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China Exclusive: Will rural residents become middle-class?

English.news.cn   2013-01-16 22:04:08            

CHANGCHUN, Jan. 16 (Xinhua) -- Wang Zhiren, a farmer in the agricultural province of Jilin, does not know what the word "middle-class" means. However, Wang's life is typically middle-class: he lives in a three-bedroom house with a garage, drives a sedan and shops in urban department stores.

Wang's family earned 100,000 yuan (16,090 U.S. dollars) last year from growing rice on dozens of hectares of land in northeast China.

Many hope that emerging rural consumers, such as Wang, will unleash their purchasing power like urbanites did during the last decade, as China is in urgent need of shifting its economic driving force from investment to consumption.

The income gap between urban and rural residents narrowed in the past few years, bringing down the urban-rural earning ratio to 3.13 in 2011 from the 2009 reading of 3.33.

Twenty-nine out of 31 provincial-level governments said income growth of their rural residents surpassed that of urban dwellers for the Jan.-Sept. period last year, official data showed.

China held its annual Central Rural Work Conference in December, one month after the 18th National Congress of the Communist Party of China (CPC) elected its new leadership.

Agriculture Minister Han Changfu told Xinhua that the conference pledged to put more efforts in boosting farmers' earnings in the "income doubling program" promised during the 18th CPC national congress.

The five-yearly congress adopted a resolution saying by 2020, the country's per capita income should be double that of 2010.

While the exemption of agricultural taxation and increasing government investment have pushed forward the rural economy for the past several years, countryside residents still face great difficulty in maintaining fast income growth momentum.

Farmers in Qionghai of the southern-most island province of Hainan, China's major tropical fruit supplier, can make 40,000 yuan on average a year.

However, Lei Zhen, deputy director with Qionghai city's agricultural bureau, said local farmers remain vulnerable to natural and economic risks as market volatility can easily erase earlier profits.

China's dim export prospects also cast shadows.

For the majority of rural families, the main income source is from wages earned by working in labor-intensive industries, many of which rely heavily on exports.

However, the European debt crisis and the United States's unstable recovery continue to threaten the survival of the factories that absorb vast rural labor. China's year-on-year export growth slumped to 7.9 percent in 2012 from 20.3 percent a year earlier.

Labor-intensive factories want to move up the value chain by upgrading technology and changing products, according to experts, but their rural migrant employees are not skilled enough to become technical workers.

The lack of property income is another disadvantage rural residents need to overcome.

Guo Zhengmo, an economic researcher with Sichuan Academy of Social Sciences, said compared with urban dwellers, rural residents face more legal and administrative restrictions when cashing in on their houses and homestead lots. For instance, Chinese farmers are not allowed to sell their property to urban residents.

However, many analysts, betting on China's fast urbanization, share optimistic views about rural residents' income growth in the long run.

China's rapid economic growth fueled the world's largest urbanization.According to a nationwide census in 2010, half of the Chinese population live in cities, up by 13.46 percentage points from 2000.

Chi Fulin, president of China (Hainan) Institute for Reform and Development, estimated that 400 million rural residents will move to cities by 2020, and 160 million of them are likely to become middle class.

Editor: Hou Qiang
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