Xie Meihuan works in Dayingjie, the most prosperous village in Yunnan Province, but like most of the labor force she doesn’t live there. Xie, a woman in her early 20s, travels about 2 km from a nearby township to sell baby clothes from a rented first-floor shop in the village.
　　In Dayingjie, visitors are driven through newly paved streets lined with manicured flowerbeds and shown villas with Greek-style columns. In Xie’s home township the living conditions are more typical of rural life in central Yunnan, one of China’s most scenic but also poorest provinces: little infrastructure, limited opportunities.
　　“I don’t want to endure the hardship of endless farm work like previous generations. I am here for something new and different,” she explained.
　　Xie is one of about 7,000 people who come from surrounding areas to work in Dayingjie, with a population of 5,012, which falls under the jurisdiction of Hongta District, Yuxi City--an area best known as the headquarters of Hongta Group, China’s largest tobacco manufacturer.
　　Local officials laud Dayingjie as a model of the “new socialist countryside” that is the Central Government’s current mantra. In its recently released 11th Five-Year Plan (2006-10), Chinese leaders pledged to invest more in rural infrastructure, health care and education, to create a better life for the vast rural population.
　　Dayingjie is an anomaly in the Chinese countryside, having done what other villages in land-locked Yunnan have been unable to do: make the transition from a backward community to a modern village with advanced industry and infrastructure, while, its leaders boast, ensuring residents are cared for, with free education for the young and pensions for the old.
　　And with its success, Dayingjie also faces challenges in the years ahead. Because residents are relatively comfortable and spoon-fed by local government, there is less incentive for hard work and a competitive mindset. Once educated, young go-getters are often drawn to brighter lights and bigger cities.
　　Meanwhile, other rural areas in China are trying to catch up to Dayingjie, with the encouragement of the Central Government. Local officials said the village must keep modernizing its industries and outlook to remain competitive in a changing environment.
　　
　　A village blooms
　　
　　Two decades ago, Dayingjie was indistinguishable from most other Yunnan villages-an obscure, poverty-stricken place chronically short of water and crops.
　　China’s economic reforms and opening-up to the outside world, which resulted in urban and coastal areas being much more developed than rural and western areas, brought positive changes to the village starting in the early 1980s.
　　After the implementation of the contract responsibility system, under which the state leases land to households for a capped period of time, food shortage that had plagued the village was reversed in the harvests of successive years.
　　With a dramatic fall in poverty and a significant improvement in the amount and quality of food available, the leadership of Dayingjie began thinking about further development.
　　Ren Xinming earned his fortune by running a construction company in urban areas away from Dayingjie. In the early 1980s he decided to return to the village, sharing what he had learned with fellow villagers by organizing a building group.
　　He invested his own capital reserves as the initial funding of the village’s new enterprise. Ren said the concept of common wealth was deeply rooted in the mentality of village leaders, and despite the trend of increasing privatization at the time, enterprises remained communally owned.
　　“I am always working toward common wealth together with all my brothers and sisters living here,” said Ren, a gallant man who has been the head of Dayingjie since 1993.
　　“Most of our profits have been put into industrial expansion, while the rest is for the improvement of villagers’ living conditions,” he added.
　　Tong Mei, 14, middle school student“I want to be a university student when I grow up. I see the big changes in my hometown, especially the living conditions. I like all the gardens the most.”
　　Under the guidance of Ren, and after accumulating enough funds, the village committee began operating a sesame candy factory and a red brick factory, earning profits on what amounted to a small initial investment.
　　In 1988, they established a cigarette filter factory and a filter paper factory, with the support of Hongta Group and a bank loan of about 40 million yuan. The two factories reaped impressive profits that same year, realizing combined gross revenue of 3.9 million yuan.
　　By 1992, the total yearly revenue of Dayingjie had reached more than 100 million yuan, making it the richest village under the jurisdiction of Yuxi City. In 1993 there were 28 township enterprises under its thumb, in such diverse areas as the manufacturing of aluminum foil and printer ink, copper and steel making, and solar power generation.
　　Meanwhile, an employment shift took place within the village as farmers left the fields to work in factories and other non-agricultural sectors.
　　“It is so rewarding to see our villagers driving to work in such a beautiful, neat and modern village, just like city people,” Ren said.
　　
　　‘New countryside’ at work
　　
　　Today, Dayingjie is intersected by wide, straight streets lined with trees and flowerbeds, and local officials say the total area of parks exceeds that of crops. The village is divided into an industrial area in the west, entertainment district in the center and residential neighborhoods in the east, giving it the appearance of a miniature city in the midst of countryside.
　　Ren Kunhua, 39, restaurant owner since 1984“My biggest wish is a stable policy that encourages privately owned businesses.”
　　Dayingjie’s economy is now driven by the manufacturing and service sectors. More than 95 percent of the labor force works in industries such as tourism, entertainment and real estate development.
　　At the end of 2005, the village’s gross revenue stood at 2.1 billion yuan, with 151 million yuan of pretax profits and 85.1 million yuan in taxes paid to the state, more than 1,500 times higher than in 1984. In contrast, the net income of each villager averaged 10,699 yuan.
　　The local government boasts that it provides employment, housing, education and retirement pensions for all residents. For example, children can attend kindergarten without paying tuition fees. The children of workers who come from neighboring villages can attend kindergarten for half price.
　　Employees are eligible to retire at age 54 and may receive pensions that range from 250 to 660 yuan a month, depending on their previous experience and profession. From birth to age 54, villagers receive financial assistance to buy endowment insurance. All villagers receive free daily necessities such as meat, cooking oil, eggs and vegetables.
　　A promotional video for Dayingjie, shown to visiting guests, shows smiling senior citizens dancing with children, playing instruments and lining up to receive wads of money. On the streets of Dayingjie there is a sense of relaxed ease, with many villagers sitting around on a leisurely afternoon and playing cards or chatting.
　　According to the local government, with a total investment of more than 200 million yuan, by 1995 every family in the village had moved into a new home with an average residential area of 50 square meters for each person, compared with the previous 8 square meters for each.
　　Dayingjie officials also highlight the village’s election process. Leaders are elected every four years, and every villager over the age of 16 with an identity card is allowed to vote, said Zhang Yunchun, a local official.
　　“Everyone can be a candidate in Dayingjie, and the selected leaders will be publicized on bulletin boards to all villagers,” he said, adding that the core leadership is most trusted and reelected every year, most recently with 95 percent of voter support.
　　
　　The road ahead
　　
　　Xu Jiafu, a barber in his 70s“I have a monthly pension of 250 yuan to support myself, and most of my children or grandchildren are working at township enterprises. I am retired and now I work for fun, not money. But I think the biggest trouble for me is expensive medical fees.”
　　In 1998, the village began the initial steps of restructuring its enterprises. The eight biggest key enterprises were preserved and strengthened through internal reform, and 20 small and medium-sized enterprises went through financial restructuring through mergers and acquisitions for a more diversified village economy.
　　Dayingjie officials say that throughout the process of development they have stressed the importance of village planning, environmental protection and energy efficiency.
　　The development of Dayingjie attracts visitors from other communities who come to learn and replicate the village’s successes. For example, nearby Xiahecun Village in Liqi District, Yunnan, was inspired by Dayingjie to establish an auto repair and auto-trading center in the village, an initiative that has proved financially successful.
　　In the past two decades, Dayingjie has prospered while most neighboring villages remain stuck on the wrong side of the rich-poor divide. But what will happen to the village’s enterprises when nearby communities start to catch up?
　　Officials say the work in Dayingjie must continue, in particular when it comes to deepening reform of township enterprises, adjusting the agricultural structure and developing infrastructure. As well, the local government is exploring a new profit generation model and a cooperative project in metal manufacturing is under discussion, said Zhang, the local official.
　　The local government has also been repairing roads, building highways and improving public transportation.
　　According to Zhang, Dayingjie’s biggest challenge is to improve the knowledge and abilities of leaders and residents alike, as well as make the administration more efficient and improve the operation of the village’s political and economic systems. Better leadership, he said, will help ensure the village has a vibrant future.
　　“We regularly arrange training courses and lectures by agricultural experts,” Zhang added.
　　Meanwhile, one paradox of Yunnan’s socioeconomic situation is that while the majority of its residents are considered “farmers” by the government because of their rural household registration, agriculture contributes only 60 billion yuan or 21 percent to the total GDP of Yunnan Province, and that of Dayingjie even less than 0.1 percent, according to 2005 figures.
　　The manufacturing and service sectors are far bigger money generators, with tobacco brands such as Hongta the major source of economic growth and the pillar for farmers living in Dayingjie. This dependency also breeds concerns that if the state decides to raise tobacco taxes or cut production, Dayingjie and related villages will suffer.
　　Maintaining a solid labor force is another big challenge. Zhang said that better-educated farmers don’t want to work in agriculture because it is hard work and they have more choices once educated. Meanwhile, the village faces a brain drain of its best and brightest to big cities.
　　But Zhang said it is the longstanding mentality of village leaders and residents that will help Dayingjie remain competitive in the future, despite current concerns. Remaining open to innovation is the key.
　　“We are liberal enough to encourage entrepreneurship and let citizens grow and learn away from the village instead of restricting their energetic minds and ideas,” he said.
　　“This has been at the core of Dayingjie’s success in recent years. They bring back fresh ideas, advanced techniques and high-level management experience to promote development,” Zhang added.
　　
　　Rural Reality
　　
　　The Organization for Economic Cooperation and Development discussed the situation in China’s countryside in its Review of Agricultural Policies in China, 2005:
　　China’s rural poor are mostly concentrated in the western provinces and autonomous regions and in localities that lag in terms of growth, are remote, sparsely populated, poor in human and natural resources, and weakly linked to the rest of the economy. As a social security system is almost nonexistent in rural China, little public assistance is available to families suffering the most.
　　As the economic situation has improved, government priorities have shifted from increasing production, especially of food grains, to rural income support and more recently to environmental concerns. In the medium term, the main challenges for China’s policy makers include:
　　-- Closing the large income gap between rural and urban populations;
　　-- Integrating small-scale farmers into markets;
　　-- Stimulating internal reallocation of resources to create more efficient farm structures;
　　-- Reducing the negative impacts of agricultural production growth on the environment and energy consumption;
　　-- Improving agricultural products’ competitiveness.
　　Policy responses should be based on economy-wide measures such as further relaxation of administrative barriers to urban migration, improved access to education, health care, pension and social security services, enhanced land property rights and rural tax reforms.
　　The provision of modern research and extension services, food safety agencies and agricultural price information, services that provide widespread benefits to producers and consumers throughout the economy, will also be of crucial importance.
　　

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