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6 White Paper on the Business Environment in China
Notable Policy Activity “CPC Central Committee and State Council on the increasing
intensity of urban and rural development” , placed emphasis on
Better Land Use Rights for Farmers the reform and modernization of the rural economy—a large
New reforms announced in November 2013 allow “rural part of which is unsurprisingly constituted by the agricultural
sector.
collectively-owned land, a legacy of the planned economy, to
be transferred, rented or pooled” but will “stop short of giving According to Xinhua, the document states that in addition
commercial firms free rein to buy land and will focus instead on to attempting to stimulate consumption in rural areas, the gov-
creating bigger family farms,” Reuters reports.29 ernment will also “continue boosting financial input into the
agriculture and rural areas,” an increase in financial input to be
Another condition of the purchase of collectively-owned manifested in the following ways:
land is that “firms are only allowed to do modern farming and
livestock breeding, not real estate or tourism.”29 [Budget expenditure] should first support development
of the agriculture and rural area, and fixed-asset invest-
The move is reportedly part of the government’s effort “to ment first be channeled into agricultural-related infra-
persuade families to stay in the countryside by raising incomes, structure and projects in relation to rural livelihood.
and the large-scale family farm has been identified as the most
effective method; each [of the country’s 877,000] family-owned More subsidies should be channeled to increase the out-
farms earned 184,700 yuan ($30,300) in 2012, about ten times put of grain, potato, highland barley and peanut, as well
higher than the average rural household income.29 as the purchase of agricultural machinery, it said.
The World Bank reports that “despite massive off-farm mi- The government would implement more policies for
gration, rural population growth has meant that cultivated land purchasing and stockpiling major agricultural products,
per agricultural laborer has remained fairly constant, increas- including corn, soybean and oilseeds, to stabilize prices
ing only from 0.35 hectares in 1978 to 0.41 in 2008. Average of major farm produce.
Chinese farm holdings are well under 1 hectare, far lower than
the global average; the average farm in the United States is 300 More efforts will be made to strengthen financial ser-
times bigger than in China. “41 vices including micro-credit loans and insurance service
in rural areas, according to the document.30
Arguing against greater consolidation in the short-term,
“researchers have said it was not suitable to develop farms on The policy release reportedly also proposes increased focus
the scale of those in the United States, given China’s huge pop- on addressing issues arising from a “new generation of migrant
ulation and the need to find work for 450 million farmers still workers” (those born in the 1980s and 1990s) and methods by
likely to live in the countryside by 2030.”29 which to stimulate the construction or refurbishment of rural
residential properties.30
On December 1, 2015, the Chinese central government
issued a guideline in a bid to push the transformation of State Later in 2010, a Vice Minister of Agriculture “noted that
farms before 2020. A week after the national government’s development of rural tourism (for example “farmstay” programs
announcement, a senior official with the Ministry of in which comparatively-wealthy tourists temporarily reside in
Agriculture, Yang Shaopin, in a news conference, said that rural settings) was a strategic move to balance urban and rural
China will transform its 1,780 State farms into “modern” development and play multiple roles.” Such tourism promotion,
agricultural market enterprises, even as he warned that this said Mr. Gao, “not only help[s] to accelerate the strategic
could be a “slow transitional process”. In a report by China restructuring of agricultural and rural areas and promote
Daily, the national guideline said that the reform “is intended employment of farmers and increase of their income as well as
to develop a number of agricultural production bases for grain, development of modern agriculture and a new countryside, but
cotton, sugar, milk, seeds and oil”. It also “aims to further raise also play[s] important roles in strengthening the interaction
the income of workers, and improve infrastructure and public between urban and rural areas… [and coordinates the]
services available to the workers.” Mr. Yang further added that development of rural and urban areas.”31
the central government will also “enhance the supervision of
State-owned assets, as total assets of all State-farms in China For all these efforts, however, significant gains appear
have already exceeded 1 trillion yuan ($156 billion). He said elusive. Su Hainan of the China Association for Labour Studies
that the total GDP of State-farms in 2015 is expected to reach (a government think-tank) notes that urban incomes remain
701 billion yuan, a year-on-year increase of 8 percent.47 three to four times higher than rural incomes.32Accordingly,
the 12th Five-Year Plan outlines three objectives concerning
Ongoing Attempts to Close the Income Gap Between Urban
and Rural Workers
The first official announcement of 2010, the opinion titled
116
Notable Policy Activity “CPC Central Committee and State Council on the increasing
intensity of urban and rural development” , placed emphasis on
Better Land Use Rights for Farmers the reform and modernization of the rural economy—a large
New reforms announced in November 2013 allow “rural part of which is unsurprisingly constituted by the agricultural
sector.
collectively-owned land, a legacy of the planned economy, to
be transferred, rented or pooled” but will “stop short of giving According to Xinhua, the document states that in addition
commercial firms free rein to buy land and will focus instead on to attempting to stimulate consumption in rural areas, the gov-
creating bigger family farms,” Reuters reports.29 ernment will also “continue boosting financial input into the
agriculture and rural areas,” an increase in financial input to be
Another condition of the purchase of collectively-owned manifested in the following ways:
land is that “firms are only allowed to do modern farming and
livestock breeding, not real estate or tourism.”29 [Budget expenditure] should first support development
of the agriculture and rural area, and fixed-asset invest-
The move is reportedly part of the government’s effort “to ment first be channeled into agricultural-related infra-
persuade families to stay in the countryside by raising incomes, structure and projects in relation to rural livelihood.
and the large-scale family farm has been identified as the most
effective method; each [of the country’s 877,000] family-owned More subsidies should be channeled to increase the out-
farms earned 184,700 yuan ($30,300) in 2012, about ten times put of grain, potato, highland barley and peanut, as well
higher than the average rural household income.29 as the purchase of agricultural machinery, it said.
The World Bank reports that “despite massive off-farm mi- The government would implement more policies for
gration, rural population growth has meant that cultivated land purchasing and stockpiling major agricultural products,
per agricultural laborer has remained fairly constant, increas- including corn, soybean and oilseeds, to stabilize prices
ing only from 0.35 hectares in 1978 to 0.41 in 2008. Average of major farm produce.
Chinese farm holdings are well under 1 hectare, far lower than
the global average; the average farm in the United States is 300 More efforts will be made to strengthen financial ser-
times bigger than in China. “41 vices including micro-credit loans and insurance service
in rural areas, according to the document.30
Arguing against greater consolidation in the short-term,
“researchers have said it was not suitable to develop farms on The policy release reportedly also proposes increased focus
the scale of those in the United States, given China’s huge pop- on addressing issues arising from a “new generation of migrant
ulation and the need to find work for 450 million farmers still workers” (those born in the 1980s and 1990s) and methods by
likely to live in the countryside by 2030.”29 which to stimulate the construction or refurbishment of rural
residential properties.30
On December 1, 2015, the Chinese central government
issued a guideline in a bid to push the transformation of State Later in 2010, a Vice Minister of Agriculture “noted that
farms before 2020. A week after the national government’s development of rural tourism (for example “farmstay” programs
announcement, a senior official with the Ministry of in which comparatively-wealthy tourists temporarily reside in
Agriculture, Yang Shaopin, in a news conference, said that rural settings) was a strategic move to balance urban and rural
China will transform its 1,780 State farms into “modern” development and play multiple roles.” Such tourism promotion,
agricultural market enterprises, even as he warned that this said Mr. Gao, “not only help[s] to accelerate the strategic
could be a “slow transitional process”. In a report by China restructuring of agricultural and rural areas and promote
Daily, the national guideline said that the reform “is intended employment of farmers and increase of their income as well as
to develop a number of agricultural production bases for grain, development of modern agriculture and a new countryside, but
cotton, sugar, milk, seeds and oil”. It also “aims to further raise also play[s] important roles in strengthening the interaction
the income of workers, and improve infrastructure and public between urban and rural areas… [and coordinates the]
services available to the workers.” Mr. Yang further added that development of rural and urban areas.”31
the central government will also “enhance the supervision of
State-owned assets, as total assets of all State-farms in China For all these efforts, however, significant gains appear
have already exceeded 1 trillion yuan ($156 billion). He said elusive. Su Hainan of the China Association for Labour Studies
that the total GDP of State-farms in 2015 is expected to reach (a government think-tank) notes that urban incomes remain
701 billion yuan, a year-on-year increase of 8 percent.47 three to four times higher than rural incomes.32Accordingly,
the 12th Five-Year Plan outlines three objectives concerning
Ongoing Attempts to Close the Income Gap Between Urban
and Rural Workers
The first official announcement of 2010, the opinion titled
116
