Re: Lecherdog

On Thu, 16 Mar 2006 12:58:32 +0800, J.Venning wrote
(in article <4418f08a$0$47001$edfadb0f@xxxxxxxxxxxxxxxxxxxx>):

Where did you get this figure of $404 a year? Epoch Times?
J.

http://www.bjreview.com.cn/En-2005/05-10-e/10-china-1.htm


Uncut below:


Rural Dilemmas

By LI ZI

As China is an agriculture-based economy, it made perfect sense for it to
initiate its reform and opening up from the vast rural areas over a quarter
century ago. However, despite an unprecedented period of sustained rapid
economic growth and escalation in urban living standards, the country's rural
population today lags way behind city dwellers. Farmers labor under a slow
growth in per-capita income for consecutive years. Government officials say
that developing agriculture and helping farmers play economic catch-up is not
only a necessity for the overall development of the national economy, but
also vital to the stability and prosperity of Chinese society. Encouragingly,
measures taken by China's leadership last year paid off, reversing slow rural
income growth. It's a start, but more efforts are needed in this field.

Chinese Premier Wen Jiabao may well breathe a sigh of relief when hearing the
news that per-capita net income of farmers increased 6.8 percent in 2004,
ending the sluggish growth of farmers¹ income in the last seven consecutive
years. Issues concerning farmers have been weighing heavy on the mind of the
premier since he took the post to head China¹s cabinet two years ago. Early
this year, Li Deshui, Commissioner of the National Bureau of Statistics,
announced that the per-capita net income of Chinese farmers reached 2,936
yuan ($355) last year, 314 yuan ($38) more than the previous year. Allowing
for price factors, the real growth exceeded the urban income rate for the
first time.

China is a big agricultural country, with 900 million of its 1.3 billion
people living in the countryside and developing agriculture has long been a
basic national policy of the Chinese Government. Launched in late 1978,
China¹s ongoing reform and opening-up drive began in its vast rural areas.
Since then, China has witnessed rapid economic growth and enhancing
comprehensive national strength. However, the agricultural development has
failed to keep pace with the overall national reform and opening-up process.
Despite noticeable progress, issues concerning agriculture, the countryside
and farmers, also known as the three rural issues, remain hard nuts for the
government to crack, prompting their listing as high priority on its work
agenda each year. They have also been among the hot topics at the annual
sessions of the National People¹s Congress, China¹s top legislature, and the
Chinese People¹s Political Consultative Conference, the country¹s top
advisory body. Without exception, they are expected to remain a focus of
discussion for Chinese lawmakers and political advisors when they meet in
March.

Farmers Issue
ANTIQUATED: Modernization of farm production is key to solving poor rural
conditions

The overwhelming process of reform in China was originated in the rural areas
by introducing what was known as the ³contract system with remuneration
linked to output² in the early 1980s. Through separating the land ownership
from the right to its management, farmers were given the right to decide on
farm production. This policy greatly motivated farmers¹ enthusiasm for
production and injected vigor into the rural economy. For a while,
agricultural production and farmers¹ income witnessed explosive expansion.
When the country was experiencing a shift from long-term shortage of farm
produce supply to an abundance, most farmers benefited from the reform.

However, such rapid expansion lasted for only seven years due to the
deep-rooted factors that restricted agricultural and rural development
remaining unsolved. In subsequent years, the gap between urban and rural
income widened further and rural grass-roots governments suffered financial
difficulties. Agriculture is still a weak sector in the national economy and
the sluggish social development in rural areas has not been completely
reversed.

According to Chen Xiwen, Vice President of the Development Research Center of
the State Council and an agricultural expert, under the centrally planned
economy, China practiced price scissors, which featured low prices on
agricultural products and high prices on goods needed in agriculture,
starting from the early 1950s, in order to speed up urban construction and
build up an independent industrial system in the agriculture-based country as
quickly as possible. This practice was to squeeze surplus labor and products
from agriculture for the sake of primitive capital accumulation. Some experts
estimate that, during the decades of this practice, farmers contributed as
much as 800 billion yuan ($96.6 billion) to the country¹s urbanization and
industrialization. But, they benefited little from the achievements of the
process.

Professor Huang Jikun, from the Center for Chinese Agricultural Policy of the
Chinese Academy of Sciences, noted that the transformation from an
agricultural society to an industrial one is a gradual process. Following
economic growth, the share of agriculture in the national economy will
decline, as will the number of agricultural population, he said.

During China¹s economic transition, many rural people have left their
hometown for cities, forming a big contingent of migrant workers. But due to
the restrictions of the long practiced dual structure, which divides cities
and the countryside, these migrant workers are still regarded as ³farmer²
workers. They are categorized as rural residents in population census though
many have been living and working in cities for many years.

The highly decentralized mode of production in rural areas has led to high
production costs and low productivity, placing farmers in a disadvantaged
position in the market. As there is lack of economy of scale, many farmers
are still living at the mercy of the weather. And a social security system
has yet to be established in the countryside.

Root Causes

Among the three rural issues, that related to farmers is key, which features
low income and slow growth.

China¹s modernization program has been designed to benefit its 1.3 billion
citizens, especially farmers who form the majority of its population and are
living a comparatively poor life. Although farmers¹ income has been
increasing over the past years of rapid growth of the national economy, its
annual growth rate is much slower than that for urban income, resulting in a
widening gap.

Compared with 1998, the annual per-capita net income of farmers increased 460
yuan ($55.6) in 2003, a yearly increase of 92 yuan ($11.1) on average.
Meanwhile, the per-capita disposable income of urban residents increased
3,047 yuan ($368), an annual rise of 609 yuan ($74). Last year, the average
income of farmers reached a historical high at 2,936 yuan ($355), which
merely equals the average monthly salary of an ordinary company employee in
Beijing.

Of the average income of farmers, a considerable part is earned from off-farm
jobs and non-agricultural business work. Currently, 60 percent of rural
households in China earn their income purely from farm production, having no
earnings from non-agricultural work. It means that actual income of most of
the rural households has not increased in the past five years, some even
suffering a decline.

³China tops others in the world in terms of the gap between urban and rural
income,² said Li Shi, a researcher with the Institute of Economics of the
Chinese Academy of Social Sciences. His research findings show that the ratio
of urban and rural incomes reached 2.9:1 in 2004.

This doesn¹t even reflect the real difference, Li said, because the income
indicators have not included the nonmonetary income (such as medical
insurance and other benefits in kind) of urban dwellers. Taking these factors
into account, the difference between urban and rural income could be as high
as five, or even six, times, Li estimates.

Although the living standard of many farmers has improved during the
country¹s industrialization and modernization, they failed to gain due
benefits compatible with the rapid growth of the national economy. An
important indicator is the declining proportion of rural consumption in the
total national retail sales of consumer goods, which is a key factor
reflecting the living standards and consumption level of farmers.

In 1978, when rural residents made up 87 percent of the national population,
the value of goods they purchased accounted for 67.6 percent of the total
consumer retail sales. The figure dropped to 53.2 percent in 1990, when rural
population made up 79.1 percent of the national total, and dropped further to
35.1 percent in 2003, when the rural population accounted for 70.8 percent.
The consumption level of farmers lags 10 to 15 years behind that of their
urban peers.

Education. In 2000, rural people at and over 15 years of age received 6.85
years of education on average, three years less than those living in cities.
Some 75 percent of the 85.07 million illiterates or semi-illiterates (people
at and over 15 years of age who cannot read or can read very little) on the
Chinese mainland lived in the western rural areas, ethnic minority regions or
state-designated poverty-stricken counties. In 2002, national investment in
education totaled 580 billion yuan ($70.1 billion), of which 77 percent went
to cities and a mere 23 percent to the countryside, while rural population
accounted for over 70 percent of the national total.
HEAVY LOAD: Farmers in the underdeveloped western region are in urgent need
of development-oriented relief projects

Medical care. Statistics demonstrate the great difference in the allocation
of public health resources between urban and rural areas. Rural residents,
who form 70 percent of the national population, have access to less than 30
percent of the nation¹s total health resources. There is only one hospital
bed and one medical worker for every 1,000 rural people, whereas there are
3.5 hospital beds and at least five medical workers for every 1,000 urban
residents. The medical insurance coverage stands at only 9.58 percent in
rural areas, while it reaches 42.09 percent in urban areas. To date, there
are still nearly 100 million people in the countryside who have no access to
medical service, and about 20 percent of the counties have yet to reach the
basic standards of the goal of ³Health for All by the Year 2000,² an
ambitious program adopted by the first International Conference on Primary
Health Care convened by the World Health Organization (WHO) and the United
Nations Children¹s Fund (UNICEF) in 1978 in Alma-Ata, Kazakhstan. And 8
percent of rural infants are not guaranteed access to immunization.

Telecom service. While urbanites are keen on updating their cellphones, the
penetration of fixed-line telephone service in rural areas is merely
equivalent to the urban level in the early 1990s. Varied access to public
communication resources further widened the gap between urban and rural areas
in acquiring knowledge, information, technology and advanced ideas.

Social status. Economist Hu Angang believes contradictions accruing from the
country¹s dual economic and social structure form the fundamental
contradictions in Chinese society. From the economic perspective, agriculture
is a disadvantageous sector in the national economy, with low efficiency and
high risks (market and natural disaster risks). Politically, farmers form the
largest disadvantageous group though they constitute the majority of the
national population. They are not guaranteed the right to political
involvement and expression of interest. From a social perspective, rural
population is the largest group living at the bottom of social strata, facing
discrimination, social injustice and unequal opportunities.

For example, ³farmer² workers do all kinds of hard work in cities, which few
urbanites are willing to do, but get low pay or suffer payment default. They
serve the cities while living in poor housing conditions and having no
guarantee for medical care and difficulties in securing an education for
their children. In a word, it¹s hard for them to get integrated into city
life.

Difficulties for Solutions

Ever since the founding of the People¹s Republic in 1949, the Chinese
Government has attached great importance to rural issues. But why is it so
difficult to solve them?

Chen Xiwen believes the solution to the issue of agriculture is to accelerate
modernization of farm production; the issue related to the countryside should
be solved by establishing a sound social management system and developing
education, health and other social undertakings in rural areas; while the
solution to the farmers issue lies in securing employment and income growth
for farmers.

The three rural issues are interrelated, Chen said, noting that the
government used to focus on finding solutions to these issues from within the
countryside. However, the situation has changed, especially in the farm
produce market where supply exceeds demand for consecutive years. This makes
the rural problems more acute so that it¹s hard to find a cure merely from
within the countryside, Chen said.

Encouragingly, the government has changed its approach to solving the
problems, said the think-tank expert. The new approach links rural
development with accelerated urbanization and the transfer of surplus rural
laborers. With the establishment of a structure of coordination between urban
and rural areas, it's promising for China to solve its rural issues properly,
Chen concluded.




--
Love, Jim


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