Rural Industrialization in China: Approaches and Results

Abstract

This chapter discusses the rural industrialization in China. The existence of a rapidly growing rural industrial sector that consists of a large number of small and medium-sized enterprises is characteristic of the present development strategy in China. The rural industrial sector in China, consisting of state-owned relatively large enterprises and collectively-owned smaller companies, employs approximately 18 million people—according to preliminary estimates. The development is different in China where rural industries span a considerable part of the industrial spectrum between traditional village crafts and modern large-scale industry. Almost every person in rural areas in China is a member of a people's commune, which provides him with basic security. Agricultural mechanization is, in principle, controlled and people are hindered from migrating into the cities. Further, small-scale industries serve as an important training ground for peasants who are learning manufacturing skills and adapting to an industrial environment and, thus, to conditions found in larger enterprises. Even if rural industrialization has a limited impact on the employment pattern, in relative terms, it must not be forgotten that the sector engages approximately 3 per cent of the total number of people of working age. However, China's rural industrialization programs have in the past undergone sharp oscillations between acceptance and rejection of major portions of a development strategy. The provision of a strong and viable development basis in China for small-scale industries is then likely to have significant long-term economic as well as social advantages.