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The central government stipulated the 1976-1985 Ten Year Plan Outline of Developing National Economy (Draft) in 1975, which included the 5th Five-Year Plan (the Plan).

 

In March 1978, the Ten Year Development Outline was amended because the original version stipulated that by 1985, steel and petroleum outputs should reach 60 and 250 million tons respectively, and 120 large projects, including 10 steel production bases, nine non-ferrous metal bases, eight coal bases and 10 oil and gas fields, should be built. To achieve these goals, the government would invest 70 billion yuan in infrastructure construction, equaling total national investment over the previous 28 years. These were impossible targets and ran counter to economic development rules.

 

The Plan put forward suggestions to set up an independent and comparatively complete industrial system and national economic system from 1978 to 1980.

 

With the implementation of the Plan, considerable success was achieved. In 1977, the gross output value of industry and agriculture reached 505.5 billion yuan, 4.4 percent above-target and representing an increase of 10.4 percent compared with the previous year. Gross domestic product for 1978 reached 301 billion yuan, an increase of 12.3 percent compared with 1977, and an increase of 19.4 percent compared with 1976.

 

However, during this period, China developed its economy too quickly, and the very high goals set spelt the onset of yet another round of mistakes.  

 

In December 1978, the 3rd Plenary Session of the 11th Communist Party Central Committee shifted the work focus of the Communist Party to modernization. The Session emphasized that the development should follow economic rules and proposed readjustment and reform measures, which indicated that national economic development had entered a new phase, one of exploration and development. In April 1979, the central government formally put forward new principles of readjustment, reform, rectification and improvement.