ABSTRACT

China’s rural industry has been the most vibrant sector of the national economy since the mid-1980s. For several decades after they first emerged from the 1958 Great Leap Forward as a product of self-reliant development, rural factories were seen both within and without China as only an ancillary part of China’s economic development. They offered a strategy by which rural surplus labor could effectively use local resources. By the late 1960s, rural industry became a conduit for introducing urban technology to the rural areas. Yet, they remained part of Mao’s cellular approach to economic development and his goal of protecting the urban sector from the economic demands of the countryside. Rural, not urban, industry would supply finances and material for agricultural modernization, leaving urban, state-owned enterprises (SOEs) free to fulfill urban demands. In this way, too, profits from the SOEs could be used exclusively to modernize China’s cities, strengthen the national economy, and improve the living standards of urban residents.