Conventional wisdom explains the remarkable growth of Chinese rural industry after 1978 in terms of changes in economic policy; that rural industrialization took off through a combination of privatization, liberalization, and fiscal decentralization. This book takes issue with such claims. Using a newly-constructed dataset covering China’s 2,000 counties and complemented by a detailed econometric study of county-level industrialization in the provinces of Sichuan, Guangdong, and Jiangsu, the book sets out the continuity which underlies the process of rural industrialization in China. The devel ... More

Conventional wisdom explains the remarkable growth of Chinese rural industry after 1978 in terms of changes in economic policy; that rural industrialization took off through a combination of privatization, liberalization, and fiscal decentralization. This book takes issue with such claims. Using a newly-constructed dataset covering China’s 2,000 counties and complemented by a detailed econometric study of county-level industrialization in the provinces of Sichuan, Guangdong, and Jiangsu, the book sets out the continuity which underlies the process of rural industrialization in China. The development of rural industry in the Maoist period set in motion a process of learning-by-doing, whereby China’s rural workforce gradually acquired an array of skills and competencies, leading to a vastly enhanced level of industrial capability on the countryside by the late 1970s. As a result, the pace of rural industrialization accelerated well before the supposed 1978 climacteric, and the growth of the 1980s and 1990s was simply a continuation of this process. Indeed, without the prior Maoist development of skills, China’s growth during the post-1978 era would have been much slower and perhaps would not have occurred at all — as has been the case in countries such as India and Vietnam.