On The Paths And Mechanism Of Non-agricultural Industrialization In Rural Areas Based On The Facts From Fixed Observation Points

With the development of industrialization and urbalization, there has been no fundamental changes in the long established dual social and economic structure which separates rural areas from cities. The gap between rural areas and cities continues to grow, negatively affecting rural development as well as the harmonious development of the nation. The construction of new socialist rural areas offers feasible idea for the harmonization of urban and rural development and for narrowing the gap between cities and rural areas. Due to the attraction of cities to rural production factors including land, capital and labor, the continual net outflow of rural resourses negatively affects the clustering of rural industries, leading to the lack of resources and weakening of self-development capacity in rural areas so that the urban-rural gap will be wider. The increasingly serious phenomenon of plantation abanddoment and the destroyed rural productivity threatens the nationa’s agricultural security and will further negatively affect the harmonious development for the national economy. In addition, incomplete rural labor transfer to cities causes a serial of social issues and is harmful to the harmony between cities and rural areas.The experiences of the developed countries show the promotion of non-agricultural industries in rural areas solves the problems of rural labor transfer and farmers’ income, alleviates population pressure in cities, decreases the cost of industraliztion and urbanization, increases the economic wealth of rural areas, and improves the overall social and human development in rural areas. China is exploring the paths of non-agricultural industralizaiton but issues exist including the weakening of agricultural production in some regions, an uneven development in different areas, and rural environmental pollution in some regions.There are substantial studies on urban-rural gap, non-agricultural industrialization in rural areas, and rural modernization, but these studies cannot offer the solutions to the above-mentioned issues and for the government policy-making; therefore, more effective theories and policy suggestions are needed to solve China rural issues. Under the unique social, cultural and transit economic background featured with dual structure, problems in China’s rural areas are different from those in other nations and the complexity and uniqueness of the problems cannot be solved by foreign experiences and merely on theoretical basis. To solve industrial development issues in China’s rural areas asks for new horizon, new ideas, and new theories. In view of the above, starting from China’s reality and by using positive and normative methodology, the paper constructs analytical framework on the mechanism of non-agricultural industrialization. By integrating data analysis of 9 national fixed observation points in Fujian province from 1986 to 2006 and case study of Houban Village, the paper explores the general paths and mechanism of Chinese-style non-agricultural industrialization to offer solutions for policy-making on harmonious and orderly development of urban-rural industries and for the construction of new rural areas. The paper contains the following five sections.Part One analyzes the experiences of non-agricultural industrialization home and abroad. Firstly, the paper introduces models of non-agricultural industrialization of the developed countries including those of US, West European countries and Japan and summarizes the features and experiences in the said countries and regions. Secondly, the paper analyzes the experiences of the developing countries and compares the models of developing countries with those of developed countries. The finding is that the differences in the starting points decide the differences in the paths. Thirdly, the pape analyzes the experiences of non-agricultural industrialization in China’s rural areas with the focus on the four models in south of Jiangsu province, Wenzhou, the Pearl River, and Jinjiang to find out the similarities and differences. In the last place, the paper implements comparative analysis on the experiences and models in the fixed observation points in Fujian .Part Two constructs the analytical framework of mechanism on the non-agricultural industralizaiton paths. Based on the complexity and uniqueness of non-agricultural industrialization in rural areas and by using relevant theories, the paper analyzes Three Relations and Eight Factors. Three Relations refer to the relation between non-agricultural industries and agriculture, the relation between the internal forces and external forces for non-agricultural industrialization, and the relation between division of labor and clustering. The Eight Factors refer to regional factor, economic development at county level, agricultural development level, factor endowment, technigical factor, farm household management, market needs, institutional and policy factor. Base on the above, the analytical framework of mechanism on the non-agricultural industrialization paths in rural areas is constructed.Part Three is empirical study. By using 1986-2004 panel data from the 9 national fixed observation points in Fujian, the paper implements empirical analysis to test the mechanism of non-agricultural industraliztion in rural areas. Through the construction of analytical framework of mechanism on the paths of non-agricultural industrialization, the paper chooses relevant indexes to quantify the affecting factors on non-agricultural industrialization in Fujian rural areas. After analyzing data from villages at different non-agricultural industrialization levels, the paper has the following findings. For villages of the first category with high level of non-agricultural industrialization, position (plain), economic region (fishery region), suburb (yes), the economic development among the county (upper and medium-upper level), per capita pure income of the village, labour productivity of agriculture, mechanization level in agriculture, number of labour transferred to other places, number of people with junior high school diploma to the total number of labour in the village, number of businesses (year-end), original value of the fixed capital for production in different categories of businesses, production premises, the usage of capital inputs by rural household (the expenditure among the first and second industries under household management), capital accumulation, GDP per capita of the county where the village resides, rural Engel’s coefficient of the county where the village resides, and the ratio of people engaged in agriculture only have significant impact on the non-agricultural industrialization. For the second category of villages with low non-agricultural industrialization level, per capita pure income of the village, mechanization level in agriculture, number of labour transferred to other places, number of people with junior high diploma to the total number of labour in the village, the usage of capital inputs by mral household (the expenditure among the first and second industries under household management), rural Engel’s index of the county where the village resides, and the ratio of people engaged in agriculture only have significant impact on the non-agricultural industrialization. For the third category of villages with medium non-agricultural industrialization level, per capita pure income of the village, labour productivity of agriculture, mechanization level in agriculture, number of labour transferred to other places, number of people with junior high diploma to the total number of labour in the village, original value of the fixed capital for production in different categories of businesses, the usage of capital inputs by rural household (the expenditure among the first and second industries under household management), capital accumulation, GDP per capita of the county where the village resides, the ratio of agricultural GDP of the county where the village resides, and the ratio of people engaged in agriculture only have significant impact on the non-agricultural industrialization.Part Four is case study. By using the facts form Houban Village of Zhangzhou, Fujian, the paper analyzes the development of non-agricultural industrialization, tests the mechanism of non-agricultural industrialization in rural areas, and explores the non-agricultural industrialization paths. The paper analyzes the development of non-agricultural industrialization of Houban at different time frames to understand the tracks. Major affecting factors and path features at different stages are analyzed respectively to find out the road for non-agricultural industrialization. The paper finds out that though situates in Zhangzhou, where agriculture has long been the dominating industry, Houban Village takes a lead in industralzation in Fujian. Its non-agricultural industraliztion is spontaneous, self-driven, and pushed by external factors, featured with equal importance between non-agricultural industrialization and agriculture and integrating division of labor with clustering. The finding proves that what happens in the village, where non-agricultural industrialization starts from agriculture, has general implication.Part Five reveals the general path of non-agriclutural industrialization and offers solutions. Based on the theoretical analysis on non-agricultural industraliztion mechanism and the relevant empirical study, the paper elaborates the general path and constructs the framework. Non-agricultural industraliztion in China is affected by Three Relations and Eight Factors, the uniqueness and complexity of which determine that Chinese style path of non-agricultural industrialization in rural areas should be followed. Based on the above analysis, the paper concludes with solutions from four perspectives.