ABSTRACT
The Chinese government announced new economic reform policies in December 1978 and October 1984. The announcements included an urban distribution policy that emphasized small towns and rural industrialization as a means to achieve many development goals. Traditional Chinese society was characterized not only by its hierarchically structured rural market systems, but also by its well-developed and specialized cottage industries. The major goal of rural nonagricultural development is to eliminate rural poverty by diversifying rural economic activities and creating employment opportunities in secondary and tertiary industries. The change from commune and brigade organization to a township and village system in the early 1980s improved the management efficiency of rural enterprises but hardly altered community attachments or modified the flexible link between nonfarm and farm activities. Both institutional reforms and the revival of traditional entrepreneurial and marketing behavior have accelerated the growth of nonfarm activities in rural China.
