Post–1978 Rural Economic Policy and Peasant Income in China

Per capita peasant income in China rose only 0·5 per cent per year over the two decades prior to 1978. Rural income growth was not only slow, it also lagged far behind the 1·7 per cent per year rate of the urban sector, which had started from a higher base. In December 1978 participants at the Third Plenary Session of the 11th Central Committee of the Chinese Communist Party ratified major policy changes designed to increase peasant income substantially. These and ensuing changes have raised the profitability of agriculture and altered production and marketing patterns. Before evaluating the magnitude and sources of income growth it will be useful to outline the major policy changes.