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Farming (and spending) their way to recovery?

As economic woes continue, China hopes rural farmers can play a new role.

Farmer Zhao Jiqing nearly doubled his family's normal income last year with extra work in a nearby magnesium factory, but the factory has since closed down. The Chinese government is hoping new spending by farmers like Zhao will help the economy. (Kathleen E. McLaughlin/GlobalPost)

YANGQU, China — With a raft of subsidies and thousands of new stores to spur spending, China is eyeing its poorest people — farmers — to kick-start the economy with a buying spree.

Trouble is, most Chinese farmers, already burdened with rising health care costs and school fees, don’t have extra yuan to spend. In the past decade, their vast migration to factory boom towns sent new wealth back to families in the countryside. But with 20 million of those boom-era jobs gone in recent months and 5-6 million more expected to be on the chopping block, most in rural China find themselves slipping economically.

In other words, Beijing's new hope of depending on the country’s 700 million rural residents to replace the sudden loss of spending by comparatively rich U.S. consumers is a risky proposition.

Per person income average in rural China is about $700 per year, less than one-third of that in the cities. Though rural earnings have increased dramatically in the past decade, most farmers are far from able to buy a houseful of appliances.

Yet the government is banking that $3 billion in aid for rural residents to buy televisions, refrigerators and air conditioners will help make up vastly slowed American and European demand for Chinese exports. It’s just one part of the government’s massive economic stimulus plan that is targeted at rural areas.

Guo Gaiying, a 42-year-old dairy farmer near Yangqu, makes slightly less than the average farmer in central China. She is in no position to spend on luxuries for her two-room, dirt-floor farmhouse. Three years ago, Guo broke her leg and had to have it set with steel pins. The pins were supposed to be taken out after the break healed. She cannot afford to see a doctor, let alone spend more than half the family’s yearly income on a second surgery, so the pins remain.

Most of Guo’s family income comes from three cows, 10 pigs and roughly 15 acres of corn. With a third of that income gone to school fees for two children and the rest spent on basic living expenses and animal feed, Guo laughs at the idea of buying a new electrical appliance. She washes the family’s clothes by hand, has no running water and depends on a filthy open coal stove to warm the house and cook the meals. She does, like most every other Chinese farmer, have a television set — the family’s lone luxury.

Buying one appliance wouldn’t change Guo’s life.

“I don’t dare take a bank loan,” she said. But if she could, “I’d build a whole new house and save some of the money for my son’s wedding.”

http://www.globalpost.com/dispatch/china-and-its-neighbors/090303/farming-and-spending-their-way-recovery