The government was receptive to schemes for agricultural revival, and began to experiment with the creation of collectively owned enterprises in rural communes. These enterprises exploded in size and profitability, taking advantage of skilled but low-cost labor, local government backing and market niches for light consumer goods that had not existed in the era of central planning.

In the mid-90s, township enterprises were privatized as increased competition in the marketplace and changes in macroeconomic policy cut into their profitability. The formation of many of China's industrial clusters can be dated back to this time. The first violin factory in Huangqiao, for example, started out as a branch of a State-owned, Shanghai-based manufacturer, employing local farmers to make basic components. As the community gathered expertise, it split from its parent and in 1995 went into business alone, soon eclipsing its rivals and turning its eye toward the export market. Dozens of its managers, after leaving the company, started their own, and China's violin capital was born.

Township enterprises have been a major driver of China's rapid economic growth. However, their model may have been too successful in some ways. Fei's Kaixiangong is far wealthier than it was in the 30s. Its residents, thanks to a burgeoning textiles and weaving industry, now have access to all the amenities of modern life, like healthcare and education, TVs and refrigerators, cars and well-built homes. But with increased prosperity comes rising labor and material costs.

The government is aware of this, and has called for a restructuring of the rural economy, but township enterprises have always been bottom-up ventures, and it is up to local people to lead the way in adapting to new circumstances. The good news is that Chinese village communities have shown time and again their resilience and resourcefulness.