Excellent study of China's rural industrialisation. This William Podmore review is from: The Industrialization of Rural China (Hardcover) The task that Chris Bramall, a Senior Lecturer on the Contemporary Chinese Economy in the School of East Asian Studies at Sheffield University, sets himself in this fine book is to explain how rural China industrialised so successfully in the 1980s. He cites Alexander Gerschenkron who wrote, "industrial labor, in the sense of a stable, reliable and disciplined group that has cut the umbilical cord connecting it with the land and has become suitable for utilization in factories, is not abundant but extremely scarce in a backward country. Creation of an industrial labor force that really deserves its name is a most difficult and protracted process ..." Bramall writes, "The very process of learning itself requires an extensive programme of investment in physical capital: many skills are acquired by a process of learning-by-doing in a factory environment. For that very reason, one cannot expect newly-created factories to be efficient. It is a simple enough task to create new factories, but it takes time before infant industries grow up to become efficient enterprises." He observes, "Indeed it is hard to think of a country which has successfully industrialized - certainly not the USA, Germany, Japan or South Korea - without extensive state intervention, whether in the form of industrial subsidies or tariff protection. It is because infant industries are unprofitable in the short and perhaps even medium term that subsidies are essential." He explains, "The most plausible explanation for the absence of rural industrial take-off in the period between 1958 and 1978 is that there was a lack of industrial capability. Rural China enjoyed the advantages of backwardness in the 1950s, and the state was committed - in both word and deed - to the promotion of rural industrialization. Neither agency nor incentive were lacking in the 1960s and 1970s. ... Yet the rural industrialization programme failed." So what happened that accounted for China's exceptional growth in the 1980s? Bramall suggests, "it was the diffusion of skills from urban core to rural periphery, and the learning-by-doing in the primitive rural industries of the Maoist era, which ensured that China entered the 1980s with the workforce needed for rapid industrial expansion. By 1978, an extensive manufacturing capability had been created in rural areas." He continues, "One of the attractions of this learning-by-doing hypothesis is that it explains the gradual acceleration in the growth of rural industrial output during the late 1970s. If policy change had been critical to the process, a much more abrupt discontinuity in the pace of the growth in the early 1970s (following fiscal decentralization) or in the early 1980s (as a result of liberalization of controls on ownership) would be observed. In fact, however, the change was much more gradual." He adds, "One key element in this post-1960 process of capability enhancement was the transfer of skilled workers and urban youth to the countryside. ... However, the fact remains that this process of urban to rural diffusion was without parallel in the developing world. It is hard to believe that the rural industrial explosion of the 1980s would have occurred in its absence." ************
China’s new industrialization strategy: was Chairman Mao really necessary? Y. Y. Kueh, hardback, 283 pages, ISBN 978-1-84720-232-1, Edward Elgar, 2007, £77. Reviewed by William Podmore Y. Y. Kueh is Chair Professor of Economics and Business Administration at the Chu Hai College of Higher Education, Hong Kong. This book comprises 13 essays, written between 1968 and 2006, grouped into three major subject categories. The first is Deng Xiaoping’s agricultural policy programme, the second China’s new industrialization strategy itself, and the third is Deng’s controversial open-door policy. On Deng’s agricultural policy, Kueh writes, “‘Reparcellization’ of the collective farmland in the early 1980s, coupled with the extension of the leasehold rights to 15 years starting in 1984, brings Chinese agriculture very close to the private land-tenure system of the West. The replacement in 1985 of the Stalinist scheme of compulsory farm delivery with a system of purchase contracts to be signed between the peasants and the state procurement agencies is also meant to further enhance the privatization and marketization process in rural China. No less important is the rapid proliferation of rural non-farm industries, which operate largely on a cooperative or de facto private basis, being detached from any hierarchic-vertical controls following the abolition of the People’s Communes in 1982-83.” He points out that during Mao’s rule industry grew from providing 21 per cent of GDP in 1952 to 48 per cent in 1978. Grain output grew from 285 kilograms a head in 1952 to 388 in 1996. As Kueh observes, “The single most important factor underlying this success is obvious. That is … the remarkable expansion in the country’s irrigation capacity.” GDP rose by 5 per cent a year even during the years of the Cultural Revolution, 1966-76. Kueh concludes, “Mao was, in situ, not at all ‘inward-looking, ‘closed-door’ or ‘autarkic’-oriented, with a predilection for the philosophy of ‘self-reliance’, entirely ignorant of the technological advances made in the West, as many outside observers believe him to be.” He sums up, “what Mao did as an economic strategist was absolutely necessary, underpinned as it was by historical imperatives. … the economic heritage of Mao has to be assessed in its entirety to include the massive material foundation in both agriculture and industry, that he helped to create with the particular economic strategy practised.” ********************
