The Chinese government has encouraged social capital to invest in agriculture and rural areas in an effort to promote rural revitalization, according to the recently released “No. 1 Document”. This change in language from “strengthen the supervision” in the 2023 document to “encouragement” in this year’s document signals a positive affirmation of the role of social capital in agriculture.
The 2023 “No. 1 Document” had proposed to “strengthen the supervision of the entire process of the introduction, use, and withdrawal of capital to the countryside” and “leverage financial and social capital to invest more in agriculture and rural areas in accordance with market-oriented principles”. However, the 2022 document is expressed in the word “encouragement”.
Hu Bingbing, director of the Agricultural Products Trade and Policy Research Office of the Institute of Rural Development, Chinese Academy of Social Sciences, highlighted the significance of the change, stating that “encourage” is a positive and positive statement that affirms the role of social capital in agriculture.
In line with the government’s encouragement, many provinces and cities have instituted policies to incentivize capital to invest in the countryside. For example, Qingdao City recently issued fiscal rewards and subsidy policies to support industrial and commercial capital investment in agriculture and rural areas, while Zhejiang Province is offering significant rewards to encourage all types of capital to invest in key agricultural and rural areas.
The increased focus on social capital investment in agriculture and rural areas comes as the Chinese government aims to advance its agricultural modernization and rural revitalization strategies. However, challenges such as long investment return cycles and relatively high risks still exist.
To address these challenges and further promote rural revitalization, experts believe that future efforts should include policy support and the introduction of more incentives, infrastructure improvement, financial service innovation, promoting scientific and technological innovation, talent training and introduction, strengthening policy support, guiding and encouraging more social capital to enter the agricultural and rural fields, and innovating financing methods.