The Bulletin of the Center for Research on Regional Economic Systems, the Graduate School of Social Science, Hiroshima University Issue 20
2009-03 発行

中国における工業化の進展と農工間資金移動の役割 <論説>

The Contribution of Money Flow from Rural to Urban Areas in Chinese Dual Economy
Okuda, Mai
In this paper, we are seeking to find out whether the current problems of urban-rural income gap and unemployment in Chinese rural areas will come to an end like some developing countries such as Japan and South Korea, which used to carry out a dual economy in the past.

Our framework is based on A. W. Lewis's theory of Dualism. Lewis's theory concerns the dual labor market in a nation. According to his model of dualism theory, there are two sectors in a dual economy, Urban Sector and Rural Subsistence Sector. The time span we consider is from the beginning of the reform and open policy in 1978 to 2000, when the market economy was introduced and, in particular, rural enterprises were positively established.

Nowadays Chinese shortage problem of labor force is getting serious in urban areas. This issue was mentioned and discussed that accumulated Outflow of Labor vs. Real Wage in Agricultural Sector by Professor T. Watanabe. His analysis of the turning point of an economic transition in Japan, South Korea, and Taiwan was used to find out whether the turning point was occurred or will occur in China. According to the analysis of Labor Force outflow and Real Wage in China, the turning point was in 1989.

On the other hand, this paper is going to investigate the upgrading of the industrial structure in the development of Chinese economy by analyzing the money flow and the structural changes in employment. The enlargement of the industrial sector, capital and labor forces are indispensable for the progress of industrialization.

We will examine the function of capital to determine whether the agricultural sector could invest their profit in giving birth to the industrial sector. We will come to the conclusion that the agricultural sector in China has been a surplus unit since 1989. The surplus generated in this sector was invested in the industrial sector through financial institutions and the capital inflow since this sector has turned to be an influential factor in industrial development.

The authors demonstrate that the changing of industrial structure was 1989, by applying the analysis of capital and the labor force.
dual economy
money flow