The Impact of the Growth of Township Enterprises on Rural-Urban Transformation in China, 1978–1990

Abstract

China remade its economy in the 1980s. Since 1978, the year economic reforms were officially sanctioned by the Chinese Communist Party (CCP), the structures of industry and employment have changed markedly. Rural and urban markets have been revived, the income of peasants has risen, and new settlement patterns have evolved. Peasants drove those changes, switching from collective-based commune production to contractual-based house- hold production. Profits were soon channelled into rural industry and other non-agricultural ventures. Collectively known as township and village enterprises (xiangzhen qiye, or rural town enterprises, RTEs), these ventures became a very dynamic sector of Chinese industry. Their growth rates outstripped state-owned and urban collective industrial enterprises, they absorbed some of the huge rural under-employed and surplus labor force, and they became a major source of rural household income and local government revenues. In the mid-1980s, the private sector re-emerged, too. These new enterprises revitalized market towns and lower-level small cities as nodes for the articulation between the urban and rural economies.