Food staple production and alternative development paths: India and China

摘要

In this paper, it is argued that structural change has been quite different in India as compared with China, with the former seeming to skip labor-intensive manufacturing while the latter fully exploiting this sector's potential for employment and growth. It is hypothesized that productivity growth in agriculture, particularly food staples, is a critical factor in explaining the differences in structural change. In China, rapid agricultural growth kept food cheap and thus labor inexpensive, fostering rapid growth in labor-intensive manufacturing. In India, sluggish agricultural growth and rising food costs meant that labor in India has become increasingly expensive and this has inhibited the development of labor-intensive manufacturing.