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New policy needed to boost rural economy
By Fu Jing (China Daily)
Updated: 2008-10-13 15:53

In July, while chairing a five-day discussion on China's reform, the 95-year-old Nobel laureate Ronald Coase asked Peking University professor Zhou Qiren to speak on how "Deng's drama unfolded" .

For an intellectual like him, Zhou replied, the first step in the late leader Deng Xiaoping's reform was to help people regain their chances of obtaining higher education. "This changed the fate of many people of my generation," said the famous economist. Zhou himself had been sent to a remote village in the Inner Mongolia Autonomous Region to be "re-educated by farmers" at the age of 16. Only ten years later in 1977, he joined the first batch of college entrants after years of suspension of college enrollment in China due to "cultural revolution" (1966-76).

But Zhou had even been fascinated by the pioneering spirit of hungry farmers in Xiaogang village of Anhui province, whose starvation forced them to divide the collective land to every household in 1978.

New policy needed to boost rural economy

And gradually, every rural family nationwide got their plots of land in early 1980s, rekindling farming enthusiasm and accordingly raising grain yield. Most rural people had enough to feed and clad themselves, obtained education opportunities and freedom to migrate as laborers earning their living in cities.

Hence, Zhou said, the land reform is, for millions of Chinese farmers, the "first scene of Deng's drama" during the past three decades.

As a journalist hailing from a poor, mountainous village in western China, I agree with this eminent professor and applaud the success of Deng's drama in rural development despite the fact that many unfavorable practices, such as levying heavy taxes and collecting unnamed fees from farmers, had once occurred along the way.

Last week, China's highest leadership, the Central Committee of CPC, convened its plenary to sum up 30 years' reform in rural sectors and map out a new road for China's rural development in the coming years.

As the 400-strong highest decision makers hold closed-door debates at a time when the specter of worsening economic crisis hangs over the world, I would like to share two bitter episodes during my recent rural tours.

The first one took place in Tongjiang county of my home province of Sichuan. The villagers, most of whom now were women left behind and old farmers, were summoned one day in August by the village head to attend a half-day training session to improve their farming skills.

The villagers, as Li, the village head, said, had actively flocked to the sessions I witnessed because each of them would be paid 50 yuan for each session. "It would be hard to organize the training session otherwise," said Li.

The other scene occurred on a high road in Anhui province, where the farmers actually turned over the first page of China's rural reform in 1978 when they secretly distributed the collective land to individual households.

In September when I was there for an interview, tractors filled with villagers in the province passed by once in a while along the way, and most of them were women, the old and kids. Local drivers told me they chose to ride the dangerous vehicles, instead of buses, merely to save one dollar, at most, to the county town.

The two episodes, in a nutshell, indicate how poor rural villagers are.

When the decision makers think of either short-term solutions to ward off the world's financial crisis, or a long-term strategy to develop the country's rural economy, this is a fact they must take into consideration.

China's rural areas have massive potential. Just imagine the scenario: Half of China's rural households buy new TVs, need modern furniture or rebuild their homes with bricks and steel, while dreaming of sending their children to university.

Facing this round of financial earthquake, China's leadership should mull over concrete steps, together with long-term development strategies, to further tap the consumption potential in more than 200 million rural households.

With this in mind, the leadership should continuously seek to improve the villagers' social warfare and social security systems. This can not only help boost their sense of security and reduce their need to save for hard times, but is also in line with the leadership's goal of building a "harmonious society."

Actually, China has already had a roadmap in this endeavor. By 2010, all the rural regions should be covered by basic social security system. And by 2020, China will unify separate urban and rural social security systems.

Since 2003, the government has taken many measures to improve rural infrastructure and productivity. In 2007 alone, the central government allocated 420 billion yuan from the treasury for rural development, a sum that is almost equal to total government spending in rural areas between 1998 to 2003.

This has injected life to rural development as it has created many jobs for surplus laborers. Following a 9.5 percent annual increase last year, the per capita income for villagers rose 10.3 percent in the first half of this year, the highest in four years.

However, compared with urbanites, the income level for farmers is still low. With the urban per capita net income at 13,786 yuan, against 4,140 yuan in the countryside, the ratio was 3.3:1 last year, the highest since China launched its reform and opening-up policy in 1978.

Furthermore, farmers are also affected by the price hikes. In my hometown, many farmers dreamed of refurnishing their homes. But currently, a ton of steel is priced at 5,500 yuan, representing a 30 percent rise from last year. Other materials have also experienced different degrees of price hikes.

"The farmers are constantly calculating how much they will spend on their new homes," said village head Li from my hometown. On an average a new house in a rural region cost about 100,000 yuan. "That's still a big sum for the average rural household in my county," said Li.

Talking with farmers gives one ideas for solutions.

Grass-root leadership should be shored up and village heads be frequently trained with modern development knowledge. Just as Li said, "My role has changed a lot but I lack training to do a better job in the new era." In China, the majority of village heads were locally born and have never had higher education. "We always teach ourselves from practical work," said Li.

Financial aid needs to be given to farmers and encourage their consumption. And for the coming years, micro-credit and rural banking, as discussed together with land reform by the policymakers, should be greatly developed.

Officials' performance assessment mechanism needs to be reformed. No matter whether at provincial or county level, they should not get promotion if they fail to achieve their rural development goals. This is the step to ensure that "good policies" at the central level are implemented in letter and spirit.

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