Why did industrial production in China decline during the Red Guard phase?

During the Red Guard phase of the Cultural Revolution (1966–76), industrial production in China declined significantly due to the widespread anarchy, terror, and political paralysis that gripped the nation’s urban centers.12

The decline was driven by several key factors:

• Factionalism and Conflict: Red Guard units splintered into zealous, competing factions, each claiming to be the true representative of Maoist thought. These groups engaged in large-scale armed clashes throughout urban China, which completely disrupted industrial operations and daily life.312
• Disruption of Management: Technicians and managers were frequently targeted, persecuted, or removed from their positions, leaving them unable to play an effective role in production.4
• Erosion of Incentives: The broader environment of the Cultural Revolution led to the freezing of wages and the cancellation of bonuses, which eliminated material incentives for workers to maintain productivity.4
• Political Instability: The movement’s focus on purging "bourgeois" elements and "revisionist" authorities led to the overthrow of existing government and party apparatuses, creating a power vacuum and administrative chaos that paralyzed the urban economy.312

These conditions were so severe that industrial production in 1968 fell 12 percent below 1966 levels.12