China's rural economic achievements of the past two decades-rapid growth and declining poverty-have been remarkable. However, replicating these achievements and improving sustainability during the next two decades will be difficult as many underlying conditions have changed. Economic reforms were initiated when supply shortages constrained growth, but currently, weak demand is more constraining. Furthermore, the productivity gains are largely exhausted from transition policies and institutions; future productivity gains will come from efficiencies, stimulated by markets forces, and improved productivity of scarce water and land resources, through resource conservation and new technologies. The rural-agricultural sector will remain dependent on a robust urban-industrial sector to creat jobs and absorb surplus rural and agricultural labor-thereby permitting the remaining farmers access to additional land resources. Several crucial rural institutions need to be forested-an effective fiscal system, a more efficient financial system, a workable land tenure arrangement with marketable land-use rights, and improved agricultural investment incentives. Continued reform will entail further liberalization of production, pricing and marketing policies and strong government promotion of a market environment and investment in public services and infrastructure.

Text in English