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Agriculture
Notwithstanding the current Western skepticism following the previous
economic troubles in East Asia, China's performance must be considered no less
than an economic miracle. Agriculture has played a central role in that miracle.
When reforms began in 1978, China was one of the poorest countries in the world,
with 60 percent of the 1 billion population living below poverty and earning
less than $1 a day. Almost all of the poor were in the agricultural sector,
which provided livelihood to nearly 75% of the total population.
For several preceding decades China had gone through cataclysmic events, e.g.,
the collapse of an imperial state, foreign invasion, civil war, followed by the
rise of communism, the Great Leap Forward and the Cultural Revolution. Since
1978, however, China has been in the midst of two important transitions, from a
rural to an urban society and from a command economy to a market based one. The
first transition would be unremarkable were it not for China's vast size, its
past control of urbanization and unprecedented speed of its industrialization.
China has experienced one of the fastest rates of agricultural and overall
economic growth. At 1.2 billion China's population easily exceeds the combined
populations of sub-Saharan Africa and Latin America and its agricultural growth
of 6 percent and industrial growth of over 8 percent per capita, for two full
decades (from 1978 to 1997), has also been remarkable for its speed and
duration.
Its transition to a market economy has been unique for its combination of
experimentation and incremental reforms leading to rapid progress in several
areas, although agriculture, which was a clear leader in reforms, now lags
behind other sectors.
Since 1978 China has lifted over 200 million people out of poverty, an
unprecedented decline. Again agriculture has played an important role in poverty
reduction. By international standards, China's social indicators as reflected in
close to universal access to primary education, low infant mortality and high
life expectancy have been outliers, in view of China's low initial per capita
income.
China's integration with the world economy has advanced rapidly, leading to a
strong external position including rapid export growth and reserves estimated to
be well over $100 billion in 1996. China has essentially privatized farming,
liberalized markets for many goods and services and intensified competition in
industry while introducing modern macroeconomic management.
Both the transitions to urbanization and liberalized economies have taken a long
time in most industrialized and currently developing countries. It took the UK
58 years (from 1780 to 1838) to double per capita incomes, the US 47 years (from
1839 to 1886) Japan 34 years (from 1885 to 1919) and Korea 11 years (1966 to
1977). China has doubled its income twice in periods of 10 years each (1978 to
1996). Whereas liberalization of the economy has also been fraught with many
risks and set backs in eastern block countries, China has telescoped both these
in a relatively short period and done so successfully.
In 1997, the total output of grain, cotton and edible oil came to 490 million
tons, 4.6 million tons and 21.57 million tons, increasing respectively by 62.1
percent, 112.4 percent and 313.5 percent over 1978. The output of milk and eggs
was 4.5 times and 2.7 times as much as those in the early 1980s. The output of
grain and cotton jumped to No.1 in the world. The total output value of
agriculture, forestry, husbandry and fishery reached 2.4709 trillion yuan,
2.4-fold increase over 1978 after adjustment for price factors with an average
annual increase of 6.6 percent which is 2.8 times as much as that before the
initiation of reform and opening to the outside world. By the end of 1997,
township and town enterprises throughout the country added up to 2,015 and
provided 130 million job opportunities for the surplus labor force in the
countryside. At the end of 1997, the original value of fixed assets of township
and town enterprises exceeded one trillion yuan, current assets came to over 1.3
trillion yuan, business income totaled 3.8 trillion yuan, tax paid and profit
turned to the state amounted to 323.8 billion yuan and these enterprises
retained nearly 200 billion yuan of profit.
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