Section 2 of 1958–1976: Three Rounds of Crises at the Initial Phase of Industrialization and the Background of Foreign Debts Due to Introducing Foreign Investment which is Chapter 2 of Ten Crises: The Political Economy of China's Development (1949-2020)
In 1956 China insists on territorial sovereignty of Chinese Changchun railway and Dalian Special Zone + removal of Soviet military base in N.E. China. -> Soviets cuts aid, in dissatisfaction (but China and USSR still negotiate a few dozen projects afterwards)
In 1958, China "decentralized" industry by mobilizing business ventures in local governments -> The ratio of local fiscal spending to national fiscal spending goes from 29.0% (1957) to 55.7% (1958)
Local gov't's inexperience with technology/management results in "ridiculous practices" like the "Great Steel Forging" and "Great Leap Forward"
Fiscal revenues go from 30.3 billion (1957) to 57.2 billion (1960)
In 1960, USSR withdrawal causes huge fiscal deficit: fiscal revenues see 21.6 billion decrease by 1961, employment goes from 130 million (1960) to 45.37 million (1962)
Revised data (published 1982) shows population growth curve downward from 1960-1962, caused by declining fertility, infant mortality, and starvation.
Wen Tiejun claims the reversion to traditional peasant economy (village-based accounting and administration as opposed to county-level command economy) + 15% allotment of arable lands being given to peasant households led to 1962-1963 recovery