Stalin's death in 1953 and the emergence of Nikita Khrushchev as party leader in Moscow were a severe blow to Hoxha. Not only did he lose a powerful friend and like-minded teacher, he suddenly passed under the control of a highly volatile and unpredictable political leader who held dangerous reformist ideas. Hoxha's first shock came in 1955 when Khrushchev decided to bring about a reconciliation between Moscow and Yugoslavia, whose relations had remained frozen since 1948. The Albanian leader was asked to bring to an end his regime's long hostility towards Yugoslavia and establish normal relations with it. Although he made a few superficial friendly gestures towards his neighbour, Hoxha was at heart opposed to any genuine reconciliation, and he remained so mainly because he feared Tito's reformist ideas. Another greater shock was Khrushchev's denunciation of Stalin in his 'secret speech' of 1956. Hoxha saw this as an attack not only against the policies of his regime but also against his own personal position in the Party and government. The Soviet leader's efforts to persuade Hoxha to reform his rule and give up some of his Stalinist policies also proved ineffective. As a result, tension between Moscow and Albania steadily grew from 1955-61, when the final break occurred. The first signs of trouble in the Soviet-Albanian alliance appeared in 1960, when Hoxha sided with China in the early stages of the Soviet-Chinese ideological dispute. Matters came to a head at the international conference of 81 Communist parties held in Moscow in November 1960, where the Albanian leader openly defied Moscow by supporting China's cause. A year later Moscow broke off diplomatic relations with Albania and stopped all economic, industrial and military aid. The Chinese quickly came to the rescue of their small ally in Europe with a package of economic help. They undertook to build 25 industrial plants in Albania with the assistance of Chinese technicians. But relations between the two countries faced great difficulties from the beginning because of their immense difference in size and the huge cultural and political chasm that divided them. Nevertheless, Mao's cultural revolution did have a profound impact on Hoxha: it led him to make all religious practices illegal in 1967. However, serious strains between the two countries arose when the Chinese government opened up to the USA and Yugoslavia in the early 1970's. Hoxha rejected China's advice that his government should do the same. The alliance finally came to an end in 1978, when Peking stopped all economic and military aid and withdrew its experts. As a result, not only was Albania left completely isolated, it was also deprived of all foreign aid it so desperately needed.
The end of the alliance with China marked the beginning of a period of steady economic and industrial decline. Factories and industrial plants built in the 1950's with Soviet bloc aid became outdated and derelict. Shortage of new machinery and equipment led to the widespread use of manual labour in collective farms. The situation was aggravated by a highly centralised bureaucratic system and inefficient management. At the same time, incessant official propaganda exhorted people to increase production and to rely more than ever on their own efforts and on natural resource.
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