Agriculture Reference
In-Depth Information
regime, combined with capital controls, appears to have restricted the
flow of workers into manufacturing and services by at least 1 per cent per
year and nto servces by at least 2 per cent per year.
Urban-rural inequality and worker relocation in China
The pace of rural per capta ncome growth depends on the rate at whch
surplus labour s generated by agrcultural change and the correspondng
rate at whch workers are accommodated n the manufacturng and
servces sectors. It s a common vew that the economc reform of the early
1980s, which brought de-collectivisation and the household responsibility
system, along with associated increases in agricultural labour productivity,
created a substantal rural labour surplus.
4
Moreover, prior to that reform,
wages were not market-determned and there s evdence of consderable
underemployment. This was due, in part, to the seasonal nature of
agricultural activity, which meant that many workers were left idle in the
off-peak parts of the agricultural cycle, yet unable to take full employment
elsewhere (Banister and Taylor 1989).
An exacerbatng factor on the supply sde n the Chnese case was rapd
rural populaton growth n the pre reform perod. Even though the rate
of rural population growth slowed in the 1970s and 1980s, the growth of
the rural labour supply contnued strongly due to the aftermath of the
'baby boom' perods of the 1950s and 1960s.
5
On the demand side, China's
pre reform economc strategy promoted relatvely captal-ntensve heavy
ndustres. These two effects tended to rase underemployment n the rural
sector in the post reform period, where, although rural communes were
disbanded, all workers were still technically employed.
6
The post reform
perod therefore carred consderable potental for worker relocaton from
agrculture nto other sectors. The subsequent volume of nternal mgraton
would depend, then, on economic incentives in the form of urban-rural
ncome nequalty and on both polcy-nduced and natural barrers to
mgraton.
