Reforms Stimulate Domestic Demand
In conclusion, reforms of the dualism mechanism – namely allowing transfer, sales, conversion and mortgage of rural land – will stimulate development in the agricultural sector, increase farmers’ incomes and accelerate urbanization. Consequently, that will narrow the income gap between the rural and urban populations. This will be a great step forward to developing China’s sustainable economy.

Today’s economy is largely supported by investment, with domestic consumptions trailing behind. Expanding our domestic demands is the way forward. The key to this is to improve the incomes of farmers, change their lifestyles and consumption patterns. If we managed to put in place a system that guarantees farmers’ basic livelihood, then the lower income group will be less hesitant in spending. This will immensely expand domestic demands.

Where is the biggest market in the world waiting to be explored? It is in China’s countryside, where enormous numbers of Chinese farmers are waiting to be rich. Once they move on to becoming the middle class, the impact on China’s and the world’s economy will be mammoth.

All the reforms stated above need to be institutionalized by law. To avoid acting hastily, the government can carry out pilot projects in selected regions. Later, based on experience and improvisation, the best suited model can be gradually extended and implemented nationwide.

No doubt that many laws at present contradict the above reforms, yet, if that was indeed the right path to follow, laws can be amended or new ones drawn up to accommodate change. As we look back at the 30 years of reform and opening up, we have indeed come a long way by taking one step at a time.