RURAL POPULATION

Members of China Academy of Agriculture and Forestry Sciences told Dr. M. E. Ensminger that 80 percent of China's population was rural. See M. E. Ensminger and Audrey Ensminger, "China-The Impossible Dream," Agriservices Foundation, Clovis, California, October 1973, p. 197.

SIZE OF RURAL HOUSEHOLDS

Data collected from the reports on 1,400 communes indicate that the average size of households in terms of persons was about 4.4. This average corresponds closely to an average derived from estimates made by Ta-chung Liu and Kungchia Yeh, "The Economy of the Chinese Mainland: National Income and Economic Development, Princeton, N.J., Princeton University Press, 1965, p. 102,

NUMBER OF COMMUNES

The report "Growth of Commune Clinics Shows Emphasis on Rural Health," NCNN, Peking, in English, June 25, 1973; in FBIS, Daily Report: People's Republic of China, No. 123, June 26, 1973 p. B-1, indicates China has about 50,000

communes.

NUMBER OF BRIGADES

Edgar Snow reported in 1971 that there were 750,000 brigades, op. cit., p. 138.

NUMBER OF TEAMS

A 1966 TKP report said there were about 5 million teams. Liu Shen, Pen Shui-li yao kuan-ch'e hsiao hsing-wei chu te fang-chen ("In Water Conservancy, Take the Direction of Undertaking Small Sized Projects"), TKP, March 11, 1966, p. 3.

ARABLE LAND

Total arable land was reported by the State Statistical Bureau to be 107 million hectares. See State Statistical Bureau, "Ten Great Years-Statistics on Economic and Cultural Achievements in the People's Republic of China," Peking, Foreign Languages Press, p. 2. Communes are said to cultivate 95 percent of this land. See Wang Hsiang-ch'un, Chiang Hsing-wei, and Ch'en Kun-hsiu, "The Question of Planned Management of Agricultural Production in Our Country," Ching-chi yes-chiu (Economic Research), No. 3, March 20, 1965; translated in SCMM, No. 466, April 26, 1965, pp. 31–39.

Thus 95 percent times 107 million hectares equals 101,650,000 hectares cultivated by communes. State Farms are estimated to cultivate not more than 4 percent of arable land. See Audrey Donnithorne, "China's Economic System," op. cit., p. 96.

CALCULATIONS FOR COMMUNES

1. Rural populations of 736,000,000=920,000,000 × 80 percent.

2. Persons per commune of 19,920-736,000,000 rural persons÷by 70,000

communes.

3. Households per commune of 3395.5=14,125÷4.4 persons per household. 4. Brigades per commune of 15.7-750,000 brigades 50,000 communes.

5. Teams per commune of 100=5,000,000 teams-56,000 communes.

6. Arable land per commune of 2,032=101,650,000 hectares÷70,000 communes.

CALCULATIONS FOR BRIGADES

1. Teams per brigade of 6.7=5,000,000 teams÷750,000 brigades.

2. Persons per brigade of 981=736,000,000 rural persons÷750,000.

3. Household per brigade of 233=981 persons 4.4 persons per household. 4. Arable land per brigade of 136=101,650,000 hectares÷750,000.

51-174 O - 75-27

CALCULATIONS FOR TEAMS

1. Persons per team of 147-736,000,000 rural persons 5,000,000 teams. 2. Households per team of 33=147 persons÷4.4 persons per household. 3. Arable land per team of 20=101,650,000 hectares÷5,000,000.

CALCULATIONS FOR HOUSEHOLDS

1. Rural households of 167 million

rural population of 736 million÷4.4.

2. Data collected from the reports on 1,400 communes indicates that on the average a rural household had 1.87 labor force units.

3. Average size of private plots of 300 square meters was derived as follows. Private plots are said to account for 5 percent of arable land in communes. See "Life in China's Rural People's Communes," NCNA, English, Peking, February 19, 1966: in SCMP February 24, 1966, p. 26. Arable land in communes was calculated above (Arable Land) to be 101,650,000 hectares, and 5 percent of this figure would leave 5,082,500 hectares for private plots, and this quotient divided by 167 million rural households leaves each household with 0.03 hectares. One hectare has 10,000 square meters, hence 0.03 hectares would equal 300 square meters, which would equal 0.074 acres (1 hectare 2.471 acres and 1 are=100 square meters=0.02471 acres), which would equal 3,222 square feet of land or a square plot of land about 57 feet on a side.

The encouragement of small-scale industries in rural areas in China is an essential element of regional development programs which today focus on agricultural development and diversification, local raw material utilization, resource mobilization, and long-term employment impact. However, rural industry in China is not a homogenous concept, as it is the outcome of two different strategy approaches. First, it is the logical outcome of a sector strategy involving technology choices in a number of industrial sectors-most of which were initiated during the great Leap Forward or earlier. This has required the scaling down. of modern large-scale technology through a product and/or quality choice combined with design changes in the manufacturing process.1 Second, rural industry is part of an integrated rural development strategy also initiated during the Great Leap Forward-where a number of activities are integrated within or closely related to the commune system. They are often rooted in the traditional sector of the economy and have often been preceded by a long tradition of village crafts. Such industries are often based on the scaling up of village crafts. The scaling up of cottage industries in China is not based on improvement of technology alone, but the cottage industries have been converted into modern small-scale industries through cooperativization, electrification, and access to low-cost simple machinery. The assumption for both categories is that they, in the main, should be using local resources and should be meeting a local demand for producer goods and industrial services.

Consequently, the rural industrial sector in China consists of enterprises which vary greatly in size and in degree of technological sophistication. The total number of enterprises is very high. The largest category consists of the very small brigade-level repair and manufacture shops, of which there may be several hundred thousand. The second largest category is likely to be the small mines-or mining

1 The best-known examples are small-scale production of nitrogen chemical fertilizer, cement and iron, all of which are discussed at some length in a forthcoming monograph on Rural Industrialization in China, to be published by East Asian Research Center, Harvard University, by the author. For a theoretical discussion of the issues involved, see Ishikawa, Shigeru A note on the choice of technology in China; the Journal of Development Studies, 9(1), 161–86, 1972.

spots of which there are likely to be considerably more than 100,000. There are also 50,000 small hydroelectric stations. A large number of the 50,000 communes are likely to have their own workshops for grain milling, oil pressing, and other food processing plants, woodworking shops, et cetera, which are usually organized in multipurpose units. Rural heavy industry-small iron and steel plants, cement plants, chemical fertilizer plants, and other chemical plants-may amount to between 5,000 and 10,000 units. The number of county-run machinery plants may amount to more than 3,000 units. Then there is also a large number of light (consumer) industry enterprises in counties, communes, and brigades, and these may amount to more than 100,000 units. So, the total number of industrial units-within the rural industrial sector is likely to be in the region of 500,000 or more.

However, total rural industrial employment is still limited and total employment is estimated to be in the region of 10-17 million, which may correspond to approximately 50 percent of total employment in manufacturing and mining. Since the summer of 1973, a couple of provinces have indicated clearly that, based on local conditions and relevant instructions from higher authorities, the number of workers used by industries at county, commune, and brigade levels should not exceed 5 percent of the labor force in a county. All other available information indicates that this may be the upper limit today.

China has not released any national figures for employment in county-, commune-, and brigade-level enterprises. There can be no doubt that employment in various parts of the county differs widely. Rural areas which are under the administration of big industrial cities have 20 percent or more of the labor force in industry. Remote places in the interior of the country may have hardly any industrial activity. Information from a number of relatively well developed (in terms of rural industrialization) regions in Hopei province indicates that less than 5 percent of China's total labor force is engaged in rural industries. The Chinese labor force is estimated to be approximately 350 million, which is about 70 percent of the population between the ages of 15-64.

Rural industry is distributed within a county at brigade, commune, and county level, with the heavy industry and larger enterprises located in the county capitals. The larger county capitals usually would not have a population exceeding 20,000. Most of the rural industrial enterprises are relatively small, rarely exceeding a few hundred employees. When discussing rural industry in China, it is essential to realize that many of them are not small by international classification and that many of them are located in small urban centers-county seats with a population of up to 20,000-which are not considered rural areas according to international classification. Rural industry is in this context not defined on the basis of size but as any local industry run by county, commune, or brigade. The enterprises are collectively owned or wholly owned by the state but under local management.3 Rural industry also includes units attached to middle schools, hospitals, and health clinics.

2 Information provided by officials of Lin County Industrial Bureau, Honan Province. Summer 1973.

The collectively owned enterprises may be jointly financed by the state and collective

Rural industry in China forms one part of the small-scale industrial sector which basically is made up of two different parts. (The other is the urban small-scale industrial sector, which is not discussed here.) The sophistication and scope of industrial activities are dependent on the level of education, economic development, natural resource endowment, nearness to ideas, and new information. Consequently, it is realistic to differentiate between rural industry in near-city locations and rural industry in rural areas proper. The former seems to have much more in common with urban-based small-scale industry than is the case for the rest of rural industry.

The development of industries in rural areas around Shanghai, Peking, and Tientsin, with a substantial amount of subcontracting, may indicate the long-term prospects for rural industry in the rest of the country. The formation of technical and organizational skills is only in the early stages of development in most parts of rural China. This and the still low level of mechanization explains why the industrial level in most rural areas in China is still comparatively low compared with more favored rural areas around the big cities.

Industrialization in rural areas proper appears to have been successful only when local character has been stressed. In other words, those activities, which have high coefficients for backward linkages to agriculture and for forward linkages to final users in the localities have been successful. A distinct difference between the approaches to rural industrialization in the late fifties and in the period since the Cultural Revolution is that the latter approach appears to have much higher coefficients for forward and backward linkages in the locality.

It seems that the greatest merit of small enterprises, as experienced in China, lies not in the superiority of their capital/labor or capital/ output ratios but in the overall savings in resources they make possible.*

Rural industry is part of a communication network which has the important task of spreading innovations as quickly as possible within a local technology system. New things and ideas often look complicated to an outsider, and, therefore, people have to be able to ask questions, to test things and ideas, and to get a feeling for them in order to fully understand and accept them. A tightly meshed network is a consequence of the fact that the links of personal communications are heavily restricted by distance for most individuals. Personal communication between pairs of individuals and direct observation are still the basic instruments for the diffusion of innovations.

Furthermore, small-scale industries serve as an important training ground for peasants who are learning manufacturing skills. The peasants are aided in adapting to an industrial environment and to conditions found in larger enterprises. This training contributes to the local formation of technical and organizational skills, and is part of a general process of breaking down the barriers to a transition from a

Watanabe argues that "small enterprises seem to contribute most to the economic development of countries with surplus labor and shortage of capital (which applies to China at her present stage of development) under the following conditions: "(1) Where they can be set up without heavy overhead capital expenditure on buildings, land, and infrastructure;

"(2) Where the diseconomies of small enterprises are compensated by the use of idle capital, labor, and raw materials;

"(3) Where division of labor between enterprises in different size groups, e.g. in the form of subcontracting, enhances the overall efficiency of the industry."

(in "Reflections on Current Policies for Promoting Small Enterprises and Subcontracting", by Watanabe, Susumu; International Labor Review, vol. 110, No. 5, November 1974).