Empirical Study On The Influence Of The Rural Fixed-asset Investment On Income Of Farmers

Ever since the reform and opening up in China, the “Sannong” issues (the issues ofagriculture, rural areas and farmers) have become an important aspect of buildingsocialism with Chinese characteristics and the well-off society. Solving the “Sannong”issues is to resolve the issues of increasing farmers’ income, quickening agriculturalgrowth and strengthening rural stability, with the fisrt one as the core. Attaching greatimportantce to the development of agriculture, rural areas and farmers, the CPC CentralCommittee, for nine consecutive years, issued Document No.1concerning the“Sannong” issues from2004to2012. The content of the document involves numerousfields such as capital investment, improving the environment of rural areas and so onwhile putting forward the idea that it is not only necessary to increase the total amountof funds used to resolve the the “Sannong” issues, but also to improve the proportion ofthe funds.Based on the study and research of the existing literature at home and abroad, thispaper makes a descriptive analysis of and a regional comparison between fixed assetinvestment and the total amount and structure of residents’ income in rural areas fromboth the national level and the regional level; More than that, on the basis of theempirical test on the relationship between the various sources of funding of fixed assetinvestment in rural areas and net per capita income of farmers from the national and theregional level respectively by using the established panel data model, the followingbasic conclusions are gained:①From1995to2010, the total investment in fixed assets in China’s rural areas hasincreased year by year, but since1997, the the proportion of rural fixed asset investmentin the total fixed asset investment of the whole country has shown a downward trend,which indicates that the phenomenon of non-rural fixed asset investment is becomingmore and more obvious.②The regional self-raised funds is the main source of rural fixed asset investment,followed by the other funds, national capital in budget, domestic loans and overseasinvestment. But among different regions, there exist significant differences in terms ofthe total amount and the structure of rural fixed asset investment: in the eastern region,the proportion of domestic loans as the source of rural fixed asset investment is higherthan that of state budgetary appropriation, and financial support for rural fixed asset investment is greater than that in the central and western regions, where state budgetaryappropriation accounts for a larger percentage than domestic loans as the fixed assetinvestment source in rural areas.③There is also a comparatively big difference between different regions when itcomes to net per capita income of residents in rural areas. The net per capita incomelevel of residents in the east is much higher than the average level in China, the level inthe central area is close to the national average, and the level in the western regions isfar behind it. Within each region, the wages of farmers are growing continually, but inthe east wages of farmers have replaced the agriculture-related income as the dominantincome source in their families while families in the middle and west still mainlydepend on the operational income to live their life.④In the whole country and within each region, the net per capita income of ruralresidents is most heavily affected by self-raised funds, followed by other funds, statebudgetary funds and domestic loans and foreign capital; the fund sources of rural fixedasset investment play the most significant role in the net per capita income of ruralresidents.⑤In order to increase the influence of fixed asset investment in rural areas onfarmers’ income, the cooperation between and support of the government, the market,farmers and finance and the mobilized enthusiasm for investment from all aspects arethe musts. It is true that the total fixed asset investment in rural areas and the proportionof rural fixed asset investment in the fixed asset investment in the whole society shouldbe increased, but the need to improve urban and rural structure, regional structure,capital source structure and the performance of fixed asset investment in rural regionsshould never be neglected.