Will rural residents become middle-class?

Farmers in Qionghai of the southern-most island province of Hainan, China's major tropical fruit supplier, can make 40,000 yuan on average a year.

However, Lei Zhen, deputy director with Qionghai city's agricultural bureau, said local farmers remain vulnerable to natural and economic risks as market volatility can easily erase earlier profits.

China's dim export prospects also cast shadows.

For the majority of rural families, the main income source is from wages earned by working in labor-intensive industries, many of which rely heavily on exports.

However, the European debt crisis and the United States's unstable recovery continue to threaten the survival of the factories that absorb vast rural labor. China's year-on-year export growth slumped to 7.9 percent in 2012 from 20.3 percent a year earlier.

Labor-intensive factories want to move up the value chain by upgrading technology and changing products, according to experts, but their rural migrant employees are not skilled enough to become technical workers.

The lack of property income is another disadvantage rural residents need to overcome.

Guo Zhengmo, an economic researcher with Sichuan Academy of Social Sciences, said compared with urban dwellers, rural residents face more legal and administrative restrictions when cashing in on their houses and homestead lots. For instance, Chinese farmers are not allowed to sell their property to urban residents.

However, many analysts, betting on China's fast urbanization, share optimistic views about rural residents' income growth in the long run.

China's rapid economic growth fueled the world's largest urbanization.According to a nationwide census in 2010, half of the Chinese population live in cities, up by 13.46 percentage points from 2000.

Chi Fulin, president of China (Hainan) Institute for Reform and Development, estimated that 400 million rural residents will move to cities by 2020, and 160 million of them are likely to become middle class.

 

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