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High-quality transport infrastructure strengthens China's rural economies

By Alexander Ayertey Odonkor | chinadaily.com.cn | Updated: 2022-11-15 14:29



Data from the Ministry of Transport shows that China's total investment in the transport sector for the first three quarters of 2022 reached 2.7 trillion yuan (about $372 billion), an upswing of 6.3 percent year-on-year. Scaling up transport infrastructure development across the length and breadth of the country – a tremendous transformation, especially for rural areas – where for years, bad roads and poor transport networks had impeded socioeconomic development.

In the last 10 years, rural areas across China have experienced rapid transport infrastructure development. By the end of 2021, the total mileage of rural roads reached 4.47 million kilometers, up from 3.56 million kilometers a decade earlier, an extension of a transport network of more than 900,000 kilometers – connecting rural communities across isolated islands, mountainous regions, forests, rivers and desert areas.

The newly constructed transport network has significantly transformed the economic landscape of rural areas. At present, high-quality transport infrastructure, including railroads, waterways and highways, which not only integrates rural communities but also connects villages to urban communities in China, has facilitated efficient, affordable and reliable movement of people and goods – a huge transformation that has created and supports an enabling environment for both new and old industries such as agriculture, express deliveries, tourism and e-commerce – stimulating production and consumption in rural areas and contributing significantly toward building a moderately prosperous society in all aspects.  

For new industries such as express deliveries and e-commerce, the uniquely amalgamated transport network in the rural landscape is crucial for efficient, affordable and reliable transportation of goods. In fact, the rapid development of high-quality transport networks has enhanced the operation of e-commerce companies and express delivery service operators, making their services attractive and convenient for farmers, entrepreneurs and other rural residents. For example, the Consumption and Industry Development Institute of JD.com, China's largest online retailer, released a report which shows that before March 20, 2022, the spring equinox, online consumption of agricultural products, including compound fertilizer and agricultural technology services on the platform, had increased rapidly in the rural areas. The well-functioning transport network in rural communities has ensured effective order fulfillment for e-commerce and express delivery companies.

As a result, the reliable services offered by these companies have encouraged widespread usage of delivery services by rural residents, a trend that has gained momentum and bolstered growth in the express delivery sector in rural areas. Data from the State Post Bureau (SPB) shows that in the first half of 2022 more than 100 million packages were delivered to rural areas on a daily basis. Presently, express delivery covers over 80 percent of administrative villages in the country – creating jobs, stimulating growth and increasing the income of rural households, a desirable outcome that has been possible to achieve partly because of the high-quality transport network in rural areas – which effectively connects buyers to sellers, eliminating formidable barriers that constrained rural development in the past.

Through the integrated rural transport network that connects urban areas, farmers, entrepreneurs and small and medium-sized enterprises (SMEs) in rural areas now have increased access to a larger market, fostering rural-urban interdependence with mutual benefits, an arrangement that has significantly increased production and consumption of rural households in the last decade. This is facilitated by express delivery services and e-commerce which digitally connects buyers and sellers, making markets easy to access. The findings of a joint research initiative (2019) between the World Bank and Alibaba Group, one of the world's largest e-commerce companies, revealed that e-commerce is associated with higher household income, growth and employment in China's Taobao villages, which are villages significantly engaged in e-commerce – fostering entrepreneurship and creating flexible and inclusive employment opportunities, including for women and youth. Clearly, the high-quality transport network has laid a solid foundation for e-commerce and other new industries to grow.

In a similar fashion, the rapid rural transport infrastructure development, integrated with urban communities, has paved the way for the influx of tourists into villages, which were daunting to reach in the past – the transformation has spurred rural tourism in China. During the National Day holiday, 3.98 million tourists took trips to rural areas in and around suburban Beijing, which generated revenue of 605 million yuan, up 12.1 percent year-on-year, accelerating rural revitalizing. For example, Tongcheng Travel, a Suzhou-based online travel agency which jointly operates Warm Village, a village resort with the local government in Wuzhong district in Jiangsu Province, received about 800,000 tourists during the National Day holiday in the first week of October, 2022. With an investment of 1 billion yuan (136.7 million), the Warm Village, which uses cultural and ecological resources near Taihu Lake, has created about 400 jobs for rural residents.

In another example, a café built under a water tower in a small village with a population of about 1,000, in South China's Hainan Province, which opened for business at the end of 2021, is now a booming tourist destination, after photos and videos of the place was shared on various online platforms in the country. In conclusion, the rapid transport infrastructure development, which has increased access to rural tourist destinations, has supported growth in the rural hospitality industry, a growth pattern that is expected to soar in the coming years.

As the Chinese government continues to increase investments in the transport sector and concurrently commit additional resources to further enhance integration of rural e-commerce and express delivery systems, to better link production and consumption in urban and rural areas, these crucial actions will further strengthen rural economies. By 2035 a comprehensive green, intelligent and cost-effective transport network of about 700,000 km will be ready for use in China, comprised of 460,000 km of roads, 25,000 km of waterways and 200,000 km of rail tracks – 36 inland river ports, 27 coastal ports, 400 civil aviation airports and 80 logistics hubs. Concomitantly, the government has dedicated efforts to accelerate integration of rural e-commerce and express delivery systems by upgrading county-level logistics distribution centers and building demonstration zones for the coordinated development of rural e-commerce and express delivery services. Ultimately, these investments will further stimulate production and consumption in the rural areas and contribute significantly to build a moderately prosperous society in all aspects.

Alexander Ayertey Odonkor is an economic consultant, chartered economist and a chartered financial analyst with a keen interest in the economic landscape of countries in Asia and Africa.

The views do not necessarily reflect those of China Daily.

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