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Early last month the Central Committee of the Communist Party of China (CPC) and the State Council issued a special document, labeled "Document No 1 in 2004," to help solve the problem of slow income growth of rural people.
To carry out policies set forth in the paper, efforts from both rural and urban areas are needed. And in a certain sense, the key to solving the problem lies in the cities.
Today, for rural people from underdeveloped areas, seeking a job in a city is a quick way to increase income. The document issued by the central authorities proposes to create a better working environment for the migrant workers and improve their treatment. This sets new and higher requirements on cities.
Relevant cities should strive to protect the legitimate rights and interests of farmers-turned-workers. Those rights are prone to infringement, including payment default. The discriminative employment policies against migrant workers existing in many cities should also be eliminated. Irrational charges on migrant workers under various names should be lifted. At the same time, urban labor departments should simplify procedures for laborers from rural areas who want to work in cities.
Migrant workers should no longer be excluded from urban systems in terms of social insurance and subsidies for their children's education. Reforms on the rigid household residence registration system that prevents migrant workers' integration into cities should be accelerated.
The current mode of collecting farmland leads to farmers' rights and interests being hurt by urban interest groups. In the absence of a strict examination system, farmland is often collected randomly, with farmers being under-compensated.
To stop this practice, the right to farmland collection should be restrained and the compensation criteria should be greatly improved.
Furthermore, poverty-relief measures by urban areas are also an important way to increase rural people's income. In the country's development, policies have been tilted in favor of the progress of urban areas, which is a major factor for the current development gap between urban and rural areas.
Urban prosperity, to a great extent, has been achieved with rural contributions and sacrifices, so help for rural areas is not only a moral obligation but a compensation cities should make.
On the other hand, rural people's increased income will be a win-win result for both rural and urban residents.
Increased income for rural people will boost rural consumption. The huge rural market potentials, if well tapped, benefit urban areas and raise the income of urban residents.
Investment and consumption are the twin engines of economic growth. Increased investment leads to an increase in the gross domestic product (GDP), but not necessarily to an increase in employment and residents' income. Increased consumption, however, is more likely to raise residents' income.
Last year, consumption contributed to 41.1 percent of China's economic growth, and was responsible for 3.5 percentage points of GDP growth. The root cause for lower consumption lies in lower income growth, especially the low income growth of rural people. Last year, the income growth of urban residents exceeded 8 percent, while that for rural residents was only 4 percent.
If rural people's income is considerably raised, the rural market will be extended, thus boosting demand for industrial products made in cities. This will not only increase employment in cities, but also raise urban residents' income.
The "No 1 Document," as a guideline to the work of the Party and government organs in cities, has set a series of concrete requirements on them to help rural people raise income.
The government is currently working on a new land collection system. In the future, the land use right transfer will be conducted via public bidding. The document stipulates that a portion of the money from the transfer be allocated for agricultural development. In my opinion, some portion of that money should also be set aside to build a comprehensive social insurance system for farmers.
Without the backing of an efficient social insurance system, farmers will tend to concentrate more on savings rather than consumption.
The cities should assist rural areas in infrastructure construction. Improved infrastructure facilities will surely be a great help in raising rural people's income and will also benefit the urban areas.
On the one hand, construction of transportation, energy and communications facilities in suburban areas of cities will increase the value of land. On the other hand, with improved transportation, it is more convenient for farm produce to be shipped to cities, and for industrial products to be shipped to rural areas.
In mapping out development plans, cities should arrange some low-rent housing for rural people seeking jobs. This will help them quickly find shelter at low cost. Furthermore, it adds convenience for management and services in terms of the family planning work, education of children of migrant workers, public security and in the building of labour markets.
Finally, cities should do more to help rural areas improve the education and public health system. At present, the majority of educational and health resources are convened in cities though the majority of the population are in rural areas. Education and health institutions in urban areas, for example, should actively seek cooperation with their rural counterparts and provide assistance in terms of human resources and materials.
The government should also establish special policies to encourage college graduates to work in rural areas.
(China Daily March 8, 2004)
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