By Yumin Sheng
This booklet makes a survey of the methodologies utilized in prior quantitative research of intersectoral source flows (IRF). in line with the dialogue of the defects of a lot latest paintings, an try is made to enhance the size of IRF. The ebook is a scientific research of IRF in China 1952-1983 and lays a lot of the foundation for constructing a coherent research of the timing, measurement and path of IRF in China. the foremost discovering from the empirical research is that whereas the chinese language executive extracted assets from agriculture via cost mechanism, huge quantities of the extracted assets have been pressured to come back to agriculture.
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Extra info for Intersectoral Resource Flows and China’s Economic Development
This conclusion is against Ishikawa's empirical study on the Chinese experience and supports the traditional view that agriculture played a vital role at early stages of industrialisation. This conclusion, however, is not convincing. It contradicts the view which is proved by statistics and empirical studies and widely accepted by the economists (including Macrae himself, 1979, p. 267) studying the relationship between China's agriculture and non-agriculture - that, at actual prices, China's agriculture has been earning a much lower rate of profit than non-agriculture has.
15 Others have argued that even the prices of the mid-1930s are inappropriate for analysing intersectoral relations because by 1936--7 relative agricultural prices had been declining for five to ten years (Hu Changnuan, 1979; Li Debin, 1980). Secondly, putting aside The English-Language Literature 23 the immense difficulties of finding such a year in which the ruling prices are approximate to the 'real prices' of that year, one cannot assert that these prices are also approximate to the 'real prices' for the other years in question because the technological conditions and demand variables change over time so that the production costs related to efficiency of resource allocation change as well.
This method used in the Chinese-language literature is discussed in this chapter rather than the next, because it is related to the market mechanism rather than the labour theory of value. These economists judge - from the fact that, in the free market, prices are higher than the controlled or planned prices - that the controlled or planned prices underprice agricultural products and thus there is forced unequal exchange against agriculture. This judgement suggests implicitly that the free-market price may be taken as the appropriate price.