China’s countryside ‘returning to poverty’ as lack of reforms help fuel urban-rural divide
- China's rural economy is at the heart of national policy, but the income gap between the country’s villages and cities is widening
- Experts say the government needs to kick start much-needed reforms of the rural pension system and land rights, with US trade war increasing pressure
For most years since 2000, China’s first and most important annual policy document has focused on improving the agriculture sector, an indication not just of its political significance, but its complexity and the pressing need for deeper reform.
The welfare of the agricultural economy has become ever more crucial as China’s relatively untapped rural consumer market is now seen as a resource to help offset the slowest growth in more than 28 years, clouded by continuing trade tensions with the United States. Rural China, after all, accounts for more than 40 per cent of the country’s total population.
But the government’s good intentions could once again be thwarted by structural obstacles that stand in the way of needed economic reforms. With each year, the gap widens between China’s rural villages and its cities.
“The current situation is not optimistic, the countryside is returning to poverty,” warned Ma Wenfeng, an analyst from Beijing Orient Agribusiness Consultant, which includes the Ministry of Agriculture and Rural Affairs as a client.
The current situation is not optimistic, the countryside is returning to poverty
Putting aside the not inconsiderable amount of money that migrant workers bring home, rural income has been in decline since 2014, falling by another 20 per cent in the first half of this year, Ma said. According to his firm’s analysis based on government data, rural per capita income excluding the proportion from migrant workers fell to 809 yuan (US$114) at the end of June this year, compared with the 1,023 yuan ($145) at the end of 2018.
