CED in Rural China

by
Anna (Zhean Shen)
Community Economic Development
Professor: Gertrude Macintyre
9 April 2012

Abstract

This paper is written to explain why CED in rural China is considerably important, what the status quo of China’s rural CED is and what problems and obstacles rural CED faces. Through the application of CED theories and the analysis of these problems, feasible approaches to China’s rural CD can eventually identified.

CED in rural China

Introduction Although China’s economy grows very fast over the past three decades, it has enlarged the disparities between rich and poor. In 2010, China’s Gini-coefficient—a measure of how wealth is distributed in a society—stood at 0.47, while the United States’ Gini-coefficient stood at 0.46. Moreover, the international warning level of inequality was 0.40. In other words, inequality in China has now surpassed that in the United States, and has even surpassed the international warning level. The wealth created in China is not distributed evenly. According to the new international poverty line standard—the personal daily expenses average below $1.25, there are still 128 million people living in poverty in China now (He, 2011). However, most of the poor people are from rural China. The purpose of the paper is to find some appropriate approaches through the study of community economic development to alleviate poverty and shorten the gap between rich and poor. To achieve the purpose, this paper will proceed in five parts: reasons for rural CED, influence of New Economy on rural, problems on rural CED, application of CED theories, and approaches to rural CED.

Reasons for rural CED: Rural VS Urban China remained a rural economy until 2010. In 2011, the proportion of urban population reached 51.27%, more than that of rural population.
Chart 1
China: urban & rural population[1] and per capita income
|Urban population |Rural population |Urban residents’ per capita income |Rural residents’ per capita income|
|in millions |in millions |(Yuan) |(Yuan) |
|690.79 |656.56 |21,810 |6977 |

Source: National Bureau of Statistics of China.
As shown in this chart, the gap between urban income and rural income is huge. Since 1978, the gap has been wide and has a tendency to become wider and wider. The Engel coefficient, a measure of how much of the income households have to spend on food, has been consistently higher for rural households. Nowadays, many cities like Beijing and Shanghai, have coefficients lower than 30, while some poor provinces have coefficients more than 50 (Tobin, 2011). This implies that life quality in rural China is much worse than that in urban China because the food expenses account for a big part of households’ income. They do not have surplus money to improve their life quality. Chart 2 shows an ownership comparison of durable goods which are considered as normal essentials between urban households and rural households. As mentioned before, China tends to be urbanized. Since there is a strong trend toward rural-urban migration, CED practices seem to take place more frequently in urban settings. However, no matter the area or the natural resource, like steel, coal, and wood, is more abundant in rural China than in urban China. In addition, the population density in urban China now is considerably high and hence leads to a series of problems, such as high housing prices, high education pressure, and high employment competition. Therefore, how to develop rural areas by applying CED theories is a priority for China. By doing so, the rural resources can be effectively used, the urban burden can be lessened, and more importantly,