Extremes of Poverty and Wealth

Abstract

The Third Plenum of the Eleventh Party Congress held in 1978 marked the beginning of a second momentous revolution in China’s rural areas. The reform of the economic system and the readjustment of economic relations meant a new and more rational alignment of essential production factors. What was not foreseen was that starting in the poorer regions, these new regulations for the realignment of essential factors grew from a mere trickle to a mighty flood, and brought about a new and more alarming inequality in their wake as they spread throughout the country. After the welcome imposition of the household responsibility system (the system introduced nationwide in 1980 whereby individual households contract yearly to deliver an agreed quota of production to the state in return for land, inputs and compensation), this poverty gap between regions became more and more acute, leading to a third-world division within China itself, to a theoretical debate between proponents and opponents of the ‘staggered’ reform theory, and to increasing concern about the importance of economic development in backward regions.