SECTORAL AND STRUCTURAL CONSIDERATIONS IN CHINA'S RURAL DEVELOPMENT RICHARD KIRKBY* & ZHAO XIAOBIN** *Pacific Asia Research Institute, Department of Civic Design, University of Liverpool, Liverpool L69 3BX, United Kingdom. E-mail: twpred@liv.ac.uk **Department of Geography, Hong Kong Baptist University, Kowloon Tong, Hong Kong S.A.R. E-mail: zhaosimo@ctsc.hkbu.edu.hk Received: June 1998; revised October 1998 ABSTRACT Since 1984, China's rural-based non-agricultural sector (the Township Village, and Private enterprises ± TVEs) has seen dynamic growth, underpinning the rapid improvement in liveli- hood of some hundreds of millions of rural dwellers. Within the rural economy, however, serious tensions have arisen between TVEs and agricultural production per se. The Chinese government now confronts a central policy dilemma in which further development of the collectively owned TVE sector in particular is counterpoised against the maintenance of stable agricultural output, especially that of food grains. This paper examines the causes of the dilemma, focusing on the impact of the off-farm sector on agricultural production, and the structural imbalances that now need to be addressed. The paper argues that under current conditions, in which farming communities are pulled in two directions ± traditional crop production or rural industries ± the absence of functional and spatial segregation is creating serious economic and ecological imbalances in China's countryside. The authors suggest poss- ible solutions which rest upon clearer physical differentiation between urban and rural spheres. Key words: Development, China, con¯icts, rural, industrialisation, pricing INTRODUCTION ± SUCCESSES AND TENSIONS China's off-farm sector has received consider- able attention, if not praise, on the part of Chinese and Western scholars alike. 1 We are especially concerned in this paper with the role of enterprises developed and run by the admin- istrative divisions of Township (xiang) and Village (cun) ± the TVEs. Since the onset of the current reform era in 1978, and particularly since the signi®cant policy changes of 1984, the TVEs have experienced spectacular growth (Walker 1988; Field 1988; Byrd & Lin 1989; Kirkby 1994; Leeming 1994). As of®cial statis- tics show, starting from 1.5 million in 1978, by the end of 1994 the total number of TVEs had increased to almost 25 million. 2 In its ®rst phase of development, until the mid 1980s, China's off-farm activities were relatively simple to categorise in terms of ownership, sectoral composition and regional distribution. Chinese commentators identi®ed a limited number of regional models ± the Jiangsu type, where yi gong yi nong (both worker and peasant) prevailed, the Wenzhou model based on household outworking, and the Northeast model in which subcontracting for major state enterprises was a strong feature. The past 15 years have seen an ineluctable increase in the complexity of the TVE phenomenon. We should note, for example, that ownership, while nominally remaining `collective', has in many cases trans- muted to a de facto private form. In other cases, ownership is clouded by the practice of Tijdschrift voor Economische en Sociale Geografie ± 1999, Vol. 90, No. 3, pp. 272±284. # 1999 by the Royal Dutch Geographical Society KNAG Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA