There was an interesting item recently on a state of the art report on rural economic policies in China by the Chinese Academy of Social Sciences (CASS). It shows the maturation of Chinese social science. In fact there is intense debate in China on rural development policies. CASS has been in the forefront on it. Its experts played an advisory role for the Chinese Rural Census,much like the Agricultural Census in India and pioneered discussion on rural reform. Its analytical work in the beginning of this century questioned the time honored policy of restricting migration from rural areas to the cities,the argument being that this would restrict Chinas labor advantages in export sectors. It also in a sense pioneered the discussion on the policy of rural development rather than just rural resource allocation by central planning,This was to be a focus of recent Communist Party Congresses.
The Chinese treat Indian delegations with a lot of attention. I always noticed that this was so as compared to when I would go in some global capacities. In a visit leading a high profile NGO delegation and asking to visit the backward areas in China I was to see that rural areas,earlier subsisting on a low yielding cereal economy,were now growing many crops,visible to the naked eye. This was more so in the so called backward west as compared to the eastern seaboard which given its resource endowments is still the rice bowl even if there is some skepticism on the official statistics. The demand for these rapidly diversifying areas is sustained by the high growth of purchasing power and the improvements in transport infrastructure,bringing larger markets in the purview of the rural economy. A paper by Martin Ravallion of the World Bank on poverty in China and India also brings out that poverty removal in China is related with growth of the non agricultural sectors,while that in India is explained by agricultural and rural growth to a larger extent. The visit of my delegation to areas like Kunming Leshan and Cheng Du was instructive in this regard.
Prof. Jianjin Liu of the Institute of Rural Development Research of the Chinese Academy of Social Sciences was an acknowledged expert on Chinas non-farm economy and like his Indian counterparts a sceptic of the statistics of achievements given by Ministries. But he had worked patiently on the Agricultural Census bringing out that Chinas non-farm employment which was much lower than twenty percent two decades ago,stood at twenty five and a half percent in 2001 and was at twenty seven and a half percent in 2002. The corresponding Indian figures at around 22% in the early Nineties are around 24% in the end Nineties. Two and a half decades ago China stood behind India in non-farm employment in rural areas as the demographer Pravin Visara had shown. In the decade of the nineties India stood still in structural transformation and China went ahead. The present census will probably show dramatic changes.
There were many myths on the Chinese rural transformation path. For example as in India,there was intense debate on subsidized credit to the Town and Village Enterprises,the famous TVEs. The Chinese economist,Tan Quicheng argued that high risk lending causes adverse selection and moral hazards of banks and credit cooperatives lead to soft budget constraint in the township and village enterprises in a manner familiar to us.
The big debate in China was and is on the systems to control migration. Many influential Chinese economists feel that relaxation of migration controls from rural areas to urban configurations will trigger the next round of more widespread and efficient growth. This is a much vexed question and the Chinese solutions to it will be of great interest to us.
JianjinLiu sent me a mail message saying that he stayed in Ahmedabad 2 weeks studying SEWA practices in providing socio-economic securities for the poor,i enjoyed my experiences there and i like Ahmedabad city. he said. I knew his work was state of the art. To my great regret I was to read later in the Herald Tribune that an economist of his name was jailed for twenty years on undisclosed charges of espionage.
In 1982 the first delegation which visited China from India after decades was of social scientists. It was led by the indomitable G Parthasarathy and I was its deputy leader. Vice Chairman Deng gave us an unscheduled audience and the delegation got high stature. The Chinese delegation was led by Mah Jong the first Chairman of CASS. He was hesitant to speak up and followed the party line,although a few months later he made the cover page of Time. Much to the chagrin of some of my colleagues he laid down that China was planning to increase inequality. Vice Chairman Deng in forty minutes gave us an outline of what China was to do and said that we must cooperate. China did exactly what he said and my impression is that in spite of all the hiccups its social science is moving to global standards. A hundred flowers will bloom.