Discussion Paper No. 30 Abstract
How Fast Have China's Agricultural Production and Productivity Really Been Growing?
Output in Chinese agriculture has grown rapidly for the last several decades, as reported by
the Statistical System in China. However, reported total output is aggregated using constant
prices, which has been proven to be inappropriate by many economists. As a result, growth
rates of output reported by the government may be biased. This bias can be large,
particularly at a time when relative prices of agricultural products were changed
substantially as part of the policy reforms during the 1980s and 1990s. A similar problem
exists in the aggregation of total input. Consequently, estimates of total factor productivity, an index of output minus input, can also be biased.
This study uses a more appropriate approach to measure growth in output, input and total factor productivity for Chinese agriculture. Using newly estimated production and productivity growth indexes, the impact of rural reforms are reassessed. The conventional approach overestimates the impact of the rural reforms on both production and productivity growth. Nevertheless, both production and productivity still grew at respectable rates during the reform period.
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