THE RURAL ROOTS OF CHINA'S ECONOMIC MIRACLE
 
Yasheng Huang
Tuesday, October 23, 2007
 
 
In designing his economic policy programme for the next five years, President Hu Jintao is well advised to seek counsel from someone virtually unknown to those Chinese who came of age in the 1990s. He is Wan Li, 91 years old and still intellectually alert.

Mr Wan was a special guest at the opening session of the 17th Communist party congress in Beijing last week. It was he, more than anyone else there, who put China on the right track. In the 1980s he was a vice-premier in charge of agriculture, and before that he was the party secretary of the impoverished Anhui province.

It was in Anhui that the true Chinese miracle began. In December 1978, 18 households in Xiaogang village made a secret decision to privatise their rural output. Fearing reprisals, the households entered into a pledge – written in blood – to support the families of their leaders should they be arrested.

Mr Wan did not arrest them. On the contrary, he endorsed the experiment and bravely defended it in the face of withering attacks from conservatives. The experiment, which became known as the household responsibility system, was adopted by 90 per cent of villages in Anhui within a year and by the rest of the country a few years later.

Mr Wan was then promoted to vice-premier. In that position, he worked tirelessly to support rural financial liberalisation, lengthening the leasehold of farmland, removing employment restrictions on private businesses, deregulating rural-urban trade, curtailing the power of party officials in the countryside and introducing grassroots democracy to village governance.

The result was that rural household income per capita galloped ahead at more than 10 per cent a year in the 1980s. Western economists may tout foreign direct investment and global- isation as the reasons for China's poverty reduction. But the true credit lies with the rural reforms. The vast majority of China's poverty reduction came in the first half of the 1980s. Also during that period, income distribution improved.

A defining characteristic of Mr Wan and other leaders of the 1980s was that they respected the inclinations and actions of farmers rather than imposing their own visions.

The 1980s reforms were a classic example of a bottom-up, wisdom-of-the-crowd success story. A market economy, in essence, is an economic democracy. Mr Wan once told his subordinates always to assume that they were in the wrong if the farmers wanted to do something different from them.

It is truly unfortunate that China in the 1990s deviated from these market-conforming policy principles. In the 1990s, rural China was starved of financial resources in order to support industrial development in the cities. The effect of the urban policy bias was dramatic. Rural income growth collapsed from double-digit annual increases in the 1980s to about 4 per cent a year in the 1990s. Since then, under the leadership of Mr Hu, it has recovered to 6 per cent.

China will succeed or fail not because of how many skyscrapers Beijing and Shanghai have but as a result of the economic fortunes of its vast countryside. Domestic consumption will not grow if rural incomes do not improve and if rural residents are forced to save for their medical and educational expenses. China will not be a true market economy if rural land rights are not secure and if its financial system does not serve the most dynamic force in the economy – innovative rural entrepreneurs.

It may be counter-intuitive to think that China's high-technology future depends on its countryside – but not if you believe in market principles. The success of low-tech businesses in rural China will force urban companies to innovate in their production and technology to maintain their competitive edge. The rural stagnation of the 1990s sent millions of migrants to the cities in search of jobs. Urban companies, never short of labour, were flooded with tens of millions of eager job-seekers and they did what any rational owners and managers would do in similar circumstances – they favoured labour-intensive production at the expense of research and development.

There are other long-term costs, including the fact that the children of these rural migrants failed at schools. Due to the massive policy mistakes in the 1990s, China may have produced another uneducated generation.

In the past five years, Mr Hu has formulated many worthy objectives, such as creating a harmonious society and raising the living standards of average people above gross domestic product growth. He will realise these objectives more effectively if he can listen to Mr Wan and his colleagues, such as Tian Jiyun and Du Runsheng. These visionary leaders from the 1980s, who were marginalised in the following decade, were founders of the economic miracle. Its future success depends on how quickly and completely China returns to the model of the 1980s.

The writer, from MIT Sloan School of Management, is author of　　Capitalism with Chinese Characteristics (Cambridge University Press, 2008)

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为中国经济奇迹“寻根”

作者：黄亚生(Yasheng Huang)为英国《金融时报》撰稿
2007年10月23日 星期二
 
 
在规划未来5年经济政策的过程中，中国国家主席胡锦涛明智地向一个人请教。那些上世纪90年代刚成年的人，几乎没听说过这个名字。他就是万里，现年91岁，但思维仍很清晰。

万里是上周中共17大开幕式上的特别嘉宾。在使中国走上正轨方面，他所发挥的作用比任何其他与会人士都要大。上世纪80年代，万里是主管农业的副总理，在此之前，他曾担任贫困省份安徽的省委书记。

安徽是真正的中国奇迹的发源地。1978年12月，小岗村的18位农户作出了分田承包的秘密决定。由于担心遭到报复，这些农户写下了血书，一旦他们被捕，社员们保证将领头人的子女抚养成人。

万里没有抓他们。相反，面对保守派的猛烈攻击，他批准了这一试验，并勇敢地为其作了辩护。这一试验名为“家庭联产承包责任制”，一年之内，安徽省90%的乡村都施行了这一制度，几年后，中国其它地区也开始施行。

此后，万里晋升为国务院副总理。在这个位置上，他不知疲倦地致力于推动开放农村财政、延长农田租赁期、取消私营企业的就业限制、放开城乡贸易、削减农村党政官员的权力，并推行农村治理的基层民主。

结果，在80年代，中国农村人均家庭收入每年以超过10%的速度快步增长。西方经济学家可能会吹嘘说，外国直接投资和全球化才是中国减贫的原因。然而，真正的功臣是农村改革。中国大部分的减贫成就出现在80年代的头5年。同期，收入分配状况也有所改善。

万里和80年代其他领导人的一个显著特点，是他们尊重农民的意愿和行动，而不是将自己的意志强加在农民头上。

80年代的中国农村改革是自下而上、依靠群众智慧的成功典范。市场经济本质上是经济民主。万里曾告诉下属说，如果农民希望所做的事情与自己的想法不同，首先应该想的是，自己可能是错的。

90年代，中国偏离了这些遵循市场的政策原则，这的确很不幸。当时，为了支持城市的工业发展，中国农村金融资源严重匮乏。这种偏袒城市政策的影响巨大。90年代，农村收入从80年代两位数的增幅，急剧下滑到4%左右。此后，在胡锦涛的领导下，这一比例回升至6%。

中国的成败并不取决于北京和上海拥有多少座高楼大厦，而在于广大农村地区的经济命运。如果农村收入没有提高，农民被迫为医疗和教育开支而储蓄，那么国内消费就无法增长。如果农村的土地权利得不到保证，农村金融体系不能为经济中最具活力的力量——农村中富有创新精神的企业家服务，那么中国就无法实现真正的市场经济。

中国高科技的未来取决于农村地区，这种想法可能与你的直觉不符，但如果你相信市场原则的话，想法就会不同。在中国农村地区，科技含量较低的企业取得成功，将迫使城市企业在生产和科技方面创新，以保持其竞争优势。90年代农村经济的停滞，使成百上千万农民涌入城市寻找工作。数以千万计急切的求职者涌入从不缺乏劳动力的城市企业，而这些企业做出了理性的所有者和经理人在类似情况下会做出的决定：它们牺牲了研发，而青睐于劳动力密集型生产。

其它的长期代价，包括这些农民工子女的教育问题。由于90年代的重大政策失误，中国可能又造就了一代文盲。

过去5年，胡锦涛先生制定了许多有价值的目标，例如建设和谐社会，让人民平均生活水平增速超过国内生产总值(GDP)增幅。如果胡锦涛能倾听一下万里及其同事田纪云和杜润生等人的建议，他将会更高效地实现这些目标。这些富于远见的80年代领导人创造了中国的经济奇迹，但在接下来的10年，他们却被边缘化了。中国未来的成功，将取决于中国回归80年代模式的速度与深度。

本文作者是麻省理工学院斯隆商学院(MIT Sloan School of Management)教授，也是《具有中国特色的资本主义》(Capitalism with Chinese Characteristics)（剑桥大学出版社(Cambridge University Press)，2008年出版）的作者。