Rural industrialization is a classic field of inquiry. Historically, the development of industry in rural China has not been smooth. The process of industrialization is long and complicated, weaving through four stages from household handicrafts, communal cooperatives, township enterprises, to private firms. Among which, the industrialization represented by township enterprises, as a new economic force, is rooted in the countryside, but faces a completely different rural social environment from the city, thus forming a micro urban-rural relationship and institutional conditions that are distinctively unique.

This study views the rural community as a window for micro-observation and proposes some grass-roots perspectives different from the previous macro ones. The central question of concern is: Why, against the background of national macro institutional change, did industrialization only take root and flourish in some towns and villages in some regions under the same institutional arrangement and environment? As a new economic power, how do enterprises interact and integrate with traditional rural powers, and how do they generate a variety of new dynamics, rules, methods, and relations, to promote the emergence and development of industry?

The micro dynamics behind the scenes are precisely what we need to understand the logic of rural daily industrial life. It must be noted that this is not just a simple dialectical problem of external causes acting in response to internal causes, but a problem of mutual adaptation, reconstruction, and integration of macro and micro, internal and external factors. Before we delve into these issues, two core concepts of “village relations” and “adaptation” should be expounded for clarification.

‘Village relations’ vs ‘adaptation’

The concept of “adaptation” is transformed from the economic concept of “matching,” which refers to the adaptive changes of two elements or forces in the interaction. It mainly focuses on the tension and mutual integration between industrial management and extant village relations. The relationship between industry and the countryside cannot be reduced to a matter of geographical association, as it represents a much closer combination with rural social resources.

Village relations, network, or xiangyuan in Chinese, are social resources that can be tapped and utilized. Its static structure refers to rural social relations. From a dynamic point of view, village relations are the reason, origin, and condition of the relationship between industry and the countryside. On the one hand, the industrial system taps into rural resources. On the other hand, it is the process of rural networks responding to the industrial system. Therefore, village relations contain three interrelated connotations which create a compounded social relationship structure, institutional mechanism, and action strategy. From the perspective of social relations, the static structure of traditional rural relationships is slightly complicated, mainly composed of kinship, geographical relationships, and business relationships.

The adaptive interactions between village networks and industry has a great tension, which is not necessarily better when closer, nor does it always have a positive correlation. In practice, there must be an adaptive balance between the two. Once the balance is broken, village relations may be discarded or even split, resulting in different adaptation types.

There are at least four typical types observed from our case studies. These adaptation types show that the interaction between the village network and industry is dynamic. Overall, when the adaptive relationship between industry and village networks is close, it is easy to integrate industry into the rural society, and it takes root. In contrast, when the relationship is estranged, industry struggles to survive and is sometimes forced to exit.

This article will describe and compare several examples of different industrial (or non-agricultural) practices in villages. These villages were chosen because they were in the process of rural industrialization in the same region at the same time, and the institutional environment and village cultures they faced were basically the same, which makes them comparable. The industrial types in these four villages are all processing industries that are easy to operate in a rural setting. However, due to the differences in adaptation and interaction, different results are produced.

Taking root

Xing Village (all village names are altered to protect privacy) is a typical village that takes the initiative to embrace industry. In Xing Village, industries are rooted in communities, and its form of business is fairly compatible with the farming culture where agriculture and industry complement each other. The industrial system is deeply influenced by the tradition of local collectives and village consultation mechanisms. Institutional entrepreneurs become the intermediaries linking industry with villages, and villages with local society.

When the village network becomes the support for industrial planning and development, it also means that the industrial gains should pay for the community goal of village construction and villagers’ welfare. It is in this process of continuous adaptation of “integration of village and enterprise, complementation of agriculture and industry” that Xing Village has helped industries take root in the countryside. However, whether this “root” can survive for a long period of time will be subject to the dual constraints of the macro institutional arrangement and micro rural environment.

Parallel relations

Tang Village and Xing Village fall under the jurisdiction of the same county-level city. Under the same institutional environment of local policies and village culture, Tang Village shared a similar experience with Xing Village in the early industrialization stage, and they both had the difficult experience of inviting industry into the village via the collective system. However, the relationship between enterprises and the village community at Tang Village was different from Xing Village’s experience. After privatization, the enterprise not only outgrew village collectives in terms of property rights, but also moved out of the village geographically into the municipal development zone, expanding a rural enterprise into a group company with a collection of various sub-branches.

Nevertheless, this separation was not at all a clear-cut break, so after a few years of development, some enterprises began to return to villages to invest in ecological agriculture and rural tourism. This iterative process of industrial “in, out, and back” shows the complexity of adaptative interactions and the different outcomes of the repeated use of village relations. From the perspective of adaptation, this case is particularly representative.

To say the least, the Tang Village case provides us with a type of industrial adaptation that goes beyond traditional village relations. The adaptation process is characterized by complexity and repetition, indicating that village relations can maintain their sustainability only through continuous adaptation.

Though at first, industries take advantage of village relations, the relationship between the two parties is not stable due to organizational operations and interactive modes. The quasi-collective system of a “company-run village” leads to the separation of villages and enterprises due to restructuring demands. Enterprises leave villages not only in terms of property rights but also in terms of geographical location. Accordingly, industry will also dissociate from village networks on its transformation path to the high-tech sector.

However, such a relationship does not end. Rather, upon negotiation, entrepreneurs come back to the village, contributing to the construction of a new ecological village and home.

Disruptive relations

Bei Village, compared with Xing Village and Tang Village, used to be the earliest “advanced industrial village” in its local area. However, after three rounds of industrial transformations, Bei Village was torn from its village relations, eventually stepping into decline. This type of “mismatch” of industrial failure and fracturing village relations testifies that even if the industry theoretically matches the village’s natural endowment, it will not prosper without appropriate organizational operation and interaction.

It’s counterintuitive, but even industries that strive to develop agriculture and restore a pattern where agriculture and industry complement each other sometimes fail, despite their compatibility with rural communities in terms of technology, functionality, work culture, and development prospects. The hidden truth here is that without proper organizational operation and interaction, industry cannot help but detach from traditional village relations. Ultimately, harmony without achievement can only end in failure.

Reconstruction

When agriculture related industries failed in Bei Village, a garment factory funded by non-native entrepreneurs surnamed Shen took root and prospered upon a reconstruction of village relations. Different from the case above, of the three local enterprises, this is a story involving an enterprise that migrates from the outside.

In the Shen family case, we can see an industrial flow trajectory influenced by rural relations: migrant workers—manufacturing skills training in underdeveloped hometown—working in factories in developed areas—setting up factories in other places—returning to the home village. Therefore, the expansion of industry not only includes the spread of urban industry to villages to distribute processing links, form specialized processing chains, utilize the cheap labor force in local villages, and update obsolete technology and equipment, it also occurs thanks to the initiative of farmers who invite industries home. They want to bring their experience and benefits from advanced regions to underdeveloped hometowns, either driven by a pursuit of growth and wealth, or by the vision of rural construction. One of the ways in which industry flows, undoubtedly relies on the pull of such village relations.

The industrial adaptation type of mutual dependence between market and village relations has the following characteristics. Village relations become a social interaction mechanism for the flow of industrial elements. Village relations are not isolated, and the non-ancestral relationships may also create a new village relationship suitable for industrial development.

In the context of the market economy, when village relations accompany industrial elements to flow from underdeveloped hometowns to advanced industrial areas, a new village relationship could emerge once the relationship between industry and village networks helps build a “quasi” family type of factory. With the aid of institutionalization of township organizations such as the chamber of commerce, they could bring the industry back to their hometowns at the right time, realizing a reverse flow.

Conclusion

The cases presented in this article show that village relations have mutual dynamic adaptive interactions and integration with the industry. When village relations maintain the status quo, or are discarded, disrupted, or reconstructed, the industry will inevitably take on different fates. In these different adaptation types which occur in two-way interactions, an analysis of the industry’s established type, the village’s existing resource condition (natural and social), and the logic of rural life are deemed to be complex and dynamic. It is not correct to view it as an industrial economy “embedding” in rural society, because it is a process where the participating subjects influence each other and adapt through these social interactions. From this point of view, rural industrialization is a social process that brings dynamic village relations into the context of industrial production and organization.

She Xiaoye is a research fellow from the National Institute of Social development under the Chinese Academy of Social Sciences.