After announcing the completion of the task of eliminating absolute poverty just last month, Chinese Communist Party leader Xi Jinping once again proposed to narrow the gap between urban and rural regional development while attending the deliberations of provincial delegations at the two sessions, but acknowledged that common prosperity is still a long way off.
Analysts say that how to address the disparity between rich and poor between regions and between urban and rural areas, as well as improving the disparity between rich and poor in society, has become a major issue for the Chinese government going forward. Although on the surface, China’s rural economy is ready to take off, it is not easy to overcome the institutional obstacles.
The same old story from the two sessions
The Chinese government has recognized that there is a serious imbalance in China’s economic and social development, that is to say, a problem of inequality between the rich and the poor. This is reflected in a series of recent speeches by Communist Party leader Xi Jinping.
In February, Xi Jinping declared at a national summing-up and commendation conference in Beijing that China had “achieved a comprehensive victory in the battle against poverty,” but at the same Time he suggested that promoting common prosperity for all people should be given more importance, and that regional, urban-rural and income disparities should be addressed consciously and proactively.
During the two sessions, Xi Jinping said at the deliberations of the Inner Mongolia delegation that lifting the cap from poverty is not the end, but the starting point of what he called “a new Life and a new struggle”. He said there is still a long way to go to solve the problem of unbalanced and insufficient development in China, narrow the gap between urban and rural areas and achieve common prosperity for all people.
A longtime follower of China’s rural economy said in an interview with the Voice of America that this reflects the Chinese government’s willingness to finally confront a long-standing problem: “To be more fair, the country’s leaders have actually been plagued by this problem for decades, right? China, in the post-New Coronary Pneumonia era, is still able to maintain its economic development at a certain level in the whole world, and with so much capital, it is unjustifiable if it still does not face up to the problem of unbalanced urban and rural development in the country, but it is better late than never.”
A part of the population gets rich first
Xi’s speech has drawn attention to whether China will change its long-used development model.
China has been reforming and opening up for more than 40 years. The late leader Deng Xiaoping proposed to “let some people get rich first” and then drive poor areas to eventually achieve common prosperity for the whole country.
The observer, who asked not to be named, said that while “some people get rich first,” the differences between east and west, urban and rural areas and the disparity between rich and poor groups have gradually come to the fore. She said: “In the 1990s, there was a popular saying that ‘China’s cities are like Europe, the countryside is like Africa’, in fact, we can already see Deng Xiaoping said, let some people get rich first, some people did get rich. The gap between urban and rural areas has been widening since the nineties. In the 1990s, when Zhang Yimou’s ‘Qiu Ju Fights the Law’ was filmed, rural areas were still riding wooden carts pulled by horses, and the most powerful ones had a bicycle.”
However, in the 21st century, the Chinese Communist authorities have made a multi-pronged effort to improve the quality of life of people living in remote areas, and have spared no effort to improve rural infrastructure.
Rural areas are being “hollowed out”
This observer has a long history of rural research and therefore has first-hand knowledge of the situation. She told Voice of America that the authorities have launched several policies to improve the competitiveness of the countryside: “The state has improved the most extreme situation of ‘no sickness but death’ by completely abolishing the agricultural tax and then allowing all rural residents to buy social security and medical insurance on a large scale. More people in rural areas moved to the county to go to school. Even rural areas that used to be very remote will have roads and a lot of high speed rail will be built. Many of the poorer corners of Yunnan now have high-speed rail.”
But at the same time, rural areas are increasingly “hollowed out”. The number of young people choosing to go to the cities continues to grow. Many rural areas are being abandoned.
Most of the young people are leaving the countryside, and the only people left are the elderly and children,” she says. Extreme poverty in the countryside has improved, but the problem of agriculture being abandoned and the countryside being hollowed out is getting worse. It is only when young people go out to work in cities that they have the ability to survive and have a chance to develop.”
The gap between rich and poor and urban and rural areas is widening
With the transformation and upgrading of the manufacturing industry in recent years and the rise of new service industries, the convergence of manpower and wealth in cities is more evident. She said, “Farming is not profitable. Young and strong rural youths who work outside every month will certainly have a monthly income in return, while farming has too many uncertainties, such as drought and weather, and the price of crops is not raised very high. Farmers would prefer their children to work outside, young people are running away, most of the remaining are old and weak, so the situation in the countryside is now, you can not say that no one is farming, but it can not sustain a living, such as a rural child now to get married, at least a suite, so that he has the opportunity to be able to get married.”
Two years ago, the People’s Bank of China conducted a survey on the net assets of urban households other than rural households and found that the top 1% of households owned 17.1% of society’s wealth; the top 10% of households owned 49% of society’s wealth; the top 40% of households had 82.6% of wealth; on the contrary, the bottom 20% of household structures had only 2.3% of society’s net assets. On a per household and average asset value basis, Beijing is seven times larger than Xinjiang.
According to the observer, the task of narrowing the gap between rich and poor and between urban and rural areas in China is even more daunting than it was 20 or 30 years ago. She said, “Because now the richest people in China are already the richest people in the world.2 Forbes’ list of the world’s richest people is already on the list of Chinese billionaires. If the country says it wants to narrow the gap between the rich and the poor in the country. I believe it is more difficult than waiting for the moon and landing on Mars.”
Household registration restrictions are the biggest obstacle to revitalizing rural areas
While some commentators have argued in the past that the main reason for the dramatic widening of the property gap between urban and rural residents in China is the rapid rise in housing prices, and therefore regulating housing prices is a top priority, Chen Yao, a researcher at the Institute of Industrial Economics at the Chinese Academy of Social Sciences, told Voice of America that household registration restrictions are the biggest obstacle to revitalizing the countryside.
Chen Yao said, “To solve the problem of urban-rural gap, people and capital from cities must be invested in rural areas, which will help revitalize the townships, and only when the townships are revitalized, the gap can be narrowed. Now you go to the rural areas, you first have no land because you are not a rural household. It’s not easy for you to come back as soon as you go out.”
Chen Yao believes it is necessary to speed up the reform of the household registration system in order to promote two-way population mobility. He said, “The countryside is now a treasure trove, so now there are many people who want to move out of the countryside to the city, have to think again and again, it is easy to move out, it is difficult to move back, you have to have a place to live to settle in the countryside .”
Urban-rural income gap stems from land nationalization
Speaking to VOA, the Australian-based finance scholar Commander said China’s real estate bubble and social problems such as the widening income gap between urban and rural residents stem from China’s land nationalization policy. He said, “If China can learn from the centuries-old experience of the West in land ownership, then the housing problems of the people, and even the real estate bubble, could be solved. What is the experience of the Western countries? That is to allow land to be truly owned by the people, to allow free movement of land.”
The commander pointed out that the last 100 years or so have been the fastest growing urban-rural income gap in China, especially after the establishment of China’s government in 1949, when the Chinese Communist Party implemented a planned economy that plundered the fruits of rural people’s labor, natural endowments, and then transferred them to the cities.
In the eyes of the commander, the state-owned economy, which controls the lifeblood of the national economy and plays a dominant role in economic development, is the fundamental obstacle to solving the widening urban-rural gap. It makes it difficult to tilt resources toward many weak areas, weak links, and disadvantaged groups,” he said. This is a fundamental, most important socio-economic level, or institutional design level, that has led to the widening of the urban-rural income gap in China.”
What’s the next step on the road to common prosperity?
In an interview with the Voice of America, a longtime observer of China’s rural economic development said many farmers across the country have actively sought change in recent years. Citing the example of “live farmers” who are breaking the traditional sales model, she said, “(Consumers) are in direct contact with the farmers of certain farms on WeChat and buy their produce directly. Now there is an emerging group of farmers called ‘live farmers’. For example, if they want to plant apples in the mountains, he will directly broadcast the whole thing, ‘Hello everyone, look at the apples growing this year.'”
She believes that the only way to break the logjam agriculture is currently facing and open up bright prospects is to let young people see the prospects. She says, “Can more young people stay in the business of farming where they were born, can these people have enough income to stay in the countryside, and their children don’t have to become left-behind children, grandparents don’t have to become nannies, because in the past decades, because of the development of factories in the cities, in fact, this tradition of Chinese traditional Culture in the countryside has been completely The traditional Chinese culture in the countryside has been completely destroyed. Is the emergence of a middle-class consumer population a new internal cycle? “
Over the past 40 years, reform and opening up has indeed made some of China’s people rich first, but with the goal of reaching a medium developed country level of GDP per capita by 2035, it seems that the government and the private sector are still figuring out how to take the next step.