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Road to Rural Vitalization

China Pictorial by Li Guoxiang,March 05, 2018 Adjust font size:

Final Target

Issues relating to agriculture, rural areas, and rural people are fundamental to China because they directly concern the country’s stability and the people’s well-being.

As China has developed, its agriculture, rural areas and living standards of rural residents have constantly improved. Especially since the 18th National Congress of the Communist Party of China (CPC), China’s agriculture has entered a new stage with grain production capacity exceeding 600 million tons per year and new types of agribusiness growing fast. The gap between urban and rural incomes is decreasing. The poverty reduction campaign has achieved tremendous results, helping a vast majority of rural people emerge from absolute poverty. Additionally, rural infrastructure has been gradually updated, basic social services have improved and the integrated development of rural and urban areas has taken initial shape.

Despite all the progress, China’s agriculture and rural areas are still lagging behind. The competitiveness of agriculture is weak, the quality of agricultural products hardly meets public demand, agricultural ecological function is not fully developed, agricultural efficiency is increasingly difficult to improve and agricultural resources have been overused, which has made sustainable agricultural development especially needed.

Issues related to agriculture, rural areas and rural people reflect China’s imbalanced and inadequate development, which is a major part of the principal contradiction facing Chinese society as socialism with Chinese characteristics enters a new era. In implementing the rural vitalization strategy, the Chinese government must prioritize the development of agriculture and rural areas. To build rural areas with thriving businesses, pleasant living environments, social etiquette and civility, effective governance and prosperity, the Chinese government needs to set up sound systems, mechanisms, and policies for promoting integrated urban-rural development. To solve issues related to agriculture, rural areas and rural people, the government needs to improve reform methods and measures and remove institutional barriers to activate people and the market to make agriculture a promising industry, farming an attracting vocation and rural areas beautiful places.

The rural vitalization strategy will give rise to thriving businesses, which can raise agricultural comparative effectiveness and China’s agricultural competitiveness in the world as well as integrated development of primary, secondary and tertiary industries that will compose a prosperous economy in rural areas. Behind villages featuring pleasant living environments, strong social etiquette and widespread civility is effective governance, which is the key to making a locale attractive enough to draw quality resources and market attention. Improving the living standards of farmers requires creating more avenues for income as well as a strong sense of fulfillment, happiness, and security, so as to give farmers full access to the fruits of socialism with Chinese characteristics.

August 1, 2018: A villager applies for a mortgage loan at a bank. In recent years, Jilin Province has constantly promoted new rural financial services. It has developed a pilot project allowing villagers to mortgage their land to get loans. Xinhua

Timetable and Roadmap 

China is drawing the roadmap for the rural vitalization strategy. Since it was announced at the 19th CPC National Congress, governments at all levels across the country have paced up plans for implementing the strategy. The central government is expected to release wide-reaching action plans and policies, while local governments propose specific measures. The recently concluded Central Rural Work Conference stressed the leading role of the rural vitalization strategy and introduced several major projects, plans and measures.

The strategy is consistent with China’s “Two Centenary Goals.” According to General Secretary Xi Jinping’s report at the 19th CPC National Congress, China will finish the building of a moderately prosperous society in all respects by 2020, see that socialist  modernization is basically realized by 2035, and develop into a great modern socialist country by 2050. The Central Rural Work Conference set up goals accordingly—the strategy should achieve important progress with an institutional framework and policy system formed by 2020, and make “decisive” progress with basic modernization of agriculture and rural areas by 2035, and the rural areas should see all-around vitalization featuring strong agriculture, a beautiful countryside and well-off farmers by 2050.

Institutional Guarantee

It was stressed at the annual Central Rural Work Conference that efforts must be made to nurture agriculture through industrial development, and use urban development to drive rural development. Agriculture and rural areas must be prioritized in terms of fiscal budget and public services. This is a necessary requirement for building an institutional mechanism of integrated urban-rural development. Thus, the institutional framework and policy system which will be issued by the government in steps are key to vitalizing rural areas.

To implement the rural vitalization strategy, China will advance reform of the rural land system, primarily by improving the system for separating ownership rights, contracting rights and management rights for contracted arable land and keeping rural land contracting practices stable on a longterm basis. The current round of contracts will be extended for another 30 years upon expiration.

These efforts will optimize the rural labor force flow between urban and rural areas, facilitate the integration of small farmers into modern agricultural development and improve the interest-interweaving mechanism to form a new agricultural management system.

To promote the development of new industries and new business models in rural areas and solve problems in obtaining rural construction lands, China will clear away obstacles in current institutions, improve the arable land requisition-compensation balance system, prioritize necessary land supply for rural vitalization and guarantee the land quotas for agricultural and rural development.

To solve financing problems facing new business entities in the rural economy, China will improve the rural financial system to make it more suitable for the development of agriculture and rural areas, strengthen innovation in financial services and enhance the reach and scope of financial services in rural vitalization.

During the process of deepening reform of the agricultural subsidy system, China will give great support to the usage of subsidy funds to facilitate appropriate-scale agricultural operations for the construction of a policy-based credit guarantee system, so as to solve problems related to insufficient funding of the rural vitalization strategy. While strengthening the construction of the rural financial credit system, China will expand the scope of financing mortgage for rural industries and support financial institutions to provide loans with agricultural facilities and equipment as mortgages and offer purchase order financing services.

In addition, China will deepen reform of the agricultural insurance system, actively develop policy-based agricultural insurance and expand coverage of agricultural insurance for major risks including natural disasters, costs of new technology applications and market price fluctuation. It aims to improve the compensation of insurance for all costs related to agricultural production and promote the sustainable development of new agricultural management bodies and the appropriate-scale management of rural land.

To implement the rural vitalization strategy, China will also reform and improve the fiscal subsidy system, and give more support to the structural adjustments, conservation of resources and environment as well as scientific and technological research and development.

China will establish and develop compensation mechanisms for grain production function zones and key agricultural product production protection zones.

Furthermore, China will advance reform of grain storage and pricing systems, minimize the market distorting effect of fiscal subsidies, reduce direct intervention of market regulation and protect producers’ benefits to create a fair competition environment for rural industries.

The rural vitalization strategy will further accelerate the integration of urban and rural development, consolidate and improve integrated urban and rural infrastructure, reduce and ultimately eliminate the social basic service gap between urban and rural areas.

The author is a researcher with the Department of Social Development under the Development Research Center of the State Council.