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Face rural challenges

(China Daily)
Updated: 2008-12-30 07:39

Consecutive bumper harvests and fast rural income growth are compelling evidence of the vast potential of China's rural economy.

However, if the country is to effectively tap the biggest potential that rural areas have for China to boost domestic demand, policymakers should spare no effort in pumping more public funds into the rural economy.

The central rural work conference held over the weekend had set major tasks for next year's agricultural work. Given the adverse effects the worsening global financial crisis and economic downturn will exert on China, local governments should pay particular attention to the welfare of farmer-turned-migrant-workers.

In spite of the difficulties the Chinese economy faced in recent months, farmers will not only manage to reap another record harvest but also see their income rising steadily this year.

It is estimated that China yielded a record 528.2 billion kilograms of grain this year, representing an annual grain output growth for the fifth consecutive year.

Meanwhile, farmers' annual per-capita net income is expected to reach 4,700 yuan ($687) this year, up 8 percent year on year. That means the annual growth rate of farmers' income will exceed 6 percent for five years in a row.

True, such growth of agricultural output and farmers' income remain inadequate to narrow the wealth gap between rural and urban residents. But it has laid a solid foundation for farmers to substantially improve their living standards. As long as local governments can do their bit to help secure farmers' expectation on income growth, it seems possible that many Chinese manufacturers will find more consumers in rural areas than they can attract in cities at home or overseas markets.

The Chinese government has significantly increased expenditure on rural health, education, social security net and infrastructure as the national coffer ballooned after years of double-digit growth of the economy. And such government supports have begun to take effect in encouraging farmers to loosen their purse strings.

Nevertheless, next year will see the double whammy of declining government revenues and shrinking job opportunities for migrant workers. This will pose a serious challenge to the country's long-term endeavor to ensure supplies of farm produce and facilitate income growth for farmers.

The extra difficulties to maintain steady and relatively fast rural and agricultural development demand extra efforts for governments at all levels. Policymakers should show no hesitation in tilting public spending even more toward the rural sector.

(China Daily 12/30/2008 page8)