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The Two Major Sectors: Agriculture and Industry

The two most important sectors of the economy were agriculture and industry, which together employed 80 percent of the labor force and in 1985 produced 72 percent of GNP. The two sectors differed in nearly all respects. Technology, labor productivity, and incomes advanced much more rapidly in industry than in agriculture. Agricultural output was vulnerable to the effects of weather, while industry was more directly influenced by political upheavals. The organization of industry was based on state and collective ownership, planning, and wage labor, while that of agriculture was built around household farming, self-reliance, and market incentives. The disparities between the two sectors combined to form an economic-cultural-social gap between the rural and urban areas--the major division in Chinese society.

Data as of July 1987