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How Important is Agriculture in China's Economic Growth?

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  • Shujie Yao

Abstract

China has achieved spectacular growth since 1949. Rapid growth in the nonagricultural sectors has been assisted by massive resource transfers out of agriculture. Prior to economic reforms before 1978, agriculture was heavily taxed by the state to subsidize urban and industrial development. Economic reforms since 1978 have reduced the burden on agriculture, but lack of state investments still remains a constraint on its development. This paper demonstrates how agriculture has contributed to China's economic development using both empirical data and a cointegration analysis. Two important conclusions are drawn. First, although agriculture's share in GDP declined sharply over time, it is still an important force for the growth of other sectors. Second, the growth of non-agricultural sectors had little effect on agricultural growth. This was largely due to government policies biased against agriculture and restriction on rural-urban migration.

Suggested Citation

  • Shujie Yao, 2000. "How Important is Agriculture in China's Economic Growth?," Oxford Development Studies, Taylor & Francis Journals, vol. 28(1), pages 33-49.
    • Handle: RePEc:taf:oxdevs:v:28:y:2000:i:1:p:33-49
    DOI: 10.1080/713688306
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    References listed on IDEAS

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    1. Hazell, P. B. R. & Roell, Ailsa, 1983. "Rural growth linkages: household expenditure patterns in Malaysia and Nigeria," Research reports 41, International Food Policy Research Institute (IFPRI).
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    2. Waseem Khan & Saghir Ansari, 2018. "Does Agriculture Matter for Economic Growth of Uttar Pradesh (India)?," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(3), pages 1029-1037.
    3. Chebbi, Houssem Eddine & Lachaal, Lassaad, 2007. "Agricultural Sector and Economic Growth in Tunisia: Evidence from Co-integration and Error Correction Mechanism," 103rd Seminar, April 23-25, 2007, Barcelona, Spain 9416, European Association of Agricultural Economists.
    4. Xiang Luo & Xinhai Lu & Zuo Zhang & Yue Pan, 2020. "Regional differences and rural public expenditure cyclicality: evidence from transitory and persistent shocks in China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(2), pages 281-318, October.
    5. RAMDE, Fousseni & LO, Sérigne Bassirou, 2015. "Le Role Du Secteur Agricole Dans L’Economie Du Senegal [The Role Of The Agricultural Sector In The Senegal Economy]," MPRA Paper 81906, University Library of Munich, Germany.
    6. Grabowski, Richard, 2009. "An alternative Indian model?," Journal of Asian Economics, Elsevier, vol. 20(1), pages 50-61, January.
    7. Gang Chen & Brett Inder & Paula Lorgelly & Bruce Hollingsworth, 2013. "The Cyclical Behaviour Of Public And Private Health Expenditure In China," Health Economics, John Wiley & Sons, Ltd., vol. 22(9), pages 1071-1092, September.
    8. Runganga, Raynold & Mhaka, Simbarashe, 2021. "Impact of Agricultural Production on Economic Growth in Zimbabwe," MPRA Paper 106988, University Library of Munich, Germany.
    9. Herrerias, M.J. & Orts, Vicente, 2011. "Imports and growth in China," Economic Modelling, Elsevier, vol. 28(6), pages 2811-2819.

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