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Economic Growth and Change in China: A Twenty-Year Perspective

Published online by Cambridge University Press:  17 February 2009

Alexander Eckstein
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Extract

Maoist ideology and policy imposed on the realities of China's economic backwardness and the scarcities resulting therefrom have produced a peculiar and sharply contrasting pattern of development during the past two decades. The differences in economic performance were so marked – characterized by rapid expansion in the 1950s and stagnation in the 1960s – that it almost seems as though one were dealing with economies in two entirely different settings, perhaps even in two different countries.

Type
Research Article
Information
The China Quarterly , Volume 54 , June 1973 , pp. 211 - 241
Copyright
Copyright © The China Quarterly 1973

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References

* This article was submitted to The China Quarterly before I visited China in December 1972. I have not made any substantive changes following my return since it was not possible to gather macro-economic data in China and what we saw or what we were told did not contradict the analysis presented here.

1. This and closely related aspects of the problem received a good deal of attention in the symposium volume edited by Robinson, E. A. G., Economic Consequences of the Size of Nations (New York, 1960)CrossRefGoogle Scholar.

2. See Kuznets, S., Modern Economic Growth: Rate Structure and Spread (New Haven, 1966), pp. 300–4Google Scholar and Deutsch, K. W. and Eckstein, A., “Industrialization and the declining share of the international economic sector, 1890–1957,” World Politics, 01 1961Google Scholar.

3. For detailed discussions of statistical problems and reliability in China see Li, C. M., The Statistical System of Communist China (Berkeley, 1962)Google Scholar; Eckstein, Alexander, The National Income of Communist China (New York, 1961)Google Scholar, and Communist China's Economic Growth and Foreign Trade (New York, 1966), Appendix AGoogle Scholar; Liu, T. C. and Yeh, K. C., The Economy of the Chinese Mainland (Princeton, 1965)CrossRefGoogle Scholar.

4. For an excellent discussion of the issues involved see the comments by Dernberger, Robert, Perkins, Dwight and Tang, Anthony with Liu's, T. C. reply in Ho, P. T. and Tsou, Tang (eds.), China in Crisis, Vol. 1, Bk. 2 (Chicago, 1968), pp. 650–90Google Scholar.

5. According to my national income study cited above, grain comprised 52 per cent, of China's gross farm production value in 1952. The Liu-Yeh calculations suggest a higher ratio – about 60 per cent, both in 1952 and 1957. It should be noted that the Chinese use the terms grain and food crops interchangeably. These include rice, wheat, millet, kaoling, coarse grains, and sweet potatoes converted to a grain equivalent on the basis of a 4:1 ratio.

6. The uncertainty arises from the fact that total livestock value product esti-mates based on official Chinese Communist data show no rise between 1952 and 1956 and then jump sharply between 1956 and 1957. While these official figures are somewhat implausible, the Liu- Yeh adjustment is purely arbitrary and devoid of any economic rationale. (See Liu and Yeh, Economy of the Chinese Mainland, Appendix Table E-2). For the 1960s there are virtually no data, except that it is clear from qualitative statements that livestock numbers were decimated during the 1959–62 food crisis. One would expect that recovery, particularly for cattle, horses, mules and donkeys, would necessarily be slow.

7. The population estimates are based on official data for 1949, 1952 and 1957 as given in Nai-ruenn, Chen, A Handbook of Mainland Chinese Statistics (Chicago, 1967)Google Scholar, Table 1.3, p. 124. The 1957 to 1968 population data are taken from Department of State, Bureau of Public Affairs, Issues No. 4, Communist China (Washington, D.C., 1969), p. 13Google Scholar, and from Aird, John S.: “Population policy and demographic prospects” in People's Republic of China: An Economic Assessment (Washington, D.C.: U.S. Government Printing Office, 18 05 1972), p. 328Google Scholar. In citing the latter population figures, one must bear in mind that the Chinese Communist authorities did not publish any population data for the 1960s, so that these estimates are subject to large margins of error as are all other statistical series for the past decade.

8. This conclusion is not borne out by the visual observation of all those who have visited China in recent years, including myself. Food seems abundant in all cities of China accessible to foreigners, is apparently available in great variety and is for the most part quite cheap. While grain, some soybean products, and pork are rationed, these rations seem generous and queues for unrationed foods are rarely seen. Of course, improvements in food consumption were perhaps in part achieved through better distribution even in the face of only slowly rising per capita output.

9. Estimates for 1914–18 to 1931–7 are based on Perkins, Dwight H., Agricultural Development in China, 1368–1968 (Chicago, 1969), Table D.32, p. 289Google Scholar.

10. Data concerning output in Japanese agriculture were taken from Hayami, Yujiro and Yamada, Saburo, “Technological progress in agriculture” in Klein, L. R. and Ohkawa, Kazushi (eds.), Economic Growth: The Japanese Experience since the Meiji Era (Homewood, 1968), Table 5A–1 and 5A–2, pp. 156–7Google Scholar and Ohkawa, Kazushi, “Phases of agricultural development and economic growth” in Ohkawa, K., Johnston, B. F. and Kaneda, H. (eds.), Agriculture and Economic Growth: Japan's Experience (Princeton, 1969), Table 1, p. 6Google Scholar.

11. Deane, Phyllis and Cole, W. A., British Economic Growth, 1688–1959 (Cambridge, 1964), Table 38, p. 170Google Scholar.

12. Based on data in the United Nations Statistical Yearbook for 1967 (New York, 1968), Table 183, pp. 572–4Google Scholar.

13. The data for India are based on foodgrain production stated in physical terms. These in turn represent official Indian Government statistics as cited in The Ford Foundation, Data on the Indian Economy (New Delhi, 01, 1970), p. 3.16Google Scholar.

14. See Field, R. M., “Chinese Communist industrial production” in An Economic Profile of Mainland China (Washington, D.C., 1967), pp. 293–4Google Scholar and Chen, N. R. and Galenson, W., The Chinese Economy under Communism (Chicago, 1969), Table III–7, p. 66Google Scholar.

15. For a discussion of Field's methodology see Field, R. M., “Chinese Communist industrial production” and his paper on “Labour Productivity in Industry” in Eckstein, A., Galenson, W., and Liu, T. C. (eds.), Economic Trends in Communist China (Chicago, 1968)Google Scholar.

16. Kang, Chao, The Rate and Pattern of Industrial Growth in Communist China (Ann Arbor, 1965)Google Scholar, ch. III.

17. Chao, , Industrial Growth, Tables 26 and 27, p. 101Google Scholar.

18. The Indian rates are based on the officially published index of industrial production cited from The Ford Foundation, Data on the Indian Economy (New Delhi, 01 1970), p. 4.01Google Scholar.

19. Field, R. M., An Economic Profile of Mainland China, Table 3, p. 274Google Scholar.

20. Field, R. M., “Chinese industrial development,” in People's Republic of China. An Economic Assessment. Table B–l, p. 83Google Scholar.

21. Ibid. For chemical fertilizer the lower figure is from Field and the higher from Premier Chou En-lai's interview with Snow, Edgar, New Republic, 27 03 1971, p. 20Google Scholar.

22. For a detailed analysis of foreign trade statistics and their complexities see Eckstein, Communist China's Economic Growth and Foreign Trade, chs. 4–6 and Appendices B and C.

23. The series in Table 5 differs for most years to a small extent from those compiled by Dernberger and myself. See Dernberger, Robert F., “Prospects for trade between China and the United States” in Eckstein, A. (ed.), China Trade Prospects and U.S. Policy (New York, 1971), Table A–l, pp. 276–7Google Scholar and Eckstein, , Communist China's Economic Growth and Foreign Trade, Table 4–1, pp. 94–5Google Scholar. These differences can be traced to differences in the methods or derivations of the f.o.b. and c.i.f. adjustments for China's different trading partners and/or to differences in the estimates of China's trade with North Korea, North Vietnam, Outer Mongolia and Albania. Since the series presented in Table 5 is more up to date than the others referred to, that is the one used.

24. United Nations, Statistical Yearbook, 1962 (New York, 1963), Table 152, pp. 428–31Google Scholar.

25. Eckstein, , Communist China's Economic Growth and Foreign Trade, pp. 93–4Google Scholar.

26. United Nations, Statistical Yearbook, 1967 (New York, 1968), Table 13, pp. 67–8Google Scholar.

27. Data for world and Indian trade are drawn from the United Nations, Statistical Yearbook, 1967 (New York, 1968), Table 148, pp. 384 and 390–1Google Scholar, and from Ford Foundation report cited above (n. 13), p. 7.01.

28. For a careful critique of the estimate by Liu and Yeh, see Dernberger's, Robert review of their book in the Journal of Political Economy, 78: 4, 08 1966, pp. 419–21Google Scholar.

29. See Liu, T. C., “Quantitative trends in the economy,” in Eckstein, , Galenson, and Liu, (eds.), Economic Trends in Communist China, Table 1, p. 164Google Scholar.

30. See Aird, John S., “Population policy and demographic prospects in the People's Republic of China,” in People's Republic of China, An Economic Assessment, pp. 220–331Google Scholar and Orleans, Leo, Every Fifth Child (London, 1972), p. 56Google Scholar.

31. For a more detailed discussion of this foreign exchange problem and the sources of these data, see the appendix in Eckstein, Communist China's Economic Growth and Foreign Trade.

32. All the figures for India are based on the Ford Foundation report cited above, pp. 2.01 and 2.02. It must however be noted that all national product estimates for India must be used with great caution and may be subject to considerable margins of error. Consequently, these national product comparisons for China and. India must necessarily be considered as quite tentative.

33. For average long-term growth rates of these countries see Kuznets, , Modern Economic Growth, Table 2.5, pp. 64–5Google Scholar.

34. See Kuznets, S., “Quantitative aspects of the economic growth of nations, II. Industrial distribution of national product and labour force” in Economic Development and Cultural Change, Supplement to Vol. V, No. 4, 07 1957, Tables 3 and 10Google Scholar.

35. T. C. Liu, “Quantitative trends in the economy” in Eckstein, Galenson and Liu (eds.), Economic Trends in Communist China.