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Development of Township Enterprises
Township enterprises, a great innovation of the Chinese farmers and a product of reform and opening up to the outside world, have become a major force in rural economy and an important pillar of national economy in China.
 In 1998, the total number of staff employed by township enterprises was up to 130 million. And in the same year, these enterprises attained 2,400 billion yuan of added value, 750.2 billion yuan of export delivery value and 644 billion yuan of profit and tax.
The sudden emergence of township enterprises has ushered changes in industrial and employment structures in rural areas and the development of small towns, opening up a way to modernization in rural areas.
The development of township enterprises has also effectively improved the production conditions of agriculture, stimulated the transformation of traditional farming to modern one and promoted the development of rural as well as national economy.
 In 2001, there were 21.15 million township enterprises, which increased by 19.63 million compared with that in 1978. The proportion of non-farming industries in rural economy climbed up from 30.5 percent in 1978 to 67.2 percent in 2001.
Township enterprises have also become an important driving force behind China's economy. Currently township enterprises generate one third of the GDP, one fourth of the financial revenue, one third of foreign currency earned, half of the added value of industry, two thirds of the rural social added value and one third of farmers' income.
Nevertheless, China's township enterprises must undergo a new round of adjustment. The development speed of township enterprises has slowed down in recent years due to some internal problems and conflicts.
Rural enterprises must adjust their industrial structures because they have many shortcomings, including irrational product mix, small scale of production, out-of-date technologies, and old-fashioned management ideas.
The township enterprises scored rapid development in the early years because they enjoyed a series of advantages in terms of markets, policies, management mechanism, resources and labour force.
However, the medium and low-grade products turned out by the rural enterprises have lost much of their original market in recent years due to the weakening of these advantages.
Township enterprises must adjust their industrial structure to find a way forward.
The Chinese Government expects to further increase the competitiveness of township enterprises in both the domestic and international markets through the adjustment of industrial structures.
A group of township enterprise-owned high-tech production bases is expected to be built in China's coastal provinces of Jiangsu, Zhejiang, Shandong and Guangdong and Shanghai Municipality. Township enterprises in western China are expected to build their own pillar industries based on their respective resource advantages.
According to the plan of the Ministry of Agriculture, township enterprise zones will be formed in the future, and in these zones township enterprises will have their own chains of co-ordination in production, supply and marketing.
These zones are expected to produce around 80 per cent of the business income of township enterprises by the year 2015. Township enterprises will focus on the development of high-tech, high value-added, named brand and characteristic products in the coming years. Such products will account for 45 per cent by 2015, and the number of rural enterprises boasting an annual export value of more than US$1 million should reach 60,000.
The Chinese Government has worked out a series of policies and regulations, including the Law on Township Enterprises issued in 1997, to encourage and support the development of rural enterprises. At the same time, concerned departments have launched special information networks and websites <http://www.cte.gov.cn> to serve the township enterprises in terms of policy, circulation, and e-commerce information.
Experts point out that China's township enterprises now face a good opportunity for development, citing rural and agricultural structural adjustment and the development of the country's western regions, the two key state strategies at present.
Edited by CECAT
2002/01/06 |
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