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Cablegate: Baise, Guangxi: New Countryside Program Impact May Be

VZCZCXRO4409
OO RUEHCN RUEHGH RUEHVC
DE RUEHGZ #0954/01 2720739
ZNR UUUUU ZZH
O 290739Z SEP 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4194
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEHRC/USDA FAS WASHDC 0916
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC
RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 02 GUANGZHOU 030954

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/CM AND DRL
USDA FOR FAS/ITP AND FAS/FAA
USDOC FOR 4420/ITA/MAC/MCQUEEN
USPACOM FOR FPA

E.O. 12958: N/A
TAGS: EAGR ECON SOCI PGOV CH
SUBJECT: Baise, Guangxi: New Countryside Program Impact May Be
Limited

REFERENCE: A) Guangzhou 4033 B) Guangzhou 30952

(U) This document is sensitive but unclassified. Please protect
accordingly.

1. (U) Summary: Baise in western Guangxi Zhuang Autonomous Region
has been a poor place for many years. Sporadic fighting with
Vietnam through the late 1970s prevented concerted efforts at
economic development. In response to Beijing's 11th Five-Year Plan
to develop rural areas, Baise is building model villages and is
continuing pilot programs to develop small scale income projects.
Providing benefits to the broader rural population requires more
investment into infrastructure. However, building the New Socialist
Countryside in Baise could be difficult, due to the prefectural
government's inability to fund its share of development costs. End
Summary.

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Agriculture and rural poverty: raising incomes
----------------------------- ----------------

2. (U) Baise Prefecture is predominantly an agricultural economy.
The government's priority in its rural work is to increase farmers'
incomes, especially by guiding farmers to grow cash crops. Baise's
major cash crops include fruits, vegetable, mulberry, tobacco and
sugars. Baise can grow over 100 types of fruits, and is one of the
three places in China suitable to grow mangos. It is also Guangxi's
largest center for raising vegetables out of season as well as a
major sugarcane area of China. In the mountainous areas, the
Government is encouraging farmers to grow tobacco, tea, mulberry and
raise silk cocoons, which can be harvested four times a year in
Baise compared with only once in eastern China. However, officials
admitted the quality of Baise's products is not very high and needs
to be upgraded.

3. (U) Farmers in Baise are widely scattered in valleys and
mountain areas. For a prefecture that only has a population of 3.65
million, there are over 20,000 villages spread among in its valleys
and mountains, with some are as small as 50 households. The best
farmland and most prosperity is concentrated in more level valley
areas, especially by the two local main rivers called "Zuojiang" and
"Youjiang" (Right and Left Rivers), with poverty concentrated in the
mountains. The income gap between the two areas is very large. In
a model village called "Toutang," part of the Toutang township that
Congenoff visited in the Youjiang Valley, the average annual income
is RMB 3,095 (USD 389) and can be as high as RMB 30,000 to RMB
40,000 (USD 3,800-5,060). In contrast, in remote and mountainous
areas, people's average annual income can be as low as RMB 300 to
500 (USD 38 to 63), well-below China's abject poverty line and much
lower than the World Bank poverty standard of USD 1 per day. Ref B
discusses an overview of Baise's economy and ref A discusses
Guangxi's rural development goals.

Raising Incomes through the "Courtyard Agriculture"
---------------------------- ----------------------

4. (U) In Toutang Village, the local government is actively
promoting a practical, small-scale farming model called the
"courtyard economy" in which farmers raise small animals for meat,
such as frogs or rabbits, or plant cash crops in small spaces, which
are usually their courtyards. One family that raises a type of Thai
frog and rabbits in Toutang Village for local sale saw its annual
household income increase from RMB 10,000 (USD 1,260) in 2004 to
more than RMB 40,000 (5,060) in 2005. The Government designates
local successful and certified farmers to provide free training and
educational materials to villagers in neighboring villages to
promote the courtyard economy. The director of the Toutang Village
Committee, who began raising rabbits in 2004 and became a local
success story, has trained a total of 60 farmers during the past
year.

5. (U) Like most area in China, Baise' farming is still based on
individual households. Farmers have few machines, some small
tractors, small hand threshers, and handheld power tillers; most
farmers rely on manual labor and water buffalos. Several
self-organized distribution units help farmers to sell their produce
and eliminate the middleman. Village officials complained that it
was difficult to get loans from local credit cooperatives, and most
farmers had neither the concept nor courage to borrow money to
expand their farming scale or start a processing business.


GUANGZHOU 00030954 002 OF 002


6. (U) Labor export is an important income source for local rural
families. The whole prefecture has 800,000 people working outside
in Guangdong and Fujian. Toutang Town, with 20,000 rural people out
of a total population of 24,000, receives 20% of its GDP in
remittances from people working outside the town, with farming and
services contributing 70% and 10% respectively. In Toutang Village,
with 3,600 inhabitants, 547 people work outside as migrants, most of
them young and comparatively "well-educated." The local Government
provides limited technical training to farmers before they leave for
outside jobs.

Anti-poverty and the Building "Socialist New Countryside"
----------------------------- ---------------------------

7. (U) Baise benefits from the central government's grand
anti-poverty project called "Eight Seven Plan," a plan to take seven
years from 2004 till 2010 to relieve the whole country's 80 million
poor people from poverty. The Prefecture receives from the Central
Government approximately RMB 200 million in special financial
support each year. Other benefits also include interest-free loans,
tax waivers, and aid from Guangzhou, which also supports Baise's
poverty relief efforts. Officials said one could find in Baise a
greater variety of poverty relief programs than in any other
prefecture, leading to a the number of Baise's poor dropping from
1.4 million in the past to the current total of 220,000.

8. (U) Following Beijing's instructions, Baise is preparing a plan
for "constructing the new socialist countryside." Officials said
the prefecture has a different goal in this national campaign, the
whole country is moving toward the "comparatively well-off" (xiao
kang) standard of living, while Baise is still trying to make sure
all its people were fed, clothed, and sheltered. Most of Baise's
plans remain on the drawing board but the government has rebuilt
several relatively well-off villages into model villages as
showcases, selected because their farmers could repay their housing
loans. The selected model villages have comparatively high incomes
and strong agricultural foundations. According to officials,
farmers elsewhere will be responsible for most of the cost of
infrastructure construction in their villages, while the government
will only contribute a small portion of it. The government also
plans to move people living in small and remote villages,
particularly those that have an average size of 50 or smaller
households, to locations where they can be reached with government
services more easily and efficiently.

9. (U) Baise has not felt much impact from competing imports from
ASEAN, which is building a free trade zone with China. Most of
ASEAN's agricultural imports are sold to China's inland markets,
while Baise's agriculture is mainly self-sufficient, though this
appears to be gradually changing.

Comment
-------

10. (U) A large rural population with a low income base limits
Baise's ability to develop quickly. While pilot programs and
showcase villages help a limited number of people, depending on poor
farmers to fund the cost of local infrastructure will mean that most
rural areas will remain undeveloped.

GOLDBERG

© Scoop Media

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