In 1957 Mao seeks to regain the initiative, faced with the rise of competent administrators who have begun to overshadow him, especially Liu Shao-Qi. He imposes an economic project with delirious ambitions, the Great Leap Forward. The goal is to "exceed England within three years and USA within fifteen." A utopian undertaking, considering China's state of development at that time.
In the Great Leap Forward heavy industry is the priority, and even the peasants have a part to play in producing steel. Small-scale high-temperature furnaces are built in the countryside. They generate a very poor quality of steel, practically unusable. But little does it matter. In their production-driven delirium, at times peasants even melt down their kitchenware and burn their household furniture. Millions of modern-style Bernard Palissy are at work in the China countryside.
Meanwhile, agriculture suffers, and a drought which strikes the north of China aggravates the situation. Nonetheless, official agricultural production output figures remain strong - local cadres don't want to spoil the Great Leap Forward feast, nor do they want to take responsibility for poor results. Therefore the central government realizes the magnitude of the disaster only belatedly, and entire provinces will be affected by famine. In order to conceal the surge in deaths, signs of grieving and death announcements will be forbidden in the capital.
At the Lushan Central Committee Conference in July 1959, Marshal Peng De-Huai, Minister of Defense, denounces with courage and sincerity the damages wrought by the Great Leap Forward. It is an unbearable slight to Mao, who fiercely counter-attacks by threatening to split the Party, and even to trigger a new civil war. Frightened, the other leaders abandon Peng De-Huai and negotiate a compromise. Mao informally renounces his claim to any real power, to the benefit of Liu Shao-Qi. In compensation, Peng De-Huai is dismissed. He is replaced by a close comrade of Mao, marshal Lin Biao - a Trojan Horse who will play a key role in Mao's comeback, on the occasion of the Cultural Revolution.