China’s Rural Economic Restructuring

The restructuring of China’s rural economy began in December 1976, immediately following the third plenary session of the Eleventh Central Committee of the CCP. In the first ten-year period of reform, our rural areas underwent a tremendous transformation, the outstanding success of which attracted worldwide attention. Reform has brought about the conversion of the country’s natural rural economy of selfsufficiency to a system based on the commodity, and thereby opened the way to rural modernisation. The primary aims of reform were (i) to develop a socialist commodity economy; (ii) to promote the modernisation of agriculture; (iii) to increase the wealth and prosperity of rural areas. In practice, the ten-year period of reform witnessed the following measures, aimed at making good the weaknesses of the old structure: reorganisation of the people’s communes; separation of government administration and enterprise management; establishment of a dual-level system of management based on household contract; regulation of industry with the aim of developing a diversity of enterprises; reform of the circulation system; cultivation of a market; encouragement of a variety of flexible economic associations; deployment of mechanisms of price, taxation, credit and the law to regulate the operation of the rural economy and thereby accelerate the process of founding a new system based on a commodity economy.