At the beginning of the reform era, China was still a predominantly agrarian society. In 1978, 82 per cent of the population (790 million people) lived in rural areas; of the total labour force then, about 76 per cent worked in the countryside, mostly in agriculture.1 Despite substantial progress towards industrialisation over the past four decades, and despite rapid diversification of the rural economy during the reform era, agriculture still remains the foundation of the Chinese economy. The performance of agriculture continues to underpin the fortunes of the national economy as a whole and improvements in popular living standards. Success in reforming agriculture is also essential for success in the reforms as a whole.
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