Liu Yonghong had never seen--or heard--anything like it. A little more than 10 years ago this migrant worker from Sichuan walked into a supermarket in Hangzhou, 75 miles from Shanghai. All the goods were neatly arranged on the shelves, the aisles were clean and "nice music was playing in the background," he recalls. While toiling away in a local silk factory, Liu decided he wanted to be his own boss. So in 1997 he returned to his hometown in Santai County and opened the first of five supermarkets. In one store, smiling salesgirls in crisp pink uniforms welcome customers and say "thank you" in unison. If patrons prefer, the store will deliver purchases to their homes--and, yes, tinkling Chinese Muzak plays in the background.
It may not sound like much, but Liu's supermarket chain is a revelation in China's vast, underdeveloped interior. Today, the very migrants who have fueled an eye-popping manufacturing boom in factories along the Chinese coast are fomenting a quiet revolution. They're returning home and investing money. They're introducing modern know-how. And they're proving that peasants can turn profits. "Their injection of capital into the hinterland helps raise rural income and ease social tensions," says economist Fan Gang of the National Economic Research Institute. In a nation where poor peasants and laid-off workers have resorted to violence to protest falling wages, this new wave of entrepreneurship is a vital safety valve.
A decade ago many predicted that the massive influx of farmers into Chinese cities would spawn nightmare slums and urban crime. Not only have these dire predictions not come to pass, but China's "floating population" is proving to be the hinterland's salvation. According to a recent analysis of official statistics, each migrant who worked away from home for more than six months sent home roughly $545 in 2000, says labor economist Cai Fang. Even if the number of migrant laborers was less than 80 million--most estimates run higher--that would total a mind-boggling $43.6 billion in remittances. The numbers of those who physically return home are less clear--perhaps around 10 percent. But they bring with them newly acquired business savvy as well as cash, which are having a ripple effect on the rural economy.
In the verdant Sichuan county of Santai, for instance, a little expertise can go a long way. With a population of nearly 1.5 million, Santai--China's most populous agricultural county--suffers from a tremendous shortage of arable land. Local farmers have an average of about one tenth of an acre to grow their crops, "and we don't have any other natural resources," laments Qiu Mingjun, Santai County Communist Party secretary. So why is the party encouraging former peasants to return home to set up shop? "People are building new homes and factories," says Liao Xuemei, a local party representative. "It's all thanks to peasants who've worked on the coast and come back to invest." And Santai County has plenty of people to call. Seventy percent of its households have at least one member working in a distant city.
Local authorities are eagerly devising ways to woo even more established businessmen back home. "For those who invest, we offer lower land prices, lower fees and shortcuts to reduce red tape," says Qiu. The preferential treatment--specifically, land leases at half price--was enticing enough to lure back Jia Mingzhong. One of the first Sichuanese to obtain an M.B.A., in the mid-1990s, Jia ran a thriving business in the massive metropolis of Chengdu when Santai local officials finally persuaded him to open Hongbei Technology in his old hometown. He and his 21-member staff--most of them returnees as well--provide improved hybrid seeds and advise farmers on modern farming techniques, such as the proper temperature for storing fruit. Zhao Yi, a 27-year-old Hongbei employee, sees a bright future down on the farm: "As Chairman Mao Zedong once said, the countryside is vast, and you can achieve a lot here." After 10 years of flocking to the cities, maybe China's peasants have found a new field of dreams.