By Albert J. Nyberg, Scott Rozelle
"...two concerns stay primary to the [Chinese] government's rural improvement targets: nutrients safety and poverty relief. China has made amazing growth in assembly those ambitions: the economic system, together with the agricultural region, has grown at extraordinary charges through the reform period." whereas China's rural items, enter, hard work, and land markets are enhancing, they continue to be nascent. China nonetheless must foster a number of severe associations, resembling a good monetary procedure, a extra effective rural economic climate, a doable land tenure association, and a remodeled alternate and funding atmosphere for agriculture. the first function of this document is to spot and consolidate info on those an important concerns that influence on rural improvement in China. This record assesses strategic ideas from the viewpoint of potency, equitable improvement, and development. it's meant to aid govt officers and global financial institution employees to prioritize coverage and institutional reforms and public funding judgements within the rural region.
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Extra info for Accelerating China's rural transformation
Recent measures adopted in mid-1998 are reminiscent of those of the 1980s, which were costly and relatively unsuccessful. These measures include remonopolizing farmgate procurement at government-determined prices, prohibiting the grain bureau enterprises from selling grain at prices below the government-determined procurement prices, and clearly separating commercial and policy functions and central and local government responsibilities in price stabilization and buffer stock management. Implementation of the new policies will likely lead to substantial grain overprocurementstressing financial and physical storage capacity.
Explicit financing (for onlending or loan guarantees) for small and medium enterprises channeled through existing financial institutions is an option. However, a training program to improve financial management and operational skills of both the lending institution and borrowing enterprise should accompany, or be a component of, a financing program. Reforming Rural Credit The financial sector has reformed more slowly than some other sectors, and the government maintains strong controls. Several financial institutions have developed to serve the rural sector, but most lending is to rural enterprises and to state agencies to procure grain and cotton (policy lending).
Local government consolidation and reform should be high on the policy agenda. Rural Incomes, Off-Farm Employment, and Township and Village Enterprises Recent increases in agricultural income have resulted, in part, from increased farmgate commodity prices. This option has been fully exploited as domestic prices are near international price equivalentsunless government decides to embark on a costly farmer subsidy program and ignore the commitments made in the yet unfinished World Trade Organization accession negotiations.
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