A Comprehensive Analysis of the Two Current Positions in the Three Rural Issues Field

Against the backdrop of urbanisation, the direction of three rural issues policy has become the focus of debate, intentional or otherwise, among current academic circles and policy departments. How to judge China's current national conditions and agricultural conditions, and what kind of urbanisation strategy and three rural issues policy measures should be adopted, have given rise in current Chinese academic and policy research circles to a debate between two different lines. The two lines are based on different judgments of the current national and agricultural conditions, and offer completely different proposals on China's urbanisation and three rural issues policy. One line may be called the "four modernisations in sync" school, which is the current mainstream view and also the mainstream of policy practice from the central to the local level. The other line may be called the "smallholder economy" school, which also occupies a certain position in policy practice and is a voice and proposition that should not be ignored in current China.

The two presuppositions and eight propositions of the "four modernisations in sync" school

A typical formulation of the four modernisations in sync school is "advancing agricultural modernisation in sync with the in-depth development of industrialisation and urbanisation", to which "informatisation" was later added, thus forming the synchronisation of the "four modernisations". Whether it is "three modernisations in sync" or "four modernisations in sync", the core meaning is that, as industrialisation, informatisation and urbanisation advance rapidly, agricultural modernisation should be advanced in sync. That is, in the course of the "four modernisations", traditional agriculture and the "smallholder economy" that forms the basis of traditional agriculture should be eliminated, the basic organisational mode of agriculture should be reconstructed, and the smallholder economy should be transformed into agricultural modernisation based on scale operation. In the vision of "four modernisations in sync", urbanisation and traditional agriculture are in an opposing and mutually substitutive relationship, a relationship in which the rapid development of urbanisation proceeds in sync with the rapid disappearance of traditional agriculture and the rapid exit of the smallholder economy.

There are two key points in the presuppositions of "four modernisations in sync". First, China is currently in the process of rapid urbanisation, and the process of urbanisation is the process of the rural population continuously becoming urban population. As peasants enter the cities, the urbanisation rate rises, and the agricultural population naturally declines. In particular, as large numbers of young and middle-aged rural labourers enter the cities, who will farm the land becomes a major problem; promoting land transfer, developing modern agriculture, and carrying out "four modernisations in sync" thus become part of what three rural issues policy should entail. Second, traditional agriculture and the smallholder economy are inefficient, and peasants cannot become wealthy through a smallholder economy of "1.3 mu per capita, no more than 10 mu per household"; only by expanding the scale of operation, developing modern agriculture, and advancing agricultural modernisation can farming make money and peasants reach moderate prosperity.

Based on the above two presuppositions of "four modernisations in sync", policy must ensure that peasants who enter the cities can settle there, turning the current "semi-urbanised" migrant workers into true urban population able to settle in the cities, and therefore corresponding reforms must be carried out in the household registration system, housing, social security, and even the rural land system, to adapt to the problem of peasants settling in the cities. At the same time, in the agricultural field, capital must be encouraged to flow to the countryside, "confirming rights and confirming land", promoting and regulating land transfer, supporting scale operation, encouraging peasants to enter the cities, turning peasants' homestead land and housing into property rights, allowing cultivated land to have a "separation of three rights", allowing cultivated land management rights to be mortgaged and guaranteed, and so on.

In the public opinion of "four modernisations in sync", there are several relatively common propositions. First, attacking the urban-rural dual structure, holding that the urban-rural dual structure is the main obstacle restricting current Chinese urbanisation, while deliberately ignoring the fact that China's current urban-rural dual structure has in fact become a protective social structure, and also failing to understand the fact that land is in fact a basic guarantee and social insurance for peasants, and that basic guarantees and social insurance cannot be traded; second, holding that traditional agriculture is inefficient; third, the argument that smallholders cannot become wealthy; fourth, the argument that smallholders cannot organise themselves and are inefficient; fifth, the argument of peasant rights; sixth, the argument of who will farm the land, the most typical being that the rural young people who have entered the cities now are unwilling to go back to farm; seventh, the argument of abandoned land; eighth, the argument of agriculture losing blood, and so on.

The smallholder economy is China's "secret weapon" for achieving modernisation

Opposed to the four modernisations in sync school is the smallholder economy school. The smallholder economy school holds that China currently still has 700 million rural people, including close to 300 million agricultural labourers, and that, in addition, to date most of the roughly 260 million migrant workers who have gone to the cities to work or do business have not yet obtained the income and employment conditions for truly being able to settle decently in the cities. Most migrant workers only go to the cities and towns to work or do business when young, and may return to the countryside to farm when they are older. Moreover, the parents and children of the vast majority of migrant workers who have entered the cities remain in the countryside. Through the intergenerational division of labour, the older parents farm and obtain agricultural income, while the younger children go to the cities to work and obtain wage income. Village life has a low cost, and the self-sufficient economy can reduce the consumption expenditure of peasant households. It is this structure of relatively more income and relatively less expenditure that allows peasant households to have economic savings and a relatively higher quality of life.

In response to the four modernisations in sync school's worry that in the future no one in the countryside will farm the land, the smallholder economy school holds that, although young people are unwilling to farm and hope to truly settle decently in the cities, under the current level of Chinese economic development and the state of the industrial structure, the cities cannot provide all the people entering the cities with the employment and income conditions needed for decent settlement. This has nothing to do with policy and institutions, only with the stage of economic development, and this is also the reason why in almost all developing countries the proportion of formal employment among people entering the cities is not high and large-scale urban slums exist. This situation means that most young migrant workers who enter the cities struggle in the cities for twenty or thirty years yet still cannot settle decently in the cities, and if they cannot return to the countryside, they can only sink into urban slums. Compared with urban slum life, which is neither decent nor safe nor secure, returning to the countryside is a rational choice. Returning to the countryside is a process, that is, when peasants who have entered the cities pass a certain age stage, for example 40 or 45, and have still not been able to obtain the employment and income conditions for decent integration into the cities, they must consider returning home. After about 5 or even 10 years of returning home, migrant workers will eventually return to the countryside. And after 10 years, they are already familiar with rural life and have learned agricultural production, and thus become the main force in farming.

At the current stage of economic development, most migrant workers who have entered the cities cannot settle decently in the cities, and the number of returning migrant workers will be extremely large, so who will farm the land is of course not a problem.

The smallholder economy school holds that China's urbanisation is a long process and cannot be accomplished overnight. Urbanisation in developed countries is measured in centuries. Since reform and opening up accelerated urbanisation, China has had only just over 30 years, and truly completing urbanisation will take another 30 or even 50 years. If urbanisation is accelerated and peasants entering the cities cannot obtain stable employment and income, they cannot urbanise decently, and huge, hard-to-govern slums, such as exist in other developing countries, will inevitably appear in the cities. Under the current institutional framework of the protective urban-rural dual structure, peasants who have entered the cities can return to the countryside, making the countryside a stabiliser and reservoir for China's modernisation. When the rural population is still huge and peasants who have entered the cities can still return to the countryside, promoting rural land transfer, encouraging capital to flow to the countryside, advancing modern agriculture, and accelerating agricultural modernisation may cause most peasants who still must rely on land to survive to lose their land and lose their hometown. This is not only inhumane to peasants, but also causes China to lose the countryside as a buffer space and stabiliser for modernisation; development will inevitably become unstable, the state will lose its capacity for adjustment, and this is an extremely dangerous thing.

The smallholder economy school holds that the current basic rural operating system still has enormous room to play a role. It is precisely the basic rural operating system and the urban-rural dual structure, which still play a foundational role, that have enabled China to achieve world-renowned miracles since reform and opening up, and this is again the key for China to escape the "middle-income trap" in the coming 30 years. The smallholder economy school opposes government-promoted land transfer, holding that agriculture run by the elderly is efficient; agriculture is fundamentally a basic guarantee and social insurance, and it is impossible to expect to become wealthy from agriculture. The smallholder economy school has also formed a systematic understanding from such aspects as the society of acquaintances, social values, the self-sufficient economy, social networks and capital, and middle peasants, and so on.

In the view of the smallholder economy school, the relationship between urbanisation and traditional agriculture is one of mutual complementarity and mutual support, not one of mutual substitution, still less one of mutual opposition. It is precisely the Chinese-style smallholder economy that has provided the most important foundation for China's rapid modernisation and for China's escape from the "middle-income trap". The smallholder economy is China's secret weapon for achieving modernisation.