ABSTRACT
The fundamental theme is that industrial growth has changed from reliance mainly on quantitative expansion to a new stage focused on quality improvement. On an average per capita basis, China’s industrial production lagged far behind large developed countries such as the United States and Japan. Insufficient effective rural consumption demand is one of the main causes limiting industrial growth. The widening disparity between urban and rural incomes and spending levels has increased the relative oversupply of industrial products, with the growth of farmers’ purchasing power vis-a-vis industrial products being very slow. The situation for sustaining high growth in rural industries has changed; or rather, their growth rate has gradually declined. Since agricultural production efficiency is low, the growth of farmers’ incomes is slow. This led to shrinkage of farmers’ incomes and consumption levels in the mid 1980s, which only expanded in the 1990s.
