An Economic History of Modern China

An Economic History of Modern China

Joseph C.H. Chai

As a country’s current development is path dependent, the rise of China and its strategic implications can only be understood in a historical context. Hence, the key to understanding contemporary China is the understanding of its past. So far there has been an absence of a comprehensive text dealing with Chinese economic history in the English language. An Economic History of Modern China fills this important gap, focusing on modern Chinese economic growth and comprehensively surveying the patterns of China’s growth experience over the past 200 years, from the Opium wars to the present day. Key events are traced back to their foundations in history to explain their impact on China’s modern economic growth.

Chapter 12: The Great Famine

Joseph C.H. Chai

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


The factors responsible for China’s Great Famine in the years 1959–61 are also the causes of the failure of Mao’s strategy of concurrent development. While several good studies are available (see Kueh 1995; Becker 1996; Walker 1998; Riskin 1998; Lin and Yang 2000; Kung and Lin 2003) the most recent one by Yang (2009) is the most reliable and comprehensive one and this discussion largely follows it. Prior to Sen’s contribution (1977) the cause for famine was mainly attributed to the decline in food availability (FAD) as a result of either natural or man-made disasters. However, Sen argues that the more crucial factor may, in fact, have been problems with the distribution rather than the production of food, for example entitlement failure (EF). In a market economy the famine affects segments of the population who lose their entitlement to food because of the sudden loss of their possessions, or loss of the means to buy food, or because of change in the relative price structure which makes it difficult for them to acquire sufficient food. In his studies of several well-known historical famines in India he found that famines occurred even in the absence of FAD, simply because of EF. However, in the case of China’s famine at the end of the Great Leap Forward it has been shown that both factors were present: there was a significant decline in FAD and also EF on the part of the rural population (Lin and Yang 2000; Kung and Lin 2003;...

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