Having restored a viable economic base, the leadership under Chairman Mao Zedong, Premier Zhou Enlai, and other revolutionary veterans sought to implement what they termed a socialist transformation of China.
Consistent with the focus on developing industry, northeast China was the region which received the greatest share of state funds during the First Plan.
[1]: 209 Regarding commercial and services industries, the approach in the first Five-Year Plan was for the government to buy them out, including through coercing reluctant sellers if necessary.
Fiscal expenditure in the form of infrastructure loans rose to 48% from 30% from 1955, putting a strain on the national budget as a result.
[2]: 18 At the same time, the growing industrial labor force and urban population stretched China's technological undeveloped agricultural production.
Central committee planning dictated that from the loosely structured, tiny mutual aid teams, villages were to advance first to lower-stage, agricultural producers' cooperatives, in which families still received some income on the basis of the amount of land they contributed, and eventually to advanced cooperatives, or collectives beginning in 1958 with the second Five Year Plan.
In terms of economic growth, the First Five-Year Plan was quite successful, especially in those areas emphasized by the Soviet-style development strategy.
[7]: 40 During this Plan period, China began developing a heavy-industrial base and brought its industrial production above what it had been prior to war.
[2]: 68 These principles included maintaining the old city core as administrative areas while building industry on the periphery with green space and residences between the two.
As the First Five-Year Plan had worn on, however, Chinese leaders became increasingly concerned over the relatively sluggish performance of agriculture and the inability of state trading companies to increase significantly the amount of grain procured from rural units for urban consumption, and for funding the many large urban industrialization projects.