The Process, Experience, and Insights from the Coordinated Planning of Urban-Rural Reform and Development–Report of 49th Issue in 2013, 1081th Issue of the Journal
On the afternoon of November 11th, 2013, the first lecture of the New Structural Economics series, “The process, experience, and enlightenment from the planning of urban-rural reform and development—what I have witnessed in Zhejiang’s reform in the past 35 years”, which was organized by the National School of Development at Peking University, was held in the Wanzhong House of the Lang Run Garden; the guest speaker was Yikang Gu, the former director of the Zhejiang Agriculture Committee. Mr. Gu raised two questions as a preface in the first place. Then the great achievements, historical trajectories as well as successful experience and profound inspiration of the reform for urban and rural development of Zhejiang were reviewed respectively.
Introduction
Why was the reform and opening policy carried out for the countryside and farmers instead of the city and workers from the beginning? The truth is that in the planned economy era, for the strategy of overtaking the U.S. and the UK, our country propelled industrialization by depriving Chinese farmers and agriculture as well. The peasants were generally regarded as having suffered and been restricted the most among all groups over China, which contributed to them having the strongest aspiration for reform. Thus this reform must be started with farmers and the countryside.
Then comes another issue: why was this market-oriented reform firstly implemented in Zhejiang? Viewed from a historical perspective, Zhejiang was one of the most restricted provinces nationwide. At that time, the money remitted by China for the whole of Zhejiang was far less than that for Kaiyuan, a county of Yunnan. As for resource endowment, Zhejiang was relatively scarce in land resources, though the weather conditions were quite suitable for a flourishing population, such that the small-scale peasant economy needed a breakthrough and to be replaced by agribusiness and industrial and commercial undertakings. From a cultural perspective, the entrepreneurial spirit of the Zhejiang people can be traced back to the East Zhejiang School of Thought; which emphasized a culture of tolerance and gave everyone the right of freedom of self-cultivation.
Taking the lead: The distinguished achievements of integrating urban and rural development by Zhejiang Province
The achievements are exhibited in the following four aspects: The first is its sustained and rapid economic growth. Zhejiang has become one of the most robust and fastest-growing provinces. The second is its accelerated change of social development. Zhejiang has basically realized a “dual transformation” which was from agricultural society to industrial society, and from traditional society to modern society. The third is that Zhejiang’s method of integrating urban and rural development changed from spontaneous to conscious. The fourth is the bright course of its ecological construction.
From 1978 to 2012, The GDP ranking of Zhejiang Province moved up from 16th to 4th among China. Its GDP per Capita increased from 0.87 times the national average level up to that of 1.7 times. The change in Wenzhou is particularly obvious. In the times of China’s planned economy, the people of Wenzhou couldn’t afford the children they gave birth to. Many Children were delivered to all parts of the country by the Ministry of Civil Affairs. Wenzhou people got rich quickly after the reform and opening-up policy. People who had to send their children out in planned economy times are rich now.
Zhejiang Province has been the pioneer in coordinating rural and urban development throughout the whole country during the past 35 years of reform. In the beginning, Zhejiang coordinated rural and urban development from a manner of spontaneity to consciousness. Zhejiang made great efforts to achieve modernization and marketization, and at the same time to achieve agricultural modernization. Also, Zhejiang worked to promote Western development and at the same time, for rural development. Marketization, industrialization, urbanization and informatization are four major forces that drive the development and progress of human society. Whoever doesn’t make use of all these forces will lag behind, for it is the common wealth of development and progress of human society. Developing the market economy will definitely result in the polarization of wealth distribution, which is not that horrible. What is horrible is the fact that the government refrains from developing marketization for fear of a slight risk or that they are indifferent to shoulder the responsibility of alleviating poverty. Zhejiang’s experience can be characterized as unswervingly spurring the development of marketization, and meanwhile, giving top priority to alleviating poverty，development and helping vulnerable groups.
A revolutionary way: the historical path of coordinating rural and urban reform development in Zhejiang Province
The reform process in Zhejiang was divided into four stages, which is the same as that of the whole country. In the first stage (1978-1984), breakthroughs were made in the reform of agricultural production and the operation system. Also, the people’s commune was abolished and farmers became entrepreneurs and commercial operators. The second stage (1985-1991) was the initial stage of urban and rural market reform. Township and Village Enterprises suddenly started springing up everywhere and individual and private enterprises made breakthroughs, the establishment of the position of private economy and the rise of the Yiwu City Market as well as the Wenzhou Commodity Market drove vigorous development of small towns and counties. The third phase (1992-2001) is the stage to extensively promote marketization reforms in rural and urban areas. Zhejiang extensively promoted reforms of property systems in township and village enterprises, focusing on the cultivation of factor markets, and breaking the barriers of urban and rural areas. The fourth phase(2002-present) is the comprehensive reform stage of balancing rural and urban development. Zhejiang has made outstanding contributions in cancelling agricultural tax and the reforms of food marketization. Zhejiang took the lead in implementing the policy of studying agriculture-related majors for free, first implementing the regulation that allows children from low-income families to enroll in polytechnic schools for free.
Around 2000, the Acting Secretary of Zhejiang Provincial Party Committee, Zhang Dejiang, submitted reports to the central government in order to apply to put agricultural tax exemption into practice on a trial basis. He also applied for grain marketization when Premier Zhu Rongji made an investigation on the status of grain production. Both of the measures were widely promoted throughout the country. Prior to the adoption of the grain marketization policy, when grain produced by farmers in Jilin couldn’t be sold, the farmer’s were smothered by large quantities of grain. Meanwhile farmers in Zhejiang couldn’t make money by producing grain, leading them to suffer loses. Grain marketization means farmer decide what to grow. Since the policy of grain marketization was adopted, the grain output has increased tenfold, which is rarely seen in history. Experiences have proved that only by the way of market economy can China develop.
When accompanying Xi Jinping, the Acting Secretary of Zhejiang Provincial Committee of the CPC at the time, to conduct the survey on agricultural production, we observed that almost all the villagers were gone and those who still stayed in the village were the old people with an average age of 65 years old, and the average person hadn’t finished middle school education. The youth were not able to work in modern agriculture engaged while the elderly were unable to understand modern agriculture; the poor were not able to afford agricultural university while the rich did not attend. Facing the situation found from the investigation, Xi Jinping immediately decided that the government would provide the funding to implement a policy to fully-fund agriculture-related university majors, so as to train older farmers, as well as to cultivate modern farming talent.
In another investigation on rural poverty alleviation with Xi, it was found that the nine-year compulsory education was not enough for casting off poverty. After graduating from middle school, the villagers who left the village would become young migrant rural workers and return as old rural workers; those who left would become young nannies and return to the village as old nannies. After working in cities for decades, they came back in their later years with disabled bodies, aged faces, and in a state of mental despair, they’d return to the mountainous regions, become the objects of poverty alleviation. It was marked as the vicious circle of “poverty reproduction” which could only be broken by education. Only the poor people who got access to free education in technical secondary schools, junior colleges or even higher education could they get promotion in their jobs, like getting promoted from low-level nurses to head nurse, from cook to head chef and from secretary to secretary-general. Based on this investigation, Xi Jinping took measures and made Zhejiang the first province of the underdeveloped areas in which children of low-income families could get free technical secondary education.
Looking back the reform process in Zhejiang province for the past 35 years, 20 pilot policies and measures had been carried out. The key to achieve these breakthroughs and innovations was that the previous provincial government acted up to the spirit of Comrade Deng Xiaoping's speeches. They truly respected and supported the creativity of the masses, setting up a splendid example of fulfilling the “mass line” of the Party.
Special experiences: successful experiences on coordinating urban and rural reform development in Zhejiang Province.
Following the guidance of the theory of socialism with Chinese characteristics, Zhejiang Province has explored a path with a characteristically Zhejiang marketization of the rural peasant body, industrialization, urbanization and agricultural village modernization. According to this theory, there is a citizen-orientation, great importance placed on farmers, widespread entrepreneurship, private operation of markets, and the overall coordinated development of rural and urban areas so to achieve the goal of common prosperity, all of which are implied characteristics.
Citizen-orientation means that we must make the public at large the primary development target in the market economy. In particular, the majority of farmers should be the major subject and force of development, and they should be considered as the engine of promoting development instead its burden.
Focus on the development of agriculture is a firmly established principle of government for the people which emphasizes the three issues of agriculture, farmers, and rural areas. Further, the transformation from traditional agriculture to efficient modern eco-agriculture should be accelerated and the construction of new village and communities should be promoted.
Widespread entrepreneurship is to make the public at large the primary actors in business, innovation and wealth creation. The farmers are developed into the new agricultural workers, new industrial workers, new businessmen and new entrepreneurs to fight a "people's war" of the market economy. This entrepreneurship is a kind of talent which is like a hidden gene and only can be expressed in the environment of nationwide entrepreneurship. In this case, the government should focus on developing the environment of starting a business for all so that the entrepreneurial talents could emerge.
The market privatization is to integrate the economic marketization and the enterprise privatization. In this way, the market mechanism plays a fundamental role in the allocation of resources and production factors. Also the private enterprises and private economy with clear property rights play a key part in the development of the market economy. The ownership division should be weakened because the marketization needs privatization and vice versa, both of which are indispensable.
To fulfill the China Dream, the overall urban and rural development must be accomplished, which is also the only way for over two hundred million migrant rural workers to realize their dreams. An American farmer was asked in an investigation: are you happy as a farmer? Are you willing to be a farmer again if there is the next life? That farmer replied that he was very happy and he wanted to bring the carrots he planted when he meets his creator. He would continue to be a farmer in next life if he was given the chance. In China, on the contrary, no farmer is willing to continue being a farmer in his next life. To change this situation, the development of urban and rural areas must be coordinated.
Common wealth is to bear in mind the principle of people enrichment and common prosperity, to establish the mechanism that the person who became richer first brings along the poorer. Common prosperity doesn’t mean the equalitarianism, yet it eliminates the inequality in starting point and in opportunity as well as eradicates the phenomenon of hatred against the rich.
On the question of how the Party and government carry out the coordination of overall urban and rural development and dealing with the issues of agriculture, rural areas, and farmers, Zhejiang has generally found the intrinsic objective rule that “Five Musts” should be adhered to, namely, the issues of agriculture, rural areas, and farmers must be stressed by the government for the people. The principle of putting people in priority must be sought for; rural and urban development must be coordinated; the reform and opening up must be carried out to promote agriculture, rural areas and farmers; sincerity and pragmatism must be pursed.
An insightful view: profound enlightenment on reform way and manner of Zhejiang Province
The process and achievements of reform and development in Zhejiang Province over the past 35 years gave full expression to idea that when a developing country and area in which the majority of farmers and agricultural economy occupying a dominant position, progress towards modernization must be made by solving issues related to agriculture, rural areas and farmers. They must be the number one priority, give full expression to the key roles of farmers, fundamental roles of markets and leading roles of government. Farmers must become the active builders and founders of industrialization, urbanization, and agriculture modernization. The reform must be focused on breaking the urban-rural binary system and carry out development strategies of coordinating rural and urban development, and thus endowing farmers with equal development rights. We must fully respect the great inventions of the public and firmly grasp the inevitable law which is that reforms in the countryside give impetus to the reform of cities and the coordinated rural and urban development. Only in this way can the socialist market economy become the market economy of the people, and can avoid being plunged into the trap of powerful market economy.
To be specific, the process of reform must be progressive. It means that we must firstly carry out reforms in the countryside and then do it in cities, and lastly coordinate rural and urban development. The mass line of reform requires that the masses start the reform on a spontaneous basis, and then political parties start it of their own free will, which means it is firstly from the bottom-up and then from top-down. The reform’s force includes not only the underprivileged classes, who are the dominant forces but also the guidance of political parties, who are the decisive forces. Breaking the laws first and then amending them is the characteristic of legal reform. That is because laws and regulations always lag behind the development of the economy in the period of economic and societal transition. However, reform aims to break through old mechanism which shackled the development of economy. The way of leading reform shifts from the principle of letting things take their own course to the principle of making great efforts, from respecting and supporting the invention of the masses to promoting their invention. The theory of reform requires that we should transform reform practice to reform theory, and put new reform theory to practice to guide new reforms.
