China's rural sector a number one priority and will balance growth

By Sara Hsu

China released its No. 1 Central Document of the year this past Sunday, which focused on modernizing its rural and agricultural sectors. This set of policies builds on rural-focused policies from previous years, but lays out more specific and ambitious targets for rural revitalization.

The document states that by 2020, there will be an institutional framework established for rural policy. At this time, poverty will be eliminated, and rural productivity as well as agricultural supply will be enhanced. By 2035, China will have embarked upon modernization of the agricultural and rural areas, and that both urban and rural residents will have access to basic public services. By 2050, farmers will be well off and rural areas will enjoy a strong agricultural sector.

Photo taken on March 7, 2017 shows rape blossoms in the fields in Zhongmiao Township of Wenxian County, northwest China's Gansu Province.[Photo: Xinhua]

In order to reach the goals for 2020, local governments are to specify their plans to meet the targets. Local policy will therefore play a large role in determining how rural areas are improved. Already, the goal of eliminating poverty has made very large strides. China has lifted hundreds of millions of people out of poverty since reform and opening up. Much of this has been carried out through the industrialization process, which increased the wages of both rural and urban Chinese citizens, as well as through strides made in social programs like compulsory education and access to health care. In the past few years, the extreme poverty have been targeted through training programs meant to assist poor individuals obtain jobs, improving dibao assistance to reach those most in need, relocation to areas with better access to jobs and other resources, and connecting isolated villages to markets.

China has also committed to improving agricultural supply. One of its goals has been to connect rural villages to markets, either by constructing infrastructure or by connecting market agents to village suppliers. Officials have also pledged to improve supply side structural reform in agriculture to enhance production quality in order to meet the changing demands of consumers. Officials are also addressing rural productivity, attempting to reduce high costs of production faced by farmers through better allocating resources and balancing crops that are produced. Changing tastes of Chinese consumers has led to greater demand for dairy and meat products, for example, and to less demand for certain types of grains. Altering the mix of what is farmed on the supply side will help to increase the profits of farmers. 

Green production is also increasingly a concern, and part of the process of improving the agricultural supply chain. Plans to cultivate better quality farmland that makes use of improved water conservation facilities and advanced agricultural equipment are in the works.

The importance of good governance at the local level is also stressed in the document. This places an emphasis on reducing corruption which has interfered with the distribution of rural subsidies and resulted in poor management of assets and acquisition. The use of rural land to construct private villas or clubs, for example, must be banned.

The No.1 central policy document is considered to be the most important policy of the year, and the emphasis on agriculture and rural well-being is quite forward thinking. Improving agricultural production and rural living will reduce China’s growing inequality and encourage people to live in rural areas rather than migrate to big cities. China has, for many years now, strived to balance growth between rural and urban areas, especially between the eastern coastal cities and more rural inland regions, with limited success. However, it appears that this policy focus is designed to overcome previous challenges to balanced growth by creating better access to livelihoods and life-enhancing services.

The focus on development of rural areas will also act to ensure that rural regions are not left behind as the country also aims to increase its level of urbanization. Urbanization has been a policy goal for years now, with attempts to move rural residents into cities and to expand cities into suburban areas. As China now underscores the importance of modernizing agriculture and boosting the wealth of the rural population, the government can safeguard food sources as well as the livelihoods of those who produce them.

Finally, economic theory shows that the modernization of agriculture is an essential step in the process of development; without it, the rural sector remains behind, and the urban sector misses out on key food and labor resources.  Not only will improving the situation of agriculture raise the well-being of those in agriculture and reduce inequality between urban and rural areas, it will also support the urban sector by providing it with necessary food and potentially freeing up additional workers from rural areas for employment in cities. The policy, then, is likely to have a widespread positive impact on the Chinese economy, for this year and beyond.

(Sara Hsu, associate professor, the State University of New York at New Paltz)