Reassessing the Lewis Turning Point in China: Evidence from 70,000 Rural Households

• Author: Yuan Zhang,Qi Dong,Ting Shao
• Published date: 01 January 2018
• Date: 01 January 2018
• DOI: http://doi.org/10.1111/cwe.12226

©2018 Institute of World Economics and Politics, Chinese Academy of Social Sciences

China & World Economy / 4–17, Vol. 26, No. 1, 2018

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*Yuan Zhang, Professor, China Center for Economic Studies, Fudan University, China. Email:

zhangyuanfd@fudan.edu.cn; Ting Shao (corresponding author), Associate Research Fellow, Development

Research Center of the State Council, China. Email: shaotingfd@163.com; Qi Dong, PhD Candidate, Hanqing

Advanced Institute of Economics and and Finance, Renmin University, China. Email: dongqi_neal@ruc.edu.cn.

This paper is supported by the Ministry of Education of China (No. 17JJD790005), Shanghai Pujiang Program

(No. 17PJC045) and the Natural Science Fund of China (Nos. 71273057 and 71703088). We gratefully

acknowledge the National Bureau of Statistics of China for the provision of data.

Reassessing the Lewis Turning Point in China:

Evidence from 70,000 Rural Households

Yuan Zhang, Ting Shao, Qi Dong*

Abstract

There is no convincing evidence to prove that China’s Lewis turning point (LTP)

arrived in 2004–2005, as suggested in some of the existing literature. Employing

data from the National Bureau of Statistics of China for 70,000 rural households and

following the method proposed by Minami (1968) to identify the Lewis turning point

in Japan, the present study reassessed the reaching of the LTP in China and found that

China’s economy reached the LTP around 2010. From a regional perspective, China’s

eastern region reached the LTP in 2010 and its central and western regions are now

approaching the turning point. After arriving at the LTP, China’s rural economy will

face three key tasks: safeguarding grain security, promoting economic restructuring

and realizing agricultural modernization. To cope with the shortage of human capital in

agriculture production and the challenge of the tight balance between grain supply and

demand, the Chinese Government should improve the human capital training system,

accelerate agricultural modernization and guarantee national grain security.

Key words: grain security, Lewis turning point, marginal labor productivity, rural

household data

JEL codes: J24, O18, Q12, R23, R58

I. Introduction

With the deepening of China’s industrialization and urbanization, increasing numbers

of surplus rural laborers are hunting for jobs in cities. Data from the National Bureau of

Statistics of China (NBS) shows that in 2008 the number of migrant workers reached as