China: why farmers do better than factory workers

Everywhere one travels in the Chinese countryside, peasants are busy building houses, sometimes with traditional mud and straw, but now increasingly of brick. Country roads are busy with peasants taking squealing pigs, cackling chickens, or leafy vegetables to market -- by bicycle, wheelbarrow, or carrying pole.

China remains poor and backward, as its leaders frequently tell visitors. But the increasing prosperity of its 800 million peasants -- four-fifths of China's population -- is the major achievement of short, peppery Deng Xiaoping and his associates since they came to power nearly five years ago.

Industry, however, is another story. Deng's leadership is engaged in an all-out, concerted effort to raise living standards and modernize the economy. In later years Mao Tse-tung did deviate from the Soviet Stalinist model to emphasize decentralized agriculture and industry. But 30 years of communist rule frequently followed a relatively centralized model of rigid economic planning, often with a strong emphasis on heavy industry at the expense of the consumer. This cannot be changed overnight.

In speech after speech, Premier Zhao Ziyang attacks ''blind production'' -- planners setting targets and factories blindly meeting their production quotas in blithe disregard of whether the goods produced are either needed or useable.

More than 20 million tons of rolled steel are stockpiled in warehouses at present because there is no use for them, Mr. Zhao told a recent conference. (That is three-fourths of China's production of rolled steel last year.) Another economic minister said 18 billion meters of polyester cloth remained in warehouses at the end of last year - 800 million meters more than at the beginning.

''China's waste of energy is shocking,'' Mr. Zhao said to the National People's Congress last year. Mr. Zhao also repeatedly criticizes what is known as ''everyone eating from the same ricepot'' -- that is, no matter whether a person is hard-working or lax, efficient or inefficient, he will always have a job and has no real incentive to do better.

Why does agriculture do relatively well and industry not so well in China?

The easy answer would be to say that the peasant has been largely free to follow his capitalistic instincts, whereas in industry, despite experiments in granting more decisionmaking powers to local enterprises, there remains a high degree of centralized bureaucratic control.

But this answer would not be accurate. It is true that peasants are much freer than they used to be in the chaotic, ideology-first days before what the Chinese now call the Cultural Revolution (1966-76). But the Chinese leadership is far from following the Polish example, for instance, and allowing land to be individually owned. Land remains in the hands of the collective -- the production brigade or the production team.

Still, private plots have been enlarged and may now constitute 15 percent of a production team's total land. (Until last year, 7 percent was the limit). Also , peasants are encouraged to have sideline occupations, whether raising pigs or keeping bees or weaving baskets. Moreover in many villages, peasants sign contracts with the collective, are assigned land and tools on the basis of this contract. They can keep all they produce over and above whatever amount they have contracted to supply the collective.

In short, today's peasant has all kinds of economic incentives to produce more. Though his consumer needs are far from being satisfied, he has an immediate, major investment - his own house. This is a luxury city factory workers jammed into cubbyhole housing can not expect. At the same time, the peasant knows that however hard he may work as an individual, he must rely on the collective for a wide range of services from irrigation and flood control to fertilizer and seed.

To some extent, agriculture in China has always been a cooperative effort. But the communists have turned cooperation into an ideological imperative. They have done away with landlords and great disparities of wealth in the countryside. They have largely eliminated recurring cycles of famine. This is no mean achievement in a country where only 10 percent of the land area is arable.

Industry is more complicated. Socialists and communists in many developing countries see capitalists as wasting resources and squandering profits made through exploiting labor on socially useless consumption.

In this view, China, as a poor developing country, cannot afford to waste its resources this way. Everything must be carefully planned and centrally coordinated so that a given amount of resources can be used most effectively.

But in fact rigid central planning has caused a tremendous waste of resources and the production of goods that, in Premier Zhao's words, ''do not meet society's needs.''

China's communist leaders are not about to give up centralized planning and control. But they do realize that there must be far more sophistication and fine-tuning in this process than previously. They agree that they must assign a more important role to market forces -- to the desire of ordinary citizens for more and better food and clothing, for bicycles, sewing machines, and television sets.

China's development problems are so vast that ideology will solve them all. China's leaders, while repudiating much that their predecessors have done, have chosen to tackle problems within the framework of what they call socialism -- collective ownership of land and the means of production, and the principle, ''to each according to his work.''

It is not realistic to think they will depart from this framework. But within it, will they prove flexible enough, imaginative enough, responsive enough to the still inadequately articulated needs and demands of their people, to reach their targets of modernization and higher living standards?

The alternative of a China once again plunged into turmoil and chaos, or sullenly withdrawn from contacts with the rest of the world, is not pleasant to contemplate.