1. Introduction

Industrialization is the procedure in which industrial production achieves dominant place in national economic system. It is by and large defined as the increasing procedure of end product value of the 2nd industry in GDP, or the lifting procedure of industrial employment in entire employment. Harmonizing to the National Bureau of Statistics, end product value of China ‘s secondary industry is 18648 billion kwais, portions about 47 % of GDP and grows by 12.2 % compared with the same clip last twelvemonth, which is much faster than the primary industry and 3rd industry. Chinese-made merchandises are exported around the universe and China has accumulated up to 20,000 billion dollars in foreign exchange reserves.A Under the background of fiscal crisis, the Chinese authorities puts frontward the construct of New Industrialization. It is to excite industrialisation dependant on information engineering, and promotes the promotion of information engineering by development of industrialisation. The New Industrialization is a development route with higher engineering, better economic returns, lower resources ingestion, less environmental pollution and better development of human capital. The Chinese authorities announces that it will heighten international fight of China. However, the procedure of industrialisation has besides been accused of spread outing the urban-rural spread. First, industrialisation consequences in the disparity of urban-rural income. Per capita incomeA of urban residentsA is about A 20,000 kwai, A whileA per capita incomeA of rural residentsA is merely 7,000A kwai. TheA monetary value index forA urban and rural areasA isA about the same. Second, the urban labours have entree to better instruction and preparation chances. They are more competitory in labour market and can happen higher-paying occupations. In add-on, the income disparity will do nest eggs disparity and farther investing disparity. Thus some people think that “ Industrialization in developing states is founded upon the redistribution of income and resources off from the destitute rural category to the urban elite. ” This paper will analyze the relationship between industrialisation and urban-rural spread in China. The thesis of this article is that: In the short term, industrialisation will spread out the urban-rural spread, but the inauspicious impact will bit by bit vanish with the development of industrialisation in the long term. Therefore China should smartly advance the procedure of industrialisation, particularly the New Industrialization in order to contract the spread between urban and rural countries and cut down poorness in rural category.

2. Analysis

This articleA will demonstrateA the statement from the theA following facets:

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1.Industrialization consequences in the urban-rural spread in the short term

First, industrialisation is the altering procedure of comparative labour productiveness between agricultural sector and urban non-agricultural sector ( Gui Jinsai,2006 ) . It leads to the addition of labour productiveness in urban non-agricultural sector compared with rural agricultural sector. Thus it causes the enlargement of the income spread between urban and rural residents.A Rural labour transportations to urban non-agricultural sector and it is the alone phenomenon of migratory workers in China. Low-income migratory workers have been the focal point of the Chinese government.A

Second, in the procedure of industrialisation, the quality of labours between the agricultural sector and urban sector will change.A On the one manus, workers in the non-agricultural sector in the metropolis accumulate experience and go skilled labours ; On the other manus, engineering and direction within the industrial sector have been improved continuously, so workers have more entree to instruction and accomplishments training.A City ‘s work force, particularly those knowing elites, are really competitory in the labour market. They can happen high-paying jobs.A The income spread between urban and rural occupants is farther widened ( figure 1 ) .A

Third, industrialisation brings increasing of industrial merchandises and graduated table of production brings decrease and monetary value advantage ( Zeng Guoan, 2007 ) . Price snap and income snap of industrial merchandises are higher than agricultural merchandises. China ‘s industrial merchandises are highly competitory. Cheap Chinese-made merchandises are exported around the universe and make up to 20,000 billion U.S. dollars in foreign exchange militias. Under the background of fiscal crisis, the demand reduces but exports of Chinese industrial merchandises do non fall but lift. On the contrary, China ‘s agricultural merchandises are much less competitory. Although China is the beginning of soya beans, but now about all the soya beans in Chinese market are imported from the USA.A The status of trade besides contributes to urban-rural income disparity.

Fourthly, harmonizing to economic growing theory, higher income means higher nest eggs, and therefore investing additions ( Solow, 1957 ) . The income of urban occupants is increased and more capital can be invested to better the substructure, instruction and wellness attention ( Figure 2 ) . The life quality of urban occupants is comparatively improved than the rural category.

Last, industrialisation is the redistribution of resources. In order to fulfill the demand for qualified labours, the urban non-agricultural sector needs educational services. Thus a assortment of educational and preparation establishments in urban countries are developed. In add-on, China ‘s colleges besides concentrated in metropoliss, particularly in big metropoliss. Top universities in China are all in Beijing and Shanghai, and best MBA instruction is besides concentrated in the concern schools in these top universities. Children from urban elect households need much less tonss to come in the best universities than rural pupils and they are able to pay for abroad instruction. This in turnA allows them toA acquire better occupations and acquire higher income. At the same clip, industrialisation leads to the demand for financess in urban sector and it can supply better returns for the financess. So the capital flows from rural countries to urban countries. In China, big metropoliss have developed fiscal systems while most rural countries have even no Bankss. Besides, the authorities has urban prejudice in trade, finance, instruction, wellness attention, societal security, public goods supply and so on ( Jiang & A ; Duan,2007 ) . This is an of import ground for resources transfer from rural to urban countries.

Figure 1: Urban-rural householdA per capita income ( kwai )

( beginning: China Statistical Yearbook ( assorted old ages )

Figure 2: Urban-rural fixed assets investing ( 100 million kwai )

( beginning: China Statistical Yearbook ( assorted old ages )

2. IndustrializationA will extinguish theA urban-rural spread in the long tally

China ‘s traditional industrialisation forms the double construction of urban and rural economic system. However, industrialisation is non the monopoly of urban development and rural economic system can besides profit from the development of industrialisation, particularly new-style industrialisation with high economic efficiency and low resource ingestion. Statisticss suggest that China ‘s rural population reaches 713 million and portions about 55 % of the entire population. To contract the spread between urban and rural economic development and cut down the poorness of Chinese husbandmans, China should still trust on the development of industrialisation. Successful pattern in China shows that through the development of rural industrialisation and township endeavors, industrial production and concern theoretical account will advance rural economic restructure, prosper rural economic system and finally extinguish the instability between urban and rural economic development.

First of all, A the success ofA rural industrialisation promotes ruralA economic development ( Sun & A ; Peng,2009 ) . This article will utilize the informations analysis from National Bureau of Statistics ( 2008 ) . In 2007, A China ‘s ruralA industrial added valueA wasA 4.78 trillion kwais, accounting forA 46.5 % ofA the nationalA industrial added value, whileA in 1978A this proportion is onlyA 9.95 % .A Since the reformA and opening up, A China ‘s ruralA industry is going progressively of import inA the industrialisation procedure. In 2007, the end product value of national township endeavors increased to 6.962 trillion kwais from 20.9A billion kwais in 1978, an addition of 322A times. It was 68.68 % of the end product value of rural economic system and 28.52 % A of GDP.

Second, rural industrialisation is the manner to work out the issues of employment of China ‘s rural excess labours ( Shen Maoxiang et al.,2005 ) . China has a immense rural population, few employment chances in rural countries and there are a batch of excess labours. Rural industrialisation can make occupations for these labours and ease the force per unit area on urban employment. A In 2007, employees in township endeavors reached 150.90 million, accounting for 29.13 % of the entire rural labour force. The township enterprises paid rewards of 137.06 billion kwais and it increased rural per capita income by 1440 kwai, which equals as 34.8 % of per capita income of rural occupants. Up to 1/3 of the Income of rural families is achieved from township endeavors ( Sun & A ; Peng,2009 ) . It means that if one member of a rural household works in the mill, it can greatly increase the income of the household. In the recent few old ages, China ‘s Pearl River Delta part have encountered the deficiency of workers and rise of labour cost. One of the ground is that inland migratory workers choose to work for the township enterprises in hometown. It is grounds that rural industrialisation can better employment and the per capita income of rural occupants.

Third, ruralA industrialisation is the driving force of modern agribusiness. An of import factor of China ‘s urban-rural spread is the uncompetitive of its agricultural sector. The Chinese authorities has A made great attempts toA promote agricultural modernizationA , which depends onA technological advancement, mechanizationA equipment and financess brought by A rural industrialisation. Over the past 30A old ages, theA township endeavors have offered A 401.2 billion kwais for A agribusiness and have greatlyA improved agricultural production. The development ofA modern agribusiness can bringA income addition and better life quality of Chinese husbandmans.

Much researches have showed that the new industrialisation is the manner to advance rural economic development and better the income of husbandmans. Yuan Linlin & A ; Chen Lihua ( 2007 ) pointed out that the Chinese authorities should attach importance to the integrating of urban and rural economic development, and advance the economic system development by new industrialisation and township endeavors to set the redistribution between rural husbandmans and urban category. New industrialisation is by and large thought to make occupations for rural labours, cut down the figure of provincials and increase their incomes, while bettering the quality of rural life in the societal security, skills preparation, wellness, kids ‘s instruction and other national interventions. Zhejiang Province is the earliest to get down rural industrialisation ( Li Ying, 2008 ; Ge Lixiang, 2009 ) . A Kang Sheng ( 2010 ) took Zhejiang Province as an illustration to research the experience of China ‘s urban and rural development strategy.A He believes that China ‘s rural economic development has undergone three phases, foremost, from 1978-1992, the rural economic system changed from a individual agricultural production to a assortment of concern development, including the rapid development of township enterprises.A From 1993 to 2003, the rural market economic system and industrialisation achieved singular consequences, and laid foundation for extinguishing the urban-rural spread. Since 2003, the integrating of urban-rural economic development is based on the authorities. The authorities should back up rural industrialisation in policies, investing, and financess.

From the macro economic system informations of China, it can be besides seen that the rural economic development is comparative to industrialisation. Chaudhuri & A ; Ravallion ( 2006 ) researched on the Chinese economic growing. The following tabular array shows the relation between poorness decrease and economic growing and income growing. Left is the factors that affect overall poorness decrease and the right is correlation coefficient andA tA trial consequences in parentheses. Apart from the Growth rate of average urban income, T value shows important in statistics. As the tabular array shows, GDP grows by 1 % , so poorness rate reduces by 2.6 % .The growing ofA the primary sectorA is the largestA impact factor on poorness. The primary sector economic system grows byA 1 % , so poorness rate reduces by 8.07 % ; while the consequence of industrialA sector growing on poorness rate is the smallest with the coefficientA of -1.75. China’sA poorA population is chiefly inA rural areasA and the tabular array implies that China should cut down poorness rate and improveA life quality of the provincials through new industrialisation, modern agribusiness and the development of the service sector. In add-on, the growing inA ruralA income significantly decreases ( -2.56 ) A poverty rate while the impact ofA income ofA urban occupants is non important onA the poorness rate.

Table 1: Poverty decrease and its impact factors

Growth rate of GDP per capita


( -2.16 )

Primary ( share-weighted )


( -3.97 )

Secondary ( share-weighted )


( -1.21 )

Tertiary ( share-weighted )


( -1.24 )

Growth rate of average rural income ( share-weighted )


( -8.43 )

Growth rate of average urban income ( share-weighted )


( 0.20 )

Beginning: Chaudhuri & A ; Ravallion ( 2006 )

The undermentioned figures show the growing rate of GDP in the three economic system sectors, the income, investing and life quality of urban-rural disparity and the comparing of the richest and poorest states.

Figure 3: Growth rate of GDP in the three economic system sectors ( % )

( beginning: China Statistical Yearbook ( assorted old ages )

From the tabular array above we can see that the secondary sector grows the fastest. Considered that industrial economic system portions more 50 % of the national economic system, A industrialisation is A the driving forceA of China ‘s economic development.A

China should farther promoteA new industrialisation. A In add-on, since 2003 the primary sector have grown at a faster rate but it is still slow. Therefore A China needsA to promoteA the development of ruralA industrialisation to pushA the development ofA the primary sector.

Figure 4: Urban-rural per capita incomeA index ( 1978=100 )

( beginning: China Statistical Yearbook ( assorted old ages )

Since the reform and opening up, with China’sA acceleratedA industrialisation procedure, A the disposable income ofA urban and rural residentsA areA quickly increasing. From the figure above, A the disposable income ofA urban and rural residentsA have increased by 7A times during the past 30 years.A It shows thatA life quality of China’sA urban and rural residentsA have improved fast.A In add-on, A the disposable income ofA rural residentsA grew slower thanA urban occupants, but its growing rate has increased rapidlyA in recent old ages. In A 2007, A the growing rateA of incomeA of rural occupants caught up with that of urban occupants.

Measured byA the 1978 GDP, China ‘s five mostA richest states are Shanghai, Guangdong, Jiangsu, Shandong and Liaoning. China ‘s five most hapless states are Qinghai, Hainan, Guizhou, Gansu and Inner Mongolia ( Ningxia, Tibet and Xinjiang are excluded ) The mean one-year growing rate of the two groups are calculated and we can see that the growing rate of the poorest states starts to catch up with and exceed that of the richest. It indicates that the urban-rural spread have been narrowed in line with the economic growing. The 2nd sector dominates Chinese economic system, therefore industrialisation will extinguish urban-rural spread in the long tally.

Figure 5: Average growing rate of the five richest and poorest states ( % )

( beginning: China Statistical Yearbook ( assorted old ages )


As the largest developing state, China ‘s economic system has maintained long-run growing under the industrialisation scheme. Now the Chinese Government put frontward new industrialisation scheme with low pollution, low resource ingestion and high economic returns to heighten China ‘s international competitiveness.A However, the industrialisation of developing states is said to establish up on the redistribution of resources and income from hapless rural category to urban occupants, particularly the elect category in the metropolis. China ‘s industrialisation is accused of spread outing the urban-rural spread. This article study China ‘s rural economic system in labour productiveness, educational resources, trade fight and investing, and concludes that in the short term, China ‘s industrialisation so transportations resources of instruction and financess from rural to urban countries and expands the urban-rural gap.A Then, the article researches on the rural industrialisation, combined with China ‘s macroeconomic informations, points out that development of industrialisation and township endeavors will increase income and advance the development of rural economic system. In drumhead, the riddance of urban-rural economic system disparity relies on the development of industrialisation, particularly new industrialisation in the long tally. New industrialisation is the manner to accomplish the integrating of urban and rural economic development, cut down and extinguish urban-rural spread, increase the income of rural occupants and better the quality of rural life.