How to Win the Tough Battle of Comprehensive Rural Reform

The "Comprehensive Implementation Plan for Deepening Rural Reform" recently issued by the Central Government is of great significance to rural development and reform in the period ahead. Rural reform bears on the overall situation of economic development. Only by substantially raising the level of agricultural modernization, lowering agricultural production costs, and relatively reducing the prices of agricultural products can China change household spending expectations, expand consumption, increase the total volume of domestic market demand, and form a virtuous cycle in the national economy. Only by relying on agricultural modernization, with farmers becoming prosperous modern professional farmers, can the building of a new countryside obtain effective support and can the state's overall cost of supporting agriculture be saved. Once the cost of eating for Chinese people falls, workers' employment choices will also better adapt to the needs of entrepreneurship and innovation, which is conducive to China's economic transformation. To raise rural reform to such a height of understanding is by no means empty boasting.

The prominent feature of this plan is that its orientation toward market-oriented reform is clear, it dares to face the difficult points of reform, its supporting reform ideas are systematic and mature, and local experience receives close attention. The document reiterates the established principles of rural reform that have proved effective for many years, summarizes the good experience gained from reform explorations in recent years, and at the same time raises difficult issues that very much need to be changed but for which there is still no certain way of doing so. Only by understanding these three aspects of this reform implementation plan can one have a basic grasp of future rural reform.

The established major policy of rural reform is to give play to the decisive role of the market in the allocation of basic economic resources in rural areas. China's tremendous agricultural achievements are inseparable from reform and opening up and from the basic policy of granting farmers the right to independent production and operation. Giving farmers freedom, creating a sound market order, and establishing a policy system that serves agriculture are the secrets of China's sustained agricultural development. Summing up this experience, the Third Plenary Session of the 17th Central Committee of the Communist Party of China clearly established the market economy orientation for deepening rural reform, and the resolution of the Third Plenary Session of the 18th Central Committee of the Communist Party of China further established the reform direction of letting the market play a decisive role. If this direction is upheld, reform has hope. Any wavering when facing reform difficulties, and any conservative thinking that abandons the direction of market reform and tries to retreat to the old path of the traditional planned economy, will become an obstacle to development and will make the country's prospects dim. This rural reform implementation plan reiterates the basic road map of market-oriented reform, which is an important guarantee for the success of the reform.

This reform implementation plan puts forward clear measures for problems in the rural field that grassroots cadres and the masses have strongly voiced in recent years and on which there is relatively consistent understanding, reflecting the top leadership's ability to make reform decisions in line with public opinion. For example, for many years grassroots cadres have complained greatly about the shortcomings of the agricultural support system, in which projects are set up in tiny fragmented pieces and spending ignores efficiency; some places boldly broke through the fetters of multiple authorities issuing overlapping policies and pooled agricultural support funds for use, achieving good results. The difficulty in solving this problem does not lie below but above. The reform implementation plan issued by the Central Government this time directly faces this "pseudo-difficult problem" and for the first time clearly requires vigorous cleanup, integration, and standardization of transfer payment funds related to agriculture, and resolute rectification of special funds related to agriculture that are "small, scattered, and disorderly" and whose effects are not obvious. In the future, standardized and transparent management systems must be established, and any form of misappropriation, interception at each level, and false reporting to fraudulently obtain funds must be eliminated, so as to genuinely improve the performance of investment in agriculture-related funds. For another example, Nanhai District of Foshan City, Guangdong Province, piloted a "separation of politics and economy" reform, clarifying the boundary between community public affairs and competitive economic affairs and rationally dividing the functions of grassroots organizations; Qingyuan City, adapting measures to local conditions, appropriately extended the establishment of villagers' self-governance organizations down to natural villages or villagers' groups, greatly mobilizing the enthusiasm of rural community elites who had been marginalized for many years to provide voluntary public services. These reforms are effective and praiseworthy. Although some people have concerns about these reforms, there is no doubt that the direction of reform is correct. The reform implementation plan issued by the Central Government this time clearly recommends these reform experiments and encourages all localities to explore and learn from them. China is vast, and there will always be reformers who dare to explore and take the lead. Affirming useful local experience and delegating power so that localities can exercise their initiative is the only way to remove obstacles to reform.

Reform has truly difficult problems, and the focus is rural property rights reform. If no effort is made in rural land property rights reform, property rights transactions will not be efficient, and letting the market play a decisive role in the allocation of agricultural factors will be empty talk. The reform implementation plan issued by the Central Government points out that it is necessary to "clearly define farmers' rights as collective members, clarify the ownership attribution of collective land property rights, and achieve clarity in the subject of collective property rights." This is an operational difficulty of reform and also a conceptual difficulty. In the author's understanding, our past determination of collective economic membership rights in fact followed the principles of "rights granted by birth" and "rights granted by migration," that is, when a person is born in a village or legally transfers household registration to a village, that person obtains collective economic membership rights. But market-oriented countries apply this principle only in the community public sphere, in order to determine "community membership rights." In the competitive economic sphere, the principles of "rights granted by inheritance" and "rights granted by transaction" must be followed. When a person inherits land contractual management rights or "purchases" land contractual management rights, that person naturally obtains "collective economic membership rights." "Collective economic membership rights" and "community membership rights" must be clearly separated. This is the cognitive precondition for a breakthrough in reform. This comprehensive reform implementation plan allows exploration, under certain conditions, of collective operational construction land "entering the market," allows exploration of a "paid exit mechanism" for rural homestead land, and allows "pilot programs for the paid exit of farmers' land contractual management rights," providing an opportunity for a breakthrough in reform. In the author's view, this is the greatest highlight of this reform implementation plan, and its significance is immeasurable. The success or failure of China's tough battle in rural reform depends on this.