In the wake of Zhucheng's example, the central authorities issued explicit guidelines that "in general, it is permitted to sell small state-owned enterprises to collectives or individuals." As a result, the ranks of China's private enterprises swelled from 90,000 in 1990 to 238,000 in early 1994.

    At the dawn of 2005, the State Council circulated the "36 Articles on Non-Public Sectors of the Economy" (full title: Several Opinions of the State Council on Encouraging, Supporting and Guiding the Development of the Private and Other Non-Public Sectors of the Economy). Now non-public sectors of the economy could enjoy equal status with their state-owned counterpart. The spring of 2005 was known as the "spring of China's private economy" in Chinese and foreign economics circles.

    I was the earliest advocate of the principles set out in this document. Leading up to the drafting of the articles, I served as the deputy director of the Subcommittee of Economy of the CPPCC National Committee and was entrusted to lead a committee investigation in Liaoning, Jiangsu, Zhejiang and Guangdong provinces. On the trip we discovered that the private sector faced many obstacles in its development. For instance, it was greatly limited with regard to access to certain types of fields or industry by the current system. It was also treated unfairly by legislation governing financing, taxation, land use and foreign trade. Public opinion remained unfavorable to the private sector as well. Our investigation concluded with a detailed report in the fourth quarter of 2003, which we then submitted to the National Committee of CPPCC. Meanwhile, we wrote a letter to Premier Wen Jiabao, as a companion commentary on our report. Premier Wen paid close attention to this, and drafted a lengthy directive in early 2004, entrusting the State Council Research Office and the National Development and Reform Commission to take responsibility for drafting the "36 Articles on Non-Public Sectors of the Economy."

    In 2005 the 36 Articles were formulated and enacted. This was the first document encouraging, supporting and guiding the development of private and other non-public sectors of the economy ever issued in the name of the central government. Under the new system capital put up by private investors or enterprises was allowed to enter monopoly trades and fields, such as finance, public utilities, telecommunications, public transportation, civil aviation, and the petroleum industry, as a measure to stimulate market competition. It also stipulated that it was illegal for any unit or individual to violate the legitimate property rights of non-public enterprises, or to illegally alter the right to proprietorship of private enterprises.

    After the enactment of the 36 Articles, various regional and departmental supporting measures found their way into policy and regulations. The whole environment for the non-public sector was greatly enhanced, ushering in a new era in the development of China's private economy. By the end of 2008, private corporations made up 61 percent of the country's total number of enterprises.

    "Three F Li"

    In 2004 and 2005, I conducted a field study in 16 provinces while touring the countryside, and was impressed with the latest advancements in rural reform, such as transference of land use rights, eco-oriented relocation of rural populations, and shareholding methods applied to farmland management.

    In my opinion, China's reform will continue, especially in rural areas. A shareholding system is not only related to urban economics, but also closely pertinent with rural economics. In the countryside of Zhejiang Province, particularly in rural Wenzhou and Taizhou, shareholding enterprises established by farmers appeared as early as the 1980s. They channeled private funds into production, solved unemployment problems for millions of people, and spurred annually two-digit GDP growth for successive 20 years. They also contributed taxes valued in RMB hundreds of billions, and drove the emergence of hundreds of new cities and towns. The rural communities in these areas have become well-off. All this indicates that a shareholding system can also play an important role in rural areas.

    To us, reform and opening-up is an unprecedented practice, and setbacks and shortcomings are unavoidable. The planned economy has two major pillars.One is the system of state-owned enterprises featuring non-separation of enterprise and administration, and indistinct property rights; the other is the dual urban-rural structure featuring segregation between cities and the countryside and the subsequent restricted flow of production elements between them. These two pillars help up the planned economy. The contracted responsibility system in agriculture was set up on the precondition of recognizing the dual urban-rural structure, so basically this structure was not touched by reforms during these years. The result is farmers' incomes increase only incrementally, and the urbanization process is also slow. Inequality still exists between urban and rural inhabitants. A living example is the migrant worker. Clearly, rural reform is only in its initial stages, and there is still a long way to go.

    Besides, there is another issue – the social security system. Due to financial difficulties and other reasons, this system is proceeding very slowly, with many problems needing resolution.

    Matters concerning farmland, farmers and farming, often referred to as the "Three F" issues, are of primary importance. I have been consumed by making appeals regarding these problems. In early 2008, I published a lengthy article in the Journal of Peking University entitled "On Reform of the Dual Urban-rural Structure." In it I pointed out that to promote the development of the agricultural sector and increase farming income, the key lies in changing this duality, so farmers can enjoy equal rights with urban inhabitants, and equal opportunities. In my opinion, without a reform that eliminates this split there would be no significant improvement in farmers' livelihoods, and the income gap between the city and country dwellers cannot be narrowed in any real sense. In the past, people called me "Shareholding Reformer Li" (Li Gufen) and "Private Enterprise Li" (Li Minying), but now, I prefer to be called "Three F Li" (Li Sannong).