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According to Hu Weidong's estimates, in 1939 more than eighty percent of the tax revenue in the Central Plains Liberated Areas would come from the towns rather than the countryside (as long as the tax system did not make the same mistakes as in the Ming Dynasty, even before the Industrial Revolution, the income of industry and commerce must have been higher than that of agriculture, not to mention that the Central Plains Liberated Areas, which now have some modern industrial foundations). At the same time, because state-owned enterprises account for more than 80% of the total industrial capacity in the liberated areas (and because of the large amount of investment brought about by Sino-German cooperation, this proportion will continue to rise for at least the next few years). Therefore, Hu Weidong boldly proposed to the central authorities to abolish the agricultural tax in order to stimulate the labor enthusiasm of the vast number of peasants in the liberated areas, and to win the hearts of the people throughout the country and clear the way for the liberation of the whole country.

However, the Red Party Central Committee held that the war was still going on, that industrial construction was in full swing, and that even the rural areas were vigorously carrying out the basic construction of farmland and water conservancy, and that money was to be used everywhere. However, in the end, the central authorities agreed that Hu Weidong should first try it out in areas where the conditions were met, so as to test the actual impact of tax exemption on fiscal revenue and expenditure, and at the same time give hope to the peasant masses in the liberated areas and even in the nationalized areas and occupied areas

But the results of the test were very encouraging to the central leadership, although the agricultural tax was abolished. But it can be balanced by the difference between industrial and agricultural scissors, because with the surge in production, the scale effect of fertilizer and pesticide production is beginning to appear, and the cost will have a lot of room to fall in the next few years, so the government does not even need to raise prices to get more revenue. This practice is more popular with the peasants than the continued collection of agricultural taxes and the lowering of the prices of industrial products such as fertilizers and pesticides, although there is not much difference between the two in essence (but if you analyze it carefully, the actual burden on the peasants has been reduced because the phenomenon of local distribution has been eliminated at the source). As long as the government of the liberated areas adheres to the policy of unified purchasing and marketing, it will remain unchanged. It is entirely possible to completely exempt agricultural taxes from agriculture. But. Taken the other way around, this means that only areas that have completed rural cooperativeization can be exempted from agricultural taxes, so the final national agricultural tax exemption is not achieved overnight, but is gradually implemented. However, this increases the demonstration effect. At the same time, it also stimulated the enthusiasm of the peasant masses in the newly liberated areas to participate in the cooperatives. It's a win-win.

Compared with industry and agriculture, since the current economic system in the liberated areas is still dominated by the Jihua economic model, it is obviously unlikely that much attention will be paid to commerce. However, Hu Weidong still gave it a certain amount of guidance at the macro level, and its focus was to reduce logistics and warehousing costs, reduce costs as much as possible, and avoid waste; in addition, for daily necessities, the government of the liberated areas strictly prohibited hoarding, because the government had an astonishing amount of material reserves in its hands, so it won a great victory in many commercial wars such as the "war of grain" and "the war of cotton" between speculative businessmen, and there were countless speculative businessmen who went bankrupt and jumped off buildings within a few months, and prices in the liberated areas became more stable. The renminbi is also becoming more and more accepted by the masses in the liberated areas and even outside the liberated areas, although the renminbi is only a pure legal tender, and no matter how much it holds, it cannot be exchanged for gold, silver and foreign exchange in banks

In fact, strictly speaking, there is also inflation in the liberated areas, but because there is a negative reference to the fiat currency of the national control area and the military tickets that the devils forced the people to accept in the occupied areas, so the prices appear to be very stable. Although he is an economic layman, after all, he comes from the 21 st century, when the information explosion occurred, and he knows very well that as long as the magnitude of inflation is within the range that the people can bear, it can stimulate economic development, but on the contrary, it is a deflation in which prices generally fall, and the harm to the national economy is even greater.

Historically, the national government once encountered this kind of crisis, when the main currency in the domestic market was the silver dollar, due to the sharp rise in international silver prices, resulting in a general sharp drop in domestic prices, as a result of the factory production of products sold can not recover the cost, businessmen are also constantly losing money, but borrowing bank loans but still have to take silver dollars to repay, for a time the domestic industrial and commercial enterprises have collapsed, but the bankers have profited a lot, but the real economy collapsed, the banks will inevitably suffer from the pond fish, for a time the domestic economic situation is precarious. In order to tide over the crisis, the Nanjing government at that time issued fiat currency and banned the circulation of silver dollars in the market (in fact, it was not completely banned), because fiat currency can artificially create inflation by printing more money, so the problem was easily solved, but after the outbreak of the Anti-Japanese War, the government was financially tight, and had to desperately turn on the money printing machine to make up for the shortfall, and the result fell into a vicious circle

With the lesson of hyperinflation in the national government, the historical new Chinese government inevitably overcorrected itself, and prices almost unchanged in the two or three decades before the reform and opening up, and the people's sense of security increased, but China's economic development inevitably suffered a great negative impact. As a traverser, Hu Weidong naturally would not make this mistake again, and he not only explained the truth to the central and local comrades, but also carried out practical verification in the Central Plains Liberated Areas, with the result that the economy of the Central Plains Liberated Areas became increasingly prosperous under the stimulus of inflation of 5 to 10 percent per year.

In fact, if such an inflation rate were to be put into future generations, it would certainly arouse the government's vigilance, but in today's China, compared with the soaring prices in the Kuomintang and the occupied areas (Note 1), the prices in the Central Plains are already very stable, and as long as the people can accept it, inflation is not a problem at all. In addition, the economic component of the Central Plains Liberated Areas now has a very high proportion of China's economy, and the government can increase the wages of most of the urban population with a single word, so it does not matter if prices rise; as for the rural areas, the natural economic component of self-sufficiency is still very large, so there is no problem either, which is much more convenient than the government of later generations

Note 1: Historically, the price increase in the Kuomintang area in the early stage of the Anti-Japanese War could not be compared with that during the later War of Liberation, but it still doubled at least in a year, and the devils shamelessly forced the Chinese people to accept worthless and crazy military tickets in the Japanese-occupied areas, and inflation was even more terrifying. Moreover, in this time and space, due to the diversion of overseas funds by the Red Party, which performed more well in the War of Resistance Against Japanese Aggression, the financial situation of the national government is worse than in history, and the devils who have been defeated in successive wars can only exploit the people in the Japanese-occupied areas more and more cruelly, and the "economic blockade" strategy adopted in the "foreign trade" of the liberated areas has made it even worse, so whether it is the national control area or the occupied area, inflation is far more severe than the same period in history (to be continued). For mobile phone users, please go to read. )