Dayingjie officials say that throughout the process of development they have stressed the importance of village planning, environmental protection and energy efficiency.

The development of Dayingjie attracts visitors from other communities who come to learn and replicate the village's successes. For example, nearby Xiahecun Village in Liqi District, Yunnan, was inspired by Dayingjie to establish an auto repair and auto-trading center in the village, an initiative that has proved financially successful.

In the past two decades, Dayingjie has prospered while most neighboring villages remain stuck on the wrong side of the rich-poor divide. But what will happen to the village's enterprises when nearby communities start to catch up?

Officials say the work in Dayingjie must continue, in particular when it comes to deepening reform of township enterprises, adjusting the agricultural structure and developing infrastructure. As well, the local government is exploring a new profit generation model and a cooperative project in metal manufacturing is under discussion, said Zhang, the local official.

The local government has also been repairing roads, building highways and improving public transportation.

According to Zhang, Dayingjie's biggest challenge is to improve the knowledge and abilities of leaders and residents alike, as well as make the administration more efficient and improve the operation of the village's political and economic systems. Better leadership, he said, will help ensure the village has a vibrant future.

"We regularly arrange training courses and lectures by agricultural experts," Zhang added.

Meanwhile, one paradox of Yunnan's socioeconomic situation is that while the majority of its residents are considered "farmers" by the government because of their rural household registration, agriculture contributes only 60 billion yuan or 21 percent to the total GDP of Yunnan Province, and that of Dayingjie even less than 0.1 percent, according to 2005 figures.

The manufacturing and service sectors are far bigger money generators, with tobacco brands such as Hongta the major source of economic growth and the pillar for farmers living in Dayingjie. This dependency also breeds concerns that if the state decides to raise tobacco taxes or cut production, Dayingjie and related villages will suffer.

Maintaining a solid labor force is another big challenge. Zhang said that better-educated farmers don't want to work in agriculture because it is hard work and they have more choices once educated. Meanwhile, the village faces a brain drain of its best and brightest to big cities.

But Zhang said it is the longstanding mentality of village leaders and residents that will help Dayingjie remain competitive in the future, despite current concerns. Remaining open to innovation is the key.

"We are liberal enough to encourage entrepreneurship and let citizens grow and learn away from the village instead of restricting their energetic minds and ideas," he said.

"This has been at the core of Dayingjie's success in recent years. They bring back fresh ideas, advanced techniques and high-level management experience to promote development," Zhang added.

Rural Reality The Organization for Economic Cooperation and Development discussed the situation in China's countryside in its Review of Agricultural Policies in China, 2005: China's rural poor are mostly concentrated in the western provinces and autonomous regions and in localities that lag in terms of growth, are remote, sparsely populated, poor in human and natural resources, and weakly linked to the rest of the economy. As a social security system is almost nonexistent in rural China, little public assistance is available to families suffering the most. As the economic situation has improved, government priorities have shifted from increasing production, especially of food grains, to rural income support and more recently to environmental concerns. In the medium term, the main challenges for China's policy makers include: - Closing the large income gap between rural and urban populations; - Integrating small-scale farmers into markets; - Stimulating internal reallocation of resources to create more efficient farm structures; - Reducing the negative impacts of agricultural production growth on the environment and energy consumption; - Improving agricultural products' competitiveness. Policy responses should be based on economy-wide measures such as further relaxation of administrative barriers to urban migration, improved access to education, health care, pension and social security services, enhanced land property rights and rural tax reforms. The provision of modern research and extension services, food safety agencies and agricultural price information, services that provide widespread benefits to producers and consumers throughout the economy, will also be of crucial importance.