Rural China Economy

Chinese Economy
Name
Institution Affiliation
Chinese Economy
The rural industry in China, which originated from rural subsidiary production, has been a key component of China’s Economy for several decades (Chen, 2016). The first wave of China’s rural industry occurred during the people’s commune era, resulting from the government efforts to promote rural industrialization and agricultural mechanization. Nevertheless, this sector experienced meaningful developments during the Chinese reform era, particularly between 1978 and 1996, when the previous brigade and communal enterprises were converted to village or township collective enterprises (Chen, 2016). In addition, during this era, new individual/private or collective enterprises were also established. Township and village enterprises (TVEs) played a vital role in absorbing rural surplus labor force released from the agricultural sector, improved rural income, generated sufficient revenues for local government, contributed to economic growth in these regions, and helped to bridge the rural-urban gap. Further, TVEs provided stiff competition to the state-owned enterprises (SOEs) because they grew out-of-plan, an act that resulted in improvement of marketization in the entire of China’s economy (Chen, 2016). Thus, the sector empowered the transformation of the country’s economy from the command to market economy. Various regions in China adopted TVEs, which are referred to as regional development models of Township Village Enterprises. Particularly, three common models were present in China, and they include the Southern Jiangsu (Sunan) model, the Pearl River Delta (PRD) model, and the Wenzhou model. Each of these models has unique characteristics and has a different path of evolution.
Southern Jiangsu (Sanan) Model
The Southern region of Jiangsu, which is found in Jiangsu Province, has been for long considered as one of the strongest economic centers in China. The region has abundant resources such as adequate infrastructure, good locations, sufficient labor, agricultural products, and technology from one of the Chinese strong economic cities, Shanghai (Wang, 2010). The presence of these resources provided a strong foundation to the rural industrialization during the 1980s, and as a result, Jiangsu developed into one of the wealthiest Chinese regions with high economical levels. Since the preliminary stages of the reforms, the government’s attention has been directed to this region. The first reform occurred in 1993 and was labeled “the South Jiangsu model. Over the years, this term has used as an expression for rural development and modernization in China (Wang, 2010). The South Jiangsu Model focused more on the development of TVEs. The model particularly focused on collective enterprises and in some areas, foreign enterprises located in small towns and villages. In 1980s and early 1990s, the model was declared as the strongest social and economic development model in China. During this era, TVEs developed rapidly and become strong and profitable to Jiangsu and other rural regions of the country (Wang, 2010). TVEs accounted for over 60% of the Jiangsu economy, which resulted in the establishment of the strong South Jiangsu Mod...