Beginning in 1979, the authorities on Mainland China began implementing the Production Responsibility System, which was designed to correct long-term imbalances in the agricultural sector and to improve the standard of living of the rural population. While the system has proved effective in some areas, it has failed to resolve some serious problems, most prominently the problem of labor surplus in the rural areas.
A combination of rapid population growth and insufficient employment opportunities in nonagricultural sectors swelled the ranks of the agricultural labor force from 173.17 million in 1952 to 305.88 million in 1981. In addition, the relative scarcity of cultivated land in Mainland China has made it difficult to productively employ the expanding labor force.
Faced with this dilemma (too many laborers and inadequate arable land), the government has generally followed a policy calling for the intensive use of farm labor, an augmented multiple cropping index, and basic construction projects throughout the rural areas in order to employ the agricultural labor force.
A related problem has been equalized payment systems for rural workers. Equalized payment reduces the enthusiasm and hence the level of activity of the farm population. The net result has been poor productivity and low incomes, both of which have adversely affected the livelihood of the peasantry. Also affected has been the laborer’s ability to undertake heavy manual labor. In the latter context, the government has responded by expanding the number of workers engaged in a given project; this approach is called “working by sharing” in Mainland China.
The above. discussion should indicate that there is a large, disguised labor surplus in Mainland China. To analyze this, the paper adopts a labor productivity approach. The paper illustrates that the labor surplus rate has reached 35 percent, or 107.11 million people. Moreover, the author sees little chance for improvement in the near-term future. Because the agricultural sector is the most important sector and because efficient birth control has been difficult to realize in rural areas, the problem will probably grow to even larger proportions as the population increases. Mainland China’s ambitious farm mechanization goals will also exacerbate the problem.
