One problem envisaged prior to the onset of this new agricultural system, was that once the peasant was in control of the land, he would be in a position to use it to his advantage; furthermore he may refuse to pay taxes or give the state the predetermined quota. In order to alleviate this problem, contracts were drawn up and signed by each peasant household. The contracts presented the output targets for farm produce and they carefully defined the responsibility of the household, the collective unit and the state.
Initially the contracts formed were on a short term basis, but by 1984, they were increased to a minimum of 15 years so as to ensure long term implementation. Contracts could be transferred to another household as long as the transfer was registered with the production team. At all phases the government stressed that ownership lay with them and not with the household and they hold power over a number of aspects such as planning, building and land allocation (Marsh Marshall, 1985)
Despite the impact of the production responsibility system raising levels of motivation, income and living standards as planned, it nonetheless created problems. Firstly, occasionally the peasant found himself in a position whereby he was unable to meet his quotas laid out within the contract. Secondly, in some areas the problem of surplus labour intensified as a result of the realisation that if fewer people farm an area intensively, then the benefits each person receives will be greater. Finally, the new system has bought with it a lack of social control. Reports since the onset of the reforms have told of misuse of collective land and machinery, illegal building of houses and selling of surplus goods and tensions due to the new income disparities.
Despite these clearly dramatic and radical changes made during the reforms, whereby the household increased grain production; the newly formed production responsibility systems alone did not satisfy the aims of the state. China did not purely want to see an increase in grain production, for output would soon exceed demand; the aim was not to make households self-sufficient. Instead, as has been previously mentioned, the aim was for modernisation and an increase in income and living standards. For these to be met, the rural economy must be developed further leading to specialisation and diversification (Cannon and Jenkins, 1990). This process of specialisation was in direct contradiction to Mao's ideals because his belief was for commune self sufficiency, but by the late 1970's following his death, this form was seen as uneconomic and inefficient, primarily due to areas producing unsuitable goods for that environment. Thus specialisation was created to boost the economy and increase efficiency. This new process encouraged peasants to develop their special skills. Gradually the government began to implement it and by 1983 a little over 13% of households farmed under this system (Cannon and Jenkins, 1990).
Specialisation was developed at a number of levels. At the top level there were county amalgamations where up to fifteen counties joined forces, this usually being the case where a huge area would be suitable for one type of production. Below this level complete regions became specialised, for example, hilly and mountainous areas are particulary suited to forestry. Then below this level, households within regions were encouraged to become specialised, occasionally organisations developed where a number of households joined forces and these newly formed enterprises were run on more democratic lines (J and M Gray, 1983). The impact of this process has led to a more prosperous and efficient rural economy, hence showing benefits at both the local and national level. As specialisation began to mature and increase in popularity, the peasants were encouraged to progress into non-agricultural products. This enabled the peasant to loan his land to others, thus absorbing surplus labour and helping relieve this problems. Specialisation appears to be relatively problem free; although in some areas tensions have developed where some peasants have benefitted more through modernisation than others.
Secondly, in addition to specialisation, the Chinese government has encouraged the rural economy to become diversified. The aim of diversification, which goes alongside those of the general reforms, are to increase the peasants autonomy, income and standard of living. The peasants were encouraged to develop other forms of production more suited to their environment, whether agricultural or non-agricultural. In particular they were encouraged not to purely produce grain, but diversify into domestic food production through the cultivation of private plots and the raising of livestock, for example, pigs, sheep and chickens (F.Leeming, 1985). Despite Mao's guidelines allowing this, it had been rendered unpopular as it conflicted with communist ideals; but to overcome this obstacle and eliminate possible tensions, the CPC Central Committee in 1979, pointed out that diversification was a supplement to the socialist economy and should not be regarded as capitalism. As a result of the government realising the advantages of this process, they devised incentives to encourage peasants to diversify. Firstly, they expanded the area allocated to private plots, initially commune members cultivated 5-7% of total agricultural land, this was subsequently raised to 15% (Genghang, 1984); secondly, restrictions placed on growing certain crops were raised and finally the government increased the number of new rural markets to ensure all surplus could be sold.
The impact of this transfer to diversification was important and advantageous at the state, household and ecological level. The state benefitted because agriculture and labour were chiefly provided by the household and can thus help absorb the surplus labour. The individual householder benefitted because it provided more rapid returns than growing grain, furthermore, the peasant can expect to see an addition increase in income because they now have goods to exchange on the market. Ecologically it proved beneficial because areas of land were allowed to return to their natural use.
Nevertheless there are disadvantages. Despite a peasants' desire to change to another form of produce, this is not always possible which can lead to tensions arising. Additionally markets are not always accessible, rendering sales difficult.
Specialisation and diversification have also led to an increase in technology, whilst advantages seen include a more efficient use of the land, some critics and environmentalists would argue the disadvantages outweigh the advantages; the use of chemical fertilisers continues to grow, irrigated areas are declining and there is no soil conservation (A.Saith, 1987).
Thus, so far rural agricultural reform policies of which the principal one being the production responsibility systems, have been discussed and their individual impacts, generally social have been examined; but it is not purely through agricultural growth that the Chinese government perceived and planned development to take place. Although clearly initial growth took place in grain crops and subsequent growth was later seen in the rearing of livestock, in fisheries and forestry through specialisation and diversification, these cannot produce infinite growth. After 7 years of reforms, the rapid growth in the production of grain and cotton slowed down and gradually levelled out to fluctuate around the 1984 levels. Therefore once again emphasis changed, this time to rural industries, which were later termed 'township enterprises' (F.Leeming, 1985). Rural industrial growth has developed mainly in the richer, less remote peasant areas where there were seen to be more opportunities, a more skilled labour force and more demand for the goods and services. For example in the Wuxi County in the Jiangsu Province, industrial development has taken place along the lines of agricultural machinery, repairs and spare part factories. The benefits seen here include the absorption of the surplus labour; the provision of essential goods and services to the rural economy; reducing income disparities due to the capital gained being used for farm subsidies and assisting the accumulation of the collective funds. Clearly therefore rural industries are the way forward for rural China helping it to become modernised in a way agricultural growth could not and allowing for the continuation and development of the modernisation process.
Although clearly each individual change made during the reform period has had specific impacts on rural society, when the period is examined as a whole, more significant consequences can be seen, both within rural and urban communities.
Efficiency and Output Growth
a) Contracting work to the household
This, being the principal reform during the period has led to the substantial growth the Chinese government aimed for. A rapid increase was initially seen in grain production, followed by an increase in non-agricultural production, which in many parts has been superceeded by a growth in rural industry; these overall developments have naturally led to an increase in the rural economy (See Table 1).
So how has China's economic performance faired in the light of the reforms? The gross value of agricultural production has increased dramatically especially in the initial years, where between 1978 and 1983 there was an average annual growth of 16.2%. For example, increases can be seen in grain production, where in the same years the annual increase was 4.5% and cotton production where the increase was 18.9%. There was also steady growth in the rural collective industries during the same period; the commune and brigade enterprises have seen an increase in employment from 28 million people to 32 million. Communes and brigades further helped develop rural areas through their investments in crop production (J and M Gray, 1983).
The aims of the reform period though, were not to purely increase the rural economy, but to improve the standard of living of the peasant by the gains reaching them. This again has been successful - increases can be seen in net income per head, housing space per head and food consumption. (See Table 2). The housing space has increased due to the income of the peasant family increasing as they can afford to extend their living space; their diet has increased in both quality and quantity and it was through price adjustments that helped cotton production to increase and thus increase the amount of cloth used by the peasants.
The main indicators of performance depict strong evidence showing that the reform policies have been a success. Growth in rural areas has accelerated and living standards have increased. This can especially been seen through comparing the changes made from prior to the reforms (See Table 3). It is therefore not surprising that the current reforms have been received well by the peasants. The increases seen have been mainly due to the incentives to work harder through ample rewards.
b) Relations between the town and countryside
Through modernising and developing the rural areas, the relationship between the rural and urban areas has naturally been effected; the main changes which have occurred since the onset of the reforms in 1978 include (A.Saith, 1987):-
* Prices of agricultural produce increased significantly more than prices of industrial products.(See Table 4).
* Initially, prior to the reforms, Chinese economic policies strongly favoured investment in heavy industry, but the new reforms have bought about a swing in investment to favour light, rural industries.
* Peasants were strongly encouraged to become wealthier through the removal of the fixed ceiling for income which had existed under Mao - this was only the case for the rural areas, it did not apply to urban people.
These incentives, targeted at the rural peasants were never implemented with the urban dwellers in mind; thus they would never be in a position to benefit.
c) Changes within the rural economy
Since the reforms, peasants have had better access to machinery, especially within the past few years, as for the first time since the 1950's rural machinery is gradually being sold of to individuals. Once owned by the individual, the machinery is generally better maintained and the peasant has found he can increase his income by loaning it out to fellow villagers. Initially some feared that the reforms would bring about a decrease in agricultural investment, but this has proved not to be the case, instead it is clearly visible that farm inputs are continuing to grow at a rapid rate (Marsh Marshall, 1985). Gradually through shifts in emphasis, from increasing agricultural production for personal use to increasing production for sale at market, there has been a shift in the composition of rural assets. Recently there has been a growth in rural truck ownership, which has occurred as a reflection of the new demand for transport. Prior to the reform period, compulsory state purchases at a fixed rate were dominant, but with the onset of reforms, free-markets developed and state purchases decreased. By 1985 these state purchases were a thing of the past on all products except grain and cotton. Moreover rural industries have bought about significant changes. By 1989, there were about 1.5 million enterprises employing 47 million people with a gross output value of 482 billion yuan. Clearly then they are an essential part of rural China and in the future they will be hailed the most successful part of the reforms.
Inequality and poverty
a) Within villages
i) Income distribution
Whilst the reforms have removed the ceilings of the peasant's income, this has nonetheless created problems as it has bought about an increased range of income within villages, as some peasants have been more successful under the reforms than others. These newly created income disparities caused tensions amongst the peasants as in the previous system there were no income inequalities.
Specialist households have been created to bring about rapid technical change; but in turn this has created an elite group who benefit through being able to receive technical services and material inputs before the non-specialised households
ii) Poverty
Although the aims of the reforms were to raise the income of the peasants, this has not been the case for every household. Instead there is still poverty. The government is addressing the problems faced by the remaining poor households, through redistribution policies. Here the poorest households can obtain assistance, for example in the form of increased grain to help raise output to local standards.
iii) Control over the production process
The reforms have led to a shift in the decision making process, now the household makes a large number of their decisions. In theory this should lead to control under more democratic lines, whilst this has been so for economic activities it has not been the case for social activities, one of the main examples here is the choice over the number of children the peasants have; China has had one of the most famous family planning policies whereby a family are only allowed one child - a highly contentious issue in rural areas.
Another disadvantage of the reform era is the increase of hired labour, some believe it is a way of rectifying temporary imbalances between resources and labour, whilst other argue that it in time will create a peasant sub-culture. Finally despite the claims that rural villages are run on more democratic lines, the election process does not allow for a true democracy, for the selection procedure for the head of the village takes placed under closed ranks; thus the peasant has very little say in the running of their organisations.
b) Spatial inequality
Rural inequalities, as with many countries worldwide have existed, but in China despite the reform policies, these inequalities still exist. The ban on certain migration is still in practise and peasants are prevented from moving to the cities or from the very poor rural areas to less poor areas. This problem has been further deepened by the fact that these very poor areas have tended to have the highest population densities and growth rates. Additionally, they are disadvantaged because they are not in a position to develop rural industries and it is here growth is most successful.
Poverty
At the onset of the reform period, large areas of the Chinese countryside had extremely low living standards, but since 1978 this has changed. Rural villages have been able to reinstate the diversified economy known during the pre-communist era and the new redistribution policies have also been advantageous. Such policies include private savings partly being redistributed by the banking system to those areas outside from where they originated and secondly, the tax rate on the commune and the brigade is much higher than on agriculture thus providing funds which can be used for assistance in the backward areas.
One of the most substantial developments made in the Chinese economy since the onset of the reforms have been the increases seen in the rural areas. Economically speaking, no other communist country has achieved what China has managed to. It has successfully transformed rural agriculture and rural industries and the benefits have been received by the rural dwellers not the government. Although a small number of tensions have developed, which many believe would be inevitable when such radical changes are implemented, generally the reforms have been well-met by the peasants as the benefits have come rapidly. Since the reforms were implemented in the 1970's they have ben assessed and changed in the light of new ideas and technology; this will continue to happen thus rural China will continue to modernise and be an asset to the country rather than a problem.
BIBLIOGRAPHY
Cannon,T and Jenkins,A (eds) (1990) "The Geography of Contemporary China"; Routledge
Leeming,F "Necessity, policy and opportunity in the Chinese Countryside" in Dwyer,D (eds) (1994) "China: the next decades"; Longman
Genghang et al (translated) (1984) "China Handbook Series - Economy"; Beijing, Foreign Languge Press
Gray,J and M "China's New Agricultural Revolution" in Hussain and Feuchtwang (eds) (1983) "The Chinese Economic Reforms"; London, Croom Helm Ltd
Hinton,W (1991) "The Privatisation of China: the Great Reversal"; London, Earthscan
Lemming,F (1985) "Rural China Today"; London, Longman
Marshall,M (1985) "Organisation and Growth in Rural China"; Macmillan Press Ltd
Saith,A (eds) (1987) "The Re-emergence of the Chinese Peasantry"; London, Croom Helm
Vermeer,E (1992) (eds) "From Peasant to Entrepreneur; growth and change in Rural China"; Wageningen, PUDOC
