Sectoral and structural considerations in China's rural development

Abstract

Since 1984, China's rural-based non-agricultural sector (the Township Village, and Private enterprises - TVEs) has seen dynamic growth, underpinning the rapid improvement in livelihood of some hundreds of millions of rural dwellers. Within the rural economy, however, serious tensions have arisen between TVEs and agricultural production per se. The Chinese government now confronts a central policy dilemma in which further development of the collectively owned TVE sector in particular is counterpoised against the maintenance of stable agricultural output, especially that of food grains. This paper examines the causes of the dilemma, focusing on the impact of the off-farm sector on agricultural production, and the structural imbalances that now need to be addressed. The paper argues that under current conditions, in which farming communities are pulled in two directions - traditional crop production or rural industries - the absence of functional and spatial segregation is creating serious economic and ecological imbalances in China's countryside. The authors suggest possible solutions which rest upon clearer physical differentiation between urban and rural spheres.