From Commune to Capitalism. Zhun Xu

Although different studies have presented varying results, there is a general consensus that decollectivization is the most important reason for China’s impressive agricultural performance in the early 1980s.

      However, Chinese agricultural productivity slowed down significantly after the completion of decollectivization. Table 3.1 lists the growth rate of the yields of the three most important crops (grain, cotton, and oil crops), which constituted more than 80 percent of total sown area in both the transition period and the era of stable household production. For all three crops, the average yield growth rate decreased dramatically after 1984. It is thus fair to conclude that agricultural performance in the stabilized household production era was inferior compared to that of the transition period.

      Since performance in the era of stabilized household production has not been impressive, what is the real source of the Chinese agriculture miracle during the transition period? To answer this question, it is necessary to reconsider the causes of the remarkable growth in the early 1980s. A critical review of the historical process and previous studies of this period indicates that decollectivization did not have a significant impact on output, while more intensive application of modern inputs and other exogenous factors, such as weather, accounted for most of the growth in output.

TABLE 3.1: Household Agriculture before and after 1984

      Source: Ministry of Agriculture, 2009, 17, 23, 25; State Statistical Bureau, 2005, section 39.

      HISTORICAL OVERVIEW OF THE TRANSITION PERIOD

      The transition period was complex, with very different forces in operation at the same time. While it is not possible to cover all the facets of change during this period, this overview offers an analysis of a variety of factors, from weather conditions to institutions.

       Decollectivization: The Household Responsibility System

      Before the reform, Chinese rural production and distribution were all managed by production teams, which were the basic units under the people’s communes. During the early stage of reform, some management adjustments in the collectives were permitted, but the collective framework was maintained, and work management and income allocation were still determined by the collectives. One of the popular forms of this early transitional policy was that small jobs were contracted to workgroups or individuals with specific skills. But in fact, small-job contracting was not new at all: it had been practiced during the collective era. However, under the new regimen, more economic incentives were used. That was why this policy was called the “responsibility system” (zerenzhi), or more accurately, the “performance-based compensation and responsibility system” (lianchanzerenzhi).

      The early reforms of the collective system proved to be minor compared to the decollectivization reforms of 1980–1981, when collectively owned land was divided up among rural households, and production, distribution, and related business came under the full control of individual families.¹ This new policy basically dissolved the collectives and, from 1984 on, made the individual household the basis of the new system of production. This decollectivization reform was vividly named “divide-all-up” (da baogan), but it was later renamed the “household contract and performance-based compensation and responsibility system” (jiating lianchan chengbao zerenzhi), or simply, the household responsibility system (HRS) for short. As column 1 of Table 3.2 shows (see page 43), HRS expanded very rapidly: in 1980, only 14 percent of production teams had adopted HRS; two years later, 80 percent had adopted HRS.

       Technology Diffusion and Conditions of Production