China’s Ur-reform: Farming and Village Life

China’s reform and opening-up period started with agricultural reforms, that solved the hunger problem and encouraged entrepreneurship in rural areas. By moving to a “land to the tiller” policy, individual incentives were restored boosting agricultural production. China has a long history of rural families combining farming with some kind of small business. Beginning in the late 1980s, China’s rural areas moved toward this traditional economic model. Rural areas and small towns will be important contributors to future entrepreneurial dynamism and to overall aggregate demand.