1. The Chinese Communist regime is now facing the most serious economic diffculties it has confronted since it consolidated its power over mainland China. As a result of economic mismanagement, and, especially, of two years of unfavorable weather, food production in 1960 was little if any larger than in 1957 -- at which time there were about 50 million fewer Chinese to feed. Widespread famine does not appear to be at hand, but in some provinces many people are now on a bare subsistence diet and the bitterest suffering lies immediately ahead in the period before the June harvests. The dislocations caused by the "Leap Forward" and the removal of Soviet technicians have disprupted China's industrialization program. These difficulties have sharply reduced the rate of economic growth during 1960 and have created a serious balance of payments problem. Public morale, especially in rural areas, is almost certainly at its lowest point since the Comunists assumed power, and there have been some instances of open dissidence.
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