Township Enterprise

Various enterprises, mainly rural collective economic organizations or farmers’ investment, which undertook the obligation to support agriculture, were created by Chinese farmers in the Reform and Opening-up period in townships (including villages under their jurisdiction). The predecessor of township enterprise was commune and brigade enterprise. During the people’s commune period, in order to increase income, some local communes and brigades made use of local resources and rural surplus labor to set up communal and brigade enterprises, which Mao Zedong called “where the hope of brightness and brilliance lies.” After the Reform and Opening-up, as the household contract system became increasingly popular, the people’s communes were disintegrated and enterprises in communes and brigades developed rapidly. In March 1984, the Central Committee of the Communist Party of China and the State Council forwarded the notice of the “Report on Breaking New Ground of Communal and Brigade Enterprises” from the Ministry of Agriculture, Animal Husbandry and Fisheries and the Party Group of the Ministry and agreed to the report’s proposal to change the name of communal and brigade enterprises to township enterprises. The report proposed that township enterprise was an important part of diversified operations, an important pillar of agricultural production, an important way for the broad masses of farmers to achieve common prosperity and a new important source of national fiscal revenue.

On January 1, 1985, the Central Committee of the Communist Party of China and the State Council issued “Ten Policies on Further Encouraging the Rural Economy”, clearly proposing the policy of adjusting rural industrial structure and actively developing diversified operations. In view of the vigorous development of township enterprises, in June 1987, Deng Xiaoping spoke highly of the rise of township enterprises, “In rural reform, the biggest gain we did not expect at all is that township enterprises have developed and suddenly there are various industries, commodity economy and all kinds of small businesses.” In October 1996, the “Law of the People's Republic of China on Township Enterprises” was promulgated, which clarified the legal status of township enterprises and provided a legal guarantee for the promotion of the development of township enterprises, putting the development of township enterprises on the track of legalization. Township enterprises have a natural connection with “agriculture, rural areas and farmers” in that they develop from rural soil. The sudden emergence of various forms of development is a great creation of Chinese farmers. It opened up a new path for the transfer of rural surplus labor from the land, for prosperity and gradual realization of modernization in the countryside and for promoting the reform and development of industry and the entire economy. In the reform of building a socialist market economy, the property rights of township enterprises were clarified and transferred, and the interests of property owners were guaranteed, which stimulated farmers and collectives to develop township enterprises. It became an important part of the national economy, an important support for the rural economy and the main channel for farmers to transfer employment, becoming a leading force in the market-oriented reform of the urban and rural economy and industry nurturing agriculture and playing an important role in solving the problems of agriculture, rural areas and farmers in our country.