Economic Diversification and Growth in Rural China: An Anatomy of a ‘Socialist’ Success Story

Abstract

The impressive transformation and development of the rural economy in China since the comprehensive reforms in 1978 has for good reasons attracted much attention from scholars and policy-makers alike. By 1990 rural non-farm enterprises operating outside the central state sector employed over 92 million people, accounted for 25 per cent of the country’s total social product, 58 per cent of the rural social product, and for 24 per cent of the total export earnings (Zhongguo Xiangzhen Oiye Tongji Zhaiyao, 1991, 1). The scholarly focus has largely been on the magnitude and implications of this development, while its causes have usually more or less implicitly been ascribed to the beneficial impact of the market-oriented reforms on incentives and on allocation and utilization of resources.