4.1 Agricultural production.  Since 1978, the overall productivity of agriculture in the country has registered a dramatic improvement. The output of grain and cash crops has increased sharply. China has basically solved the problem of domestic food security through relying on its own efforts. Since mid-1990s, the supply and demand pattern of farm produce changed once and for all, progressing from long-term shortage to balance with some surplus in good harvest years. In 2003, China produced 430.67 million tons of grain, 126.2 million tons more than 1978, making China the biggest grain producer in the world. The output of cotton was 4.87 million tons, which could basically meet the domestic demands for processing. The output of oil seeds, sugar crops and fruits reached 28.05 million tons, 96.7 million tons and 144.7 million tons, respectively, which was 22.83 million tons, 72.88 million tons and 62.37 million tons more than 1978. The output of meat, eggs and milk was 69.2 million tons, 25.35 million tons and 16.25 million tons, respectively, which was 57.15 million tons, 22.79 million tons and 15.11 million tons more than 1980, respectively. The aquatic production was 46.9 million tons, 42.4 million tons more than 1978. Up to now, the output of cereals, cotton, peanuts, rapeseeds, fruits, vegetable, tobacco, meat, poultry, eggs and aquatic products in China all ranks first in the world, respectively. Per capita output of grain, cotton, oil seeds, vegetable, meat, poultry, eggs and aquatic products has reached or surpassed the world average.

4.2 Structures of agriculture and rural economy.  In 2003, the value added of agriculture was 1 724.7 billion yuan, an increase of 1 622.9 billion yuan on the basis of 1978 with annual growth rate of 11.98 percent. Crop production accounted for 58.8 percent of the total value added of that year, which decreased by 18.2 percentage points from 1978; forestry, animal husbandry and fisheries made up 4.4 percent, 25.9 percent and 10.9 percent, respectively, which increased by 1.4 percent, 7.9 percent and 8.9 percentage points from 1978, respectively. As regard to the rural economy, primary industry declined to 30.5 percent in 2003 from 68.6 percent in 1978, decreasing by 38.1 percentage points; secondary industry was up from 26 percent to 52.9 percent, tertiary industry from 5.4 percent to 16.6 percent, increasing by 26.9 percent and 11.2 percentage points, respectively.

Structure of Agriculture in China, 1978-2003

Year	1978	2003	1978 – 2003
Total	100.0	100.0	0.0
Crop farming	77	58.8	↓18.2
Animal husbandry	18	25.9	↑7.9
Forestry	3	4.4	↑1.4
Fisheries	2	10.9	↓8.9

Industrial Structure in Rural China, 1978-2003

Year	1978	2003	1978 - 2003
Total	100.0	100.0	0.0
Primary industry	68.6	30.5	↓38.1
Secondly industry	26.0	52.9	↑26.9
Tertiary industry	5.4	16.6	↑11.2

4.3 Strategic restructuring of agriculture.  In 1999, the Chinese government launched the strategic restructuring of agriculture based on the development of agriculture at the new phase. The restructuring aims at optimizing the quality of farm produce on the basis of stabilizing the total output and securing supply; giving play to comparative advantages through optimizing the regionalization of agriculture in an all round way; transforming the traditional agriculture with advanced technologies so as to improve agricultural productivity and farmland output capacity; readjusting the overall economic structure of agriculture and rural areas and vigorously developing secondary and tertiary industries so as to make an overall planning of the economic and social development in urban and rural areas and fully improve farm produce quality. Up to now, the strategic restructuring has made remarkable progress. Firstly, crop farming has been improved in terms of structure through building up, step by step, a pattern of coordinated development in production of grain, cash and feed crops. As a result, cash crops like vegetable, fruits and flowers have all made rapid development, becoming new points of increasing farmers’ income. Secondly, animal husbandry and aquaculture have registered a fast development, leading to a gradually decreased share of crop farming but continuously increased shares of the two in the agricultural structure. Such a development has played an important role in securing the supply of farm produce and increasing farmers’ income. Thirdly, the quality and safety of farm produce have been remarkably improved. A number of poor-quality varieties and breeds have been eliminated, a number of quality varieties and breeds for special purposes developed, and a number of brand name farm produce fostered. In 2003, more than half of the total rice acreage was under quality rice, 25 percent of the total under quality wheat for special purposes, and 56 percent of the total under the double-low rape. In the case of high-oil and high-protein maize, it has developed quickly from zero. Issue of safety and hygiene of farm produce has attracted more public attention. Contamination-free food, green food and organic food have seen a dramatic development. And fourthly, the production of major agricultural products tends to further concentrate in places where they are particularly adapted.  For example, the acreage under paddy rice in areas along the Yangtze River valley accounts for tow thirds of the national total. Acreage under quality wheat varieties for special purposes in Hebei, Shandong and Henan covers 52 percent of the national total. Quality corn and soybean for special purposes grown in the three provinces of northeast China occupy 48 and 64 percent of the national total, respectively. The total acreage under double-low rapeseeds grown in Jiangsu, Anhui, Hubei, Hunan and Sichuan accounts for 75 percent of the national total. Some 41 percent of the national total beef production comes from the three provinces of Hebei, Shandong and Henan.

4.4 Township enterprises.  Township enterprises, a new force emerging all of sudden, has promoted changes in rural industrial structures, employment makeup as well as the development of small towns, opening up a way towards rural modernization with Chinese characteristics. In 2003, there were 21.85 million township enterprises, 20.33 million more than 1978. The total employees were 135.73 million, 107.47 million more than 1978. These township enterprises generated added value of 3 668.6 billion yuan, an increase of 3 667.8 billion yuan over 1978. They realized a total of 857.1. billion yuan of profits and tax, 847.55 billion yuan more than 1978. Currently, township enterprises have contributed one third of GDP, one quarter of the financial revenue, one third of the foreign currency earned through export, half of industrial added value, two thirds of rural social added value and one third of farmers’ income.

Township Enterprises in China

Year	Number of enterprises (10 000)	Number of employees (10 000)	Added value (100 million yuan)	Total  profits (100 million yuan)	Export value (100 million yuan)
1978	152	2826	493	95.5	…
1980	142	2 999	669	126.3	…
1985	1 225	6 979	2 755	247.1	39
1990	1 850	9 264	2 504	683.5	486
1995	2 203	12 861	14 595	3 697.2	6 008
2000	2 084	12 820	27 156	6 481.8	8 669
2001	2 115	13 085	29 328	6 709.5	9 397
2002	2 133	13 288	32 386	7 557.8	11 563
2003	2 185	13 573	36 686	8 571.0	14 197

4.5 Transfer of rural labor and rural employment structure.  It was until 1978 that the rural labors in China were simply engaged in agricultural production. The proportion of farm labors to the social total declined from 83 percent in 1952 to 70 percent in 1978 with an average annual decrease rate of merely 0.5 percentage point. Since 1978, a large number of rural labors have moved out of farming operations or rural areas through non-agricultural employment in rural areas, employment in other areas or settlement in towns or cities. A. Non-agricultural employment in rural areas. From 1978-2003, the rural labors that transferred to non-agricultural employment in rural areas increased from 21.8 million in 1978 to 177.11 million in 2003. A total of 155million of rural labors transferred, with an annual increase of 6.2 million on average. B. Employment in other areas. Since 1978, starting from zero, the number of rural labors employed in other areas has increased rapidly. Migrant rural labors have  played an active role in increasing farmers’ income, changing the outlook of rural areas and maintaining the stability in these areas. In 2003, over 98 million of rural labors had jobs in townships or towns, of which those employed outside their own provinces accounted for about 42 percent. The labor income growth from service has become an important element for the increase of farmers’ income in recent years. C. Settlement in towns or cities. The urban population increased from 172 million in 1978 to 524 million in 2003, and the urbanization ratio (the proportion of urban population to the national total) rose from 17.9 percent to 40.53 percent. Some 150 million rural residents moved into urban areas according to estimates. To summarize the transfer of rural labors in the country, there are three important experiences. A. To develop various industries. Efforts should be made to develop the rural productivity, push forward the national economy for a high-speed development and create new job opportunities. From 1984 to 1988, the GDP increased by 12 percent annually, 2.6 percentage points higher than the annual average growth rate of 9.4 percent between 1978 and 2003. In this period, a huge number of rural labors transferred to secondary and tertiary industries. From 1992 to 1995, the GDP increased by 12.7 percent annually, 3.3 percentage points higher than the average growth rate between 1978 and 2003. In this period, most rural labors transferred to non-agricultural industries, and employment outside rural areas also grew quickly. B. To carry out structural reform. This reform has broken down the barriers between urban and rural areas, and allowed rural labors to move into cities for job opportunities. From 2000 to 2003, in spite of just 7.5 percent of GDP growth, the accelerated structural reform and urbanization facilitated more rural labors to move into cities or small towns. C. To improve the competence of farmers. According to survey results, the average education time of rural labors that work outside is about 8.1 years, one year more than the average of rural labors.

With transfer of rural labors, the employment structure of rural China has taken a dramatic and historic change. Although the agricultural labors increased from 285 million in 1978 to 320 million in 2003, its ratio to the social total declined from 70.9 percent to 43.2 percent, and its ratio to the rural labors dropped from 92.9 percent to 65.3 percent. The absolute number of agricultural labors began to reduce in 1993, which indicated that the employment structure of rural labors entered upon a new stage. The agricultural labors declined from 333 million in 1993 to 320 million in 2003 with an annual decrease of 1.3 million on average.

4.6 Farmers’ income and life.  In 1978, the net income per capita of Chinese farmers was only 134 yuan. With development over the past 25 years, this figure in 2003 was up to 2 622 yuan, 2 488 yuan more than 1978. On inflation-adjusted basis, the annual growth rate would be 7.06 percent. Thanks to the increased income, the farmers’ living standards and their quality of life have kept improving remarkably. In 2003, the farmer per capita consumption of wheat flour and rice, meat, edible oil and fruit was 200, 15, 7 and over 20 kg, respectively. Compared to 1978, they increased by 78, 9, 5 and 18 kg, respectively. By the end of that year, the per capita dwelling space was nearly 26 m², an increase of 18 m² compared to 1978. In early 1980s, almost no farm househoulds had durable consumer goods such as TV set, washing machine, refrigerator or motorcycle. However, in 200 every 100 farm households had 109 TV sets, 32 washing machinery, 15 refrigerators and 28 motorcycles. From 1978 and 2003, the Engel's coefficient of rural residents declined from 0.68 to 0.46, dropping by 22 percentage points over the 25 years. With improved material life, farmers have received full respect for their democratic and political rights. Currently, over 70 percent of villages have carried out direct election by villagers; set up the system of villagers’ meeting, the open village affairs system and the open financial affairs system. The self-governing system is being popularized. Self-governance has fostered the farmers’ democratic and legal awareness, cut down the social managerial costs at grass roots, and alleviated contradictions between cadres and rural residents, and accelerated the process of democratic and legal development in rural areas.

Income of Urban and Rural Residents

Unit: yuan

Year

Index of GDP per capita

Disposable income per capita of urban residents (yuan)