Anhui's Xiaogang village establishes China's first village-level rural vitalization fund by Ye Kai, February 24, 2023
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Li Jinzhu, first secretary of Xiaogang village, Fengyang county, Chuzhou city, Anhui province, was busy preparing materials necessary to register a new rural vitalization platform company that the hamlet was in the process of launching. Xiaogang signed an agreement on the establishment of a rural vitalization fund – its latest initiative related to promoting reform and accelerating rural vitalization and the first fund of its type to be deployed at the village level in China – with Chunguangli Capital Group at the 13th China Anhui Famous High-Quality Agricultural Products and Agricultural Industrialization Trade Fair in September.

The fund is used to invest in competitive growth enterprises that are likely to improve supply chains and industrial chains as well as the promotion and application of emerging technologies, establishment of new sales channels, development of new brands, and realization of new business scenarios in Anhui's rural areas. Its 1 billion-yuan (US$156.9 million) first phase is financed by governmental investment platforms ran by Fengyang, Chuzhou, and Anhui in addition to Xiaogang and Chunguangli Capital Group. The agreement that was signed stipulated that Xiaogang and Chunguangli Capital Group would found the Xiaogang-Chunguang Rural Vitalization Company and that it would be tasked with constructing the Xiaogang intangible cultural heritage specialty food block, the Xiaogang Huiwei e-commerce platform, and a rural vitalization institute and implementing other rural vitalization projects.

Important tools for promoting rural financial reform, rural vitalization funds were mentioned in China's State Council's No.1 Central Document, which is a report that outlines major policies for the year.

"Rural vitalization funds represent a major innovation in development thinking,” Li stated recently."We always preferred to rely on government investment and policy support when we were developing industries in the past. Now we need to learn to use the logic of the market and the power of capital.”

The first secretary mentioned that Xiaogang's fund is stimulating industrial development and noted that the people who are involved play demonstration and leadership roles with regard to reform and development related to "agriculture, rural areas and farmers” in Anhui.

Xiaogang has been creating a rural vitalization model that entails using rural vitalization funds and platform companies to leverage modern agriculture, e-commerce, dining, culture and tourism, food manufacturing, and other resource in China and abroad in order to develop industrial chains while pursuing an integrated framework involving modern "scaled farmland management, organizational management, advanced technology, market-oriented operations, and socialized services”developed by Anhui.

Known as the birthplace of rural reform in China, Xiaogang inaugurated a land contracting system that allows individual households to utilize land according to their wishes rather than in conjunction with a government-owned commune-based system that proved to be disincentivizing at the dawn of the nation's reform and opening up in 1978 and has continued to break new ground ever since. In recent years, it implemented a collective asset management system that enables its residents to receive shares in a cooperative in exchange for pooling their land together in order to increase profits, scale and efficiency. Shareholders are issued dividends that allow them to enjoy the fruits of the collective economic development that is occurring in the village and receive other benefits.