He Xuefeng says relatively high urban-rural income gap is "not necessarily bad"
He Xuefeng says relatively high urban-rural income gap is "not necessarily bad"
The Wuhan University Professor and well-known scholar says the gap may be China's institutional advantage because it benefits the relatively vulnerable groups in the countryside.
We have shared quite some articles reflecting some domestic advocacy for tearing down the barrier for rural land to be sold, leased, and appraised as shares by farmers for urban use.
But make no mistake: so far there is no public indication in terms of policy of any meaningful change to reform the rural land system. And I think it would be helpful for you to be exposed to other views, especially those defending the status quo.
Below is a brief excerpt of 乡村的视角 Rural Perspective, a 2024 book by Professor 贺雪峰 He Xuefeng, Dean of School of Sociology and Director of the China Rural Governance Research Center at Wuhan University. The excerpt was publicized on March 24 on 新乡土 New Rural, a WeChat blog run by the center, under the headline 城乡差距：差距偏高并非一定是坏事 Urban-rural gap: A relatively high disparity is not necessarily a bad thing.
城乡差距：差距偏高并非一定是坏事
Urban-rural gap: A relatively high disparity is not necessarily a bad thing
The primary challenge facing common prosperity is the current income imbalance in China. "Currently, our country's Gini coefficient remains as high as 0.465, similar to countries with high income disparities such as South Africa and the United States. In fact, the main reason for the large income gap in our country primarily stems from the urban-rural divide." "The income multiplier difference between urban and rural residents has continuously declined for 13 years since 2008, dropping to 2.56 in 2020. However, from a global perspective, this still ranks as relatively high," "The income gap between urban and rural areas in our country remains significantly high, accounting for about 27% of the national income gap, while in some developed countries like Switzerland, Finland, Canada, it's less than 10%, and in developing countries like the Philippines, India, it does not exceed 20%." So, how should we understand the urban-rural divide in China and its impact on common prosperity?
A key reason why the urban-rural income gap in China accounts for a higher proportion of the national income gap than in developing countries like the Philippines and India is China's current rural collective land system. This system means there are no large landholders in rural China; all farmers contract land almost equally, and the state, aiming to protect farmers' fallback options, treats rural land as basic security for farmers, prohibits irreversible land transfers, and restricts urban capital from moving to the countryside. Economically better-off rural households move to cities, and currently, almost all rural household young and middle-aged labor forces have moved to cities. Rural China lacks large landowners, nor does it allow urban wealthy to move to the countryside; rural households have contracted land, homesteads, housing, and social relationships in the village, making the village a basic guarantee and their base for moving to cities. Against the backdrop of rapid urbanization in current China, economically better-off rural households become urban residents, and the general rural household young and middle-aged labor forces also move to cities for work and business, being counted as urban population. Those remaining in the countryside are mostly relatively vulnerable rural households and the relatively vulnerable, old, weak, sick, and disabled groups lacking urban employment opportunities. These left-behind rural groups, because they still have land, housing, and a familiar social village, have their hometowns, can obtain a not low quality of life. In fact, the quality of life for rural farmers nationwide has been improving. Farmers staying in villages do not move to cities because they lack the ability to move and still have the capability and right to stay in the village. From the perspective of average income of rural residents, it has not been raised due to the restriction of urban capital moving to the countryside.
The movement of economically better-off rural groups and those with more employment opportunities in cities to urban areas further increases the average income of urban residents but decreases the average income of rural residents. Thus, the current Chinese policy restricting urban capital from moving to the countryside and rapid urbanization itself have led to the widening of the income gap between urban and rural residents. From a global comparison, the reason for the relatively high income gap between urban and rural residents in China probably stems from here.
However, the restriction of urban capital moving to the countryside and economically better-off rural households moving to cities is not necessarily a bad thing for farmers. Capable rural households and farmers move to cities not because they cannot stay in the countryside but because there are more opportunities in cities. After moving to cities, they will give up the profit-making opportunities previously available in the countryside, and those lacking the ability to move to cities can take this opportunity to expand their operational scale, thereby improving the income level of agriculture and rural areas. Restricting urban capital from moving to the countryside provides more opportunities for rural households lacking city opportunities to profit from staying in the village, so these households do not have to be forced into cities. Especially for older people in rural areas lacking the ability to work in cities, their connection with the land not only provides agricultural income but also employment in agriculture, thus offering a sense of purpose and value in life. Work fills people with fulfillment, and connecting with the land allows the lives of rural elderly to become enriched.
In this light, the relatively high income gap between urban and rural residents actually provides more opportunities for the relatively vulnerable rural households and farmers left behind in the countryside, which is a good thing rather than a bad one.
Looking at the income gap between urban and rural residents in developing countries like the Philippines and India. Unlike China, in most of the world's developing countries, rural land rights are severely unequal, with the vast majority of the land owned by landlords, and the state does not restrict all capital, including urban capital, from concentrating on (or buying and selling) land. Landlord ownership and land concentration drive the most vulnerable rural farmers into cities, ending up in slums. Because of the wealthy moving to the countryside and the poor into cities, these countries might not have a higher urban-rural income gap than China, but they do not possess advantages worth learning from China because these countries' poor have lost their homes, and large-scale urban slums have become a cancer to social development.
In the process of urbanization, economically better-off rural households move to cities first, while those rural households and farmer populations lacking the ability to move to cities still have to rely on agriculture and the countryside for income opportunities. At this time, protecting the profit-making opportunities of rural households and farmer populations in the countryside, restricting urban capital from competing with farmers for profits, is a significant wisdom and advantage. As more and more rural households have the ability and do move to cities, leaving behind rural households and farmers increase their profit-making opportunities, income levels may gradually improve, eventually reducing the income gap between urban and rural residents.
The current relatively high income gap between urban and rural residents in China may be China's institutional advantage because it benefits the relatively vulnerable groups in the countryside.
Also sourced from the WeChat blog 新乡土 New Rural
