Rural Development in China, 1980s–2000s

Abstract

This chapter analyzes Chinese rural development in the reform era. Before the 2000s, China's reform-era agricultural policy could be summed up as decollectivization followed by resource extraction and neglect. Between 1978 and 1984, the replacement of the people's commune system with household contract farming resulted in historic poverty reduction. After 1984, however, central government investment and growth rates in agriculture started to decline. As was the case during the Maoist period, local governments were expected to be self-reliant and raise their own funds for development. Under pressure to impress higher-level officials with economic achievements, many local governments resorted to imposing heavy taxes on farmers. These went toward developing industry instead of providing public goods. In 2004, China had entered a new era in which “industry should nurture agriculture, and the cities should support the countryside.” Two policies in particular came to embody this principle. First, after a period of experimentation with rural tax reform, the central government decided in 2006 to completely eliminate agricultural taxes. Second, a policy called Building a New Socialist Countryside was introduced as the top domestic priority of the eleventh five-year plan (2006–2010).