Dancing with Three Hands: The Identical Roots of China’s Agricultural Miracle and Crisis

Abstract

Ever since economic reforms were launched in China in 1978, the government, as ‘the visible hand’, introduced extraordinary policies by reorganising agricultural production and providing fiscal and financial support to promote rural development. The market, on its part as ‘the invisible hand’ stimulated distribution and strengthened agricultural competitiveness. Society, as ‘the third hand’, helped agricultural development further by creating a favourable environment; reinforcing human relationships and emphasising qualities like diligence and thrift. These three hands, namely the government, market and society, then promoted agricultural development in China. However, at the same time, their unequal relationship had the opposite effect. Thus, while on the one hand, a ‘dance’ of these hands lead to great achievements in agricultural production, farmers’ income and rural development, it also created a systematic crisis of unsustainable agricultural production. So this relationship simultaneously has been the cause of the miracle and the crisis in Chinese agriculture. We conclude by saying that for the sustainable development of China’s agriculture an efficient market, an effective government and a powerful society are three necessary elements.