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

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