China’s large population is its most abundant resource, and this resource has been both help and hindrance for governments and the people over many centuries. The concept “high-equilibrium trap” elegantly describes this paradox, noting the predicament of an agrarian economy where additional labor input under limited technological conditions might yield greater returns but also, once this unique resource reaches a certain size, result in diminishing returns.
For three decades after the Communist takeover in 1949, China was an underdeveloped economy with limited technology and industry but a fast-growing population. The People's Republic made various efforts to escape the high-equilibrium trap, among which the Great Leap Forward for rapid industrialization is the best known. Despite its catastrophic failure in large measures, important legacies of the Leap remain unexplored. This paper, focusing on cases in Beijing, discusses the urban communes that were created during the Leap. Operating at the neighborhood level, urban communes put urban residents’ idle hands to work and engaged them in a wide range of small-scale, low-technology production. Versatile and small, neighborhood enterprises managed by urban communes (and later incarnations of this institution) operated mostly outside and on the fringes of state planning, filled many gaps in China's industrial development, and spearheaded the expansion of tertiary industry during the second half of the twentieth century.