China’s New Industrialization Strategy

China’s New Industrialization Strategy

Was Chairman Mao Really Necessary?

Y. Y. Kueh

Deng Xiaoping’s economic strategy is widely regarded as a complete anathema to Mao’s, but this study strongly argues that without the material foundations laid by Mao, it would have been very difficult for Deng to launch his reform and open-door policy. Deng basically shared Mao’s aspirations and approach in pursuit of China’s industrialization, and this had in fact helped to condition him to the successful gradualist methodology. Deng lost patience at times and resorted to the ‘big bang’ strategy, only to fail miserably. Taken together, the book tells a new story about the economics of China’s transition. This is a highly thought-provoking study, blending institutional and convincing statistical analysis.

Chapter 5: The Economics of the ‘Second Land Reform’

Y. Y. Kueh

Subjects: asian studies, asian economics, economics and finance, asian economics, economic psychology


* THE BACKGROUND For peasants who have been collectivized for nearly three decades, the national campaign initiated by the Party Central Committee’s Document No. 1, 1984, to promote the reparcellization of collective farmland, by extending the peasants’ leasehold right to over 15 years (para. 3-1),1 is certainly not less spectacular than the land reform of 1949–52, when land was confiscated from the rich for redistribution among poor peasant families. This ‘second land reform’ has now firmly consolidated the long-fought policy of Deng Xiaoping for a decentralized approach towards rural management. All the cats – ‘black or white’ – seem to have now been totally unleashed to run after their best catch. This stands in sharp contrast to the uneasy equilibrium of the ‘two-line struggle’, which existed throughout the entire 20-year period following the abortive communization drive of 1958–59. Nevertheless, while probably no Chinese leader today can afford to play the role of Mao’s Liu cum Deng, one wonders whether, for economic reasons, the present rural institutional solution as envisaged in Document No. 1 will mark the end of the perennial Chinese search for an ‘optimum’ level of decentralization. In a way, the agricultural reform of recent years has begun with the drastic increases, decreed in 1979, in state farm procurement prices. For a regime very much obsessed with the value imperative of modernization, the farm price increases should clearly be construed as income incentives for promoting agricultural production to ease the economic constraints on industrialization. This is nothing...

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