Eradicating poverty is an essential political commitment of the CCP. Despite decades of sustainable growth, China still had pockets of rural residents mired in chronic poverty. In 2013, the Chinese leadership promulgated the Targeted Poverty Alleviation (TPA, jingzhun fupin 精准扶贫) policy to lift the remaining 89.99 million people out of poverty by 2020. To attain this goal, the central government designed a general policy framework outlining crucial anti-poverty strategies, used a task-responsibility system to align local priorities and mobilized high-level cadres to penetrate rural societies.Footnote 1 Moreover, the central government delegated authority to counties and subordinate levels to collect information about households and take targeted measures to ease their plight.Footnote 2 As a result, investigating how the local state adapted central mandates is key to understanding and evaluating China's TPA campaign.
A vital approach for local governments is to engage enterprises in developing and operating anti-poverty projects. From 2015 to 2020, 98 central enterprises were paired with 249 nationally designated poor counties to provide assistance, and millions of private enterprises were mobilized to contribute to poverty alleviation.Footnote 3 This aroused widespread interest regarding why and how enterprises participated in the campaign. Scholars argue that enterprises’ political linkages and their leaders’ attributes determine their poverty-relief strategies and outcomes.Footnote 4 Several studies emphasize the local state as a vital collaborator of these enterprises, offering crucial resources and networks that enable them to approach poor villages and households.Footnote 5 However, researchers tend to view the local state collaborating with enterprises as a coherent entity, even though prior studies have illuminated the multilayered and fragmented nature of China's state.Footnote 6 There is a lack of knowledge about how local state structure affects government–business partnerships for poverty alleviation.
This study analyses vertical interactions among different levels and horizontal partnerships between local policy players and businesses in China's poverty reduction. To address poverty at different scales, the TPA campaign mobilized the county governments to assume leading responsibilities within their county, steering and supervising townships and villages to address poverty within their jurisdictions. Vertical lines transmit the priorities, incentives and resources of upper-level authority to lower levels;Footnote 7 lower levels can also take bottom-up initiatives to expand their opportunities, resources and autonomy.Footnote 8 Horizontally, policy actors at different levels can leverage their networks and resources to attract and incentivize enterprises to conduct developmental projects for poverty relief.Footnote 9 This study demonstrates how the responsibilities and capacities of policy actors in a multilayered system have shaped their approaches to collaborate with enterprises, resulting in diverse impacts on rural development and poverty reduction.
This study conducted four-month fieldwork in two poverty-stricken counties in Jiangxi province and drew data from semi-structured interviews, second-hand materials and on-site observations. We found that elite bureaucrats at the county and township levels tended to adopt growth-oriented strategies, cooperating with large-scale enterprises to create new ventures in poor regions. Their projects have stimulated growth and created high-quality and stable jobs in urban and suburban areas, benefiting relatively capable rural residents. At the village level, the coalition between elite bureaucrats and enterprises has excluded the authentic participation of villagers, especially in demonstration projects. However, for villages with limited endowments and political linkages, officials can utilize indigenous resources to build small- and medium-sized businesses to relieve poverty. Although they contributed less to economic growth, their strategy enhanced flexible employment for less-competitive groups.
This study provides insights into how the multilevel politics of local China generates various strategies for poverty alleviation. It shows that the policy actors at county, township and village levels have varying motives and capacities so they have adopted different solutions to local poverty problems. It provides a nuanced analysis of the impacts of these different strategies, enriching our knowledge of the complex impacts of TPA. In addition, this study furthers our understanding of government–business collaboration for poverty reduction and rural development in China. While earlier studies have analysed government–business interaction primarily from the enterprises’ perspective, this study provides a lens from the government's perspective to understand the variation in government–business collaboration.
Literature Review
Several scholars have underscored the heightened top-down control in China's TPA campaign. They asserted that TPA adopted and refined the mass-line campaign, a historical legacy of the CCP that imposed temporal pressure and heavy responsibilities on local governments to accomplish poverty alleviation.Footnote 10 Nevertheless, TPA relies on the county level and below to adapt general policies and deliver services to their poor. Studies analysed how county governments utilize their discretion and resources to accomplish central directives.Footnote 11 They argued that local autonomy remains significant and robust, even in China's pressurized system.Footnote 12 Others adopted a micro-perspective to investigate how cadre-in-residence (zhucun ganbu 驻村干部), dispatched by high-level governments and state-owned enterprises, facilitated policy implementation and initiated policy entrepreneurship at the village level.Footnote 13 These findings imply that poverty reduction is a function of co-production between multiple levels and players.
A systematic investigation of the interplay of local state and non-state actors is useful to shed light upon the complex mechanisms of China's poverty reduction campaign.Footnote 14 Vertically, the central government establishes a clear division of power and responsibility between different administrative levels, with each level playing a significant role in specific regional jurisdictions. They were nested in higher-level units to execute their directives. In the case of poverty reduction, the county determines the overall poverty relief plan and financial schemes and requires townships and villages to explore practical approaches to accomplish poverty reduction. Subordinate officials can take advantage of their resources and bargain with upper-level governments to pursue their goals.Footnote 15
Horizontally, collaboration between governments and businesses provides vital resources to assist poor regions and households in escaping poverty. Research on TPA has revealed that enterprises have made significant contributions to China's poverty reduction. A group of studies analysed government–business interaction from the enterprises’ perspective. They found that entrepreneurs’ personal experiences and interests affect their decisions to make charitable donations.Footnote 16 In addition, enterprises’ business size, family backgrounds and political connections affect their participation in government-led social projects.Footnote 17 Others argue that enterprises depend on vital resources provided by local governments; therefore, the interests and strategies of local governments have a decisive impact on the mode of government–business collaboration.Footnote 18 However, they have insufficiently discussed the implications of the multilayered structure of the local state or the varying roles of policy players in government–business collaboration.
Prior studies on China's local state have established that intrastate relations between the county, township and village levels have immediate impacts on China's rural governance.Footnote 19 Most studies have described the three levels as coherent groups for implementing a unified policy.Footnote 20 The TPA campaign opened new opportunities and offered substantial resources for different levels to exploit and innovate new projects of different sizes. There is a lack of research on how policy actors at the three levels engage with different enterprises to achieve policy goals. While a body of literature has explored the incentives and behaviours of elite officials at the county level and above, grassroots cadres’ strategies to adapt anti-poverty policies remain largely underexplored.Footnote 21
Data and Method
Our analysis drew data from the lead author's four-month investigation in Ganzhou municipality, Jiangxi province, once in July–August 2019 and again in December 2019–January 2020. Ganzhou municipality is located in one of the designated continuously poverty-stricken regions, the Luoxiao mountain area. This region is plagued by mountainous terrain, inconvenient transport, rocky lands and thin soil. We selected two counties – S and G – for in-depth investigation.
The data collection methods reflect the fact that poverty reduction is operationalized in a multilevel system. The lead author interviewed policy officials and participants from the county to grassroots levels to understand how they contributed to anti-poverty programmes. At the county level, the author interviewed offices of poverty alleviation and development and functional departments in charge of specific anti-poverty programmes, such as bureaus of public employment and bureaus of agricultural and rural affairs. The lead author then purposefully selected townships and villages with diverse socio-economic and natural conditions and visited them to collect first-hand information. In addition, the lead author interviewed market entities, rural organizations and local residents. The lead author visited 32 villages and conducted over 120 semi-structured interviews. Written materials such as government policies, performance reports and village briefs were collected. By triangulating multiple sources of data, we can obtain a complete picture of how bureaucrats, enterprises, villagers and poor people interact with each other and how their interactions shape anti-poverty outcomes.
This study developed a three-layered framework to analyse how different types of officials initiate various government–business collaborative projects. We examined how officials at the county and township levels involve enterprises in poverty reduction. Next, we investigated the grassroots officials at the village level, including village officials and sent-down cadres. We found three types of villages with diverse modes of collaboration with businesses.
County-Level: Growth-Oriented Strategies
County-level officials at the bureau level (keji 科级) and above are referred to as local cadre elites, who enjoy considerable discretion and power to design and implement policies. County officials are driven by two goals: economic growth and poverty reduction.Footnote 22 They integrate these goals by adopting a growth-oriented strategy to reduce poverty. Specifically, they bet on large-scale enterprises that can create significant economic output to improve the local tax base and trickle down to the destitute.Footnote 23 These large-scale projects are likely to yield prominent outcomes that attract the attention of upper-level governments and improve bureaucrats’ chances for promotion.
County officials possess the rich political and social capital to achieve their goals. They have dense social and political networks that enable them to motivate large enterprises to invest in poor regions by using preferential policies, providing land, factories and tax rebates, and by using political appointments such as positions in the People's Congress and the People's Political Consultative Conference (CPPCC) to motivate enterprises.Footnote 24 Moreover, they can use their informal authority, such as personal connections, to facilitate access to bank loans and speed up the registration process.
In S county,Footnote 25 the head of the bureau of public employment played an entrepreneurial role by cooperating with high-tech companies to establish industrial projects. He identified industrial development as the main pathway to stimulating growth and solving poverty problems. He maintained that large enterprises could create employment for poor populations and a market for rural entrepreneurship to grow.
To attract external investment and business talent, in 2016 he made several business trips to Guangdong province, a developed region in China, and relied on social networks to approach potential investors.Footnote 26 On one business trip, he met an entrepreneur who specialized in photoelectronic industries and persuaded him to move his business to S county. To motivate the entrepreneur, he lobbied county leaders to exempt the enterprise from administrative registration fees and reduce its taxation and expenditure on sanitation. In addition, the government provided subsidized loans to the enterprise to hire poor people and offered subsidies for vocational training. In 2017, with strong support from the S county government, the entrepreneur built 13 industrial factories occupying 468,000 square metres of an industrial park in the suburban area of S county.
This project had significant economic outcomes and created substantive employment opportunities for residents, including poor households. In 2019, the factories produced export-oriented products valued at 2–3 billion yuan and contributed 55 million yuan to S county's tax receipts. Factories in the industrial parks created 3,700 job opportunities. However, most workers in the industrial parks were young and capable, and only 131 workers were identified as poor. Low-income employees are covered by social welfare plans (minimum wage, pension, healthcare insurance and unemployment insurance) and enjoy free accommodation, meals and commuting services funded by the S county government.
Additionally, the bureau head expanded the project to create employment opportunities in rural areas. He subsidized the company to outsource a proportion of its products to rural entrepreneurs who built manufacturing workshops in townships and villages, in the hope that these workshops would hire more rural residents, especially the poor. If their workshops hired more than five poor households on-site or ten working from home, rural entrepreneurs could receive start-up funding of 5,000 yuan and a subsidy of 150 yuan per poor employee. Our investigation shows that, on average, an employee can earn a salary of 500–800 yuan and receive a subsidy of 300 yuan per month.Footnote 27 However, the plan to help small entrepreneurs and rural residents did not work as expected. The original plan was to hold 200 anti-poverty workshops and hire 2,000 poor people. However, by the end of 2019, it had supported only 71 workshops and 1,046 low-income workers because the company's orders were unsustainable; therefore, small entrepreneurs had to seek alternative orders to survive. Many small entrepreneurs failed and quit the project after a few months.Footnote 28
The bureau head's innovative strategy to engage large high-tech enterprises in poverty reduction has attracted significant attention from high levels. His experience was promoted as a national model and was demonstrated at a nationwide conference held by the Ministry of Human Resources and Social Security and the National Office of Poverty Alleviation and Development in 2017. Consequently, the county official received several honorary titles awarded by the provincial and national governments.
Township: Betting on the Large
Township governments are responsible for implementing policies designated by the county government in their jurisdictions.Footnote 29 A large body of research has shown that townships have become hollowed out after tax and fee reforms, and they increasingly rely on county governments for resources.Footnote 30 Moreover, since counties have gained unprecedented authority in decision making and resource allocation during TPA,Footnote 31 they have more leverages to align and require towns to prioritize the core task of poverty reduction. Towns must compete with each other when applying for limited financial resources, so they divert considerable resources to develop programmes identified by their superiors. They bet on large enterprises to achieve prominent performances to impress their leaders and advance their career opportunities.
We found variations among township officials according to their development endowments.Footnote 32 Townships with endowments such as fertile farmland, exclusive landscapes and transportation convenience are more likely to attract enterprises and form a strong coalition to apply for government grants. In contrast, townships with poor endowments and few connections cannot attract large enterprises. Because their projects are unlikely to receive leaders’ attention, their partnerships with enterprises are loose, and their primary concern is to meet basic requirements while avoiding potential blame. The findings therefore add to existing knowledge that pays insufficient attention to the heterogenous performance at the township level.Footnote 33
The case of J town in G county is a typical case of “betting on the large” for cooperating with an external investor to build a modern agricultural project for poverty alleviation. Ganzhou municipality identified modern vegetable projects as its primary strategy to reduce poverty and provided preferential policies to support professional agribusiness companies in building and managing large-scale vegetable programmes. This provided a policy opportunity for J town, which had fertile and flat ground and proximity to the municipal market. In 2016, the deputy town leader of J town used this opportunity to attract an agribusiness company from Shangdong province, which had rich experience and financial capital, to establish and operate modern agricultural projects.
The town leader applied for government funding to build infrastructure including roads, irrigation and greenhouses, which paved the way for agribusiness enterprises to develop large-scale vegetable bases.Footnote 34 The development of modern agriculture requires the concentration of small land tracts from rural households, which is a daunting challenge for external investors. The town leader facilitated land transfers by commanding village officials to persuade peasants to contract their land within two months.Footnote 35 To motivate peasants, the township government set land rental at 800 yuan per mu, which was almost twice the average rental in J town. The town leader also negotiated with the county government to provide a subsidy of 500 yuan per mu to the company to cover its expenditures.Footnote 36 He also rebuilt the town bus station as a logistics transit station for free.
Moreover, the town leader devised a plan called “100–1,000–10,000” to foster cooperation between the enterprise and local peasants. It encouraged local peasants to build 100 rural cooperatives to learn advanced technologies from the enterprises. Enterprises should offer low-priced seeds and technical support to local rural cooperatives and purchase their products at a guaranteed minimum price. The cooperatives were expected to hire 1,000 peasants and increase their income by 10,000 yuan each year. To motivate cooperation, the government provided additional subsidies to enterprises when seeds were provided to local peasants.Footnote 37
Town leaders’ initiatives yielded prominent results. The enterprise invested 50 million yuan in building two large vegetable bases in J town, occupying 530,000 square metres. In 2017, the vegetable bases produced approximately 30,000 tons of vegetables that were sold nationwide and transported overseas. In addition, the company's production base created employment for approximately 250 peasants with a daily wage of 70–80 yuan.Footnote 38 Moreover, some nearby villages emulated the company by establishing rural cooperatives to develop collective vegetable bases.Footnote 39
However, the agribusiness enterprise had difficulty balancing efficiency and poverty reduction. In exchange for government assistance, the company hired more poor people than needed. According to the manager in the vegetable base, “Initially, the company employed more than 60 peasants, which was too many, causing a loss to the company. Later, we laid off the employees to around 40 to reduce production costs.”Footnote 40 This implies that in the long run, profit-seeking enterprises tend to hire capable labour, excluding senior or disabled peasants, to remain competitive in the market.
Cooperation between agribusiness enterprises and peasant cooperatives was problematic. Several rural cooperative managers stated that they lacked sufficient experience to operate a modern agricultural project and obtained little support from the enterprise.Footnote 41 They also held that the enterprise had set the purchase price too low, so they preferred selling their products at the local market.Footnote 42 Moreover, the large enterprise enjoyed government subsidies that the cooperatives could not receive, causing feelings of inequality among villagers.Footnote 43
Towns with less favourable conditions, such as N town, also attracted medium-sized agricultural enterprises to develop modern agriculture.Footnote 44 In 2014, N town leaders used preferential policies to incentivize agribusiness companies and family farms to build greenhouses and grow vegetables. However, since town officials were primarily concerned with accomplishing the task of building large-scale agricultural bases, they did not scrutinize the qualifications of these companies, which resulted in high turnover rates of agricultural operators. Taking farmland in HW village as an example, it was initially developed and managed by agricultural producers from Fujian province. When they received subsidies and left, they transferred the project to Guangdong investors, who then passed it on to Yunnan investors and then to a group of Zhejiang producers.Footnote 45 In February 2019, a couple returned from Shanghai and took over the farmland.Footnote 46 The collaboration between the town government and enterprises had limited impacts on agricultural development but caused a waste of government resources.Footnote 47 Moreover, the failure of agricultural projects has undermined villagers’ trust in the local government, who have complained about these investors and the government wasting their land only for show.Footnote 48
Heterogeneous Responses by Villages
This section illustrates how the uneven influence of upper-level governments has resulted in the heterogeneous responses of villages. During the TPA campaign, villages had some autonomy to decide which projects to apply for and report to their township and county leaders. Counties and townships would consider the conditions and significance of the villages and select a few as “models.” We found that this modelling strategy excluded the meaningful participation of villagers. However, in regions that received less attention, village officials and sent-down cadres initiated bottom-up innovation by cooperating with small- and medium-sized enterprises.
Type 1 village: absorbed by the large
The first village type received tremendous attention and resources because of its superior endowments for development and linkages with high-ranking officials. The upper-level government preferred to construct large-scale projects in these villages and absorb local actors in ambitious projects. Village players were marginalized and could not bargain with the powerful coalition between the government and large enterprises. Although these projects might have yielded impressive economic output in the short term, their sustainability was questionable due to their heavy reliance on government support.
As mentioned earlier, J town in G county had attracted large agribusinesses to develop modern vegetables, and they selected HT village as the location of the project. According to its village party secretary, town leaders required them to transfer 1,000 mu of arable land in one month and lease it to the large enterprise. After completion, the project had created employment for approximately 30 peasants who could earn 60–100 yuan per day. However, village officials felt excluded and demotivated because of this arrangement. The village party secretary complained that although village officials shouldered the primary responsibility of transferring land and resolving conflicts, they were not partners in the collaboration between the township government and large enterprises. They had no information on the details of the contract and received no benefits from the project. Moreover, village officials had limited room to develop other development plans since most of their quality land was occupied.
Some villages received tremendous attention and support because of their linkages to high-level bureaucrats in the paired assistance system. During the TPA campaign, central, provincial, municipal and county governments dispatched capable cadres to assist the most impoverished regions. These sent-down cadres were evaluated according to their performance in developing rural industry and increasing local employment, which motivated them to leverage political authority and social networks to introduce large-scale companies to establish large development projects in poor villages.
QX village in N town received substantial attention because it was paired with the county party secretary of G county. Three consecutive sent-down cadres served a tenure of five years in the village, indicating their significance to county leaders.Footnote 49 Huang, the first-party-secretary (FPS, diyi shuji 第一书记), also the deputy head of the bureau of employment, came to QX village in 2015. In 2017, he persuaded a businessman to invest in QX village with preferential policies provided by his department. In exchange, the businessman built a company to grow mushrooms and provided employment opportunities for local villagers. However, because village officials and villagers were excluded from the negotiation process, they harboured a grudge towards this project and used “weapons of the weak” to undermine it. Seeing the company hardening its arable land to construct factories, the villagers initiated protests and launched a petition. It was not until the company hired the son of the village party secretary that village officials took action to pacify the peasants.Footnote 50
Type 2 village: taking a balanced approach
The second type of village had some endowments for development but had not been designated as a model of development. Motivated village officials initiated original development projects and mobilized available resources to attract enterprises to develop their villages. They often benefited from village solidarity in mobilizing manpower and resources from villagers.Footnote 51 In addition, they were enthusiastic about pilot programmes that could attract the attention of their leaders to apply for more projects and resources. However, once they became reliant on government and business investments, they might have been absorbed by large companies. Consequently, village officials should have balanced the interests of villages, governments and enterprises to ensure sustainable development.
In S county, the development of tourism in D town created opportunities for YH village to start a new industry. YH village is two kilometres from the newly built sailing base; therefore, the village party secretary decided to develop a rural tourism project. He took village officials to visit a few local enterprises to find appropriate investors.Footnote 52 They decided to cooperate with two entrepreneurs: Mrs Hu, a local entrepreneur growing fruit and also a member of the county's CPPCC; and Mr Zou, an entrepreneur specializing in vegetables, who was introduced by a former municipal leader from Anhui province.
The village party secretary utilized a variety of indigenous resources to develop agricultural industries. He mobilized villagers to transfer their land to develop the collective project, saying that “and because of our routine work, villagers have a collective sense of honour. They did not ask us to pay, even if we had used their land to pave roads.”Footnote 53 Additionally, he planned to advertise his strategies to township and county officials and persuade them to invest in the projects. He also took advantage of the lineage network by selling his ideas to a villager serving as party secretary in the political and legal affairs committee of Zhanggong district, Ganzhou municipality.
According to one entrepreneur, government support is vital for bottom-up initiatives. Mrs Hu stated that strict government rules hindered their projects. Owing to the central government's strict control of arable land for food security, arable land should only be used to grow food crops rather than cash crops (including fruits) in the strict sense. In addition, there is a ban on using arable land for construction; thus, investors in YH cannot harden roads or build a pavilion for tourists to rest. Mrs Hu underscored the government intervention and supported the success of the village projects. “We would not invest in the project if the government did not intervene. It was the role of government to construct buildings like pavilions. We can report our ideas to township government or use my rights as a CPPCC member to submit a proposal. We will start a trial programme to prove our capacity before we apply projects from the government.”Footnote 54
The village party secretary put forward his idea about the collaboration with enterprises: “My ideal was that our village must take 15 per cent shares from this project. Our village has provided land and other resources, and village officials took care of the social stability, environment maintenance and infrastructure building etc. I held meetings among village officials many times, asking them to develop the idea of ‘collective.’ The village must take the initiative even after the industry has grown up.”Footnote 55 He stressed that taking the initiative could ensure that the villagers had a fair benefit from the project. Otherwise, villagers will have limited benefits if they lease only their land and buildings to enterprises.
Type 3 village: cultivating the small
Many villages had neither prime resources nor political linkages to develop large-scale projects, so village officials and sent-down cadres concentrated on cultivating small businesses there.Footnote 56 They could not attract large enterprises to invest in the villages. Instead, they mobilized local businessmen who utilized existing industries and indigenous resources to operate micro-, small- or medium-sized businesses to reduce poverty. Village officials often used moral standing to persuade local entrepreneurs to participate in poverty relief.Footnote 57 Local entrepreneurs participated in poverty-reduction projects out of concern for material profits, social responsibilities and affective attachments to their home towns. In addition, since grassroots officials had intensive face-to-face interactions with poor households, they encouraged the latter to take advantage of the available resources to become entrepreneurs.
Village officials used informal social ties and communal trust to obtain credit and facilitate investments. They possessed rich local knowledge, which was a valuable asset for entrepreneurial development. Their knowledge of local soils, farmland quality, the local climate and local markets helped agricultural enterprises plan their production. Sent-down cadres used their knowledge and professions to help villages and households take full advantage of government policies to benefit themselves, such as applying for government subsidies, acquiring training opportunities and collecting market information to facilitate small businesses. These projects had a direct impact on local residents; however, their development was hindered by a lack of resources.
In MT village, S county, grassroots officials included village officials and the FPS from the county bureau of finance.Footnote 58 They invited an entrepreneur, the owner of a farmhouse restaurant in MT village, to promote countryside tourism and e-commerce to reduce poverty. Grassroots officials acted as brokers between local entrepreneurs and villagers. On the one hand, they advised the local entrepreneur to purchase fresh agricultural products such as vegetables, poultry, oil, homemade food and firewood from local peasants for her restaurant.Footnote 59 On the other hand, they persuaded villagers to trust the entrepreneur to supply products to their businesses.Footnote 60 They passed on the restaurant's needs to the peasants to help them arrange farming activities. Upon the request of the restaurant, the peasants delivered fresh products to the restaurant at 9 a.m. the next day and received payments immediately.
With the assistance of grassroots cadres, the project matured and incorporated approximately 30 low-income peasants by the end of 2019. Peasants earned 10–100 yuan for each transaction. A small number of transactions led to a non-trivial outcome. In 2019, the restaurant paid 230,000 yuan to poor households that supplied agricultural products, of which 24 earned more than 5,000 yuan through the project. Some earned as much as 1,000 yuan each month by selling vegetables to the restaurant.Footnote 61 The local entrepreneur managed an e-commerce platform to market peasants’ fresh yields and homemade food. She demonstrated the peasants’ products online and delivered or mailed them to consumers.Footnote 62 In addition, the FPS approached official media and utilized social media to publicize the enterprise.
However, the local entrepreneur's business expansion was hindered by a lack of government investment. According to her, e-commerce projects require the local government to provide a logistics centre to decrease transportation costs.Footnote 63 Grassroots officials barely had political influence on the county government's decision making to solve these problems. The local entrepreneur found the online business to be too energy-consuming and costly, so she paused the project at the end of 2019.
In addition to partnering with mature entrepreneurs, the government encouraged rural residents such as migrant returnees, retired soldiers, college graduates and poor residents to become entrepreneurs. In another case, grassroots cadres in Y town, S county, decided to cultivate poor entrepreneurs and establish small workshops. Y town was a populated and convenient region where many local people have established plants and workshops for electronic device assembly and garment processing. Local entrepreneurs have formed dense social networks to communicate and collaborate to acquire and share orders and make profits. Many rural residents have already acquired manufacturing experience from working in these workshops. Under these advantageous conditions, grassroots officials decided to motivate the poor to start microbusinesses to escape poverty.
One typical example of poor entrepreneurship was a manufacturing workshop in LG village, Y town. Through daily interactions, the sent-down bureaucrat from the bureau of commerce and the FPS in LG village noticed a poor villager's interest in starting a small business to produce electronic devices.Footnote 64 The bureaucrat and village officials therefore assisted him in applying for a subsidized loan of 80,000 yuan from the county government and setting up a workshop in his own house. Additionally, grassroots officials helped the poor entrepreneur take production orders from county enterprises to start his business.Footnote 65 After a few months, the poor entrepreneur made some profit and upgraded his production equipment to take on higher value orders. His workshop hired ten employees, mostly middle-aged rural housewives, to manufacture electronic devices on a flexible basis. In 2019, a rural employee at the workshop earned an average of 30,000 yuan.Footnote 66
Another example was a project managed by a female entrepreneur in XY village. The entrepreneur managed a private kindergarten that provided preschool education to village children. The project failed in 2015 due to a shortage of financial support. In 2018, she turned her attention to building a small workshop to create employment opportunities for villagers, especially women staying at home.Footnote 67 Village officials and the FPS identified this opportunity and supported her by offering her an unused village committee building as a worksite. In addition, the FPS used his connections with private enterprises to obtain more orders. Initially, she hired around ten women to work on-site, but soon found that the working mode was not suitable for those who had to take care of their families. Hence, she distributed semi-processed products to those women so they could work at home.Footnote 68
Her micro-workshop provided valuable opportunities for rural housewives in XY village. One interviewed woman maintained that manufacturing electronic devices at home was an appropriate means of making money that allowed her to balance the needs of caring for her family and attending to agricultural work.Footnote 69 Their monthly wages ranged from a few hundred to several thousand yuan, depending on the amount of free time they had to manufacture products.Footnote 70 However, because work was flexible, employees could not accomplish it within the required time. Hence, managers could not take urgent orders. In addition, because employees preferred to work from home, it was difficult to upgrade the manufacturing equipment for more complicated products with a higher piece rate. Work flexibility resulted in a low return for employees. At the end of 2019, three out of the ten employees were unwilling to continue their work in this micro-workshop. The unsustainability and shortage of labour became a major concern for the entrepreneur.Footnote 71
Pros and Cons of Different Anti-Poverty Strategies
At the county and township levels, elite bureaucrats’ anti-poverty strategies had the advantage of stimulating the local economy and creating job opportunities. Partnerships with large-scale enterprises could mobilize massive resources to build modern factories and agricultural bases. These projects boosted industrial and agricultural productivity through economies of scale and advanced technologies, and they stimulated the development of small and micro-entrepreneurship to some degree. For instance, industrial factories outsourced production to village entrepreneurs to increase rural employment. In modern agriculture, the enterprise provided quality seeds to local farmers, imparted experience in agribusiness and purchased products at a guaranteed price. In addition, large enterprises provided employees with more stable jobs, higher wages, security plans and welfare benefits. Enterprises could also offer training programmes to improve employees’ skills and advance their career development.
Despite these advantages, there was a negative side of “betting on the large” for poverty reduction. Large enterprises were more likely to benefit the well-off than vulnerable and marginalized groups. In terms of geographical distribution, investors built large factories or agribusiness bases in convenient regions to access more skilled labour, natural resources and large markets. Thus, residents in remote and less-populated villages hardly benefited from these large-scale businesses. In addition, large enterprises hired competitive labour to maximize their efficiency and excluded the elderly, illiterate, disabled and rural women who did not fit into the rigid work schedule.
Although elite bureaucrats attempted to link large-scale enterprises and local economies, their top-down strategies had some limitations. In the first case we looked at (S county), high-tech companies’ orders were limited and concentrated within a few months of the year, which was insufficient for the micro-workshops to survive. To remain open, they had to acquire more orders from other sources. In the second case (J town, G county), the town leader's plan to link agribusiness and rural cooperatives failed to achieve its expected outcomes. Villagers complained about the lack of assistance from the company and criticized its power to set very low purchase prices to exploit peasants.
The findings also question the efficiency of elite bureaucrats’ market intervention. In the first case, S county provided 10 billion yuan in loans to the photoelectronic company to create more orders than those required by the market to support anti-poverty workshops in 2019.Footnote 72 Undoubtedly, these products had a poor market, resulting in a waste of resources. In the second case (J town, G county), the vegetable base hired more poor people than required, resulting in a loss of efficiency.Footnote 73 Enterprises could not refuse governmental requests, as they needed to maintain good relationships with elite bureaucrats to acquire support.Footnote 74
In comparison, grassroots officials had rich local knowledge and adopted pragmatic measures to reduce poverty. Rather than resorting to external assistance, they fostered cooperation between local businesses and poor households to improve peasants’ livelihoods, as the cases of MT, LG and XY villages (S county) show. However, grassroots strategies have several limitations. Unlike well-established companies, the micro- and small-enterprises only offered informal jobs and no security plans. This discouraged villagers from developing long-term career plans and frustrated entrepreneurs who needed stable labour. Moreover, they were also vulnerable to market fluctuations. Our investigation shows that the US–China trade war led to the closure of many workshops that processed garments and electronic devices for export.Footnote 75 Additionally, the development of small enterprises requires basic infrastructure and a friendly business environment. However, most grassroots officials were constrained in their ability to provide sufficient support and improve the environment for enterprises to prosper.
In addition, there were few ambitious village officials wishing to upgrade their development projects to attract leaders’ attention. For instance, in HB village, J town, the former village party secretary started transferring land from peasants in 2014 and had amassed around 2,000 mu of arable land in 2017. The concentration of land attracted the attention of the county party secretary, who decided to build HB village as a demonstration point for modern vegetable industries, as prioritized by the municipal government. Preferential policies in HB attracted large agribusiness companies, several medium-sized companies and family farms to establish their projects. The remaining 200 mu of land was of suboptimal quality. Therefore, the village established a rural cooperative to farm the remaining land, develop a collective economy and improve local employment. However, village officials lacked the required energy and expertise to manage cooperatives. In 2020, township officials took over the rural cooperative, excluding villages from benefiting from the yields. This case illustrates that upgrading small projects blindly can overwhelm the capacity of grassroots officials to respond flexibly to local problems.Footnote 76
Furthermore, there were problems with high-level officials imposing large development projects upon these villages. Most poverty-stricken villages lacked the essential conditions, such as markets, labour and convenient transportation, to develop large-scale businesses. Although the county government and sent-down leaders could use their authority and networks to order products from these villages, the businesses were uncompetitive in the market and could fail quickly after the withdrawal of external assistance.
Conclusion
This study unpacks the multilevel politics of China to understand how Chinese local actors engaged in business to alleviate rural poverty. This study analysed how county, township and village officials with varying responsibilities and capacities collaborated with enterprises and their impact on the local economy and poverty reduction. At the county and township levels, elite bureaucrats tended to adopt growth-oriented strategies to alleviate poverty. They bet on large enterprises to achieve prominent performance. The “betting on the large” strategy created a coalition between government and large enterprise, excluding the participation of village players. In other villages, village officials and sent-down cadres exploited indigenous endowments and resources to initiate small- or medium-sized projects in partnership with enterprises.
This study illuminates the complex and relational process of poverty reduction in China. While some might perceive China's anti-poverty campaign as a top-down and linear process, our findings show that poverty reduction relies on the co-production of multiple levels of authority and numerous non-government players. This study also shows that local officials at different levels and those at the same level did not respond to institutional settings and performance evaluations uniformly and simultaneously. Instead, the combined impact of formal institutions, local endowments and informal networks conditioned the strategies for poverty reduction. Moreover, through our detailed analysis of the impacts of different strategies, we argue that there is no simple remark on China's success or failure in reducing poverty. Instead, we advocate for a nuanced framework to assess anti-poverty strategies that target different levels and their impacts on different social groups.
This study contributes to a micro-perspective to understanding government–business interactions at the local level. While earlier studies have analysed government–business collaboration from the enterprises’ perspective, the roles played by local government actors in structuring such collaboration have not been adequately examined. This study shows that policy officials from different levels have various responsibilities and capacities, shaping their interactions with businesses. In particular, it provides insights into the strategies of village officials that have not been fully explored in the existing literature.
This study also illuminates the process of local adaptation and innovation in the state-led campaign to end poverty. Although many studies have asserted that the top-level design has decreased local experimentation and innovation, recent studies have shown that local governments have engaged in experimentation under the centre's pressure for innovation.Footnote 77 Our findings support the latter argument by showing how local governments improvised innovative projects in response to the centre's prioritized poverty reduction goals. As poverty reduction has become a core task for all departments, it provides a cover for local governments to integrate various policies and mobilize resources to support entrepreneurial projects.Footnote 78
Nevertheless, we acknowledge some limitations of this study. Given the huge diversity of China's poor counties, a case study based on two counties in Jiangxi province may not represent all regions in China, although we attempted to enrich our findings by drawing from diverse villages within the two counties. Future studies should expand the scope of this research to identify more counties to verify our findings. Additionally, although the lead author visited the two counties twice, we did not track their anti-poverty performance after the campaign. Longitudinal investigations can help us assess the sustainability of anti-poverty projects and observe the changes in local governance undergoing the transition from political campaigns to routine times.
Acknowledgements
This research was funded by the National Social Science Foundation of China, grant number 22AZD050, National Natural Science Foundation of China, grant number 71721002, China Postdoctoral Science Foundation, grant number 2023M731903, and Tsinghua University Initiative Scientific Research Program, grant number 2021TSG08204. We thank Professor Jie Gao, John A. Donaldson, Yupeng He, Ian Chong, Jiwei Qian, Liang Ma and M. Shamsul Haque for their valuable comments.
Competing interests
None.
Lu LIU is a postdoctoral fellow in the School of Public Policy and Management and China Institute for Rural Studies at Tsinghua University of China. Her research interests lie in poverty and inequality, local governance, rural studies and street-level bureaucrats. Her recent work on poverty reduction in China has been published in Administration & Society and Journal of Chinese Political Science.
Yahua WANG is a professor and associate dean of the School of Public Policy and Management and the executive president of China Institute for Rural Studies at Tsinghua University of China. He is also the editor-in-chief of World Development Sustainability. His area of research includes rural studies, environmental and natural resources management, institutional analysis and public policy. His recent works have been published in World Development, Ecology and Society, International Journal of the Commons, Land Use Policy, Journal of Environmental Management and Journal of Rural Studies.
