Examining Technological Progress Within The Chinese Agriculture Industry

As the world largest agricultural economy and an important player in global agricultural markets, China is currently struggling to manage land resources, to develop modern marketing institutions and to develop or adapt efficient agricultural technologies. The purpose of this dissertation is to investigate technological progress within the Chinese agriculture industry.A comprehensive theoretical background lays the foundation to determine the current level of technological progress by examining total factor productivity (TFP). Then establishing which variables are affecting technological progress i.e. TFP growth, thus identifying the critical success factors needed for the industry to reach a level that is in accordance with global standards so that China’s whole economy can benefit.Through an econometric analysis a simple regression model is developed by employing the Cobb-Douglas production function to test for significant relationships between the selected variables and TFP growth. It incorporates investment, labor, land fragmentation and education expenditure, and is conducted for the period2006-2009. The results indicate that decreasing land fragmentation and increasing education expenditure has a positive effect on TFP growth of agriculture in China.Based on the qualitative findings and quantitative results policy implications are discussed followed by conclusions on how to stimulate technological progress within the Chinese agriculture industry.