provincial Party Committee and transferred Chu He from Hunan to serve as Governor of Hubei. Chu He, having achieved the rank of Lieutenant General as the Third Deputy Political Commissar of the Wuhan Military Region, soon began to withdraw from the military system and officially became a local cadre. After the rank-awarding ceremony last year, he first served as Deputy Secretary of the Hunan Provincial Party Committee and then, at the end of the year, was transferred to Hubei to serve as Governor.

Wei Hongjun was talking to Chu He.

Chu He, 52 years old, is a highly educated intellectual who attended Shanxi University and Peking University. Like many scholars of his time, he abandoned his pen and joined the National Revolutionary Army. He was a member of the Communist Party during the Great Revolution, participating in the Northern Expedition and the Nanchang Uprising, and a cadre who led the Jidong Uprising. His experience is truly extensive.

It was one of the cases involving a group of sixty-one traitors during the ten years of turmoil.

That is, he was one of the sixty-one people rescued from the Peking Prison by Comrade Xiuyang on behalf of the Central Committee.

Of course, none of this had much to do with Wei Hongjun. After the Jidong troops were reorganized by the Jin-Cha-Ji Army, Chu He joined the 8th Column and became its deputy political commissar. He remained in the 8th Column during the Anti-Japanese War, and during the Liberation War, he followed Wang Qiuyun to the Northeast, fighting all the way from the Northeast to Hunan. He served in Hunan and Hubei.

There are heavy traces of the Jin-Cha-Ji movement on his body.

"what's the situation?"

Given the current level of the two people, it is easy to talk about work even in a private meeting.

Chu Hedao: "After the free market for agricultural and sideline products was liberalized, many newly established supply and marketing cooperatives initially focused solely on the purchase and sale of agricultural and sideline products. However, recently, some have been purchasing large quantities of goods needed in rural areas from state-owned supply and marketing cooperatives and then distributing them to various rural areas. These newly established rural supply and marketing cooperatives, originally focused on agricultural and sideline products, have now expanded into selling industrial products. Some people consider this problematic."

"Wholesale goods from the state supply and marketing cooperatives?"

"Yes."

"What about the price?"

"I've learned about it. These rural supply and marketing cooperatives buy goods from the national supply and marketing cooperatives, partly because they have large quantities and partly because they buy some defective goods. This keeps the prices down. Then, they use the connections they've built up over the past six months by purchasing agricultural and sideline products from various production cooperatives to sell the goods to these rural areas. It's the same model as the small merchants who once walked the streets."

Listening to Chu He's words, Wei Hongjun could only say that there is never a shortage of smart people.

They first engaged in the trade of agricultural and sideline products. In this process, they saw some business opportunities. The products of the state-owned supply and marketing cooperatives were always in demand, but that didn't mean they could just sit back and wait for people to buy.

Because these national supply and marketing cooperatives also have tasks.

Supply and marketing cooperatives also internally evaluate and assess the work of grassroots cooperative cadres. The faster the supply and marketing cooperative's merchandise flows and the higher its profits, the more impressive its political achievements. While the supply and marketing cooperatives are currently government agencies, they are also commercial institutions. The more goods they sell, the higher their profits, and the higher their evaluation from above. State-owned supply and marketing cooperatives are bound to experience damage during storage and transportation. Some products also ship with defects.

These things are easily piled up in supply and marketing cooperatives.