Nation launches three-year action plan to boost urban-rural circulation

China will build 500 "front-runner" counties by 2025 to further advance the integrated growth of urban and rural areas, said government officials on Tuesday.

The government published a three-year action plan on Monday aiming to further strengthen China's county-level commerce system and rejuvenate its rural areas. More than 20 specific tasks in seven areas have been identified in the implementation of the policy document.

These tasks include extending services to top shopping malls and markets in towns and villages, renovating shopping centers and markets, new construction or upgrading of logistics distribution centers, nurturing local farm produce e-commerce brands, and an increase in capacity of cold chain logistics for farm produce.

Li Gang, director-general of the department of circulation development at the Ministry of Commerce, said this move will continue opening two-way circulation channels for industrial products dispatched to the countryside and agricultural products bound for cities, increase farm revenue and upgrade farmers' consumption patterns, and generate fresh momentum to shore up China's economic growth.

The three-year plan was designed in the context of China's efforts to upgrade underdeveloped commercial facilities in rural regions, improve the county-township-village logistics distribution system, guide commerce and logistics companies to transform and upgrade, and promote the high-quality development of commerce in counties.

Concerning the establishment of 500 "front-runner" counties, the three-year action plan stipulates that they should possess county-wide logistics centers and convenience stores for rural populations, as well as rural commerce centers, including large and medium-sized supermarkets and farm produce markets, by 2025.

Addressing a news conference in Beijing, Li said the Ministry of Commerce will work with other government branches to continuously promote the downstream integration of supply chains, logistics distribution, goods and services, as well as the upstream development of agricultural products.

"We will ensure that a county-level commercial system centered around counties, focusing on townships, and built-upon villages, is established, facilitating a virtuous cycle of enhanced farm revenue and increased consumption power," he said.

China has more than 2,800 county-level government organizations with a permanent population of 740 million, while the consumer market at the township and village levels accounts for 38 percent of the nation's overall consumer market, according to the National Bureau of Statistics.

Fueled by robust purchasing power in China's rural regions, the sales of new energy vehicles for rural use grew by 87 percent year-on-year in 2022, data from the Ministry of Commerce showed.

In terms of developing e-commerce in rural areas, Li said that a public service and logistics distribution system for rural e-commerce has been established across China.

Over 20 billion yuan ($2.75 billion) in government funds have been allocated since 2014, supporting a total of 1,489 counties in constructing more than 2,600 county-level e-commerce service centers and logistics centers, along with over 150,000 rural e-commerce and express service sites, data from the Ministry of Commerce showed.

As the e-commerce industry has effectively bridged the gap between farmers and the consumer market, China saw its online retail sales of agricultural products grow by 9.2 percent year-on-year to 531.38 billion yuan in 2022.

In order to solve the problem of high logistics distribution costs, the State Post Bureau of China will encourage capable businesses to establish collaborative distribution networks from county-level or township-level hubs to villages, especially in places where it is expensive to enter each village individually, said Bian Zuodong, deputy director-general of the bureau's department of market regulation.

Through collaborative efforts involving various stakeholders, this approach is able to effectively reduce costs and boost efficiency, he said.

Looking ahead, Song Danyang, deputy director-general of the department of market and information technology at the Ministry of Agriculture and Rural Affairs, said the ministry, as its next step, will deploy more resources to help build premium brands for agricultural products, facilitate robust chain integration, promote brand awareness in overseas markets and strengthen weak links in cold chain logistics.