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Arguments - Prediction Error |
| Agricultural Policy |
| China's
agricultural sector faces many problems, and its future development will greatly
depend on the economic decisions made by the country's political leaders. Therefore, much
depends on China's overall political situation. While many observers envision a
continuation of economic reforms in China, surprises cannot be excluded. The swift and
largely unexpected breakdown of the Soviet Union shows that radical changes in economic
policy can come over night. China's political system still functions behind closed doors,
and many political observers admit that they have no idea which political fraction might
gain the upper hand in the long run. Any prediction of China's agricultural development
therefore has a high degree of uncertainty. Essentially, we can only make
"if-then" projections that link agricultural predictions to specific political
and economic scenarios. |
| Short Description of the Problem |
| There are many
open questions and uncertainties regarding China's agricultural policy. Here is a list of
problems that we consider most critical and that can only be solved through the decisions
of China's political leaders. |
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How will China deal with the
problem of its excess labor force in agriculture and the threat
of large-scale unemployment in rural areas? In particular, will the government
succeed in creating nonagricultural jobs in rural areas that could ameliorate
rural unemployment? |
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What will China do to stop or
diminish the loss of high-quality cropland due to the expansion
of infrastructure, industrial sites, and residential areas? Will the government introduce
zoning laws? |
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Will the administration be
able to implement and enforce measures for preventing a further increase in the pollution
of critical agricultural resources (water, soil, air)? |
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How will China deal with the
deficit and degradation of agricultural infrastructure, such as
dams, reservoirs, and irrigation systems? In particular, what will the government do to
build and upgrade systems to control flooding, which is a major factor in disaster-related
food insecurity? |
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Does the Chinese government
have the political will to further liberalize internal food trade and
market access for the farmers? Will the government allow private ownership of
agricultural land? Will the state abandon the compulsory procurement system for grain and
move to a more market-oriented grain supply with adequate producer prices for wheat and
rice? |
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What will China's
position on international trade be? Will the political leaders favor China's full
integration into the WTO and open its markets to international agricultural
trade? Will China abandon its long adherence to the concept of national
self-sufficiency in food? |
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| Discussion |
| The optimistic view |
Tables & Charts |
Many political
observers have argued that China's reforms have already reached the point of no return.
Especially the introduction of family farming, which gave land to hundreds of millions of
farmers and has greatly improved the population's food supply, seems to be undisputed. The
economic liberalization in China has also triggered a broad wave of entrepreneurial
initiative, which is the engine driving the country's economic progress. It will create a
middle class whose members are unlikely to favor any return to an authoritarian
command-and-control system. Another development unparalleled in other developing countries
is the emergence and growth of village industries, especially in China's coastal
regions. They have significantly improved living conditions for a large number of people
in rural areas.
Despite the official rhetoric of the development of a "socialist market
economy," straightforward market capitalism has already permeated many
sectors of Chinese society. Large farmers' markets crowded with customers, busy
restaurants, and numerous small private businesses - from computer shops to bakeries - in
all of China's major cities indicate that the market economy has taken hold on a broad
basis in Chinese society. China's economic reforms are linked with the improvement of
living conditions in broad sectors of the population.
The entrepreneurial spirit is observable everywhere. Even hard-core, high-ranking
socialist party officials are quitting their positions and are flocking to the private
sector: they "jumping into the sea," as the Chinese say. The most attractive
careers for university graduates are no longer in the party hierarchy or state
bureaucracy, but in the business sector. Many Chinese researchers and scientists have
given up fighting for lifetime academic posts or secure teaching positions, and are trying
to get into the commercial sector - even if they have to start at low-level junior
positions. There has been a sea wave change in attitudes in Chinese society; a great
majority of the population greatly appreciate the economic opportunities brought by the
political and economic reforms.
This social change in China lends some support to the argument that any counter-revolution
aimed at re-establishing a command-and-control society would necessary fail, because it
would not have the support of the masses. Maybe, China is in fact facing a long period of
economic growth and growing prosperity, not unlike the "economic miracle" of
Germany after World War II. |
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| The
pessimistic view |
On the other
hand, we should not forget that only three decades ago, a faction in China's power elite
around Mao's widow attempted to return society to grass-roots communism. The strong
anti-intellectual drive in the "Cultural Revolution" was not an ephemeral
ideological peculiarity of small group revolutionaries, but a deeply rooted streak in the
culture of China's ruling elite. When the Red Guards closed down the Central Statistical
Office and ordered researchers to work in the rice fields, and when they punished (or
killed) those they considered intellectuals, they were just exhibiting to an extreme the
fundamental dislike of individual and intellectual freedom that has characterized China's
rulers for centuries.
It is still a dominant cultural characteristic of the Chinese ruling class - communist or
not - that they believe they not only have the right, but the obligation,
to intervene in people's everyday lives and "improve" their condition. Stemming
from the Confucian philosophy of legitimate governance, this interventionist ideal of
political rule can be positive in a moderate form or can be a great threat to scientific
freedom and progress in China, if perverted into extreme authoritarian rule. If a
government tells the farmers what they should grow, where, and when (as was the
case in pre-reform communist China), the result can only be - at best - stagnation in
agricultural productivity. However, if a government tells a researcher what to
investigate or an engineer what technology to develop in which way, it will certainly
damage that individual's creative potential in the long run. Nothing is more devastating
to scientific and technological progress, which China urgently needs, than the
censoring of information sources, the suppression of free communication, and above all the
discouragement of individual initiative. There are some signs that Chinese rulers
might tighten censorship and intensify political control if they believe the reforms have
gone too far.
The "China bubble" could also burst, as some observers believe, if a global (or
regional) economic recession were to hit China's still-fragile economy. Three factors
might become critical: (1) the growing number of people being laid off from state
industries and bureaucracies, and the rural unemployed with little or no land might reach
a critical mass; (2) the tension between ethnic groups might intensify, especially if the
people in the hinterland become aware that the benefits of the reform have been
(geographically) distributed rather unequally in favor of the coastal provinces; and (3)
there could be growing civil discontent with widespread corruption and the "new
rich." |
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| Related Arguments |
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Agricultural Policy: Trends
Impact Data Quality
Prediction Error Intervention
Possibilities Intervention
Costs
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Revision 2.0 (First revision published in 1999)
- Copyright © 2011 by Gerhard K. Heilig. All rights reserved. (First revision: Copyright © 1999 by IIASA.) |
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