Since the start of the economic reforms in 1978, China has developed today into one of the world’s leading producers of agricultural produce—particularly pork, poultry, fruits, vegetables, wheat, corn, and rice. The transition of China’s collectivist Soviet-style agricultural production toward a modernized, mechanized, and market-based agriculture has taken many decades to take effect. A major breakthrough that marked the start of China’s agricultural transition was the nationwide adoption of the Household Contract Responsibility System in the mid-1980s. In addition to these managerial and structural changes, the Chinese government engaged in the liberalization of agricultural prices and supply and marketing systems, as well as the stimulation of agricultural diversification, mechanization, and economies of scale. As agriculture continued to develop, millions of farmers were lifted out of poverty and migrated to the cities to find employment in the industries and services. At the same time, however, China encountered significant problems as a result. For one, how to ensure food security and feed close to one-fifth of the earth’s population with less than one-tenth of its farmland? On top of that, over time vast tracts of fertile, arable land were lost due to its (legal and illegal) conversion into urban construction land. Raising agricultural production was also severely constrained by the small and fragmented nature of Chinese farms. Well into the 2010s, over 90 percent of these were smaller than 2.5 acres, while cropland was scattered over numerous different plots. Furthermore, ensuring adequate social welfare, education, and health care for the rural populace had become a daunting challenge in the face of the growing divide between urban citizens and the peasant population. Last but not least, rapid rural industrialization through township and village enterprises (TVEs), once hailed as a miracle of China’s reforms, had taken a heavy toll in the form of soil, air, and water pollution, giving rise to “cancer villages”, “black rivers,” and heavily degraded natural resources. At the time of this writing, Chinese agriculture is caught in between two worlds: on the one hand, one may find smallholders tilling scattered agricultural plots, on the other hand, there are high-tech food-processing factories and the peri-urban, sometimes ecologically guided industrial farms. The stark contrast between a highly modernized sector versus a traditional one will continue to explain the paradoxical dynamics of Chinese post-collective agriculture for the foreseeable future.
The role of clustering in rural industrialization: A case study of the footwear industry in Wenzhou
