ABSTRACT
This chapter attempts to explain the unusual disparity between the rates of agricultural and industrial growth up to the late 1970s, and ventures a preliminary assessment of the changes in economic policy since 1978. It shows that persistent undervaluation of agriculture by the Chinese Communist party was the major reason for the relatively slow growth of agriculture after 1949. Increased sophistication of Chinese agriculture was evident primarily in the evolution of cropping and marketing patterns rather than in changes in mechanical technology. The process of increasing specialization, which contributed to growing productivity per unit of land, was dependent on increased marketing, not only locally but interregionally as well. Suppression of interregional marketing by the government appears to have substantially reduced the efficiency of farm production. A complete analysis of the sectoral allocation of investment requires an analysis of the flows of credit from the state banking system and internal reinvestment by collective farms and state industrial enterprises.
