Green Gold: The Political Economy of China's Post-1949 Tea Industry (review)

102 China Review International: Vol. 2, No. 1, Spring 1995 Dan M. Etherington and Keith Forster. Green Gold: The Political Economy ofChina's Post-1949 Tea Industry. Hong Kong, Oxford, and New York: Oxford University Press, 1993. xx, 270 pp. Hardcover $55.00. For the Chinese, the tea industry has long held a special place in the country's culture, social life, and economy. In the nineteenth century it occupied pride of place as the country's leading export item, as Europeans savored a drink that the Chinese had consumed for centuries. The collapse ofthe tea industry accompanied the decay of China from its previous position ofpreeminence, and seemed to herald the end of an era. However, this book reports that the Chinese tea industry has made remarkable progress since 1949, and it grew at an extremely fast rate over an extended period from 1962 to 1988. In 1976 China overtook Sri Lanka as the second largest world producer oftea. In 1989 China was the second largest tea exporter after India . In the 1980s one ton of Chinese tea exports could on average be exchanged for 10 tons of steel, 20 tons ofgrain, 22 cubic meters oftimber, or nearly 2 tons of copper. Subsequently, the Chinese use the term "green gold" (lusejinzi) to denote the importance of the tea industry to their economy. The contribution of this book, then, is to provide a highly original argument on the development and constraints of the Chinese tea industry. According to the authors, the high growth rate of the Chinese industry since 1978 should not be explained by the new policies of the reform era. Instead, due to the relatively slow maturing process ofthe plant, increases in current tea output are primarily a result of the massive planting programs undertaken during the Cultural Revolution. The impact ofthis past expansion oftea areas is now coming to an end, and it is unlikely that output will continue to increase much in the current decade. On the other hand, the book argues that the policies ofthe reform era appear actually to have had a negative impact on the performance of the tea industry. First, at the production level, the communes have been broken up and replaced by household-based farming since 1978. The book reveals case studies and statistics to show that vast areas of China's tea plantings are being managed very poorly. Most ofthese "poor managers" are individuals or households who have contracted to look after, in their spare time, extremely small areas of tea on shortterm contracts, while better managed tea is in the hands of specialist tea farmers, village cooperatives, and state farms. As a result, China's average yield is very low© 1995 by University byworld standards. For instance, China's average yield was about 500 kg/ha, ofHawai'iPresswhik ^ ofIndiawa$ ??? tQ ^000 kg/ha ^ 199Q Second, at the level ofprocessing, one ofthe by-products of economic reform has been the establishment ofrefineries byvillage and township enterprises, Reviews 103 which are often equipped with poor equipment and backward technology. The book asserts that the very large number ofsmall-scale tea-processing plants using crude equipment has meant that it has become very difficult to maintain consistent quality standards in the industry. Third, at the level ofdomestic marketing, the 1984 reform of state marketing ended the planned monopoly purchasing and sales jurisdiction of the Ministry of Commerce. The situation of a liberalized market led to a "tea war" through which there was a mad scramble by processors to obtain raw materials for a processing industry that was highly profitable. During the "tea war," every measure possible was taken by local authorities both to ensure that locally produced tea was processed locally and to bid up the price oftea from neighboring provinces, counties, and villages, so as to secure sufficient supplies for local processors. The result of the "tea war" was that processors were forced to accept an inferior product at substantial price hikes and nominal grade increases. Finally, at the level ofthe export trade, the scramble for teaby domestic buyers during the "tea war" led to a shortfall in supplies supposedly guaranteed for the export market. Procurement prices for export teas could...