Agrarian Problem in China

The above account of the economic life of a Chinese village is the result of a microscopic examination of a specimen. The phenomena observed in this confined area undoubtedly are of a local character. But they also have wider significance because this village shares a common process with most other Chinese villages. Hence we can learn some of the salient features of the agrarian problems in China.

The essential problem in Chinese villages, putting it in the simplest terms, is that the income of the villagers has been reduced to such an extent that it is not sufficient even to meet the expenditure in securing the minimum requirements of livelihood. It is the hunger of the people that is the real issue in China.

In this village, the immediate cause of the present economic depression is the decline of domestic industry. The present depression is not due to a deterioration of quality nor to a decrease of the quantity of production. Had the villagers produced the same type and the same amount of silk, they could not get the same amount of money from the market as before. The cause of depression lies in the relation between the village industry and the world market. It is the lack of adjustment between production and demand that accounts for the fall in the price of silk.

In view of the decline of domestic industry, the only alternatives open to the peasants are to improve their produce or to give up the industry.To improve the produce, as I have shown, is not only a matter of technical improvement but also a matter of social reorganization. Even this is not enough. A successful reorganization of rural industry depends ultimately on the prospects of industrial development in China. The present analysis is a warning to reformers who tend to underrate the force of internationalcapitalist economy.

If there is no immediate recovery of rural industry, the peasants will be forced to adopt the second alternative. They will in despair give up their traditional source of income, as has already happened in the weav-ing industry. If the labour released from the doomed domestic industry could be used in other productive activities, the situation would not be so desperate. It must be recognized that in industrial development there are certain industries which it may not be advisable to retain in the village. But in so far as there is no new occupation to take the place of the old, the waste of labour will mean a further reduction in family income.