748 Economic Development and Cultural change of population growth have begun to fall. Relying on the United Nations demographic predictions, the growth rate during 1995-2000 is assumed to be 1.055 per annum. This annual rate falls during the next 2 decades to 0.740% and 0.649%0, a level that is considerably below the worlds projected growth rate(about 1.70%)but above recent projections by Chi na's demographers 4 The share of urban population will rise from 28% in the base year to 31% by 2000 and to 45% in 2020 The baseline per capita income growth rate is forecast to av about 3% in the rural sector and 3.5% in the urban sector. The growth rates in the late 1980s and early 1990s were substantially level in the urban economy (around 6%-7%)and significantly below this in rural areas (less than 1% per year between 1985 and 1992). In recent years the overheated urban growth has slowed, however, and 1991, the rural economy has begun to pull out of its recession, growing at 4% per year. The effect of high growth rates also is simulated to check the sensitivity of the grain projections to the alternative growth assump tions Market factors will also change over time. Price trends are pro jected to follow those of world prices. The rate of rural market develop- ment is expected to increase at 10% per year. Supply Side Assumptions The supply-side assumptions are identical to those used in Rozelle, Huang and Rosegrant; and Huang, Rozelle, and Rosegrant and will not be re peated. 2 Following the discussion above, supply will respond most sharply to new technology and irrigation investment. However, annual expenditures on research declined from 1985 to 1990, and irrigation ex penditures dropped from 1975 to 1985. Because of lags, these early in vestment dips will keep baseline projections of investment growth below historic rates in the early projection period. The recent recovery in re- search and irrigation investments, together with the experience of other Asian countries and Chinas commitment to a strong domestic grain economy, leads to the expectation that China will sustain its recent up- urn in investment funding over the long run. Erosion and salinization are expected to continue to increase at a steady but slow pace VIL. Results of Baseline Projections According to the analysis, per capita food grain consumption in China hit its zenith in the late 1990s. From the baseline level of 222 kilograms ood grain consumption per capita rises slightly until 2000 and falls over the remaining forecast period(app. C). The average rural resident will increase food grain consumption through 2010, before reducing demand in the second decade of the next century. The ebb of per capita rural food grain demand occurs at a time when rice and wheat income elasticities although lower than the late 1990s, are still positive. As markets develop Copyright 1999 All rights reserved.Copyright © 1999. All rights reserved