Guan revealed that in the beginning just three or four households joined in the mushroom planting. In the second year, the number increased to 18 as farmers saw the profit that could be made. If a household has no land for planting, it can rent land from other farmers at an annual rent of 7,500 yuan ($1,095) for a hectare.

Guan started planting mushrooms in 2006, and earned 80,000 yuan ($11,673) that year. In 2007, he made 100,000 yuan ($14,591) and even hired some local farmers to work for him at a daily wage of 30 ($4.4)-50 yuan ($7.3).

In 2005, Guan left his hometown in search of a living, but returned a year later unsuccessful, because he lacked education or technical skills.

After his success in planting mushrooms he asked his son, who had also left the village, to return home to help him.

"Since he can't make a lot of money in other places, it is better to come back and plant mushrooms with me," said Guan.

Promising future

"Economic development has speeded up over the last two years, and the land circulation policy, which brings farmers compensation, has increased farmers' income," Shi Xueliang, Secretary of the Party Committee of Xiaogang Village told Beijing Review.

The year 2008 marks the 30th anniversary of China's reform and opening-up policy, and Xiaogang Village has drawn much attention as a result. Taking this opportunity, the village has widened its road, constructed more buildings and set up tourism and development companies. Some smart farmers have also opened restaurants and supermarkets catering to tourists.

According to Shen Hao, director of the villagers' committee, the average annual income per person in Xiaogang Village in 2008 is 6,600 yuan ($963), while the average annual income per person in rural areas across the whole of China is just 4,200 yuan ($613).

"The important role that Xiaogang Village has played in China's history determines that it must take the lead in reform," said Shen.

Shen has been working to build a new school and a hospital in the village, as well as a culture square. His work has helped to attract three companies to the village that employ around 200 people.

"Our next plan is to set up a bank in Xiaogang Village," said Shen, who also wants to focus on developing more modern agriculture. Shen has great confidence in the future of the village. Now there are two large companies planning to set up a pig- raising base and a feed-processing factory in Xiaogang Village.