Rapid development of China's rural industry since 1980s has a massive ripple effect on rural China. However, recent rural industrial development in China has received little scholarly attention. The study aims to investigate the development process and spatial differences of China's rural industry as well as its driving forces.
The study is based on the panel data constituting 30 provinces of China during 1984–2011. The factor analysis is used to identify the most significant factors affecting the growth of China's rural industry. The multiple regression analysis is applied to distinguish the driving forces affecting spatiotemporal variations in China's rural industry.
China's rural industry developed rapidly at an average rate of 26% per year during the period 1984–2011. The period 1990–2011 was characterized by remarkable increased spatial disparities in China's rural industrial development. Specifically, such development was markedly better in the east coast areas than in the inland areas in the west. Five driving forces of rural industrial development were recognized representing regional economic fundamentals of market, industry foundation, transportation, communication and degree of opening-up.
This paper explores the trajectory of the development of China's rural industry and the related regional economic factors. It suggests that the development of rural enterprises across the regions should be valued by Chinese government as a driving force for reducing regional disparities and future rural revitalization.
