Throughout the 1950s China continued to lag behind the rest of the world powers as it struggled to rebuild itself and its industry. Mao Zedong proposed a massive agricultural and industrial recovery program to modernize China. Named Great Leap Forward, the plan was supposed to mimic Russia, Germany, or the United States during their various times of rebuilding. However, Mao planned to privatise heavy industry like steel making, so that large quantities of materials could be produced with vast expenditures of capital on the part of the government. And so, heavy industry was turned over to the cottage-industry of centuries past. The notion was flawed from the beginning. Steel making is not an endeavour well-suited to home-furnace use. As such, the steel produced was virtually worthless, setting back industry by several years. In addition, the Great Leap Forward collectivized farms, meaning that farming was done by groups, not individuals. Sadly, this method of farming is not well-suited to a big, industrial society. Unsurprisingly then, the Great Leap Forward was an economic and social disaster.

A famine struck during the Great Leap, and so, without technology to aid the people and millions of people died during the years 1958-1962. The Great Leap was so catastrophic that Communist Party in China turned its back on Mao and began plans to oust him from government, which, in turn, led to the Cultural Revolution.

Local officials had been fearful of Anti-Rightist Campaign and they competed to fulfil or over-fulfil quotas which were based on Mao's exaggerated claims, collecting non-existent "surpluses" and leaving farmers to starve to death. Higher officials did not dare to report the economic disaster which was being caused by these policies, and national officials, blaming bad weather for the decline in food output, took little or no action.

The major changes which occurred in the lives of rural Chinese people included the incremental introduction of mandatory agricultural collectivization. Private farming was prohibited, and those people who engaged in it were persecuted and labelled counter-revolutionaries. Restrictions on rural people were enforced with public struggle sessions and social pressure, and forced labour was also exacted from people. Rural industrialization, while officially a priority of the campaign, saw its development aborted by the mistakes of the Great Leap Forward. The Great Leap was one of two periods between 1953 and 1976 in which China's economy shrank.

In 1959, Mao Zedong ceded day-to-day leadership to pragmatic moderates like Chinese President Liu Shaoqi and Vice Premier Deng Xiaoping, and the CCP studied the damage which was done at conferences which it held in 1960 and 1962, especially at the "Seven Thousand Cadres Conference". Mao did not retreat from his policies; instead, he blamed problems on bad implementation and "rightists" who opposed him. He initiated the Socialist Education Movement in 1963 and the Cultural Revolution in 1966 in order to remove opposition and re-consolidate his power. In addition, dozens of dams constructed in Zhumadian, Henan during the Great Leap Forward collapsed in 1975 (under the influence of Typhoon Nina) and resulted in the 1975 Banqiao Dam Failure