From 1949 to the mid-1950s, according to the provisional constitution of the People’s Republic of China—the so-called “Common Program”(共同綱領), this new Republic “is a state of the New Democracy, or the People’s Democracy.” The essence of the New Democracy, a theory invented by Mao Zedong, basically manifested itself in the policies regarding classes. The New Democracy stipulated that the national bourgeoisie(民族資產階級)and the rich peasants(富農)were officially recognized and protected by the communist government. In the early stage of the People’s Republic of China, the Chinese Communist Party (CCP) adopted the New Democracy theory in order to ease tensions between the different classes nationwide. By uniting with the national bourgeoisie and rich peasants, the CCP could fully devoted itself to struggling with the remaining Kuomintang forces and stabilizing the economic turmoil after the civil war. However, the precise implementation of the New Democracy depended upon the intentions of the top leaders of the CCP. As a result, its significance inevitably became ambiguous. Before 1953, in the process of dealing with severe inflation and fighting against corruption (the “three anti-” and the “five anti-” campaigns), the CCP dealt a deep blow against the urban bourgeoisie. At the same time, however, in order to boost the economy and reduce the unemployment rate, the CCP had to pacify the bourgeoisie to maintain their enterprises. Things changed after 1953. After Mao proposed the General Line for the Transition Period(過渡時期總路線)and criticized the pragmatic high-ranking officials headed by Zhou Enlai in the early half of 1953 for compromising with the bourgeoisie, the CCP changed its attitude toward the New Democracy. New policies designed to realize socialism were submitted, such as the abolishment of free grain markets and the acceleration of the socialist transformation of private industries and enterprises. By examining the turning point in Communist attitudes toward the bourgeoisie, this article offers a new interpretation of the CCP's policy-making process as seen in the final abandonment of the New Democracy.