One of the most striking results was that households were more likely to use the benefits to reduce risk (e.g. by buying health insurance) than to increase consumption, and households invested more in livestock assets which they used to engage in small enterprises and in non-bank savings. In China, industrialisation in the countryside, which was encouraged to absorb surplus labour, increase rural household income and provide operating revenues for local governments, has caused detrimental environmental problems. Rural factories typically bum raw coal and consume heavy amounts of water, but lack the advanced technologies, equipment and management expertise that can mitigate environmental pollution. As a result, they cause massive air and water pollution. In the mid-1990s, rural factories were estimated to emit up to two-thirds of China’s air pollution (Tilt and Xiao, 2007), while over 80% of rivers in China have some degree of contamination and water has become public health risk. Two-thirds of rural population do not have access to piped water, which increases exposure to pollution-related illnesses.