1 From 1958 to 1978, as the result of the slow development of enterprises run by the communes, the ability to absorb rural surplus labour was very limited. In 1978, the total number of workers in enterprises run by the communes accounted for only 9% of the rural labour force. From the 80’s, township and village enterprises rose in large numbers. The ability to absorb surplus workers increased greatly. In 1998, there were 125.37 million workers serving township and village enterprises, representing 27% of China’s entire work force and over 50% of surplus labour in rural areas. It provides significant relief to the employment situation. Township and village enterprises bring steady jobs and regular income for the vast surplus rural labour. It also eases the impact of massive migration on economic development and social order in cities. Reference: 2 Falling growth in job creation by township and village enterprises A national special working committee on township and village enterprises was recently held. It was pointed out that the ability of township and village enterprises to absorb rural workers had been falling year after year. This means that the system could no longer meet the needs of the rural population for secure employment and higher income. According to statistics, township and village enterprises employed 125 million rural labourers in 1998. In 1999, 127 million were recorded, representing an increase of 2 million over the previous year. In 2000, the figure rose to 128 million, representing an increase of 1 million over the previous year. The figure for 2001 can be expected to be roughly the same as that for the previous year. The problem of rural people not having sufficient employment and slow income growth thus becomes more critical. It is a far cry from the target of the Tenth Five-Year Plan period for 2.5 million people to be given jobs annually on the average. Reference: 1. Based on Source 1, what are the effects of the development of township and village enterprises on society and the nation’s economy? Answer for reference: Township and village enterprises provide steady jobs and income. The pressure from rural labour flocking to cities is therefore reduced.As a result, there is less negative impact on economic development and social order. 3 2. Based on Sources 1 and 2, do you think township and village enterprises can solve the problem of surplus rural labour? Try and explain your view. Answer for reference: There was fast development of township and village enterprises in the eighties to absorb surplus rural workers. In 1998, they accounted for more than 50% of rural surplus labour. However, the rate of rural surplus workers absorbed by township and village enterprises began to drop from 1998 onwards. Insufficient jobs and slowing down of income growth for the rural population has become evident. 4 The development of township and village enterprises Township and village enterprises (TVEs) developed on the foundation of rural craft and the processing of agricultural products. Starting from 1978, TVEs suddenly bloomed. They are now a pillar of the rural economy. In 1987, the total output of TVEs outran for the first time the total agricultural output. In 1990, TVEs earned US$13 billion in foreign currency, representing 23.8% of China’s total foreign currency earning of that year. In 1999, China had more than 20.71 million TVEs, with 127.04 million employees and generating 2,500 billion yuan in added value, which made up more than 60 percent of the social added value of the rural areas. In 2000, the added value of China’s township enterprises stood at 2,720 billion yuan in added value, or a 9.14 percent increase over the previous year. The net income per capita of the rural population rose from 134 yuan in 1978 to 2,210 yuan in 1999. Their fields of business include manufacturing, agriculture, traffic and transport, construction, commerce and catering services. As for products, they range from rural commodities, articles for daily use, food products, agricultural processing products to light industrial products. Many of these products have been launched in the international market and TVEs are nowadays an important source of Chinese export. Reference: 5 Reference:《小平說:甚麼是社會主義》,廣州出版社,1996。 4. Does the small boat on the left in Source 4 show the strengths or weaknesses of TVEs? Explain your answer briefly. Answer for reference: Strengths – Not much capital is required because of its small scale. Therefore, there is more flexibility in development. 6 5. Do the cartoon in Source 4 and the contents of Source 3 match? answer. Explain your Answer for reference: They match. After several years of development, the TVEs mentioned in Source 4 are now of some scale and their products are being exported to earn foreign currency. This tallies with the information in Source 3 that TVEs have developed rapidly. For example, Source 3 Says “China had more than 20.71 million TVEs, with 127.04 million employees and generating 2,500 billion yuan in added value, which made up more than 60 percent of the social added value of the rural areas. … Many of these products have been launched in the international market and TVEs are nowadays an important source of Chinese export.” 7 Township and village enterprise (TVE) is the collective term for non agricultural enterprises outside of state enterprises run by rural villages. During the period of the people’s communes, industries or small enterprises run by communes or production brigades were called “commune / brigade-run enterprises”. After the disintegration of the people’s communes, commune or brigade-run enterprises were transformed into TVEs and have become the main stay of rural enterprises. Since then, various forms of enterprises run by villages and individuals have emerged. In March 1984, “township and village enterprise” became the collective term for all theses rural enterprises. TVEs can be described as a product of the rural market economy. They are not regulated by government investment plans or production projections. They are freely set up with the support of bank facilities or collective or individual capital. Small in scale, they utilize old equipment and rely on low technology and local resources. They take advantage of favourable conditions and develop. In particular, they absorb surplus workers in rural villages. Nevertheless, TVEs face the following limitations too. There is a certain degree of “blindness” in the development of TVEs. TVEs compete with large enterprises in the urban areas for capital, raw material and energy. Some of these important resources flow to TVEs operating in lower efficiency. As a result, resources may be wasted. Since government is unable to regulate them fully, environmental pollution, poor working conditions etc have emerged.