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Bridging the urban and rural gap

By Fu Jing (China Daily)
Updated: 2008-11-10 16:29

At the end of October, the State Council ordered provincial governments to draw "red lines" to protect arable land in their domains.

China aims to keep its arable land at 121 million hectares by 2010 and no less than 120 million hectares in 2020, when the urbanization rate is likely to surpass 55 percent from current 42 percent.

"But it's difficult as local governments are still in a spree of urban sprawl," says Lu. "And very soon, China's expansion policy amid global recession may further rekindle the local government's enthusiasm in this regard."

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Lu's concern is reasonable.

Urbanization and industrialization has resulted in a consistent decline in the country's arable land bank in recent years, which dropped to 121.73 million hectares by the end of last year from 127.6 million hectares in 2001.

Meanwhile, Lu says the government at various levels should protect the interests of 30 million farmers whose land has been seized in the name of urbanization and property development. "They are landless, some are jobless and their interests should be protected properly."

Hard to bridge gap

At the October plenary, the leadership also decided to double the farmers' per capita income by 2020 from that of 2008, a goal which the decision makers think is vital for social harmony and to reduce the urban-rural wealth gap.

This is a continued commitment made by the government. Since 2003, the government has taken many measures to improve rural infrastructure and productivity. In 2007 alone, the central government allocated 420 billion yuan from the treasury for rural development, a sum that is almost equal to total government spending in rural areas between 1998 to 2003.

This has injected life into rural development as it has created many jobs for surplus laborers. Following a 9.5 percent annual increase last year, the per capita income for villagers rose 10.3 percent in the first half of this year, the highest in four years.

However, compared with urbanites, the income level for farmers is still low. With the urban per capita net income at 13,786 yuan, against 4,140 yuan in the countryside, the ratio was 3.3:1 last year, the highest since China launched its reform and opening-up policy in 1978.

Meanwhile, there is a sign that the global financial crisis has started hurting Chinese farmers' incomes as many coastal factories have started to close or become idle. And meanwhile, the prices of global farm produce have begun to fall. In China, most rural households mainly rely on earnings from working as migrants in cities and income from planting crops is marginal.

This year, the annual income growth of farmers is likely to cross 7 percent but that is about 2 percentage points lower than the government target, says Song Hongyuan, an economist with the Agricultural Research Center of the Ministry of Agriculture at a recent forum in Beijing.

Song says the worsening external situation and global recession may further affect the farmers' wallets despite the fact that China's leadership has set an ambitious "double-income" plan by 2020 for them.

The financial turmoil and the global slowdown have caused massive unemployment in labor-intensive sectors and the external demand for China's agricultural products is also down.

"The country will also have a difficult time meeting its target of doubling farmers' income by 2020, taking 2008 as the base year," Song says.

To achieve that goal, the farmers' per capita income should increase at an averaged pace of 6 percent annually by 2020. But, for most of the time during past three decades, the farmers' per capita income has grown at a snail's rate, lower than 5 percent.

Actually, China has already had a timetable to help unify urban-rural development. By 2010, all rural regions should be covered by a basic social security system. And by 2020, China says it will unify separate urban and rural social security systems and the urbanities and farmers will enjoy the same prosperity brought by the fast-developed economy.

"But slow-paced income increase for farmers is still a bottleneck towards achieving the goal," says Lu Mai.

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