Social Scientist. v 15, no. 174-75 (Nov-Dec 1987) p. 34.

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Three Communes and a Production Brigade : The Contract Responsibility System in China

A NUMBER of socialist economies including the Soviet Union, Vietnam and China have undertaken in recent years a process of economic reforms aimed at revitalising their economies, particularly their lagging agricultural sectors. Perhaps the most far-reaching and sweeping reforms, however, have taken place in China's agrarian sector since 1980 with the introduction of the household contract responsibility system. Most of us are aware that production relations in Chinese agriculture have altered quite substantially with the restoration of the household as the unit of decision-making and accounting for most purposes, and with the revival of private retail trade. A great deal of confusion prevails, however, with regard to the character and implications of this change for the building of socialism in China. A number of observers have called it 'decollectivisa-tion' and have even equated the development of markets and production for the market with 'capitalism'.

The purpose of this paper is not to give a comprehensive account of the working of the new economic policy in China, but to outline, in somewhat heuristic and impressionistic terms, our own perception of the nature of the recent changes and the possible implications for socialist construction. In this, we have relied not only on the usual sources of data relating to the Chinese economy but also on our direct impressions during a visit to China in mid-1983, supplemented by the observations of other visitors at end-1985, during which period the implementation of the new policy was in full swing. An account of the three communes and a production brigade visited is given in the hope that it might help to give a concrete idea of recent developments.

It may be noted that there is a common feature in the economic reforms, especially with respect to agriculture, in the Soviet Union, Vietnam and China : the emphasis on effective material incentives for raising productivity. The question of production incentives has always been a dif-

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