How Farmers Became Entrepreneurs in the Development Process
Reform and opening up liberated farmers from the planned economic system. Unwilling to remain poor and backward, farmers in Zhejiang converted agricultural surplus into capital for industrial development within the rural areas, setting off a wave of rural industrialization and urbanization and becoming the main force driving marketization, industrialization, and urbanization. This unique path of industrialization and urbanization was an endogenous path with the farming population as the main body, the private economy as the leading force, and the county territory as the main battlefield. What made it most distinctive was that farmers became the initiators, investors, entrepreneurs, employees, and shared beneficiaries of industrialization and urbanization. This path was also an important reason why Zhejiang Province took the lead in basically eliminating absolute poverty between urban and rural areas and did not experience the phenomena of impoverished urbanization or the urbanization of impoverished people.
The reason ordinary farmers, and even poor farmers, could become the entrepreneurial main body of industrialization and urbanization is related to a certain "philosophy" of several "small" and "large" aspects in Zhejiang's rural industrialization and urbanization.
"Small commodities, big industry"
Labor-intensive small commodity production based mainly on daily necessities became the first choice for farmers starting businesses in the process of industrialization and urbanization because of its low investment threshold, low technical content, large demand scale, large employment capacity, and broad market space. The entrepreneurship of numerous farmers turned small commodity production into a big industry for farmers' employment and income growth. It was precisely the several hundred labor-intensive industries formed in this way that gave Zhejiang so many employment opportunities, enabling more than 3/4 of the province's farmers to achieve transferred employment and also absorbing more than 10 million farmers from outside the province to work in Zhejiang.
In recent years, faced with the challenges brought by the slowdown in population inflow from outside the province, the tightening relationship between labor supply and demand, and rising labor costs, some labor-intensive industries achieved transformation and upgrading through technological progress; some labor-intensive industries, through service outsourcing, dispersed part of their processes or parts production to rural areas for processing with supplied materials, which both reduced production costs and expanded farmer employment. This has become a big industry in Zhejiang's poverty alleviation and development efforts that drives full employment and widespread income growth among farmers; some labor-intensive industries, through regional transfer, moved to other provinces and abroad, and by combining with the advantages of economic resources and human resources in other places, gained new life elsewhere, driving development and farmer employment in those places. For example, Zhejiang's textile industry moved to Xinjiang, which both drove the local conversion of Xinjiang's cotton advantage and absorbed a large local labor force into transferred employment.
"Small enterprises, big clusters"
An organizational form dominated by small enterprises was the inevitable choice for capital-scarce farmers investing and starting businesses. Numerous farmers, around a certain characteristic industry within the same region, founded many small enterprises and gradually formed groups of regional enterprises with specialized division of labor and socialized cooperation - the block economy. In 2008, Zhejiang had more than 600 block economies with annual sales revenue exceeding 100 million yuan, among which 312 had annual sales revenue exceeding 1 billion yuan. These 312 block economies had total sales revenue of 2.81 trillion yuan, export delivery value of 612.2 billion yuan, and 8.31 million employees, accounting for 54%, 62%, and 56% of the province's total industrial volume respectively.
In recent years, faced with declining industrial advantages and intensifying market competition, a large number of block economies enhanced their industrial level, expanded production scale, built up product brands, and increased enterprise efficiency by establishing regional science and technology innovation centers, forming industry associations and public service platforms, creating regional brands, clustering into industrial parks, expanding joint ventures and cooperation with overseas multinational companies and strong domestic enterprises, and utilizing internationally advanced technology; another large number of block economies, through cluster-based "going global," achieved overseas listing, mergers and acquisitions and restructuring, established international marketing networks, and found new development space.
"Small markets, big circulation"
Under government leadership, Zhejiang Province established one specialized wholesale market after another. Such specialized wholesale markets not only provided numerous small enterprises with a public marketing platform, saving enterprises the matters and expenses of developing markets, but also greatly expanded the market space for products.
In recent years, faced with the new situation of expanded enterprise production scale, changes in marketing methods, and the development of e-commerce, a number of specialized wholesale markets became mall-style, turning into commercial complexes integrating raw material procurement, daily shopping, leisure sightseeing, and dining and entertainment; a number of specialized wholesale markets became park-style, turning into comprehensive service complexes with exhibition and sales halls, leisure service areas, circulation and processing areas, small enterprise incubation areas, warehousing and logistics areas, information centers, commodity inspection centers, and settlement centers; a number of specialized wholesale markets became information-based, turning into modern business entities integrating information services, online transactions, and remote settlement; a number of specialized wholesale markets became export-oriented, turning into platforms for small and medium-sized enterprises to sell products abroad; a number of specialized wholesale markets moved to the suburbs, turning into large logistics centers for the clustered development of market groups; and still another number of specialized wholesale markets became chain-based, opening "chain wholesale markets" in other places.
"Small towns, big platforms"
Cities are ideal places for developing industry, but under the system of urban-rural separation, farmers had no access to cities, while small towns with very low thresholds became a big platform for farmers to start businesses, find employment, and gather and settle, and also became a big channel linking and connecting urban and rural areas. This also led Zhejiang's urbanization onto a "network-style" urbanization path focused on developing county towns and small towns.
In recent years, faced with the shortcomings of small and medium-sized cities and small towns, Zhejiang actively transformed its urbanization form and worked to form urban agglomerations with large cities as the center, medium-sized cities as the links, and small cities and small towns as the foundation. While retaining the advantages of small and medium-sized cities and small towns in easily absorbing farmer employment and driving rural development, it strengthened the innovation-driven capacity of urban agglomerations and their ability to participate in international competition. At the same time, it actively cultivated 40 central towns to give them small city functions. "Small capital, big cooperation"
Agricultural surplus was the first batch of capital for farmers to participate in industrialization and urbanization. However, because agricultural surplus accumulated slowly and was small in quantity, the strength of a single farming household was still insufficient to establish an enterprise, so weak and small farmers jointly established enterprises in the form of shareholding cooperation. Zhejiang therefore became the "hometown" of the shareholding cooperative system. Shareholding cooperative economic entities were scattered everywhere at the time and kept changing.
In recent years, faced with the situation of farmers' own weak strength and lack of capital and technology in the process of agricultural marketization and modernization, farmers widely used the shareholding cooperative system and formed a large number of farmer cooperatives; and faced with the situation of insufficient service functions and weak competitive strength of farmer cooperatives after the growth of new agricultural operating entities, farmer cooperatives once again embarked on the path of joint development, and a three-dimensional and composite agricultural operating system rapidly formed through cooperation and re-cooperation.
"Small finance, big services"
In order to further make up for the difficulty of slow and small accumulation of agricultural surplus, farmers, when unable to obtain services from formal financial institutions, used the idle funds of early entrepreneurs to develop private financial services. A large number of farmers willing to start businesses embarked on the path of entrepreneurial development through mutual fund services. This is an important factor in the large number of entrepreneurial farmers in Zhejiang. In recent years, faced with the opportunity of increasingly abundant rural entrepreneurial opportunities, and encouraged by policies for rural financial system reform, farmers again began to establish mutual fund organizations, supporting a large number of farmers in starting businesses and developing in many fields such as modern agriculture, processing with supplied materials, leisure tourism, and community services.
These "small" aspects enabled the farming population to start businesses widely and participate fully; while these "large" aspects were the conditions, means, and results of the survival and development of the "small," catering to the needs of market economy development. Over more than 30 years, 7 million ordinary agricultural laborers in Zhejiang became investors and operators in modern industries, and tens of millions of traditional agricultural producers became employees in modern industries, forming the vivid situation of "a million capable people starting businesses driving tens of millions of farmers to cooperate in entrepreneurship and achieve full employment" and "those who start first lead those who start later, promoting entrepreneurship for all; those who prosper first lead those who prosper later, achieving common prosperity."