Agricultural reform powers China's rise

Villagers stage a performance to welcome tourists at Tongmu village in Tongren, Guizhou province, on Aug 27. HU PANXUE/XINHUA

China's economic transformation from a largely rural society to a predominantly prosperous one has been faster than any other in the world thanks to national efforts to eradicate extreme poverty, according to Rana Mitter, professor of the History and Politics of Modern China at the University of Oxford.

"People who live in cities tend to have higher incomes than people who live in the countryside. Not always though, and it depends on how you define those terms. But overall, the fact remains that because more of China's population now lives in cities, there is the capacity to increase their per capita income," Mitter said.

He noted that better investment in the countryside unleashed major changes, including the move away from small individual plots to larger agribusiness developments.

The contribution of greater agricultural productivity to poverty reduction resulted in increased farmer incomes and freed up surplus labor for other sectors and urban areas, according to a report from the World Bank.

This allowed households to diversify their sources of income and to take advantage of better-paid nonagricultural labor opportunities, both locally and as migrant workers.

China's industrialization played a key role in its growth and poverty reduction.

Figures show that between 1978 and 2020, industrial added value increased at an average annual real rate of 10.3 percent.

New industries such as e-commerce have also helped pull people out of extreme poverty, as China has become the largest e-commerce market in the world by combining technology and consumerism.

"China is one of the most innovative countries in terms of technology, along with the United States, Israel, South Korea and the United Kingdom," Mitter said.

What this transformation has achieved, he noted, is the creation of a variety of opportunities and efficiencies leading to new forms of employment and economic prospects, while also driving up individual incomes.

The Oxford professor pointed to market-oriented reforms as another driver of economic opportunities.

"China has been quite distinctive, but also successful in terms of being able to create markets in a whole variety of areas that have increased the capacity of the economy as a whole to grow," he said. "The last 20 years or so, China's place as a supplier in global supply chains has been a really important part of its overall growth and development. And it's done that because of its placement in the global market as a whole."

Wang Yi, associate professor in Marketing and Tourism at Nottingham University Business School China, said: "Absolute poverty has been eliminated, which has contributed significantly to global poverty reduction. China has been quite successful in the past decade in poverty alleviation. The government is not just tackling the income problem, but is also focused on the well-being and the living environment."

Wang also cited financial subsidies provided by the government for poverty reduction.

"Nearly 20 million poor have received subsidies and special hardship assistance. Other than that, the government has encouraged entrepreneurs to set up in rural areas to various extents, and has supported rural entrepreneurship," she said.

"These efforts worked in China because government policy ensures efficient implementation at the rural level. In the meantime, it creates flexibility at the local level to grab opportunities and develop further."