THIS chapter focuses on (1) the role of returned migrant entrepreneurs in promoting social and economic change in their home communities and (2) their contributions to the modernization goals of the central and local state. Local states in Xinfeng and Yudu try to harness the resources generated through return migration and direct them toward wider development strategies sanctioned by the central state – for example, the construction of rural industries and towns, the absorption of surplus rural labor, and the expansion of commodity markets. Returnees use their urban experiences and resources to engage with the local state in ways that improve the local policy environment and the local infrastructure, thereby making the native community more conducive to the pursuit of entrepreneurial goals. In this way, returned migrants struggle against local-level obstacles that prevent them from prospering through self-employment while contributing to broader development objectives.

The following discussion contributes a rural perspective to a growing body of literature on internal mobility as the new element in state and society relations in post-Mao China. It examines the dynamic role of returned entrepreneurs in injecting investment into the local economy; broadening the political criterion determining eligibility for loans; lobbying for changes to local tax policies and contesting the official “squeeze” on businesses; increasing local opportunities for rural livelihood diversification; integrating poorer rural areas into the national market economy; reforming business management practices; and building rural towns. Each of these contributions is examined in turn.