The Dynamics of Rural Transformation in China: Observed ... · The Dynamics of Rural Transformation in China: Observed Facts and Emerging Trends Prof. He Yupeng Development Research

The Dynamics of Rural Transformation

in China:

Observed Facts and Emerging Trends

Prof. He Yupeng

Development Research Center

of the State Council, P.R. China

Accomplishments and Assignments

Accomplishments

• Command economy to market economy

• Food shortage to self-sufficiency

• Agriculture-based economy to rural

diversification and urbanization

• Social progress

Accomplishments and Assignments

Assignments

• Urban-rural disparity to be reduced

• Rural public service to be improved

• Market and environmental constraints to

be settled

Agriculture

• China has successfully fed 20 percent of the world population with

10 percent of the world arable land,

0. 00% 10. 00% 20. 00% 30. 00% 40. 00% 50. 00% 60. 00%

1

por k egg veget abl e mut t on meat

cot t on r i ce popul at i on cer eal cor n

f r ui t wheat beef soybean sugar cane

mi l k sugar beet

China’s production share in world by commodity, 2007

Agriculture

• but has becoming increasingly relied on international market for

commodities such as soybeans, edible oil, cotton, and sugar, etc..

- 20000

- 10000

0

10000

20000

30000

40000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

r i ce

wheat

cor n

soybeans

edi bl e oi l

cot t on

sugar

Net imports by commodity, 1996-2008 unit:1,000 tons

Agriculture

• and has shifted to net importer of commodities since 2004 .

0

100

200

300

400

500

600

1996 1998 2000 2002 2004 2006 2008

expor t

i mpor t

Change of China’s agricultural trade patterns, 1996-2008 unit: US$100 million

Agriculture

• Demographically, China is still an agricultural economy, in contrast

with an highly industrialized economic structure.

0. 00%

10. 00%

20. 00%

30. 00%

40. 00%

50. 00%

60. 00%

1996

1998

2000

2002

2004

2006

2008

out put shar e ofagr i cul t ur e

empl oyment shar e ofagr i cul t ur e

Rural Economic Diversification

Development of TVEs industrialized Rural China as home to world manufactory,

• the output value of TVEs accounted for 28.0 percent of the GDP and rural labors absorbed 20.0 percent of the total employment.

• Manufacturing is the major component of TVEs and its output and employment shared 45.3 percent and 54.6 percent of national total respectively.

• Exports of TVEs accounted for 35.0 percent of national exports and 41.7 percent of TVEs output value.

• Exports of light industry, textile and clothing, and machinery accounted for nearly 2/3 of TVEs exports.

Rural Economic Diversification

• which is decisive to off-farm job generation for rural surplus labors.

TVEs empl oyment

0

20

40

60

80

100

120

140

160

180

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

TVEs empl oyment

TVEs employment in number, 1996-2008 unit: 100 million

Rural Economic Diversification

• As a result of economic diversification, farm income from wage is

replacing that from agriculture to become the largest source of

income generation.

0. 00%

10. 00%

20. 00%

30. 00%

40. 00%

50. 00%

60. 00%

70. 00%

80. 00%

90. 00%

100. 00%

1996 1998 2000 2002 2004 2006 2008

gr ant

pr opr t y

non- f ar m

f ar m

wage

Source of farmer’s income, 1996-2008

Rural Economic Diversification

• Agricultural development and rural diversification have helped to

reduce poverty substantially.

0

10

20

30

40

50

60

70

80

90

1992 1994 1995 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

poor popul at i on

poover t y i nci dence

Poverty incidence in rural China, 1992-2007 unit: million

Urbanization

• Urbanization lag has been narrowed,

0. 00%

10. 00%

20. 00%

30. 00%

40. 00%

50. 00%

60. 00%

70. 00%

80. 00%

90. 00%

100. 00%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

ur bani zat i on r at e i ndust r i al i zat i on r at e non- agr i cul t ur al out put r at e

Urbanization

• as a result of migration.

0

20

40

60

80

100

120

140

160

1996 2000 2001 2002 2003 2004 2005 2006 2008 2009

mi gr ant s

mi gr ant s

Increase of migrants, 1996-2009 unit: million

Urbanization

• This trend is reshaping China’s geo-economy.

XZ

QH

SC

GS

YNGX

HN

SX

HB

GD

GZJX

HN

SXSD

AH

FJ

ZJ

XJNMG

HLJ

JL

HB

LN

JS

CQ

NX

TW

HN

BJTJ

SH

legend net migration

0.5-1 million

1-3 million

>10 million

3-5 million

5-10 million

net

immigratio

n

0.5-1 million

1-3 million

>10 million

3-5 million

5-10 million

net

emmigratio

n<0.5 million <0.5 million

Urban-Rural Disparity

• An enlarging income disparity between urban and rural areas has

been witnessed since 1997.

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

0%

50%

100%

150%

200%

250%

300%

350%

ur ban i ncome

r ur al i ncome

ur ban as % of r ual

14 Urban-rural income disparity, 1996-2008 unit: RMB￥

Urban-Rural Disparity

• Together with a territorial divide.

0

2000

4000

6000

8000

10000

12000

1

Gansu

Gui zhou

Qi nghai

Yunnan

Shaanxi

Ti bet

Xi nj i ang

Ni ngxi a

Guangxi

Shanxi

Si chuan

Chongqi ng

Anhui

Hai nan

Henan

Hunan

I nner Mongol i a

Hubei

Ji angxi

Nat i onal Aver age

Hebei

Hei l ongj i ang

Ji l i n

Li aoni ng

Shandong

Fuj i an

Guangdong

Ji angsu

Ti anj i n

Zhej i ang

Bei j i ng

Shanghai

Rural income by province, 2008

unit: RMB￥

Social Services

• Despite China’s good performance in social development, the

urban-rural disparity is still large.

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1996199719981999200020012002200320042005200620072008

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

ur ban

r ur al

ur ban %

r ur al %

Transfer income and as a percentage of urban and rural income unit: RMB￥

Social ServicesSocial welfare expenditure as percentage of GDP and government revenue, 2005 unit: %

urban rural national

government organization total government organization total government organization total

1.as % of GDP

pension 2.57 1.86 4.42 0 0 0 2.57 1.86 4.42

medical care 0.38 0.63 1.01 0.04 0 0.04 0.42 0.63 1.5

compulsory education 0.6 0.2 0.8 0.9 0.07 0.97 1.5 0.27 1.77

minimum living 0.1 0 0.1 0.03 0 0.03 0.13 0 0.13

housing 0.39 1.01 1.4 0 0 0 0.39 1.01 1.4

unemployment 0 0.12 0.12 0 0 0 0 0.12 0.12

reproduction 0 0.02 0.02 0 0 0 0 0.02 0.02

total 4.04 3.84 7.88 0.97 0.07 1.04 5.01 3.91 8.92

2.as %of revenue

pension 13.84 10.03 23.87 0 0 0 13.84 10.03 23.87

medical care 2.05 3.38 5.43 0.2 0 0.2 2.25 3.38 5.63

compulsory education 3.24 1.05 4.3 4.88 0.36 5.23 8.12 1.41 9.53

minimum living 0.57 0 0.57 0.18 0 0.18 0.75 0 0.75

housing 2.11 5.45 7.56 0 0 0 2.11 5.45 7.56

unemployment 0 0.67 0.67 0 0 0 0 0.67 0.67

reproduction 0 0.13 0.13 0 0 0 0 0.13 0.13

total 21.82 20.71 42.53 5.26 0.36 5.61 27.08 21.07 48.14

Social Services

Social services for migrants are lack in

particular.

• Education

• Public health

• Social insurance

• Housing

Environment

• China’s forest area keeps increasing,

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

af f or st at on ar ea

of whi ch: f ar ml and r et ur n

Afforestation area and hillside land afforestation, 1999-2008 unit: 1,000 ha

Environment

• but farmland declining.

116, 000. 00

118, 000. 00

120, 000. 00

122, 000. 00

124, 000. 00

126, 000. 00

128, 000. 00

130, 000. 00

132, 000. 00

1996 1998 2000 2002 2004 2006 2008

cul t i vat ed l and ar ea

cul t i vat ed l and ar ea

Changes of cultivated land, 1996-2008 unit: 1,000 ha.

Environment

• Overuse of chemical fertilizer

• Water scarcity

• Pollution

For Future

• Sustainable agricultural development

• Integrated rural development

• Inclusive policies for migrants

Thank you!