THE FOREIGN-RICE TAX
AND ITS SOCIAL REPERCUSSIONS
How would the Guomindang state create financial resources for the new agricultural programs that it wished to enact? In order to embark on these experimental programs, the authorities needed to have secure financial resources. What if the state were to impose reasonable taxes on foreign rice and invest that income in domestic-rice promotion? And what if the state were to invest this new revenue in the rural revival program? This was the eventual resolution that economists, agricultural experts, and government planners together devised in order to rescue the declining Chinese agricultural sector in the early 1930s. Given the plunge of domestic agricultural prices, many believed the imposition of a protective tariff would help domestic rice to compete with foreign rice. This strong intervention in the economy was indeed what many Guomindang technocrats, who saw agricultural revival as particularly urgent, firmly advocated.
In the 1930s such an approach was of course not unique to China. With the global economy hit by the Great Depression, there were few countries that refused to take an interventionist policy. This was particularly true for countries like China whose economies relied largely on the agricultural sector. Such countries desperately needed this protectionist stance. Moreover, in China the social climate too was favorable to an approach like state intervention for self-sufficiency. In scholarly debate, as well, protectionism became more and more persuasive. For example, in a debate in Nongsheng, a Cantonese scholarly journal specializing in agricultural sciences and agrarian affairs, Xie Entan emphatically asserted that China needed strong protectionist measures to preserve its food security. Xie suggested that the best solution would be nothing other than a protective tariff. He argued that countries such as France, Germany, and Italy had imposed tariffs at higher rates and had successfully stabilized their wheat prices.1 In