Zhang Lirong: China's Agroeconomy and Rural Revitalization

  • ZHANG Lirong: Secretary-General of CHINA FORUM, CISS, Tsinghua University

    For thousands of years, China has been an agricultural country with planting as its main industry, basically relying on the weather for food. Although China began its industrialization process in the mid-19th century, by the time the People's Republic of China was founded in 1949, its rural population still accounted for 89% of the total population (down to 36% in 2021). After the founding of the new China, priority was given to the heavy industry and funds accumulated for industrialization. Agriculture was faced with a lack of funds and insufficient development momentum. Since the adoption of the reform and opening-up policy in late 1970s, three major strides have been made in rural economic reform. The first step is to establish a basic rural economic system and market mechanism with household contracted management as the core, so as to ensure farmers' autonomy in production and management. The second step is to take rural tax reform as the core, coordinate urban and rural development and adjust national income distribution. The third step is to implement comprehensive rural reform and solve some deep-seated problems. Over the past decade, the government has intensified policies bolstering agriculture and enriching farmers, established sound systems, mechanisms and policies for integrated urban-rural development, comprehensively deepened rural reform, steadily implemented the rural revitalization strategy and accomplished the targeted poverty alleviation.

    Over the past seven decades and more, China has grown into a global industrial and manufacturing powerhouse, with industrial output accounting for about 27% of its GDP, while agricultural output (including the whole industrial chain of production, processing, logistics, marketing and services in agriculture, forestry, animal husbandry and fishery) has dropped to about 16%. Nevertheless, remarkable achievements have been made in rural economic development. The level and quality of agricultural production, the environment of rural areas and the life of farmers have been significantly improved, which is reflected in the following aspects.

    Grain output has gradually stabilized at a high level. In 1949, China's grain output was 113 million tons, with a per capita grain output of 209 kg, which could not meet people's food needs. Grain production made some progress during 1950s-1970s. Since the reform and opening up, a two-tier management system based on household contract has been created, the circulation system of agricultural products reformed, agricultural taxes completely abolished, and an agricultural support and protection system established, which has stimulated the enthusiasm of farmers and promoted a rapid growth of grain output. In 2018, the grain output was 658 million tons, 4.8 times that of 1949. The per capita grain output was 472 kg, 1.3 times that of 1949. Grain output reached 685 million tons in 2021.

    While the grain output increases, agriculture has realized the transformation from traditional agriculture dominated by planting to an all-round development of agriculture, forestry, animal husbandry and fishery. In 2018, the total output value of the four sectors was calculated at comparable prices, an increase of 17.2 times over 1952. In terms of output value composition, agricultural output value accounted for 85.9% of the total output value of agriculture, forestry, animal husbandry and fishery in 1952. In 2018, it dropped to 57.1% while the output value of forestry, animal husbandry and fishery rose to 5%, 26.6% and 11.3% respectively.

    The production of planting industry has changed from a single planting of grain crops to a ternary planting structure of grain, economic and feed crops. Animal husbandry production has changed from a single pig production to multiple varieties of pigs, cattle, sheep and poultry. In 2018, the output of pork accounted for 62.7% of the total output of meat, and the output of beef, mutton and poultry increased to 7.5%, 5.5% and 23.1%.

    The level of green, high-quality and brand agricultural products has been continuously improved while application of chemical fertilizers and pesticides is declining. The comprehensive utilization rate of straw has reached 84%. The rate of improved varieties of major crops and the monitored qualification rate of major agricultural products remained above 96% in the past five years.

    The mode of agricultural production has changed dramatically, boosting production efficiency. According to the results of the third National Agricultural Census in 2016, large-scale arable land area accounted for 28.6% of the total actual arable land area. Large-scale pig farming accounted for 62.9%, and large-scale poultry farming 73.9%. Accelerating the scaled agricultural operations not only helps stabilize agricultural production and raise labor productivity, but also makes agriculture more intensive, specialized and organized.

    A large number of new business entities have emerged like farmers' cooperatives, family farms and leading enterprises. New business entities and new professional farmers have played an important role in application of new technologies, introduction of new varieties and promotion of new markets. It is becoming the main force leading the progress of modern agriculture.

    The new agricultural model has developed rapidly and expanded various functions of agriculture. Facility agriculture has changed the seasonality of agricultural production. Leisure agriculture and rural tourism boomed. In 2019, before COVID-19 outbreak, leisure agriculture received 3.2 billion tourists, with a turnover of more than US$131 billion. New generation information technologies such as big data, internet of things, cloud computing and mobile internet have rapidly extended to agriculture and rural areas, and e-commerce of agricultural products is in the ascendant.

    The construction of farmland and water conservancy has been strengthened and the ability to prevent and resist natural disasters enhanced. When the new China was established, the foundation of agriculture was very weak. Over the years the country has continued to carry out agricultural infrastructure construction, uplifting small-scale farmland water conservancy facilities and farmland irrigation conditions. Now the high-standard farmland which is concentrated, drought and flood resistant, with high and stable yield and eco-friendly, accounts for more than one third of the total arable land.

    In the early 1950s, most rural areas relied on kerosene lamps for lighting and drinking water came directly from wells or rivers. After decades of efforts, rural electrification has advanced in an orderly manner. Rural electricity consumption increased from 50 million KWH in 1952 to about 1 trillion KWH in 2021. Implementation of the rural drinking water safety project has greatly improved the drinking water quality in rural areas. Significant progress has been made in road and network construction, with the total length of rural roads reaching more than 4 million kilometers. By 2019, 99.6% of townships and 99.5% of administrative villages have access to hardened roads, and 99.1% of townships and 96.5% of administrative villages have access to bus services. More than 90% of villages have access to broadband internet.

    The mode of agricultural production has shifted from relying mainly on human and animal power to machinery. The total power of agricultural machinery in China was only 184,000 kw in 1952, 117.5 million kw in 1978 and 1.06 billion kw in 2021. The mechanization rate of cultivation and harvest of main crops exceeds 70%, and over 80% of main grain crops. Science and technology play an increasingly important role in agricultural production.

    Rural education and cultural activities have developed rapidly. 70 years ago, the nation’s illiteracy rate was as high as 80% (2.67% in 2021) and the net enrollment rate of primary school-age children was only 20%. The rural education was very backward. For decades, the government has given priority to education in its development strategy, and gradually brought rural compulsory education into the scope of public financial support, where tuition and miscellaneous fees are exempted and textbooks are provided free of charge. By 2019, 92.7% of the counties in China had achieved a balanced development of compulsory education and established a student subsidy system.  More rural children enjoy better and fairer education. According to the 2016 rural census, 42.5% of rural residents had a junior high school education, 11.0% had a senior high school or technical secondary school education, and 3.9% had a college or above education. The same census showed that 96.8% of townships had libraries and cultural centers, and 11.9% had theatres and cinemas.

    The medical service is improving. Seventy years ago, rural areas were short of doctors and medicine. After decades of arduous efforts, the rural medical and health service network has accelerated. With the new rural cooperative medical care system, the reimbursement proportion of outpatient and inpatient expenses is about 50% and 75% respectively. With a better medical service, the health level of rural residents has greatly improved. The rural maternal mortality rate has decreased from 1500 / 100,000 in early 1950s to 19.9/100,000 in 2018, and the rural infant mortality rate has decreased from 200 ‰ to 7.3 ‰. A multi-tiered elderly care services has been introduced and gradually eased the difficulty of providing elderly care in rural areas. The average life expectancy of urban and rural residents in China has risen from 35 years 70 years ago to 77.3 years in 2021.

    Rural residents’ income continued to grow. Before the reform and opening up, rural employment was mainly engaged in agricultural production. Thereafter, township enterprises developed rapidly and the rural surplus labor force transferred to the secondary and tertiary industries. With the adoption of market economy, surplus rural labor force went to cities for employment and the number of migrant workers has remained at about 280 million in recent years. As the exchange conditions of agricultural and sideline products have been improving, the price of agricultural products and government's investment in social security increasing, rural residents’ income has gone up and the income gap between urban and rural areas narrowed significantly.

    The number of poor people has been greatly reduced and absolute poverty eliminated. Since the reform and opening up, China has blazed a path of poverty alleviation and development with Chinese characteristics. Measured by the current rural poverty standard (annual price), the incidence of poverty in rural areas was 97.5% in 1978, and 770 million people lived in poverty in rural areas. Governments at all levels have adhered to development-oriented poverty alleviation and taken development as the fundamental approach to poverty reduction. They stipulated the basic requirements and core indicators for the rural poor to get rid of poverty as the "two no worries" (no worries about adequate food and clothing) and the "three guarantees" (compulsory education, basic medical treatment and basic housing safety) so as to improve the basic production and living conditions in poor areas. Since 2013, governments at all levels have given greater priority to poverty alleviation and development, taking targeted poverty alleviation as its key strategy. After eight years of unremitting endeavor, by the end of 2020, China eradicated absolute poverty for the first time in its history. Under China's current standard (daily living expenditure at about US$2.0 per person at PPP), 98.99 million rural people were lifted out of absolute poverty. In addition, by the end of 2020, 1.1 million kilometers of newly built or reconstructed roads and 35,000 kilometers of new railways had been built in poor areas across the country. The ability of water conservancy to support the development of poor areas has been significantly enhanced. More than 98% of poor villages have access to optical fiber and 4G. The great improvement of infrastructure has smoothen the flow of people, logistics and information between poverty-stricken areas and the outside world.

    Since 1970s, China has lifted 770 million rural poor out of poverty, more than any other country in the world, and the first to achieve the UN Millennium Development Goals. According to the World Bank's poverty standard, China accounted for over 70% of the global population lifted out of poverty during the same period. According to World Bank’s estimate of the poor population in 2022, China has 11 million poor people living on US$3.20 per person per day, accounting for 0.79% of its total population, and 153 million poor people living on US$5.50, accounting for 10.84%.

    From the abovementioned you can see that since the founding of the People's Republic of China in 1949, China's agriculture, rural areas and farmers have undergone historic changes. However, the imbalance and inadequacy of China's development is most prominent in the rural areas, which is one of the main reasons why China insists that it is still a developing country. The main problems still to be addressed are: High agricultural production cost, low price and poor benefit. The collectivized tillage rate is low, and the competitiveness and ability to resist risks are poor. Agriculture and rural infrastructure are still backward in some areas, especially in the central and western regions. Three kinds of dimensional agricultural pollution are serious, and the safety of agricultural products is threatened. Lack of high-quality agricultural labor force, farmers do not know how to adjust the planting and breeding structure according to market changes. The comprehensive agricultural services is not sound enough to promote a modern agriculture. The processing industry of agricultural products in the vast rural areas is backward or even no processing industry. The ratio of agricultural product processing industry to agriculture is 2.3∶1, which is far lower than the level of 3.5∶1 in developed countries.

    In order to boost China's rural economy, Xi Jinping, China’s President and General Secretary of the Communist Party proposed the rural revitalization strategy in October 2017. He pointed out that issues concerning agriculture, rural areas and farmers are fundamental for the national economy and people's livelihood. We must always make solving the related problems the top priority. In early 2018, the central government promulgated a directive on an overall planning for rural revitalization. In September of the same year, the Strategic Plan for Rural Revitalization (2018-2022) was issued. It is a phased plan for implementing the rural revitalization strategy in accordance with the requirements of thriving industries, livable ecosystems, effective governance and prosperity.  The Directive on accomplishing the Plan in 2022 focuses on four aspects. The first is to stabilize grain production, increase production capacity, continue to promote the construction of high-standard farmland, revitalize the seed industry, improve agricultural machinery and equipment and ensure the reasonable income of grain farmers. Second, industrial development should stabilize the foundation and improve efficiency, expand agricultural functions, develop rural multiple values and promote the integrated development of rural primary, secondary and tertiary industries. Third, rural construction should be carried out at a steady pace to improve the quality, management and protection of environment, and benefit rural livability and employment. Fourth, the good momentum of increasing farmers' income and poverty reduction should be maintained.

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