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Fostering Or Stripping Rural China: Modernizing Agriculture And Rural To Urban Capital Flows

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  • JIKUN HUANG
  • SCOTT ROZELLE
  • HONGLIN WANG

Abstract

The present study focuses on the flow of fiscal and financial resources in China's rural economy during the first two decades of reform. Specifically, we seek to quantify the nature and direction of the capital flows between agriculture and the non‐agricultural sectors and between the rural and non‐rural sectors. We track identify the flows of three main sources of capital: fiscal flows, financial shifts through the formal banking system, and the implicit taxes that are moving through the grain system as a result of payment of in‐kind (e.g., delivery quotas by farmers). Through this analysis, we provide policy makers with a set of measures showing that although in recent years the agriculture‐to‐industry and rural‐to‐urban flows have appeared to reverse themselves, as late as 2000 it does not appear as if the government is not directing enough resources into the rural economy. Greater flows, however, are needed if rural China is to modernize.

Suggested Citation

  • Jikun Huang & Scott Rozelle & Honglin Wang, 2006. "Fostering Or Stripping Rural China: Modernizing Agriculture And Rural To Urban Capital Flows," The Developing Economies, Institute of Developing Economies, vol. 44(1), pages 1-26, March.
    • Handle: RePEc:bla:deveco:v:44:y:2006:i:1:p:1-26
    DOI: 10.1111/j.1746-1049.2006.00001.x
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    References listed on IDEAS

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    1. de Brauw, Alan & Huang, Jikun & Rozelle, Scott & Zhang, Linxiu & Zhang, Yigang, 2002. "The Evolution of China's Rural Labor Markets During the Reforms," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 329-353, June.
    2. Sicular, Terry, 1988. "Plan and Market in China's Agricultural Commerce," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 283-307, April.
    3. Jikun Huang & Ninghui Li & Scott Rozelle, 2003. "Trade Reform, Household Effects, and Poverty in Rural China," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1292-1298.
    4. Linxiu Zhang & Renfu Luo & Chengfang Liu & Scott Rozelle, 2006. "Investing in Rural China: Tracking China's Commitment to Modernization," Chinese Economy, Taylor & Francis Journals, vol. 39(4), pages 57-84, August.
    5. Songqing Jin & Jikun Huang & Ruifa Hu & Scott Rozelle, 2002. "The Creation and Spread of Technology and Total Factor Productivity in China's Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 916-930.
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    Cited by:

    1. Huang, Jikun & Liu, Yu & Martin, William J. & Rozelle, Scott, 2007. "Integrating China’s Agricultural Economy into the Global Market: Measuring Distortions in China’s Agricultural Sector," 2007: China's Agricultural Trade: Issues and Prospects Symposium, July 2007, Beijing, China 55023, International Agricultural Trade Research Consortium.
    2. Jessica Leight, 2016. "Grain into Gold? The Impact of Agricultural Income Shocks on Rural Chinese Households," Department of Economics Working Papers 2016-13, Department of Economics, Williams College.
    3. Jia Chen & Kuan Zhang, 2024. "Analysis on the spatiotemporal pattern and driving force of the spatial deviation index of grain and economy in counties in China," PLOS ONE, Public Library of Science, vol. 19(12), pages 1-23, December.
    4. Shang, Juan & Li, Pengfei & Li, Ling & Chen, Yong, 2018. "The relationship between population growth and capital allocation in urbanization," Technological Forecasting and Social Change, Elsevier, vol. 135(C), pages 249-256.
    5. Jikun Huang & Scott Rozelle, 2010. "Agricultural Development, Nutrition, and the Policies Behind China's Success," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 7(1), pages 93-126, June.
    6. Xiaobo Dong, 2026. "Distributional welfare effects of agricultural subsidy reform in rural China using macro-micro simulation," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 13(1), pages 1-16, December.
    7. Hongbin Li & Prashant Loyalka & Scott Rozelle & Binzhen Wu, 2017. "Human Capital and China's Future Growth," Journal of Economic Perspectives, American Economic Association, vol. 31(1), pages 25-48, Winter.
    8. Huang, Jikun & Rozelle, Scott & Martin, William J. & Liu, Yu, 2007. "Distortions to Agricultural Incentives in China," Agricultural Distortions Working Paper Series 48478, World Bank.
    9. Fan, Linlin & Nogueira, Lia & Baylis, Katherine R., 2013. "Agricultural Market Reforms and Nutritional Transition in Rural China," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150203, Agricultural and Applied Economics Association.
    10. Rozelle, Scott & Sumner, Daniel A & Paggi, Machel & Huang, Jikun, 2006. "Rising Demand, Trade Prospects, and the Rise of China's Horticultural Industry," 2006 NAAMIC Workshop III: Achieving NAFTA Plus 163885, North American Agrifood Market Integration Consortium (NAAMIC).

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