http://news.ft.com/cms/s/9d94e5e8-a410-11da-83cc-0000779e2340.html
The announcement yesterday of China's ambitious new rural policy, marketed in
China under the politically correct banner of the "New Socialist Countryside",
has been three years in the making.
But even now, for all of the measures it contains, many of which are already
being piloted in some of the country's remote, poorer counties, the details of
how the policy will work on the ground are not yet clear.
In some respects, given the monumental task the government has set itself, of
turning around a sprawling, diverse and often backward rural economy containing
about 740m people, that is not surprising.
The government is torn between the dual and possibly conflicting imperatives
of getting the policy right, but also ensuring that it produces quick results.
"It is both a long-term goal and an urgent immediate task," said Chen Xiwen,
a senior official in the leading group on agriculture.
From the moment they came to office in late 2002 and early 2003, Hu Jintao
and Wen Jiabao, China's president and prime minister, have said that addressing
China's rich-poor gap, symbolised by the urban-rural divide, is the most
important priority of their administration.
In making their commitment, Mr Hu and Mr Wen had more than just the welfare
of impoverished farmers in mind. The surge in protests in rural areas has also
made the countryside a volatile political issue.
To that end, the "New Socialist Countryside" incorporates tax cuts,
incentives to lift grain production, and massive infrastructure spending, mainly
in the form of new roads and other transport links.
But lifting rural incomes, now about one-third of those in cities on average,
is only half the challenge. The area of perhaps greatest neglect is health and
education, which used to be free, but in recent years has become expensive and
often not even accessible in rural areas.
"The divide is even more compelling for infrastructure and social
undertakings such as education and health, which all greatly hinder improving
the quality of farmers' lives," said Mr Chen.
What is not yet clear is how much all of this will cost.
The government will announce some initial spending figures next March, with
the unveiling of the latest five-year plan at the annual National People's
Congress.
But the finance ministry and other agencies, while supporting the aims of the
policy, will be suspicious of making open-ended spending commitments in rural
areas.
Yasheng Huang, at the MIT Sloan School of Management, said it was "vitally
important" for Beijing to address problems in the countryside accumulated due to
neglect in the nineties.
"I would prefer to see the new rural strategy incorporate more liberalisation
and private sector development rather than just massive state investments," he
said.
Mr Huang says the urban boom in the nineties was financed heavily by massive
taxation on Chinese rural residents, including the high fees for basic education
and healthcare.
"The most relevant question is not how China should or should not subsidise
agriculture; the most relevant question is how China should cut its rural
subsidies to the cities," he said.
Unlike the Common Agricultural Policy in Europe, which pays money to keep
plots out of production, China's aim is to keep as much land in production to
ensure basic food sufficiency. Liu Fuyuan, the head of the think-tank attached
to the planning ministry in Beijing, thinks this is misguided, unless it is also
combined with incentives to get more rural workers off the land. "We should make
farmers move into the cities," he says. "That is the only way to get economies
of scale in the countryside."
