Changing Lifestyles : Rural Entrepreneurs: Chinese Success Story : While urban economies remain half-reformed, business is booming for many out in the country.


Four years ago, Ma Zhongbao sold his flock of 20 sheep, borrowed some additional money from friends, and bought seed-pressing machinery to set up a vegetable oil workshop.

Today Ma considers himself, if not exactly rich, at least comfortably prosperous. His family owns a tractor and in the past year has purchased both a color television set and a videocassette recorder.

Ma brings in about $850 a year from pressing oil out of huma seeds--similar to sesame--for the people of his village and half a dozen neighboring hamlets. His son earns almost that much using the tractor, purchased with profits from the vegetable oil operation, to deliver stones to a railway construction site.

Ma is one of a new breed of rural entrepreneurs emerging as part of the market-oriented reforms launched by China over the last 12 years.

China's urban economy, especially large state-owned industries, remains only half-reformed, with government restrictions and central planning limiting the free working of market forces and profit incentives.

But the much freer commercial and industrial economy of the countryside, encompassing everything from one-man village workshops like Ma's to small-scale industry run by town governments, is booming.

During the first half of this year, village and town enterprises, which may be either privately owned or run by local governments, produced $71 billion worth of goods, an increase of 27% over the same period of last year, according to official statistics.

Rural industry, most advanced in China's eastern and southern coastal provinces, transformed rural life in those regions during the late 1980s. Town and village factories in provinces such as Guangdong, adjacent to Hong Kong, have become major exporters of goods such as clothing and toys.

The same trend toward market-oriented enterprise is now seeping even into isolated areas of China's interior, such as Ma's village in north-central China's Ningxia Hui Autonomous Region.

Ma's family provides some insight into the social changes that go along with the new wealth.

A member of the Muslim Hui minority, Ma has a hearty laugh, a long, gray goatee and a simple white cap that marks his faith. His labor is revealed in his clothes: black trousers, black cloth shoes and a torn white shirt streaked with huma oil.

"My son doesn't help in the oil-processing plant," Ma said with a laugh, half-complaining and half-proud. "He's afraid of getting dirty with the oil."

Driving a tractor is a more prestigious job than pressing oil, and Ma seemed satisfied with his son's upward mobility. Taking visitors on a tour of the eight-room family residence, the room for the son and his wife was clearly the showcase. Clean and bright, the room sported not only the television and VCR, but also a radio and stereo tape deck and an electric clock.

Ma then led visitors to what he described as his wife's room. It was also spotlessly clean, and had a wooden dresser, a sewing machine and an electric humidifier. Finally, he showed visitors his own room, noticeably darker, dirtier and furnished with only a bed and dresser.

A local government official along for the tour later offered his explanation for the family living arrangements. The rest of the family, he suggested, didn't want Ma, with his oily clothes from the workshop, getting everything dirty in their rooms.

Whatever the explanation, Ma didn't seem to mind. He knew that in the dusty countryside of Ningxia, where per capita annual income averages $75, his oil-processing shop makes him a man of means. In China, even college graduates with city jobs seldom earn more than a few hundred dollars a year. And opportunities like this have existed for peasants only in recent years.

During the days of Chairman Mao Tse-tung, people faced the prospect of severe penalties should they dare to engage in private enterprise such as Ma's little workshop. Under Mao's theory that all activity should be collective, such businesses were condemned as the remnants of capitalist exploitation. During the 1966-1976 Cultural Revolution, anyone accused of such selfishness faced the prospect of public criticism, beatings at mass "struggle sessions," or imprisonment.

Jealousy and a sense that income should be shared equally are still not uncommon emotions in China, even as the country moves toward greater income differentials and increased freedom of opportunity.

A college-educated official from Tongxin, the nearest city to Ma's village, clearly felt a twinge of envy when he heard Ma describe how profitable his workshop, set up for an initial investment of about $1,500, has now become.

"Have to cut off the capitalist tail," the young city man commented, teasing Ma with the discredited rhetoric of the Cultural Revolution.

Ma guffawed.

"That era is already gone," he replied.

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