China met with serious economic difficulties after the 1958 Great Leap Forward. In the winter of 1960, the Central Committee began to correct the ``Left'' errors committed in rural work, and then put forth the policy of readjustment, consolidation, filling out and raising standards for the national economy. Nevertheless, the situation in early 1962 still was a serious one of reduced agricultural output, overextended capital construction, inflation and decline in the living standard of city-dwellers. In February of the same year, the Central Committee agreed to the analysis of the country's financial and economic situation made by Chen Yun at an enlarged meeting of the Standing Committee of its Political Bureau, and to his opinions on how to overcome the difficulties. It decided to implement the above-mentioned policy for the national economy in an all-round way and to begin extensive economic readjustment, to take resolute measures to curtail capital construction, and to further substantially reduce the number of workers and staff members and city population generally. To apply these measures called for painstaking ideological and organizational work, which also presented great difficulty at that time. On May 21 and June 5 of the same year, the Central Committee issued separate documents conveying the main points for publicity and education among the workers and staff members and peasants and urging the chief leading cadres at various levels to do propaganda work personally among the masses so as to mobilize them to overcome difficulties and strive for a fundamental turn for the better in China's financial and economic situation. Through the efforts of the whole Party and the entire people, New China had emerged from this most difficult period in its economic history by the end of 1962.