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Bridging urban-rural divide

09-21-2010 10:08 BJT

BEIJING, Sept. 21 (Xinhuanet) -- One of the byproducts of China's fast economic development over the last 30 years is the growing income disparity between rural and urban residents.

It is undeniable that absolute living conditions have improved for almost everyone, with the most notable examples at both ends of the spectrum being the eradication of poverty and the recent 30th anniversary of Shenzhen, the first special economic zone. Even if the focus of policies appears to be shifting toward filling this gap, in line with the idea of "harmonious development", the income gap is likely to grow over the next few years.

In China, allocated per capita land area is about 1.4 mu, or one-tenth of a hectare. But this number varies wildly from province to province and from county to county. In Sichuan, I have visited rural areas where per family land is about 2 mu.

Given that 1 mu of land can yield about 700 kg of rice, which a farmer sells for 2 yuan/kg, annual revenue rests at 1,500 yuan ($223.55). Subtracting the cost of producing such output (like seeds and fertilizers), it becomes clear than the actual net income is even lower. Some lucky areas, blessed with better climate, can enjoy two or even three harvest a year, thus allowing annual revenue to reach 5,000 yuan. The figures are very similar for corn production. But when the weather turns hostile, all or most of the produce can be destroyed.

Considering this, it appears that moving to a city can be an attractive option for rural residents, especially the sons and daughters of the first generation of post-1978 farmers. But without a strong education or other skills, many may end up working in restaurants or as shop assistants, earning only about 1,000 yuan a month. Even with most of their living and food expenses paid for by employers, only a few hundred yuan find the way to their parents as remittance: a small improvement, but not the solution.

Now, China has the opportunity to implement a set of policies that can make working in rural areas financially attractive for the younger generations as well and guarantee adequate food supply to the growing and more demanding population.

First, yields can be improved by modernizing production techniques and having common purchase agreements, which can partly reduce input costs. Insurance against bad weather could become the norm, with the government paying the premium.

Microfinance, still almost non-existent among low-income groups, should be promoted to give them access to credit facilities, necessary to build a sustainable development model. Social safety measures, including free education up to the university level, free healthcare and proper pension schemes, are something the government should take steps to improve.


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