CONFIDENTIAL
9. Initial successes in the rural sector led to a widely-held belief in the West that China had found an effective solution to its
This now seems less likely to long-term agricultural problems.
be the case. Adjustments will need to be made if future goals are to be achieved and these may be controversial and prove difficult. More attention is now being paid to agriculture than at any time since 1984, when China achieved its record grain harvest and the focus of the reform was switched to industry. considerable concern that neglect of the rural infrastructure which accompanied the dismantling of the commune system has left China
These have been worse vulnerable to adverse climatic conditions.
There is also
There is
this year and may leave reforms open to criticism. room to doubt whether small-scale agriculture can raise production to required levels. The household responsibility system has been very effective in achieving a recovery of the rural economy and quick increases in production. However, the need to realise further substantial production increases to provide a basis for establishing a livestock industry, more exports and industrial raw materials may require a return to some form of larger-scale management and production organisation. This would be particularly sensitive and could be destabilising.
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CONFIDENTIAL
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