One of the most important tendencies with a direct bearing on poverty reduction is the overall pattern of
growth and structural change. As noted in the first section, China’s recent growth has been along the classic
Kuznets-style trajectory, with an increase in the share of the manufacturing sector in both output and employment.
A crucial feature of such a positive tendency is agrarian transformation. It is evident from Chart
3 that the share of agriculture in
both output and employment has
declined since the early 1980s. This
is different from a number of other
developing countries (including
India) where the share of agriculture
in employment remains high. So,
the ability of the Chinese growth
pattern to generate more productive
and remunerative employment outside
agriculture played an important
role. In addition, per worker output
in agriculture increased dramatically
from the early 1980s, reflecting
the institutional changes described
earlier. What is significant is that
it continued to increase at a rapid
rate thereafter, such that it nearly
doubled in the decade after 1995.
This has clearly played a very important
role in rural poverty reduction,
dwarfing the effect of particular
poverty alleviation schemes, but