The China’s Rural Industrialization

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China’s Rural Economy
Introduction
In 1979, the central government of China began to formulate economic policies that would promote Township and Village Enterprises (TVEs). The policies centered on subjecting TVEs to low tax rates while allowing them to obtain adequate capital from banking institutions. The favorable conditions stimulated TVEs growth, which increased their contribution to the GDP from 6% in 1978 to 26% in 1996. They also started outperforming state owned enterprises (SOEs) and played a significant role in turning the Chinese economy into a market economy from a command economy. Due to China’s huge land mass and geographical differences, the various TVEs were based on rural development models; the Pearl River Delta (PRD) Model, the Wenzhou Model, and the Southern Jiangsu (Sunan) Model.
The Pearl River Delta (PRD) Model
The Pearl River Delta Model was used in the development of the region between Guangzhou and Hong Kong. Currently, this region constitutes metropolitan areas such as Quanzhou-Putian and Chaoshan and is one of the most inhabited territories in the Asia. The model was established by traders who were born in the delta region, went to Hong Kong to work, but later returned to their villages and launched various TVEs (XU, 2016). Under the Pearl River Delta Model, all business enterprises in the village were controlled by village leaders who were tasked with solving social problems as well as coordinating labor. Due to its close proximity to Hong Kong, factories employing the Pearl River delta Model manufactured and exported light and labor-intensive goods.
The relationship between the people from the delta region and Hong Kong businesses was mutual. Businesses in Hong Kong and the local government provided monetary services, which enabled the TVEs to manufacture and export their goods. On the other hand, Hong Kong relied on them to provide low-priced labor. The model has contributed significantly into transforming the Pearl River Delta region into a megacity. As a result, from a future view, the Pearl River Delta Model has a more bright future than other rural development models. According to Shen (2014), its export oriented characteristic enables it to adjust and integrate other economic practices, especially those used in Hong Kong. This implies that all business and industries that may be set up in Hong Kong will have a direct influence on the model, which would benefit any remaining TVEs.
The Wenzhou Model
The Wenzhou model was used to develop the town of Wenzhou. Before the establishment of the model, Wenzhou town was highly populated and there was no work to keep the population occupied. As a result, the success enjoyed by the model during its early years can be attributed to the cheap labor that was readily available. The long distance and rugged landscape of Wenzhou hindered transportation and limited outside influence. As a result, TVEs in Wenzhou did not benefit from technological advancements, better manufacturing processes, or better trade practices. Therefore, factories under the Wenzhou model were owned by families because they were small. Their limited manufacturing capabilities meant that they only produced common it...