<< Chapter < Page Chapter >> Page >

All this began to change in China in the late 70s. Authorities sought to attack the labor surplus by a nationwide, draconian harsh effort to bring down the birth rate.

By 1980, Chinese population expansion had slowed to only 1.2 % per year, and stayed below 1.5 % for the next two decades. During that time rapid growth in urban industrial and services sectors was absorbing more than 10 million workers per year. As a result, the workforce in Chinese agriculture began to decline steadily after 1991, to less than 50% by 1997. In that year, for the very first time in Chinese history, farmers made up less than half of all Chinese workers. And by 2011 rapid urbanization had meant that there were more people in urban than rural areas.

In the process, growing poles of urban prosperity arose, not only in Beijing and Shanghai, but throughout the Pearl River delta and in Chunking, WuHan and other interior cities. Even by 2004, Chinese urban wages were above $.80 per hour, slightly above those for Indonesia and about ¾ that of India.

But by 2008, the Chinese labor market had changed radically. China’s previous labor supply surplus had been used up , according to some. The growth in labor has slowed dramatically, due to the one-child per family policy. From 1995-2005 there was 1.3% annual compound growth in labor supply. But, owing to the one-child per family policy, the 2005-2015 growth in labor supply halve (0.7), and by 2018 China may experience a zero percent growth in labor supply.

So, has China already reached the “Lewis” turning point? Maybe not . Some believe the turning point will come only in 2020.

In any case, China will not be able to fuel its growth on cheap labor much longer. In fact they have been steadily switching strategies — accepting large amounts foreign investment, investing more heavily in technology and, as we will see some relaxation in the one-child per family policy. China’s average annual growth in total factor productivity is at 4%, the highest in world, followed by India (2.8%). The U.S. rate = 1%, Russia 1/4 of 1%.

We mentioned rapidly growing urban prosperity. What has been happening to living standards in Chinese agriculture?

Chinese who have remained in agriculture experienced much lower rates of income growth then in urban areas especially women who have confronted increasing ambiguities regarding land tenure security.

The number of landless women in China has been trending upward . By 2002 nearly one in five married women lacked any land allocation at all. Source________? (Check China File On Shelf) Daughters, to put it mildly are not highly valued in rural China. In many very poor villages that lacking clinics or medicines, the local population finds ways to buy an ultrasound machines? Why? To determine the sex of the child in the womb.

The nature of decollectivation in agriculture begun in the early 80s has been partly responsible for growing landless women. Before there was 15-year contracts on land with provision for adjustment every five years or so, this gave way the 80s to much longer contract duration of 30 years. Daughters find it very difficult to stake a claim to land, even when they remain in the same village after marriage. And a daughter who moves to a new village because of marriage does not increase land allocations for the husband’s family. As a result, women’s net rights to land have declined.

There are, by the way; other institutional determinants of women’s loss of agricultural land. These include inheritance practices and customs, the nature of divorce and widowhood and, as in most of the world, a tendency of males to discount women’s work. It turns out that in much of rural China few adult single women are landless. Landlessness seems largely concentrated among married women below age 40. There also is a strong relationship between household income and the decision-making authority of women: women in low-income settings have considerably less decision-making authority.

As the reader proceeds through this book, he or she will not be surprised to learn that what is good for raising rural incomes is generally also good for addressing the issue of women’s landlessness and reducing morbidity especially for curbing growth of AIDS.

Capital formation, human capital and international trade

International trade, Human capital formation and the role of women turn out to be interlinked.

There are significant long-run implications for Chinese agriculture—and by extension for landlessness—in China’s recent accession to the World Trade Organization in 2009. Adherence to the WTO should yield beneficial results for such Chinese labor-intensive industries as textiles and apparel. Results for agriculture and rural households are somewhat indeterminate. The possibility of more export opportunities for certain agricultural products might be counter-balanced by stiffer competition from such agricultural imports as food grains and cotton.

What might globalized WTO accession mean to rural women in China? In emerging nations in the 70s and 90s job expansion in textiles and apparel , first in Malaysia and then later in lower income Indonesia and Bangladesh, tended to favor women relative to males. It should be noted that clothing production requires some significant levels of educational attainment. For example, plants in Bangladesh and other major apparel exporting nations usually require at least a junior high school level of education. Thus, overall improvement for women from the WTO is not likely to occur unless there are improvements in women’s access to better education , credit and marketing structures, given that substantial numbers of women will remain in agriculture after WTO accession.

Note again the inter-relationship between the lesson about human capital and the lesson about trade.

Again, nothing in economics is independent from something else in economics. Economics is complicated only because things are so inter-dependent.

That is also what makes “good” economics so interesting.

Get Jobilize Job Search Mobile App in your pocket Now!

Get it on Google Play Download on the App Store Now




Source:  OpenStax, Economic development for the 21st century. OpenStax CNX. Jun 05, 2015 Download for free at http://legacy.cnx.org/content/col11747/1.12
Google Play and the Google Play logo are trademarks of Google Inc.

Notification Switch

Would you like to follow the 'Economic development for the 21st century' conversation and receive update notifications?

Ask