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Living Standards and Economic Development in Shanghai and Taiwan

Published online by Cambridge University Press:  17 February 2009

James E. Nickum  and
David C. Schak
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Extract

How people live under different economic systems is always of enormous interest, although comparison is handicapped in practice by the presence of other, non-systemic differences, such as culture and the level of economic development. Significant comparisons of living standards in the market-orientated Taiwan and the plan-orientated mainland portions of China, where the inherited culture is similar, have been precluded by the wide disparities in size, urban-rural mix, and level of development. Yet an interesting, and perhaps useful comparison can be made between Taiwan and a counterpart region within the People's Republic, such as Shanghai.

Type
Research Article
Information
The China Quarterly , Volume 77 , March 1979 , pp. 25 - 49
Copyright
Copyright © The China Quarterly 1979

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References

* Research for this article was sponsored by a grant from the Joint Committee on Contemporary China of the American Council of Learned Societies and by grants to the respective authors from the Social Science Research Council. The manuscript was prepared at the Center for Chinese Studies, University of California, Berkeley. Innumerable scholars have offered their assistance and counsel at various stages of the manuscript preparation. We are particularly indebted to Charles Hoffmann, Bruce Reynolds, Robert Scalapino, Stephen Tobias and Benjamin Ward. Any mistakes are our own.

1. Most of our observations are based on data compiled in standard compendia for Taiwan and released in a more “unsystematic” form for Shanghai. Data on Shanghai are usually released within the body of written news accounts and radio broadcasts. The state monopoly of these forms of communication ensures that data, when released, are official.

In addition, we have made use of other materials on price, wage and budget data. Supplementary information on conditions in Taipei comes from field data gathered in the course of a year's study by one of the authors (Schak). For Shanghai, we have consulted travellers' reports, plus some price data gathered by the other author (Nickum) in 1974.

Since the economy of Taiwan is more subject to changes in incomes and prices, and suffered from severe inflation in 1973 and 1974, we have selected a relatively short period, the second quarter of 1974, for cross-sectional study on wages and prices. This is also the period for which we have the most complete field data. Information on Shanghai varies from 1972 to 1975, but since wages and prices changed little, the longer time period enables us to expand our number of observations without having to take inter-temporal effects into consideration.

2. For our inter-temporal observations, we have chosen the period 1965 through 1974. The year 1965 is a common base for People's Republic data, as it was the year before the Cultural Revolution. It is also a year, as is 1974, for which contemporary data on Shanghai are relatively abundant. These endpoints are also useful for Taiwan: 1965 was the last year of the U.S. aid programme, and our field data are from 1974. There appears to be no particular bias induced by the choice of these years, except for a slight downturn in Taiwan's industrial growth rate due to an absolute fall in 1974 output.

3. Field, R. M., Lardy, N. R. and Emerson, J. P., Provincial Industrial Output in the People's Republic of China: 1949–75 (Washington, D.C.: U.S. Dept. of Commerce, 09 1976Google Scholar. Foreign Economic Report No. 12), pp. 10–11. Only Ningsia (18·8 per 5 cent), Tibet (18·6 per cent) and Tsinghai (16·7 per cent) grew faster. These also have the smallest GVIOs. However, Hopei, Shantung and Peking, all of comparable economic magnitude to Taiwan, had annual GVIO growth rates exceeding 14 per cent.

We assume that IMPV and GVIO are comparable units of measure, with the caveat that the resultant comparisons, especially once filtered through official exchange rates, are not made with surgical precision. Both IMPV and GVIO are of comparable scope, including mining and utilities, and both are summations of output values of the principal industries with no elimination of double counting. The same ratio of gross to net value, 3:1, is evident for IMPV in Taiwan in the 1970s and for GVIO in the People's Republic in the early 1950s (when such data are available).

The use of IMPV understates Taiwan's industrial growth in value added terms by roughly 2·2 per cent per annum. This undercounting stems entirely from 1973 and 1974, when the slowdown in the economy appears to have been reflected more strongly in the IMPV figures. The direction of bias in Shanghai's GVIO growth is unclear.

4. In comparison with all provincial-level units in the People's Republic, Taiwan went from approximately ninth place to fourth, after Shanghai, Liaoning and Kiangsu, and just ahead of Hopei.

5. Kuo, Wanyong, “Technical change, foreign investment, and growth in Taiwan's manufacturing industries, 1952–1970,” Industry of Free China, Vol. 42, No. 6 (12 1974), p. 10Google Scholar.

6. Ivory, Paul E. and Lavely, William R., “Rustication, demographic change, and development in Shanghai,” Asian Survey, Vol. 17, No. 5 (05 1977), pp. 440–55CrossRefGoogle Scholar.

7. Ibid. Shanghai's increase in labour productivity is well below the nearly 9 per cent of Taiwan, and is probably a reflection of the former's lower rate of net investment.

8. “Shanghai's light industry,” Peking Review, No. 3 (17 01 1975), p. 12Google Scholar; and “The immense strength of co-operation,” pp. 13–14.

9. Szu-ti, Shang, Chun-kung, Su and Wen-pin, Shih, Shang-hai ti-li chien-hua (Brief Description of Shanghai's Geography) (Shanghai: Shanghai Press, 1974)Google Scholar, in U.S. Joint Publications Research Service (JPRS), No. 65,979 (1975), p. 78Google Scholar.

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11. Lardy, Nicholas R., “Centralization and decentralization in China's fiscal management,” The China Quarterly (CQ), No. 61 (1975), pp. 55–59Google Scholar.

12. “The Immense strength of co-operation,” p. 13. These figures were updated by P'eng Ch'ung, “Ch'ung-fen li-yung ho chi-chi fa-chan Shang-hai kung-yeh wei shihhsien ssu-ko hsien-tai-hua tso-ch'u keng-ta kung-hsien” (“Make full use of and actively develop Shanghai's industry so as to make still greater contributions to the realization of the four modernizations”), Jen-min jih-pao, 8 December 1977, p. 1: “According to the statistics, investment by the state in capital construction in Shanghai from 1950 to 1976 amounted to only 7–6 per cent of the financial income transmitted from Shanghai to the state. During the same period, investment (funds) supplied to the entire nation by Shanghai comprised 41·9 per cent of total national capital construction investment. Since Liberation, Shanghai has also sent several hundred thousand technicians and technical workers to other areas.”

13. Cadres, technicians and managers are not included in these scales, nor in the discussion below. Their incomes are higher.

14. Howe, Christopher, Wage Patterns and Wage Policy in Modern China, 1919–1972 (Cambridge: Cambridge University Press, 1973), p. 72Google Scholar.

15. Marc Blecher, personal communication.

16. Howe, , Wage Patterns, pp. 71–72Google Scholar.

17. Riskin, , “Workers' incentives,” p. 218Google Scholar. Cf. Howe, , Wage Patterns, pp. 43–47Google Scholar.

18. Riskin, , “Workers' incentives,” p. 217Google Scholar; and Howe, , Wage Paterns, p. 31Google Scholar.

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20. Robert Scalapino, unpublished trip notes (1972); and Bettelheim, Charles, Cultural Revolution and Industrial Organization in China (New York and London: Monthly Review Press, 1974), p. 16Google Scholar.

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23. China Yearbook 1975 (Taipei: China Publishing Company, 1975), pp. 291–93Google Scholar.

24. Tai-pei Shih chia-t'ing shou-chih tiao-ch'a pao-kao (Investigation Report of Household Expenditures in Taipei Municipality), No. 24 (10–12 1974), p. 16Google Scholar.

25. Schenk, Hans, “Notes on urban spatial planning and development in China,” Eastern Horizon, Vol. 11, No. 3 (1972), p. 35Google Scholar; Howe, Christopher, “The supply and administration of urban housing in Mainland China: the case of Shanghai,” CQ, No. 33 (1968), p. 79Google Scholar; and Reynolds, , “Observations,” p. 36Google Scholar. m2 = square metres.

26. Schak, field data.

27. Executive Yuan, Administrative Research and Evaluation Commission, Review of Public Administration, ROC (1975), p. 122Google Scholar.

28. Ibid. p. 123.

29. Riskin, , “Workers'incentives,” pp. 217–18Google Scholar.

30. Kuo, Wanyong, “Income distribution by size in Taiwan area – changes and causes,” Industry of Free China, Vol. 45, No. 1 (01 1976), pp. 17–21Google Scholar.

31. Kuang-hsi, P'eng, “Antei shite iru jinmin hei to jinmin no sekatsu” (“A stable renminbi and people's livelihood”), Jinmin Chūkoku, 05 1974, pp. 12–15Google Scholar.

32. Industry of Free China, Vol. 45, No. 1 (01 1976), p. 53Google Scholar.

33. Grain output: 2,650,000 tonnes (T.) in Taiwan, 2,380,000 T. in Shanghai; sown acreage: 817,000 hectares (ha.) in Taiwan, 623,000 ha. in Shanghai; crop yield: 31 T./ha. in Taiwan, 3·7 T./ha. in Shanghai; per capita grain output: 160 kg. in Taiwan, 222 kg. in Shanghai. If sweet potatoes are included at the conventional People's Republic conversion rate of 5:1, Taiwan's per capita grain output increases to 195 kg. Shanghai does not grow sweet potatoes.

34. Banister, , “Mortality, fertility and contraceptive use,” pp. 267, 275Google Scholar.

35. Stavis, Benedict, Rural Local Governance and Agricultural Development in Taiwan, RLG No. 15 (Ithaca, N.Y.: Rural Development Committee, 11 1974), pp. 6–13Google Scholar.

36. Tsui, T. K., “Taiwan's economic development and its six-year plan,” Industry of Free China, Vol. 47, No. 2 (02 1977), p. 26Google Scholar.

37. Stavis, , Rural Local Governance, p. 13Google Scholar.

38. Foreign Broadcast Information Service (FBIS), No. 205 (22 October 1975), pp. G 9–10; Shang, , Su, and Shin, , Shang-hai ti-li, p. 82Google Scholar; Bettelheim, , Cultural Revolution, p. 46Google Scholar; and Ching, Chi, “Self-sufficient in grain despite little land and big population,” Peking Review, No. 33 (15 08 1975), p. 19Google Scholar.

39. White, Lynn T. III, “Workers' politics in Shanghai,” Journal of Asian Studies, Vol. 36, No. 1 (11 1976), p. 110CrossRefGoogle Scholar.

40. “Side-lines” (fu-yeh) and “multiple operations” (to-chung ching-ying) are “catchall” categories, and it is not clear that the coverage is consistent in official reportage, nor is it known whether or not income from private exchanges is included. Nonetheless, it is clear that non-grain farm produce is a significant and growing portion of family income.

41. FBIS, No. 208 (29 October 1973), p. C 7; Shang, , Su, and Shih, , Shang-hai ti-li, p. 85Google Scholar; and Chi, , “Self-sufficient,”p. 18Google Scholar.