Agricultural production and peasant incomes in China both increased at an almost unprecedented pace in 1978–81. The only other periods of comparably rapid growth in the Communist era occurred in 1949–57 and the first half of the 1960s. These three periods share several common features. Most obviously, rapid growth was partly recovery in nature. Output in 1949 had been depressed by more than a decade of war, with its attendant disinvestment in land and disruption of internal trade. A sequence of poor harvests in 1959–61 caused by planning failures and reduced production incentives associated with the creation of communes set the stage for rapid recovery after 1962. More than a decade of pressure on marketing and specialized production after 1966 set the stage for rapid growth after 1977.

Even after the recovery factor is recognized, however, it appears that the underlying trend of agricultural development was more rapid in these periods. A central hypothesis of this study is that greater reliance on price or indirect planning contributed to this superior performance. The essential characteristics of price planning include increased specialization and marketing and fewer constraints on producers, whether the private farm households of the early 1950s or the production teams in later periods. Moreover, specialization occurred along lines of local comparative advantage so that improved allocative efficiency was an important source of growth.