China’s Rural Industrialization through Township and Village Enterprises

China’s Rural Industrialization
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China’s Rural Industrialization
The rural industry has been a critical component in China’s economy for centuries. Rural areas in China have been dotted with many rural enterprises. A majority of these enterprises used to serve limited markets. Over the years, a majority of the industries scaled up while others became scaled-down forms of modern process enterprises. China has a surplus of labor and shortage of capital. As a result, rural industries have been essential in the economic development of China. The industrial sector in rural areas consists of both state-owned and collectively-owned small businesses. Moreover, rural industry has remained crucial in the renovation of Chinese rural areas and especially in addressing the imbalance between cities and rural areas. Having almost all individuals as members of the rural industries offers basic security to the people. The industries function as training grounds for peasants who want to learn manufacturing skills. This essay will entail the analysis of rural industries through the lens of the three Township and Village Enterprises (TVEs).
Features of the Models
TVEs refers to economic units that are either collectively-owned by locals or controlled by peasants in rural areas in China (Sun, 2007). TVEs exhibit some distinctive characteristics. Firstly, while they are publicly-owned, they remain to be market-oriented. TVEs were subject to the discipline of the market. Secondly, TVEs are small in size, which allows them to enjoy a high degree of autonomy in the way they operate. TVEs emerged in the rural areas, which had less controls compared to the urban areas. This allowed them to enter into competition with the state-run industrial businesses hence driving forward the idea of marketization.
The first one is the Southern Jiangsu (Sunan) model. Sunan refers to an area around the Yangtze Delta around Shanghai (Chen et al., 2019). This particular area is one of the most economically developed areas in China. In these areas, TVEs thrived in early 1970s. While the surrounding regions emphasized collective systems, Sunan adopted TVEs model. As TVEs kept on expanding these areas maintained control while the collective system declined in other areas. Sunan elements appeared whenever TVEs grew up early close to the cities. The proximity to the cities allowed these areas to obtain technical assistance from the urban SOEs. The strength of Sunan remained in its ability to have the TVEs generating profits and hence supporting the local government.
The third one is the Wenzhou model. Wenzhou is a town that is fairly remote which has caused it to evolve a different model of TVEs. Being away from the city has enabled it to develop away from the influences of the urban areas. Since the beginning, the Wenzhou economy has been based on private ownership where private individuals control a significant portion of the economy in the area (Xu & Zhang, 2009). Initially, the firms were small-sized and based individual households. Traders took the items produced and peddled them throughout China hence filling the gap that existed for cheap and diverse items. It is important to note that the farmer...