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Topic_5_Econ162bw - The Economy of China Economics 162...

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Economics 162 The Economy of China Topic 5 – China’s Agriculture Professor David Roland-Holst Department of Agricultural and Resource Economics Tuesday and Thursday, 12:30-2PM, 10 Evans Hall
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Roland-Holst 2 Economics 162 Agriculture Rural Area Agriculture Sector – “Urban population” 1/3; “Rural population” 2/3 – But agriculture labor force is around ½ • Why? – Many working in the urban areas without urban residence permit (counted as rural residents) – Many rural residents working in rural industry not in agriculture (Township and Village Enterprises)
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Roland-Holst 3 Economics 162 The Importance of the Agriculture Sector China is the world’s largest consumer and producer of food The traditional sector, largest in terms of employment The disastrous sector under central planning The successful first reform sector Economic linkages to other sectors – Releasing excess labor (very important) – Providing savings (now going in reverse) – Generating consumer demand (eventually)
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Roland-Holst 4 Economics 162 Rural Organization Natural Units 1962-84 1984-present Market town Commune (2000hh) Township Large village Brigade (200hh) Village Small village Teams (50 hh)* or neighborhood Household Household Household*
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Roland-Holst 5 Economics 162 Basic Features of Agricultural Collectives Property Rights: The land was pooled and worked in common Land is “collectively owned” Management: The collective served as the basic accounting unit Distribution: Net income was distributed to households on the basis of “work points” Households accumulate work points over one year The collective after paying taxes, deducting “collective accumulation” (retained public funds) distribute income to households by the year end, in grain and cash
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Roland-Holst 6 Economics 162 Benefits of Agricultural Collectives Achieves government’s goal of product mix Grain is priority in planning: “Take grain as the key link” Mobilization of resources for big projects Consolidation of scattered land Big construction projects such as irrigation system Local public goods Water supply – Education Health care (“barefoot doctors”) Some insurance (risk pooling) functions Non-agricultural activities Rural industry (small factories and workshops)
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