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KOLKATA, Dec. 11

IF India were to replicate the Chinese economic model, it would be imperative to increase the adult literacy rate and tax the farm sector and use the proceeds for creation of infrastructure and development of industry, as China has done.

Delivering a talk on `Explaining the Chinese miracle - Perspectives on state economy and globalisation' organised here by the Bharat Chamber of Commerce, Dr Sucheta Mazumdar, Associate Professor of Duke University and Visiting Associate Professor of Harvard University, said agricultural sector was the backbone of the Chinese economy and it employs 65 per cent of the country's labour force. The adult literacy rate in China has been pegged at 84.4 per cent.

Following land reforms in the early 1980s and the Household Responsibility System whereby right of use of land was given to households, there has been an average annual growth of 6.7 per cent in the agricultural sector in China. The annual net income of farmers, too, has gone up by 8.1 per cent annually.

China has invested heavily in biotechnology, especially in genetically-modified crop development.

She stressed on the linkage between rural development and the overall health of a nation's economy and said how township and village enterprises (TVEs) in China had begun to contribute 13 per cent of the state's revenues by the late 1980s.

"By 1992, there were 21 million TVEs in China employing 111 million people'', she said, adding that these TVEs had set up many crucial research & development institutions.

According to her, the massive investment in infrastructure in China had greatly facilitated the inflow of foreign direct investment.

"The Chinese miracle is as much a product of the state's active role as it is of individual entrepreneurial drive'', she said, adding that China had been constantly investing in cutting-edge technologies.

Earlier, in his address, the President of Bharat Chamber of Commerce, Mr N.R. Goenka, said that China had successfully attracted $400 billion, third after the US and the UK, in foreign direct investment in the last 20 years.

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