During the Great Leap Forward, Chairman Mao saw grain and steel production as the key pillars of economic development. He forecast that within 15 years of the start of the Great Leap, China's steel production would surpass that of the UK. In the August 1958 Politburo meetings, it was decided that steel production would be set to double within the year, most of the increase coming through backyard steel furnaces.

Chairman Mao encouraged the establishment of small backyard steel furnaces in every commune and in each urban neighborhood. Huge efforts on the part of peasants and other workers were made to produce steel out of scrap metal. To fuel the furnaces the local environment was denuded of trees and wood taken from the doors and furniture of peasants' houses. Pots, pans, and other metal artifacts were requisitioned to supply the "scrap" for the furnaces so that the wildly optimistic production targets could be met. Many of the male agricultural workers were diverted from the harvest to help the iron production as were the workers at many factories, schools and even hospitals.

The program was only quietly abandoned much later in 1959.