Xiangxi Tujia and Miao Autonomous Prefecture Overview — Trade (III)
Section 3: Ethnic Trade. I. Developing Ethnic Trade. After the founding of New China, under the shining ethnic policies of the Communist Party of China, ethnic trade in Xiangxi developed rapidly with good results. Ethnic trade is both a component of commercial work and a component of ethnic affairs; it links urban and rural areas, connects workers and peasants, and bridges production and consumption...
This article has been compiled from historical materials in the "Zhangjiajie Tour Guide Network" (33519.com · City Overview section). Some administrative divisions, population, socioeconomic data, and policy information may be outdated and are for reference only; for the latest situation, please refer to official releases by the local government and scenic areas.
Section 3 Ethnic Trade
I. Developing Ethnic Trade
After the founding of New China, under the brilliant illumination of the Chinese Communist Party's ethnic policies, ethnic trade in Xiangxi Autonomous Prefecture developed rapidly and achieved good results. Ethnic trade is a component of commercial work and also a component of ethnic work; it bears both the economic task of linking urban and rural areas, connecting workers and peasants, and connecting production and consumption, and the political task of promoting economic development, strengthening ethnic unity, and consolidating the unity of the motherland through purchasing and marketing activities. Ethnic trade plays an important role in the social and economic development of Xiangxi Autonomous Prefecture.
Historically, because feudal rulers of successive dynasties implemented policies of ethnic oppression and ethnic discrimination, the ethnic minority areas of Xiangxi were long in a state of ethnic isolation—"Han do not enter the territory, the Miao do not leave the caves," "copper does not touch iron, the Miao do not touch the Han"—and moreover, the ethnic minority areas of Xiangxi were far from central cities, with high mountains and steep ridges, crisscrossing streams and rivers, inconvenient transportation, a backward economy, and a shortage of material means of livelihood. Developing ethnic trade was imperative.
From the end of 1949 to the beginning of 1950, trade companies were established successively in the 10 counties of the prefecture, and some counties also set up trade groups that went deep into remote Tujia and Miao villages to sell salt, cotton cloth, and daily necessities, and to purchase native products such as tung oil and raw lacquer. In 1950, the trade companies exchanged native products such as tung oil and gallnut for 4.79 million jin of rice, helping the people of all ethnic groups get through the summer famine and winning the praise of the masses. In 1951, implementing the spirit of the First National Ethnic Trade Conference, the trade companies in the 10 counties of the prefecture gradually gained control over the supply and demand of major commodities on the market. Industry and commerce beneficial to the national economy and people's livelihood recovered and developed rapidly; those that closed or changed business were all in superstitious categories. 97 kinds of native products opened up markets, and major native products such as tung oil and tea sold well. Prices throughout the year were basically stable. In winter, the grain and cotton market was once higher than the listed price, but this did not affect overall prices, thus safeguarding the normal life of the people of all ethnic groups.
After the implementation of regional ethnic autonomy began in 1952, ethnic trade developed rapidly. State-owned trade companies earnestly implemented the spirit of the Second, Third, and Fourth National Ethnic Trade Conferences, and in business operations adhered to the policy of "no profit, no loss; some profit, some loss; using profit to compensate for loss," not taking profit as the goal, and vigorously developing ethnic trade. This was tremendous support for the people of all ethnic groups in Xiangxi who had not yet escaped poverty, and ethnic trade itself also developed greatly. In 1957, the total domestic pure purchasing value of state-owned commerce reached 15.87 million yuan, nearly double that of 1952; the total domestic pure sales value was 44.11 million yuan, a sixfold increase year-on-year. Supply and marketing cooperatives spread throughout Tujia villages and Miao townships. During the First Five-Year Plan period, the total pure commodity sales value of the supply and marketing system in the 10 counties of the prefecture was 93.96 million yuan, of which the supply value of agricultural production materials was 8.16 million yuan, and the total purchasing value of agricultural and sideline native products was 32.45 million yuan, playing an important role in promoting agricultural production and improving farmers' lives.
The Great Leap Forward of 1958 once caused great fluctuations in ethnic trade. After the "anti-right deviation" movement in 1959, the total domestic pure purchasing value of the whole prefecture, through false reporting and exaggeration, rose to a peak of 43.48 million yuan. In 1961, through adjustment, consolidation, and rational purchasing, the total domestic pure purchasing value of the whole prefecture fell to a trough of 16.99 million yuan. The losses from scrapped goods in the ethnic trade Great Leap Forward reached more than 13 million yuan, leaving people a profound lesson.
II. Implementing Preferential Policies
In order to help ethnic minority areas develop ethnic trade, after the founding of New China, the state implemented the "three preferential treatments" policy in terms of funds, profits, and prices for ethnic trade enterprises such as ethnic trade companies, specialized companies, and supply and marketing cooperatives in remote mountainous counties where ethnic minorities live in concentrated communities. All 10 counties in the prefecture enjoyed this at one time or another.
The implementation of the "three preferential treatments" policy for ethnic trade enterprises went through a process of continuous improvement. In 1952, the state began allocating more self-owned funds to ethnic trade enterprises in remote mountainous areas with inconvenient transportation, long transit times for goods, slow capital turnover, and high circulation costs than to state-owned commerce in ordinary areas. It was stipulated that 80% of the self-owned working capital of ethnic trade retail enterprises would be allocated by the state finance (at that time, the self-owned funds of state-owned retail enterprises in ordinary areas were 30%, rising to 60% the following year), and 20% would be solved by bank loans. In 1963, the state further stipulated that 50% of the self-owned working capital of ethnic trade wholesale enterprises would be allocated by the state finance (at that time, the self-owned working capital of state-owned enterprises in ordinary areas was about 7%), and 50% would be solved by bank loans. From 1981 onward, for the commerce, traditional Chinese medicine (or pharmaceutical companies), and supply and marketing cooperatives in counties implementing the "three preferential treatments," banks charged interest at a monthly rate of 3.3‰ (state-owned commerce in ordinary areas was 6.6‰). This greatly reduced the burden on enterprises, enhanced their operational vitality, and promoted commodity circulation.
In terms of profit retention, in order to accommodate the special difficulties of ethnic minority areas and enable ethnic trade enterprises to strengthen their capacity for self-development, on the basis of allowing ethnic trade enterprises to "subsidize losses" in operations in 1951, the state in 1952 also stipulated a policy that profits of ethnic trade enterprises would temporarily not be turned over to the state. In 1963, while determining the profits to be turned over by ethnic trade enterprises, the profit retention ratio was set at 20% (at that time, state-owned enterprises in ordinary areas implemented a 3% retention ratio). From 1980 onward, while the profit retention ratio for state-owned commerce in ordinary areas increased to 19.3%, the profit retention ratio for ethnic trade enterprises was raised from 20% to 50%. After the nationwide implementation of the substitution of tax payments for profit deliveries, the state's preferential treatment of ethnic trade enterprise profits remained basically unchanged, and tax preferences were granted. The Hunan Provincial Government stipulated that after ethnic trade enterprises paid taxes at 55%, the finance department would return 5% to the enterprises as profit retention, guaranteeing a 50% profit retention level for the enterprises.
In order to reduce the economic burden on ethnic minorities, the state established a price protection policy for ethnic minority areas, namely implementing minimum protective prices for the purchase of some agricultural and sideline products and maximum price limits for the sale of some major industrial products. Policy-related losses arising from this were subsidized by the state finance departments.
According to incomplete statistics, from 1951 to 1985, the state allocated a total of 65.19 million yuan in self-owned funds for ethnic trade and 18.23 million yuan in profit retention to Xiangxi Autonomous Prefecture; for price subsidies, before 1983 these were reimbursed on actual expenditure, with up to 109 kinds of agricultural and sideline products purchased at the peak and subsidy amounts of 10.41 million yuan. From 1984 onward, fixed subsidies were implemented, the number of purchased varieties was reduced to 33, and the fixed subsidy was 5 million yuan.
Since the Third Plenary Session of the Eleventh Central Committee of the Chinese Communist Party, the economic income of farmers of all ethnic groups has risen year by year, and purchasing power has increased rapidly. In 1978, total rural sales were only 2.99 million yuan; in 1982, they increased to 17.2 million yuan, a 4.8-fold increase.
In developing ethnic trade, Xiangxi Autonomous Prefecture respected the customs and habits of the Tujia, Miao, and other ethnic minorities, and organized ethnic commodities such as embroidered clothing, gold and silver jewelry, tripod pots, and copper kettles to meet the special needs of the people of all ethnic groups. In the early 1980s, 6 specialty shops for ethnic necessities were established in areas where Tujia and Miao people live in concentrated communities, and 111 specialty counters for ethnic necessities were set up in grassroots stores. Rural supply and marketing cooperatives also actively handled ethnic specialty commodities, making the entire ethnic trade work appear very lively. In the specialty shops and counters for ethnic necessities, earrings, bracelets, necklaces, clasp chains, waist chains, and children's hat ornaments loved by ethnic minorities were a dazzling array, available for selection. The embroidered clothing and gold and silver ornaments of the Tujia and Miao peoples have become a cluster of fresh flowers in the hundred-flower garden of Chinese art, welcomed not only by Tujia and Miao women but also loved by domestic and foreign tourists.
III. Ethnic Trade Reform
Ethnic trade in Xiangxi Autonomous Prefecture developed rapidly and achieved great results, but there has always been a fundamental problem: the level of commodity economy development is far lower than that of the developed eastern regions, and the foundation of ethnic trade is relatively weak. Under the traditional planned economic system, because of the single distribution method, the closed circulation pattern, and the fact that market competition had not yet taken shape, this contradiction was not prominent. With the deepening of reform, the opening of the market, and the formation of a multi-channel competitive situation, especially after the gradual formation and improvement of the socialist market economy system, ethnic trade must undergo corresponding reform in order to unleash its inherent vitality.
In 1984, the ethnic trade system of the whole prefecture subdivided 394 state-owned commercial enterprises into 676, of which 86 larger enterprises implemented contract operations; 440 small enterprises implemented "ownership by the whole people, collective operation, tax payment according to regulations, and sole responsibility for profits and losses"; 44 small enterprises were converted to collective ownership; and 37 small low-profit enterprises implemented leasing operations. Supply and marketing cooperative commerce also underwent corresponding reform. By 1986, new changes had appeared in the commercial structure of Xiangxi Autonomous Prefecture, with state-owned, collective, and individual businesses all developing together, forming a new pattern of multiple economic components coexisting. Among all commercial personnel in the 10 counties of the prefecture, state-owned commercial personnel accounted for 21.3%, supply and marketing cooperative commercial personnel accounted for 14.2%, other collective commerce accounted for 11.8%, and individual commercial personnel accounted for 52.7%.
In the course of reform and opening up, Xiangxi Autonomous Prefecture grasped the opportunity to draw in the east and expand to the west, developing border trade. Along the more than 500-kilometer boundary line where Hunan, Hubei, Chongqing, and Guizhou meet, Ala and La'ershan in Fenghuang County, Minle and Chadong in Huayuan County, Yezhuping and Huanglian in Baojing County, and Liye, Guitang, and Min'an in Longshan County were selected as border trade markets for key support and construction by the whole prefecture, opening the prefecture's doors, making friends widely, and gradually forming a commodity circulation network extending in all directions and a unified national market. Backed by border area resources, oriented toward developed regions, relying on large, medium, and small cities, and utilizing "regional price differences" and "seasonal price differences," they vigorously organized the supply of industrial products and the purchase of agricultural and sideline native products, making the border trade markets a forward base for the developed eastern regions to extend into the developing central and western regions. At the same time, they developed horizontal economic ties and invigorated commodity circulation. Adopting the method of "sending people out and bringing people in," they carried out commodity exchanges with developed regions such as Changsha, Shanghai, Guangzhou, Wuhan, and Zhejiang, reformed the ethnic trade system, and promoted the development of ethnic trade.
Implementing preferential policies for ethnic trade was decided by the Central Committee of the Chinese Communist Party and the State Council based on the actual conditions of ethnic minority areas, such as economic backwardness, underdeveloped transportation, and weak technical forces, and it played a very good role in promoting the development of commodity circulation in ethnic areas. With the deepening of economic system reform, the "three preferential treatments" preferential policies became difficult to implement fully. After the fiscal system of "eating from separate kitchens" was adopted, it became difficult to include the self-owned funds of ethnic trade enterprises in local budgets, and the preferential treatment naturally weakened; before 1980, self-owned funds were allocated year by year by the provincial finance according to the central budget to ethnic trade enterprises. From 1981 onward, based on the fund occupation at the end of 1980 as the base, the amount was fixed for three years unchanged, and the provincial finance bore the interest on the owed self-owned funds; this stopped upon expiration in 1984. After the substitution of tax payments for profit deliveries, the profit retention of ethnic trade enterprises decreased relative to general commercial enterprises. After the change from fixed-price to negotiated-price purchasing, the native products and mountain goods that originally enjoyed price subsidies decreased in variety and quantity; with negotiated-price purchasing, if the price was high they could not be sold, and if the price was low they could not be purchased, making it very difficult for them to enter the circulation field. The scope of planned commodities shrank, the scope of market regulation expanded, and the original advantage of preferential supply of goods to ethnic trade areas naturally lost its effectiveness. Moreover, newly introduced reform measures, such as real estate tax, vehicle and vessel use tax, and bonus tax, treated all commercial enterprises equally, increasing the burden on ethnic trade enterprises. Many ethnic trade enterprises had outdated and aging operating facilities; after the change from allocation to loans, their capacity for self-transformation weakened. After enterprise restructuring and reorganization, the "three preferential treatments" policy originally enjoyed by ethnic trade enterprises naturally disappeared, and ethnic trade struggled forward. From 1996 to 1999, the total commodity purchasing value completed was 1.72595 billion yuan, down 23.2% compared with the previous four years (1992-1995); the total commodity sales value completed was 1.99761 billion yuan, down 20.3% year-on-year; taxes and fees turned over to the state were 22.05 million yuan, and with profits and losses offset across the entire system, there was a net loss of 71.63 million yuan.
Under the conditions of the socialist market economy, commercial departments at all levels throughout the prefecture established market concepts, conformed to market development trends, and combined the construction and renovation of outlets with the adjustment of enterprise operating structure. On the one hand, they relied on old state-owned stores, revitalized existing assets, and provided turnaround opportunities for outlets with sluggish business; on the other hand, they expanded investment promotion, created conditions for development, actively raised funds, and increased investment in outlet construction. From 1996 to 2000, the commercial systems of the 8 counties and cities in the prefecture invested a total of 38 million yuan, built or renovated 85 outlets, and added 20,000 square meters of business area, making them new growth points for state-owned commerce. In 2004, in the commercial circulation field of the whole prefecture, through various methods such as bankruptcy exit, private mergers, and equity transfers, state-owned capital basically withdrew, and the share of the non-public economic sector as a flexible factor in the total retail sales of consumer goods grew larger and larger.
In 1995, the commercial systems of the 8 counties and cities in the prefecture had 203 independently accounting enterprises, including 121 grassroots cooperatives. According to the spirit of Document No. 5 of the Central Committee [1995], the scale of grassroots cooperative establishment was adjusted. Longshan County merged 23 township cooperatives in remote mountainous areas into district cooperatives. Guzhang County implemented "one county, one cooperative," retaining only the signboard of the grassroots cooperative and retaining the grassroots cooperative's operating stores, with unified management, unified accounting, and unified tax payment by the county cooperative union, reducing administrative personnel and saving expenses. The supply and marketing system of the whole prefecture, following the principle of grasping the large and letting go the small, implemented "cooperative-owned, privately operated" for all commodity wholesale and retail enterprises and food and beverage service businesses, diverted laid-off surplus personnel, and implemented reemployment projects. Some adhered to the purpose of serving agriculture, strengthened service functions, and did a good job in serving agriculture, rural areas, and farmers; some participated in mountain development, established specialized cooperatives, and promoted agricultural industrialization; some supply and marketing cooperatives, based on local resources, established agricultural product processing industries, implemented integration of trade, industry, and agriculture, and a coordinated operation of planting, breeding, and processing, achieving relatively good results. From 1996 to 1999, supply and marketing cooperatives established 26 industries, achieving an industrial output value of 181.58 million yuan, a 2.3-fold increase over the total of the previous four years, and turned over 2.72 million yuan in state taxes.
Supply and marketing cooperatives have many outlets, long lines, and wide coverage, with large numbers of freight yards, warehouses, and courtyards lying idle. In order to revitalize cooperative-owned assets, combine commodity operations with asset operations, and transform asset advantages into economic advantages, in 1998 the prefecture and county supply and marketing cooperatives established asset management offices to focus specifically on asset operations. From 1996 to 2000, the supply and marketing system of the whole prefecture invested 32 million yuan, of which 25 million yuan was from investment promotion, to build one comprehensive shopping mall, one farmers' market, and four large wholesale markets. The operating conditions of the supply and marketing system improved greatly.
At the end of 1997, the State Ethnic Affairs Commission, the People's Bank of China, the Ministry of Finance, the State Administration of Taxation and other relevant ministries and commissions separately formulated a series of preferential policies for ethnic trade, including preferential interest rates and tax incentives, in order to strengthen the work of ethnic trade and the production of ethnic goods. The Ethnic Affairs Commission of Xiangxi Autonomous Prefecture, together with the People's Bank of China, the Industrial and Commercial Bank of China and the Agricultural Bank of China, agreed on seven measures. In 1998-1999, they secured a total of 34.63 million yuan in preferential loan interest and 2.258 million yuan in VAT rebates for the prefecture's ethnic trade and ethnic goods production enterprises, bringing tangible benefits to these enterprises and enhancing their capacity for further development.
In 2004, the Prefecture Ethnic Affairs Commission organized an investigation into the implementation of preferential policies for designated ethnic trade and ethnic goods production enterprises, and wrote "Under New Circumstances, Ethnic Trade and Ethnic Goods Production Still Need Strong Support from Ethnic Policies — An Investigation Report on the Implementation of Preferential Policies for Ethnic Trade and Ethnic Goods Production in Xiangxi Autonomous Prefecture," actively striving to implement ethnic policies. That year, a number of ethnic enterprises such as Luxi Jintian Aluminum Industry and Xiangquan Pharmaceutical Co., Ltd. began to enjoy preferential ethnic interest rate policies. By the end of the year, the prefecture's ethnic trade enterprises and 30 designated ethnic goods production enterprises had received a total of 17.58 million yuan in loan interest subsidies under ethnic enterprise policies, securing tangible benefits for the enterprises and supporting their development.