The Relationship between Economic Growth and Agricultural Growth: The Case of China

Abstract

For the relationship between agriculture and economic development, this issue has been in controversy. This article performs econometric model analysis in the case of China for the year 1952-2007 showing that there has always been an positive relation between agricultural and economic growth and discusses how agriculture makes a contribution to economy growth. We conclude: (1) although the share of agriculture in GDP has declined significantly over time, the contribution of agricultural growth has maintained an upward trend with the elimination of the price index and it has made an important market, foreign exchange, factor (finance and labour), output contributions to nonagricultural growth and then it remains an irreplaceable driving force for economic growth; (2) economic growth strongly does not necessarily need a higher GDP growth rate in the agricultural sector. China should and have strength to enter the stage of industry nurturing agriculture. Enhancing agricultural contributions needs to continue to encourage the transfer of rural labour, raise the level of consumption of rural residents, encourage export and increase farmers’ income so that the national economy develops rapidly and orderly.