China's central government recently released an important policy
document on? "building
a new socialist countryside," and established it as one of the
primary objectives of the 11th Five-Year Guidelines for National
Economic and Social Development (2006-10) currently under
discussion by legislators.
The policy reflects the government's determination to solve
problems related to farmers, and the development of agriculture and
rural areas. Urban development has been the main beneficiary of
China's new policies on reform and opening up to the outside world
launched in the late 1970s, and particularly so during the
mid-1980s. The resultant effect has been a continually increasing
gap between urban and rural situations.
The government is now trying to narrow that development gap.
The "building a new socialist countryside" concept is one of the
major issues currently under discussion by the National Committee
of the Chinese People's Political Consultative Conference (CPPCC),
China's top advisory body, which is meeting for its annual session
in Beijing.
Dr. Lin Yifu, director of the China Center for Economic Research
of Peking University and a CPPCC member, has been researching rural
development in China for many years. According to him, the idea of
"building a new socialist countryside" was actually proposed six
years ago.
"As an economist devoted to rural development, I am happy to see
that this concept has been written into the 11th Five-Year
Guidelines. Two important documents were issued in 2004 and 2005
respectively, which focused on increasing farmer's income and
improving the comprehensive production ability of farmers. This new
document is not only a continuation of that strategy, but it takes
a bigger step forward by setting a scientific development goal in
the rural areas with more concrete measures," Lin said.
He emphasized the urgency of guaranteeing financial support to
the project. Current financial support for the rural areas is
lacking because of the "few available channels." Rural areas are
still largely dependent on loans from the Rural Credit
Cooperatives.
Lin said, "It's widely acknowledged by researchers of rural
policies that financial support is needed for farmers to develop
their production output and ultimately increase their incomes.
Although some policies have been issued to make it easier for
farmers to obtain loans, many financial organizations are still
reluctant to give loans because of the risks involved, primarily
the lack of guarantees. In order to change this situation, we need
to explore a scientific and market-oriented way of financing
farmers and realize the industrialization of agriculture."
"For example, we have suggested that large companies set up
guarantee companies to serve as guarantors for farmers. From the
banks' point of view, giving a loan to a farmer backed by a
corporate guarantor reduces much of the risk. At the same time,
these companies have the opportunity to expand their production
base."
He added: "According to our field investigation research, the
large companies can effectively organize farmers into individual
production bases. A production base cycle would work like this: The
farmers get their seeds from the companies. During the production
procedure, the companies provide technical support to the farmers.
The farmers sell their products to the companies, who then sell
them on the open market. It's a symbiotic relationship."
"The National Development and Reform Commission is considering
our suggestion seriously and has conducted field investigations in
four provinces and cities as part of a feasibility study. They've
also invited me to discuss the suggestion with them in more depth.
Some banks have also shown strong interest, saying they would like
to take part in the trial projects," Lin said.
With regard to surplus labor in the rural areas, Lin said:
"Transferring that surplus labor is an important way of increasing
farmers'?incomes. However, the labor transfer should not
become a headache for cities either. The most important thing is to
expand employment opportunities. More attention should be paid to
developing labor-intensive organizations, especially small and
medium enterprises.
"Some people ask me how long the process of 'building a new
socialist countryside' will take. My understanding is that this is
a long-term goal which will continue to be updated and expanded,"
Lin added.
Profile of Lin Yifu
Born in 1952 in Taiwan, Lin Yifu came to Beijing in 1978. He
obtained his Masters degree from Peking University in 1982, and
then left for the US for further studies on agricultural economy at
the University of Chicago, where he earned his PhD.
Lin devoted himself to the work of the State Council's Rural
Development Research Center when he returned to China. In 1994, he
founded the China Center for Economic Research at Peking
University.
(China.org.cn by staff reporter Wang Qian, March 6, 2006)
