China's vast rural regions will brace for an era of rapid development driven by e-commerce and national policies to boost farm production.
E-commerce giant Alibaba Group signed an "Internet plus rural area" agreement on Tuesday with the Commerce Department of the central province of Henan to implement a plan to develop rural e-commerce.
Alibaba chose Mengzhou City in Henan as its pilot project to build county and village-level service centers or stations for developing rural e-commerce. The project will cover 15 to 20 county-level areas by the end of this year.
Henan, which promises a vast market with its population of 100 million, is one of seven provinces where Alibaba plans to launch rural e-commerce projects this year.
China is promoting large-scale farming via transfer of management rights of rural land and development of new agricultural businesses. The reform has made the agricultural sector more attractive to industrial and commercial capital.
E-commerce not only provides rural residents much easier access to industrial products, but has also become an important channel for the sale of agricultural produce.
"The golden era of investment in agriculture has come," said Chen Shaopeng, senior vice president of Legend Holdings Ltd., at the Annual Summit of China Green Companies, held in Shenyang, capital of Liaoning province in northeast China. The summit, which brought together domestic entrepreneurs, aims to promote sustainable economic growth.
In 2012, Legend Holdings, parent company of Lenovo Group, China's leading personal computer maker, founded the subsidiary Joyvio Group for modern agriculture investment and business.
In March, Legend Holdings invested in an online agricultural materials trading platform following its strategic investment in a rural-oriented peer-to-peer (P2P) lending platform at the end of last year.
Another e-commerce platform, www.chinagaili.com, signed cooperation contracts with more than 500 farmers and sold agricultural produce worth 20 million yuan (3.2 million U.S. dollars) last year, according to Zhao Keqian, general manager of the company.
With its own quality control measures, the company can guarantee the safety and price of products, said Zhao.
Zhao Yanfeng, general manager of Yateer Holding Group Co., Ltd. in east China's Shandong Province, said his company is also considering investing in building an online platform to provide financing services and customers for farmers.
In October, Alibaba announced a plan to invest 10 billion yuan to build 1,000 county-level operation centers and 100,000 village-level service stations to tap the rural e-commerce market in three to five years.
Jingdong, another leading online retailer, said it has set up more than 100 county-level service centers covering more than 10,000 villages.
Booming e-commerce is conducive to better agricultural produce and higher rural consumption and also attracts entrepreneurial talent to rural areas, said Yu Xin'an, president of Henan Academy of Social Sciences.
"It is inevitable that more capital will go to agriculture and boost its modernization," said Zheng Fengtian, a professor in rural studies at Renmin University of China.