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Discuss the economic and social challenges facing RURAL communities in China (25)
The change in the organisation of agriculture and rural economic activities
The rural economy was the first sector to be improved because low agricultural productivity posed
problems of food security for China. In 1949, all land was brought into communal ownership under
the guidance of the state. There was initially an increase in food productions as a result of Green
Revolution farming methods, but this was not sustained. In 1981 farmland was divided up
between households, with every household given a 15year contract to farm the land. This
security gave farmers confidence to invest and to manage land more effectively. Since that time,
agricultural production has increased very slowly and China is beginning to experience food
During Mao's era, rural industries called Town and Village Enterprises (TVE's) produced heavy
goods such as iron, steel cement, chemical fertiliser and farm tools, as well as hydroelectric power.
After 1978 these enterprises expanded so as to develop a wider range of businesses. Many
Chinese farmers preferred to invest their resources in rural industry rather than agriculture. This
encouraged the growth of small businesses run by the most successful peasants. Thus a new
entrepreneurial class began to emerge and TVE's have become the backbone of development in
rural areas and China's economic growth.
As there was a significant risk of migration of unemployed / underemployed to urban areas so
rural industrialisation was encouraged. Although, by the late 1980's there was a variety of
independent styles of enterpriseindividual, joint, cooperative, private, villageowned,
townshipowned, neighbourhood, communities etc. This encouraged the multiplier effect.
Rural enterprises comprise of small restaurants, travel agents, theme parks, distribution
companies and household appliances.
However, the lack of state regulation of TVE's has led to significant corruption such as false
registrations, to acquire bank credit and the pirating of ideas, videos and pornography. This may
be partly a result of the shock of uncultured and uneducated peasants becoming rich because of
The reasons for rural industrial growth
When the production brigades were distribanded, peasants could use their time as they saw fit.
Rural poverty led to a strong profit motive. New markets developed for agricultural and non
agricultural goods and activities peasants explored niche markets.
New businesses had low startup costs. The state provided housing, there was plenty of cheap
labour, there was low capital / investment.
Rural enterprises were supported because they contributed to the rural communal economy.
There was a symbiotic relationship with urban SOE's. Villages supplied land and labour, urban
enterprises provided technology, ideas and marketing.
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Issues of land Reform and land ownership continue to beset much of China. Before the
Communist Revolution in 1949 most land had been held by corrupt and absentee war lords. In
1949 all land came into communal ownership under the guidance of the state. As private
enterprise was encouraged the issue of land ownership within communities had to be addressed.
However, there were three issues; In the 1983 consensus, the commune systems of 20 30
families ceased.…read more
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Villagers often lack any form of social safetynet such as pension of health insurance.
In conclusion, TVE's, migration and the reform of social welfare have all contributed to the
creation of economic and social challenges that face rural communities. Despite migration due to
the Hukuo system, resulting in a floating population, Political decisions to invest in the eastern
coast has resulted in the decline in the Rural interior.…read more