Dual Incentives and Dual Asset Building: Policy Implications of the Hutubi Rural Social Security Loan Programme in China

The Hutubi Rural Social Security Loan programme is a policy innovation in a rural area of China, which loans savings in social security accounts back to peasants for them to buy assets for agricultural and other development. In contrast to the nationwide recession in rural social security, this programme has shown its success in proliferating rural social security funds and retaining social security participants. With a focus on the administrative data of the loan programme, this study aims to provide an in-depth understanding of the loan programme and examine how asset building is possible for the poor when institutional incentives are offered. The findings show that when proper policy incentives are provided, poor peasants can build assets. The Hutubi programme may be a good model for other rural areas in China and other developing countries.