Under the direction of central planning, a production plan was needed and had to be approved by the State Planning Commission, a deputy department responsible for economic planning. Three key elements should be included in a production plan. They were labor, materials and production. After submitting the plan, the administrative office will publish the planning objectives for each state-owned industrial enterprise. For the first lathe factory, planning targets for several aspects were received annually in addition to the production target, which was quarterly. This central plan is a way to ensure that the party and socialist ownership can completely manipulate the management. Therefore, all decisions were made by the political authorities. Around the time the Great Leap Forward was launched, the situation worsened due to the excessive optimism of the factories and the exaggerated setting of an unrealistic goal for a plan. Instead of growing crops, farmers were asked to cut down trees to provide fuel for steel production. Food production dropped dramatically. In the end, the results showed that a quarter of the planned production was not sufficient in a certain period. There was a waste. Not only was the targeted production not achieved, but the population also suffered one of the most severe famines in Chinese history. According to statistics, about fifty million people died in this tragedy. The Chinese now call this period “the three years of natural disaster.” In this case, it embodies how inexperienced and immature the central planning system was. China aimed to conquer England and America and wanted to become the leading country of the world, while they were too anxious. There was no realistic basis for the plan. Everyone wanted to compete with others using fake figures and directly lead to that miserable accident. After 1958, in the operation of an industrial enterprise