China's Incomplete

Abstract

Over the last thirty years mainland China has experienced world transforming growth and liftedhundreds of millions out of poverty. Originally most of the growth occurred in rural areas asfarmers were given control over the management of their plots. Overall inequality throughoutChina decreased as rural incomes rose due to higher agricultural outputs. However by the mid-nineteen eighties the government shifted its reform focus towards the urban areas, particularlythe coastal port cities. Rural reform slowed considerably and the central government issuedstopgap measures to keep rural land usage contracts frxpiring without introducing anysignificant market reforms. The Chinese government's refusal to secure rural property rights hasa role in reducing agricultural production growth due to less financing and investment. Thiscould also have a long run effect of reducing rural to urban migration, which slows urban-ruralinequality predicted reductions. Using international panel data I measure the importance ofproperty rights and institutions on agricultural productivity. I also attempt see how increasedagricultural productivity affects migration and the urban rural wage gap.