Social Sciences in China (Chinese Edition)

No.8, 2013

The Emergence of Chinese Agricultural Product Markets under the Circumstance of Capital Loss: With the Example of a Township Agricultural Market

(Abstract)

Ai Yun and Zhou Xueguang

This study takes the case of an agricultural product market in northern rural China to explore the phenomena of “market transactions under the circumstance of capital loss.” It attempts to reveal, both in theory and experience, the “black box” of market operations and identify the circumstances in which different forms of capital transform and function, in particular the important role of social mechanisms in market operations. The results show that different forms of capital, such as social capital, political capital and economic capital, can transform into one another under certain circumstances. Among them are two different but inter-connected mechanisms: the reciprocal mechanism based on “gift exchange” and the “credit taking” mechanism based on market power. With these two mechanisms in place, rural households, free traders and enterprises can overcome capital deficiency capital deficiency and achieve market transactions, providing conditions for the emergence of agricultural product markets.