TNAG-1458-FCO40-1982-Relations-between-Hong-Kong-and-China-1986 — Page 132

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jobs to prevent rural under or unemployed. Rural industry, often but by no means exclusively related in some way to

agriculture, provides a way out as well as a much more rapid

means for the creation of wealth.

5. The results were extremely gratifying.

Between 1979 and

Grain

The

1984 China enjoyed a succession of excellent harvests.

production rose from just over 300 million tons in 1978 (the

last year before reform) to 407 million tons in 1984.

weather was kind, but there could be no denying the stimulating effect of the reforms. Rural living standards and incomes rose markedly. New rural housing could be seen going up everywhere. In some places an almost unimaginable phenomenon, the rural household that earned 10,000 (about 1,300) a year, began to

appear. The Rural People's Commune, one of the prime symbols

of the Maoist egalitarian path to development, ceased to exist as an administrative unit and became only vestigial as an economic one. In effect agriculture had largely been

decollectivised.

6. The second stage of agricultural reform initiated in 1985 has not been so happy. In an attempt to further stimulate commercial activity in the countryside, all quotas for agricultural products other than grain and cotton were abolished

and the State monopoly on the purchase even of these was ended. The role of the free market was greatly extended. Under the

new system, the State purchasing authorities contract with growers of agricultural products or buy directly in the market. The immediate result was a rapid rise in consumer prices,

especially of vegetables and meat, in the cities. To soothe

outraged popular feelings, monthly pay supplements had to be introduced for urban workers in compensation for the rises. new policies also had an adverse effect on grain production. Raising cash crops or working in local industry became a much

The

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