The commune of China is more strictly organized than the Soviet collective farm, including a wider range of activities, putting greater emphasis on communal living and including nonagricultural workers. Collectivization of agriculture in China began in 1955; by 1956, 96% of all farming households were included in cooperatives. The system failed to free the labor and capital needed for industrial expansion, and in 1958 the commune system was established.
Twenty to thirty cooperatives comprising over 20,000 members and 40 to 100 villages were merged into each commune. The land and equipment of the former cooperatives and any property and cash still held by the peasants became the property of the commune. In each commune an economic and administrative unit controlled the labor force and all means of production, providing central management of industry, commerce, education, agriculture, and military affairs. Living communally, workers performed both industrial and agricultural tasks and supported a military unit. They used communal nurseries, bathing facilities, barbershops, and similar facilities. Wages and perquisites were controlled by the state, and all products were marketed through state agencies.
By 1959 virtually all Chinese farm workers were members of communes. The inefficiency and management problems of large collectives, coupled with natural disasters and government errors, led to reforms. In the early 1960s communes were decentralized; some were divided into private farms. In the late 1970s, after the death of Mao Zedong, individual households were granted long-term leases on their farms, paying a fixed amount of their production to the state and consuming or selling the rest. For the first time the farm household was also allowed to sublet land, recover capital investments, hire labor, own machinery, and make agricultural decisions.