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Chinese Government To Focus On Rural Economy

posted on February 4, 2005


The Canadian beef flap is typical of global trade issues, which can be delicate because of diverse political and economic agendas. But the fundamentals of trade rarely change.

For instance, Federal Reserve Chairman Alan Greenspan said Friday that the weaker dollar finally may be slowing the explosive U.S. trade deficit. That's because a weaker dollar makes American-made goods cheaper overseas ... and therefore more attractive to foreign buyers.

*Greenspan's reserved optimism was in line with a host of upbeat economic reports this week, including improvements in job growth, manufacturing, worker productivity, and personal income.

Economic expansion also is the case in China, although it's happening there in an uneven fashion. So this week, the Chinese announced plans to spread the wealth from urban to rural areas.

Chinese Government To Focus On Rural Economy After two decades of focusing on building its export market and seeing incomes in Chinese cities soar compared to those in the countryside and the government is promising to do more to improve the lives of the rural poor.

A new policy pledges higher crop subsidies and improving farmers'land use rights. Property is a critical issue as many farm families have no formal title to their land and the government has been seizing farmland for real estate development. Farmers receive little or no compensation when it is seized.

A Chinese newspaper endorsed the proposed improvements saying, Only by doing this can we support more population with less land, meet the growing consumption demand, open more space for agricultural adjustment of structure and boost farmers income.

The proposed changes may help not only those in China's rural countryside ... but also could help U.S. interests ... at least in the long term.

Urban Lehner, DTN Editor-in-Chief: "This is, I would think, the way Chine will go in the future. Its going to import more land-intensive grains like wheat and soybeans. One thing I would say is think beef, because there's one thing they don't have: big herds of cattle there now. They don't seem to be showing any indication to have them and yet you saw the fast food cheeseburger slid, they're going to be eating more and more beef in the future."


Tags: agriculture China economy government news rural