Can Agricultural Labour Adjustment Occur Primarily through Creation of Rural Non-farm Jobs in China?

Abstract

If China's rural families are to participate fully in the future economic growth there must be a large reduction in the number of farm workers. In order to accommodate the reduction needed over the next three decades, there will need to be 12-15 million new non-farm jobs created every year. Township and village enterprises have provided roughly 100 million new jobs since 1985, but in recent years there has been little increase in such jobs. One problem is that these enterprises are very small-industrial enterprises average about 11 workers. As the Chinese economy becomes more competitive, such small enterprises have had increasing difficulty in maintaining employment, let alone providing millions of new jobs each year. Where can the new jobs be provided? Due to continuing restrictions on migration, it is unlikely that many will become available in cities. An alternative is proposed, namely to promote the development of enterprises in one or two towns or small cities in each county. The worker could then continue to live in the villages and commute to their jobs on a daily basis. The advantage of this alternative is that it requires far less capital than if the same number of workers migrated with their families to cities.