Since the twentieth century, the problem of rural China in the process of industrialization through state corporatism has been nothing but the question of, under strict agrarian resource constraints, how to extract huge surplus from rural areas to support industrialization and, at the same time, ensure that the rural sector would not decline

86 Tiejun, Xiaodan, Shuai, Jiansheng, and Chi

Figure 5.3 The institutional gains and institutional costs in China's industrialization process

Source: Wen Tiejun’s forthcoming book, Three Rurals and Three Governances.

rapidly so that the stability of society at large could be guaranteed. The rural sector, being the main carrier of millennia of traditional civilization, has been engrossed in the process of national modernization. In fact, it has been the primary source of primitive accumulation of capital in industrialization under the urban-rural dualism and took the burden of cost transference during several financial crises.19

Accordingly, rural development in China is a twofold problem. On the one hand, it is a historical problem of how to inherit and develop an old irrigation civilization that is composed of a huge peasant population with a gregarious culture as a systemic heritage containing internal regulations. On the other hand, it is an inevitable aftermath of primitive accumulation of capital in the specific historical background, in which the goals were to achieve industrialization after national independence and to solve the subsequent problem of the expansion of industrial capital.

In the 1990s, when elaborating this situation, we suggested that the fundamental problem of rural development in China is not simply the problem of agriculture but the “three-dimensional agrarian issues,” namely, the “san-nong” issues including peasants’ rights, rural sustainability, agriculture, and safety under the constraint of the major institutional contradiction of urban-rural dualism. We further proposed that the “san-nong” issues are intrinsic to almost all the developing countries where the institutional contradiction of dual structure is commonly found. Moreover, nations with peasant economies, that is, the whole of east Asia including China, Japan, and Korea, have no simple problem of agriculture in the sense of the West. If people in east Asia use the term “farmers” to refer to the peasants with little arable land, hence equating

American farmers who often drive big tractors working for self-owned hundreds of hectares of land with Chinese peasants who work on fragmented and dispersed land with mixed income sources (by part time working in industrial and agricultural sectors) under a small peasant economy, then what follows this basic conceptual mistake is inevitably a series of grave theoretical and policy misunderstandings.20

In the late 1990s, China once copied the Western agricultural policy as represented by the United States. This did not only lead to the deterioration of the “san- nong problem but also made agriculture the largest polluting industry in China in less than two decades. The problem of unsafe food products became a serious cost of externalities that the society at large has to bear.

Based on the above investigation and reflections, the authors and like-minded people inside China and abroad have worked together and launched the Rural Reconstruction Movement with sustainable development as its substantial contents, including organic farming, ecological architecture, and urban organic consumer cooperatives based on community supported agriculture (CSA) for initiating “fair trade” in China. Accordingly, we have proposed policy recommendations on many occasions.

Fortunately, in October 2005, the Chinese central government specified “building of a new socialist countryside” as a national strategy; in October 2007, “Ecological Civilization” was set as a guiding principle of the whole country; and in October 2008, “resources-conservation and environment-friendly agriculture” was announced as major contents of the long-term strategy in the 2020s.21

We hope that in the major changes under globalization, moderate reforms, or as we advocate, innovation instead of reform, can help sustain the stability of rural China, where the majority of the Chinese population lives.22

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