Reexamining the Viewpoint of the World Bank: Does Agricultural Growth Play a More Important Role in Reducing Poverty in Rural China?*

Xu Qing 1, Li Yun 2 and Zhang Yuan 3
1 Institute of Finance and Economics, Shanghai University of Finance and Economics, Shanghai
2 School of Economics, Fudan University, Shanghai
3 China Center for Economic Studies, Fudan University, Shanghai
Abstract: The World Bank maintains that, compared to the growth of other industries, agricultural growth plays a more important role in reducing China’s rural poverty. This stance, however, is contrary to the findings in this paper. This paper asserts that China’s experience in reducing rural poverty should be attributed to: (1) its earlier, unbalanced economic development strategies, which gave priority to heavy industries and industrialization and led to the economic boom; and (2) the expansion of non-agricultural sectors, which enabled poor rural households to engage in non-agricultural production. Thus, the key impetus to reducing poverty in rural China is industrialization. Due to its large population but limited farmlands, it may not be a good strategy for China to make agricultural development a priority because its relatively low value added and net profits are inept to promote economic development and reduce rural poverty.
Key words: rural poverty, industrialization, Chinese experience

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