Commentary RESEARCH

Agricultural, rural development underpins Chinese economy

Aria

2024-05-14 07:26

LU QIANWEN
Chinese Social Sciences Today

China’s GDP grew 5.2% year-on-year at constant prices in 2023, creating favorable conditions for steadily advancing high-quality development. In the face of the complex, grim international environment along with arduous tasks of reform and development, the Chinese economy has demonstrated resilience for robust growth, partly because continuously consolidated fundamentals of the work regarding agriculture, rural areas, and rural people have laid the social stability groundwork for effectively mitigating risks and bolstering economic recovery.  

Food security 

Food security is the cornerstone for people’s wellbeing and social stability. The CPC has consistently regarded safeguarding food security as the top priority of national governance and the bottom line of reform and development. The central leadership has firmly practiced the policy of “ensuring basic self-sufficiency in grain supply and absolute security of staple food,” promulgated a food security law, and kept improving the policy mechanism for boosting production capacity and securing food supply, thus keeping the “rice bowl firmly in Chinese people’s hands.” 

In 2009, China implemented the first round of its action plan to increase grain production capacity by 100 billion jin (50 billion kilograms), aiming to bring grain output to over 1.1 trillion by 2020. In 2020, China’s grain production reached 1.34 trillion jin, an increase of more than 270 billion jin from 2008. In 2023, grain output hit a record high of 1.39 trillion jin, up 51.8 billion jin from 2020. The staple food self-sufficiency rate has topped 100%, and the inventories of rice and wheat are more than sufficient to meet market consumption needs for at least a year. 

Assured by food security, China has withstood the impact of grain trade fluctuations due to changing global circumstances, ensuring the overall stability of food prices. This stands in stark contrast with countries plagued by soaring food prices as the number of people suffering from hunger has been rising around the world. 

While fully capable of providing sufficient food with abundant choices to the population, China still has room for increasing grain production and improving the food structure. This is the strategic confidence that can brace China for tackling unprecedented risks and challenges. In 2023, China embarked upon a new round of action for boosting grain production, with emphasis placed on increasing per-unit yields of major crops, improving the cropland protection and land productivity enhancement mechanism, cultivating high-caliber agricultural production and operation teams, promoting appropriately scaled agribusiness operations of various types, and building a sound long-term mechanism for agricultural disaster prevention, mitigation, and relief.  

Meanwhile, an all-encompassing approach to agriculture and food has been adopted to expand the space and fields for agricultural production, develop protected agriculture, marine ranching, plant factories, and intelligent farming, and construct a diversified food supply system. These measures can ensure the continuous improvement of safe and stable food supply capacities on the basis of cementing the foundation of food security, thereby underpinning sound economic growth. 

Raising rural residents’ income

China’s push to lift rural residents’ income levels eases the urbanization process. Continuously raising rural people’s income levels to bridge the urban-rural income gap is essential to steadily advancing urbanization, hence fueling quick economic growth. This is also the basic pathway for China to uphold the people-centered, shared development philosophy. 

Global experience shows that growing income gaps between urban and rural residents would smoothly jumpstart urbanization, but rapid urbanization would result in even wider income gaps. Into the middle and later stages, continued urbanization necessitates narrowing income gaps by steadily raising rural residents’ income to reshape the driver for economic growth, and overcoming barriers posed by a rigid interest pattern to the advancement of the economic development stage. 

Since the dawn of the 21st century, China’s urbanization has transitioned from quick advancement, typical of the middle stage of urbanization, to high-quality development as seen in the mid-later stages. This transition was facilitated by the government’s continued efforts to increase rural people’s income levels, in order to reverse the trend of growing income gaps and build momentum for the economy to enter the next development stage. 

At the end of 2008, China’s urbanization rate attained 45.7%, as the urban-rural income gap shifted from widening to narrowing. Thereafter, with increasing rural residents’ income regarded the central task of the work related to agricultural, rural areas, and rural people, and intensified support for the rural income increase policy, income gaps were narrowed in sync with the advancement of urbanization steadily. 

From 2012 to 2023, the urbanization rate jumped from 53.1% to 66.2%, rural residents’ per capita disposable income rose from 8,389 yuan to 21,691 yuan, and the urban to rural ratio of disposable income per capita fell from 2.88 to 2.39. Steady growth of rural people’s income levels has effectively resolved mounting frictions between urban and rural development during the quick progress of urbanization, paving the way for high-quality economic development through urbanization. 

Flexible mechanism

Chinese modernization is globally significant in that China has blazed a new development path for developing countries via which common prosperity for all can be achieved. The global history of modernization indicates that most developed countries and major developing nations saw various phenomena affecting social stability during the rapid urbanization and industrialization stages, such as farmers losing land and growing numbers of unemployed people. These undesired phenomena led many economies to stagnate, and even retrogress in turmoil. 

It took China decades to cover the modernization course which took Western developed countries hundreds of years. China has not only fulfilled the historical mission of building a moderately prosperous society in all respects as scheduled, but also turned many crises into opportunities amidst risks and challenges, and realized economic transformation and upgrade. One of the crucial reasons for this success is that it held the bottom line of reform and development, retaining the institutional pathways for domestic migrant workers to flow between urban and rural areas. 

Since reform and opening up, labor-intensive industries have absorbed large amounts of rural labor. The resultant large population of migrant workers has provided powerful support for Chinese manufacturing to go global. From 2008 to 2023, the number of internal migrant workers rose from 225 million to nearly 298 million. The flow of rural labor has not affected economic and social stability. Instead, it has unleashed demographic dividends, due largely to the principles of retaining public land ownership, holding the “red line” for arable land, and protecting farmers’ interests, so that migrant workers’ development rights as members of rural collective economic organizations are reserved. This is tantamount to leveraging the fallback function of rural areas, making them a reservoir for China’s development. 

First, rural residents’ rights as collective members were considered when capitalizing on resource factors to translate latent resource advantages into practical development opportunities, encouraging farmers to turning from seeking livelihood security to go back to the countryside to start businesses,  thus accumulating new impetus for economic development. From 2012 to 2022, rural entrepreneurs, who either returned to the countryside or went there from urban areas, cumulatively numbered 12.2 million. 

Second, new dynamics in labor flow between urban and rural areas will continue to release new demographic dividends, accelerating the transformation of growth drivers. Currently, China still has a dozen percentage points to grow its urbanization rate, suggesting that there is much more rural labor to transfer to urban areas. In addition, with the improvement of rural education and the sharing of quality educational resources between urban and rural areas, the quality of migrant laborers has also improved substantively. The trend has evolved from primarily young laborers moving to cities to young laborers working in cities while older workers return to the countryside. The jobs and businesses undertaken and started by young migrant workers in cities have also extended to mid- and high-end industries. China’s labor cost advantage has shifted into a human capital edge, unlocking the multiplier effect of driving growth by dint of both labor quality and quantity. 

Balanced regional development 

Balanced regional development, promoted by all-around rural revitalization, has created favorable conditions for high-quality development. China’s per-capita GDP has approached the standard of high-income countries as defined by the World Bank. It is in the critical period of sidestepping the “middle-income trap.”

As a developing country, China still faces a prominent problem of imbalanced and inadequate development, particularly imbalanced development between urban and rural areas, and inadequate rural development. This determines that the most challenging and arduous tasks in building a modern socialist China in all respects remain in rural areas, and the most extensive and profound foundation, largest potential and momentum also lie in rural areas. 

Since the 18th CPC National Congress, China has prioritized agricultural and rural development. Through targeted poverty alleviation and paired assistance, it has set the stage for the accelerated modernization of agriculture, rural areas, and rural people as well as integrated urban-rural development, building a strong groundwork for resolving unbalanced and inadequate development. 

In terms of regional gaps in rural residents’ per-capita disposable income, the ratio of the country’s eastern areas to central regions stayed at around 1.31 from 2017 to 2022, while the ratio to western regions fell from 1.55 to 1.51, and the ratio to northeastern areas hovered around 1.32 from 1.28. Meanwhile, the ratio of central regions to western areas decreased from 1.18 to 1.15, and the widest inter-provincial income gap, excluding the regions of Hong Kong, Macau, and Taiwan, dwindled from 3.45 to 3.27. Balanced and coordinated regional development between urban and rural areas signals that the foundation for steadily advancing high-quality development has become more solid. 

At present, momentous changes of a like not seen in a century are accelerating across the world. In the pursuit of Chinese modernization, as long as China keeps stable the fundamentals of agriculture, rural areas, and rural people, and makes good use of rural revitalization across the board and integrated urban-rural development as drivers, it will be equipped with the anchor to withstand headwinds and even storms, along with a firm base for maintaining steady economic growth and high-quality development. In this sense, China not only enjoys bright economic prospects, but will also lend more strength to world recovery and growth, continuing to contribute Chinese insights to global economic governance and creating a new model of human advancement through Chinese modernization. 

Lu Qianwen is an associate research fellow from the Rural Development Institute at the Chinese Academy of Social Sciences.

 

 


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