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Food Consumption and Peasant Incomes in the Post-Mao Era

Published online by Cambridge University Press:  17 February 2009

Y. Y. Kueh
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Extract

One of the most dramatic changes in rural China in the post-Mao era has been the abrupt increases in peasant incomes and consumption since 1978. These were deliberately brought about by an overall reorientation in economic policy which aimed at improving peasant incentives, so as to boost farm output and ease the agricultural supply constraint on industrialization – the government's long-run goal. The new development strategy has already resulted in a considerable modification of the Soviet-style agriculture-industry dichotomy, in favour of the Chinese peasants.

Type
Research Article
Information
The China Quarterly , Volume 116 , December 1988 , pp. 634 - 670
Copyright
Copyright © The China Quarterly 1988

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References

1. Kueh, Y. Y., “China's new agricultural-policy program: major economic consequences, 1979–1983,” in Journal of Comparative Economics, Vol. 8, No. 4 (12 1984), pp. 353–75.CrossRefGoogle Scholar

2. For a detailed study of the Economic Readjustment period, see the special issue of The China Quarterly (CQ), No. 100 (12 1984), on this subject.Google Scholar

3. See Kueh, , “China's new agricultural-policy program,” esp. p. 358.Google Scholar

4. Sheng-ming, Yang, Zhongguo xiaofei jieguo yanjiu (Research on China's Consumption Structure) (Taiyuan: Shanxi renmin chubanshe and Zhongguo shehui kexue chubanshe, 1986), p. 63.Google Scholar

5. A careful scrutiny of the official statistics reveals that for quite a number of provinces, considerable discrepancies exist between different sources concerning the per capita peasant grain consumption figures for 1978. The discrepancies warrant a separate study, but they will not alter the main conclusions to be drawn from our present analysis. See also f.n. 24.

6. For an example to show the official income statistics may be adjusted, see Travers, Lee, “Post-1978 rural economic policy and peasant incomes in China,” in CQ, No. 98 (06 1984), pp. 241–59.CrossRefGoogle Scholar

7. The estimated regression equation is:

R2 = 0·52 (figures in parentheses are T-values), where Y stands for the detrended yearly percentage fluctuations in peasant net income per head, P1 and P2 the yearly percentage changes in state farm procurement prices and state retail prices of farm inputs respectively, and W the weather index. All the statistical series are shown in Table 3.

8. A major contention made in my previous studies about China's agricultural reforms is that, given the still egalitarian collective-distributive structure of 1979/80, the decreed increases in state farm procurement prices might represent for the Chinese peasants nothing but a once-for-all windfall, without giving rise to any positive output incentives. See my “The economics of the ‘second land reform’ in China,” in CQ, No. 101 (03 1985), p. 124Google Scholar, and “China's new agricultural-policy program,” p. 358.Google Scholar

9. See Kueh, Y. Y., “Weather cycles and agricultural instability in China,” in Journal of Agricultural Economics, Vol. XXXVII, No. 1 (01 1986), pp. 101–104.CrossRefGoogle Scholar

10. The estimated regression equation is:

R2 = 0·61 (figures in parentheses are T-values), where Y and W stand for the same series as given for the earlier regression cited under footnote (7), and D the “decollectivization dummy.”

11. Hongtao, Wang and Yunyang, Zheng, “Ruhe renshi lianchen chengbao qianhou nongmin renjun chuen shouru zengzhang fudu” (“How to understand the magnitude of increases in peasants' net income per capita before and after the implementation of the responsibility system”), in Nongye jingji wenti (Agricultural Economic Problems), No. 11 (1986), pp. 47–48.Google Scholar

12. Cf. van der Craag, Jacques, Private Household Consumption in China: A Study of People's Livelihood (Washington, D.C.: World Bank Staff Working Papers No. 701, 1984), pp. 15–16.Google Scholar

13. Sheng-ming, Yang, Research on China's Consumption Structure, p. 79.Google Scholar

14. ZGTJNJ 1987, p. 700.Google Scholar

15. SSB (ed.), Woguo nongmin shenghuo de juda bianhua (Great Changes in the Livelihood of the Peasants of Our Country) (Beijing: Zhongguo tongji chubanshe, 1984), p. 24.Google Scholar

16. Changzhong, Ji, Dui Shandong sheng Engeer xishu guan quanguo zhishou de boshiGoogle Scholar (“An analysis of why Shandong province's Engel coefficient ranks highest in China”), in Zhongguo nongcun jingji (Chinese Rural Economics), No. 4 (1986), pp. 34–38.Google Scholar

17. See Kueh, , “A weather index for analysing grain yield instability in China, 1952–81,” pp. 78–80.Google Scholar

18. Kueh, , “The economics of the ‘second land reform’ in China,” p. 122.Google Scholar

19. Cf. ZGTJNJ 1985, p. 303; 1986, p. 209; and 1987, p. 199.Google Scholar

20. ZGTJNJ 1987, pp. 701–702.Google Scholar

21. Gansu TJNJ 1985, p. 378.Google Scholar For a detailed discussion about intra-regional income inequality in the post-Mao era, see also Lardy, Nicholas, Agriculture in China's Modern Economic Development (Cambridge: Cambridge University Press, 1983), pp. 169–85.CrossRefGoogle Scholar

22. Cf. Figure 5 and Sheng-ming, Yang, Research on China's Consumption Structure, p. 32.Google Scholar

23. For an interesting study about urban Tianjin, see Hu, Teh-wei, Bai, Jushan and Shi, Shuzhong, “Household expenditure patterns in Tianjin, 1982–84,” in CQ, No. 110 (06 1987), pp. 178–95.Google Scholar

24. Figure 6 also tends to suggest that the per capita peasant foodgrain consumption figures for 1978 for most of the provinces and for the country as a whole are possibly biased downwards in relation to the subsequent years. The figures for 1978 are drawn from ZGTJNJ, but for quite a number of provinces they are in fact greater than those given in other sources, including the provincial statistical yearbooks. The discrepancies imply that the growth rates of peasant income and consumption expenditure as shown in Table 2 for 1978–86 might be overstated.

25. Changzhong, Ji, “An analysis of why Shandong province's Engel coefficient ranks highest in China,” p. 36.Google Scholar

26. The Coppock instability indices represent the means of the yearly percentage deviations of the respective measures from their log-linear trend values (ignoring the plus and minus signs of the deviations). The methodology is borrowed from Coppock, Joseph O., International Trade Instability (Farnborough: Saxon House, 1977), pp. 4–10.Google Scholar Kenneth Walker used the same method in his extensive study about instability in foodgrain consumption in China from the 1950s up to the early 1980s; see his Foodgrain Procurement and Consumption in China (Cambridge: Cambridge University Press, 1984).Google Scholar

27. For a discussion about the possible trends in rural-urban differentials, see my article “China's food balance and the world grain trade: projections for 1985, 1990, and 2000,” Asian Survey, Vol. XXIV, No. 12 (12 1984), p. 1, 265.Google Scholar