Unformatted text preview: is more valuable if you own property or capital in an urban area than a rural area. Recommendations: drop of 50% if eliminate rural-urban gap. Short run: 1) establish and develop rural capital markets. Essential for promoting capital formation. Also eliminates discrimination against small farmers and rural activities. 2) Make fiscal spending and redistribution progressive. All transfers geared towards physical capital formation and education of the young. R&D in agriculture must be increased to improve productivity. 3) Promotion of trade and FDI in inland China (foreign direct investment) Long Run: URBANIZATION…move everyone to the city or make cities out of the rural areas… it is possible. If they are treated as urban residents, thy get better education and have brighter futures. Transferring them will also create more jobs especially in the service industry. To minimize social problems – need a step-by-step procedure to secure jobs and housing in urban areas....
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- Fall '07