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Through collective enterprises, villagers grow rich


DAQUIZHUANG, China -- A slogan on a wall along the rutted road to this small North China village exhorts everyone to take "economic construction as the center." The message is hardly necessary here.

Daquizhuang, once one of the poorest places in these parts, is now one of the richest villages in all China. It is rural China's equivalent of paradise.

The village's 4,400 full-time residents enjoy per capita incomes more than five times China's average of about $330 a year. They receive free housing, utilities, medical care and education to boot.

All but a few hundred of Daquizhuang's residents live in new, spacious, brick apartments and duplexes with central heating, air conditioning, carpeting and modern appliances.

The village's top 100 families occupy huge $50,000 villas that much more resemble U.S. suburban housing than that typically found in the Chinese countryside. They ride around in the village's fleet of 180 imported cars, including more than a dozen Mercedes and one brand-new black Cadillac.

Daquizhuang provides for all this with the profits from its 226 small, low-tech factories, manned by about 7,000 contract workers from all over China. Last year these workshops turned out products valued at more than $300 million.

Industrial profits also have bought 200 machines that enable eight villagers to farm all Daquizhuang's 3 square miles of cropland. Farming here, just 15 years ago a subsistence exercise requiring the labor of 1,200 villagers, is now an agribusiness.

Lately, Daquizhuang's achievements have been held up by the Chinese press as a model for the future of rural China as it rushes into industrialization. Daquizhuang's top leader, Yu Zuomin -- head of the village's Communist Party committee and its enterprises -- is treated as a prophet of economic reform.

But Daquizhuang attained its riches by directly bucking China's agricultural reforms of the 1980s: The community's leaders, who today manage its enterprises, refused to dismantle its collective and contract out land to individual farmers.

Instead, with the end of the Cultural Revolution in the late 1970s and the demise of the notion that industries were subversively capitalist, Daquizhuang hand-built a small steel mill. By 1982, it had four factories -- which have grown into four conglomerates, owned collectively.

Daquizhuang's leaders say their village was so backward in the late 1970s that it had no choice but to stick with the collective system.

Close to the sea, the village's land was heavily salinized, which could only be corrected with a huge investment. So, while most of rural China embraced what is now called "the household responsibility system," Daquizhuang's leaders foresaw that individual farming only meant continued poverty.

"We needed capital to invest in the land and to mechanize farming," says Li Feng Zhuang, vice general manager of Daquizhuang's enterprises and vice party secretary. "The only way to get that capital was in industry, and the only way to industrialize was through the collective."

L Daquizhuang's rags-to-riches tale has some noticeable flaws.

Doctors here talk of a rise in stress-related diseases. Street posters attest to rising crime. Nearby canals run red with industrial pollution. The village's 7,000 contract laborers and as many as 10,000 seasonal construction workers don't enjoy benefits equal to the residents.

And the village has not dealt with the sticky question of ownership rights. If residents leave, they cannot withdraw their individual equity.

But Daquizhuang's leaders do not plan to stop expanding. In the past year, they signed contracts with 23 foreign companies to invest $120 million to turn its domestic-oriented industries into high-tech exporters.

In the meantime, Daquizhuang's leaders take a good deal of satisfaction from their accomplishments.

They recently were paid a visit by the leaders of a nearby village, a place that was held up to Daquizhuang as a politically correct model during the Cultural Revolution of the 1960s and 1970s. Now, that village is so impoverished that it is a half-year behind in paying its factory workers.

Daquizhuang graciously lent its fallen neighbor $11,000.

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