In his government work report released at the First Session of the Eighth National People's Congress (NPC) held this March, Chinese Premier Li Peng noted, "We should do all we can to develop township and village enterprises, particularly assisting those in the central and western vegions of the country." Earlier, the State Council made the decision to accelerate development of rural and township enterprises in central and west China and devised nine policies accordingly. Thus the question of how to develop township enterprises became a hot topic among deputies to the recent NPC and especially those from the central and western parts of China.

Distinctive gaps

The central and western regions of China include all hinterland provinces and autonomous regions except the three provinces in northeast. The area encompasses two-thirds of China's total territory and contains over a half of the nation's total population. In 1992, the total output value of China's township enterprises amounted to 1,650 billion yuan, with two-thirds turned out by the eastern coastal areas in east China and one-third by the central and western regions.

A more detailed comparison will display even more noticeable disparities. Take Shanxi and Shaanxi provinces as an example. According to 1991 figures of the State Statistical Bureau, the two provinces respectively ranked first and second in comprehensive social development among the central and western regions. They also assumed the lead in terms of economic strength but were left well behind by the coastal areas. For example, the township enterprises in Jiangsu Province's Suzhou City had a total output value of 80 billion yuan in 1992, which was 3.2 times the figure for township enterprises in Shaanxi Province as a whole.

The formerly poor Huaxi Village of Jiangyin City in Jiangsu Province, Hangmin Village of Xiaoshan City in Zhejiang Province and Xinmouli Village of Yantai City in Shandong Province have all attained prosperity by developing township enterprise. The three villages are roughly similar in scale and economic clout. Each settlement has an area of no more than one square km and a population of only just over 1,000. However, they have absorbed a workforce several times their resident population and launched a total of 117 businesses. In 1992, the three villages created a total of 1.376 billion yuan in output value. Many such small villages with an output value exceeding 100 million yuan have emerged in China's coastal areas. Luliang Prefecture in Shanxi Province has under it 14 counties with 21,000 square km of land and a population of 3 million. But except for the five counties in the plain areas, the remaining nine counties did not have significant township firms until 1992. The total output value of the prefecture's township enterprises last year was 3.5 billion yuan.

Dongguan in the Pearl River Delta is one of the fastest growing cities in Guangdong Province, with 80 percent of its industrial increase from township enterprises. In 1992 alone, the city signed more than 2,000 contracts for foreign investment, most of which were concluded with local township enterprises. The household electrical appliances, garments, wrist watches and foodstuffs manufactured by these rural enterprises have entered the most high-class markets in China and been exported to over 10 countries and regions. In 1992, the total export volume of China's township enterprises amounted to US$21 billion, one-fourth of the nation's total. Most of this came from township enterprises in the eastern coastal areas. The total export volume from their counterparts in Shaanxi Province accounted for only 1 percent of the nation's total. Moreover, the township enterprises in hinterland areas are mainly engaged in mining and primary processing of agricultural and sideline products.

Average income of Chinese farmers reached 784 yuan in 1992. While farmers in the coastal areas had an average income of more than 1,000 yuan, with those in middle-ranked Zhejiang Province achieving 1,360 yuan per person, the incomes of farmers in Shaanxi Province and Luliang Prefecture in Shanxi Province only averaged 559 yuan and 446 yuan respectively.