Wednesday, July 06, 2016

China food

Deng Xiaoping was probably China’s greatest 20th century leader. He turned a very large and very poor country into a very large country that is among the world’s richest (measured by GDP, not GDP per capita). Economic freedom expanded but political freedom not so much. How are the two linked? Is there a “night watchman state” standard for fast-growing large Asian countries that have no western liberal tradition? No one knows.

How to build on Deng’s magic? Land and agricultural policies, not so long ago, were so misguided that millions starved. That was then. But even today, China’s poorest are still in the countryside.  Food has to be imported.

Farmland cannot be owned; it can only be leased for up to 30 years. Here is some land policy history.
Crop plantings that require many years to mature, as well as farm sizes that reap scale economies, are foregone. A recent FT (gated) includes Lucy Hornby’s “Losing the plot … For decades, the country has wrestled with modernizing its agricultural industry, sometimes with tragic results. But as long as the sale of rural land remains illegal, how realistic is it to expect radical reforms?”  Policymakers are trying to import food and even buy land abroad to feed the population. Taking a page from Deng's playbook, more land policy liberalization would help to solve a bunch of problems.

I have no idea about the domestic politics of further reform.  In any political system, reform encounters resistance. How did Deng Xiaoping do it? He started small. First Shenzhen, then the rest of the country. That's the way to go here as well as there.