CHINA RURAL INDUSTRY FACES PROBLEMS IN ADVANCING
Workers in China's rural
factories are struggling against a variety of problems to
maintain the momentum of progress since industrialisation of
the countryside began in the 1970s.
    "When I was a child, we had no bicycles. We went everywhere
on foot. The land here is salty, so the harvests were not good.
Money and food were inadequate. When it rained, the water
leaked through the grass roof," said Li Wenxian, 31, of Hongshan
in Zhejiang. Now he and other villagers live in large
two-storey concrete homes with balconies and courtyards.
    But still they face formidable difficulties. Many rural
factories are unable to get the raw materials they need, or
else they find they have become too expensive.
    Gao Jianming, an official of Zhejiang's Rural Industry
department, said Zhejiang firms scour China for raw materials,
which sometimes they barter for finished goods.
    The People's Daily this month reported about 60 pct of
China's rural factories operate below capacity because of power
shortages. It said many rural factories lose money because of
these problems and difficulties in getting credit, poor quality
of goods and competition from larger state firms.
    "Electricity is short. In the busiest periods on the farms
the factories work three to four days a week so that
agriculture can have all the power it needs. But more power is
available at night or on Sundays," Gao said.
    Rural factories mostly operate outside official plans,
which allocate raw materials under quota at cheap prices to
state firms. They have to compete on the open market for raw
materials whose prices are driven up by demand.
    Li said Hongshan does not suffer from power shortages only
because its cement factory provides cheap cement to the
electricity supply department.
    The raw materials of Hongshan's cement have to come
hundreds of miles from central China by rail or canal, while
its textile factories buy fabric from the far northeast.
    The industrialisation of rural China began in the late
1970s, a key part of top leader Deng Xiaoping's economic
reforms. Deng wanted to harness the manpower of the
countryside, but keep it there and not draw it to the cities.
    Hongshan set up factories and businesses because there was
not enough work on the land for its 3,700 people. Now just 120
of its workers work full-time on the land. The rest work in 23
factories making cement, plastics and textiles.
    The transformation of the rural economy is most noticeable
along the eastern seaboard where communications are good,
labour plentiful, land fertile and large markets nearby.
    Gao said rural factories in Zhejiang now employ 25 pct of
the province's labour force. In 1985 such factories, for the
first time, produced more in value than the province's farms.
    "The industrialising process is not over. When our farms are
more mechanised, and not many are now, more labour will become
available. There is a very big potential," Gao said.
    Rural industry in Zhejiang has grown by more than 20 pct a
year since 1980, faster than any other sector of the economy.
    Goods from Hongshan's factories are sold all over China.
    Villager Li said when Hongshan started building factories
in 1975 it was illegal, but local leaders approved it on
condition no state money was invested.
    "We borrowed money to start our cement factory and have
relied on our own resources since then," he said.
    Another worker in a Hongshan tea-growing collective said
before rural industrialisation there was no point in working
hard, because most people earned the same.
    "The laziest in the commune used to laugh at those of us who
worked more, but got the same," she said.
 REUTER
