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OO RUEHCN RUEHGH RUEHVC
DE RUEHGZ #0954/01 2720739
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O 290739Z SEP 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4194
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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 
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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. 
 
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