RURAL INDUSTRIALIZATION - AN ENGINE OF PROSPERITY IN POSTREFORM RURALCHINA

The postreform period (post-1978) in China has been marked by very sha rp increases in both income and consumption of peasant households. Suc h sustained high growth over a period of more than a decade is impress ive by any standard. The fast-growing rural industries acted as the en gine of prosperity achieved by the peasant households of China during this period. With very high rates of growth achieved by such industrie s, the emergence and rapid growth of private enterprises, and institut ional changes that took place in methods of recruitment and payment of wages in collectively owned industries, rural industries as a whole b ecame an important source of income for peasant households. In additio n to the direct contribution, these industries played an important rol e in fostering the growth of agriculture (e.g., by providing funds for social investment in irrigation, and by facilitating farm mechanizati on and the use of fertilizers), and thus made a valuable indirect cont ribution to peasant income.