China Builds Over 30,000 Cooperatives a Year, Quo Vadis?

In Cilacap on 29 April 2026, President Prabowo Subianto posed a rhetorical question: “In world history, has there ever been 25,000 or 30,000 cooperatives built and completed in one year?” The answer, besides Indonesia through the Red White Village Cooperatives (KDMP) programme, is that China has actually been building an average of 112,000 cooperatives per year. This momentum began with the enactment of the farmers’ cooperative law in October 2006. Over two decades, the number of cooperatives surged to 2.24 million units by 2022. However, behind these large figures, many cooperatives were found to be shells and inactive. Given its massive scale, China’s experience is worth using as a benchmark. The question is, what can we learn from there? China’s experience shows that some cooperatives become shells, while others continue to operate. A study by Liu, Cao, Wang & Liu (2024) provides empirical evidence on the determinants of cooperative viability. This research was conducted in 2021 in Heilongjiang, with a population of 95,165 cooperatives and a sample of 487 units. There are five main findings worth noting. The research found that every one-level increase in experience improves services by around 5.9 percent. Second, the number of members is not a success factor. In farmers’ cooperatives, too large a number of members actually reduces the quality of services, both pre- and post-production. This is due to the increased coordination burden and potential conflicts of interest as the number of members grows. Third, business scale and profitability are crucial. The finding is that cooperatives with larger land areas have better service capacity. Meanwhile, profitability is key to expanding cooperative services to other value chains such as processing, storage, and marketing. Fourth, democratic governance plays an important role. The principle of “one person, one vote” has been proven to enhance service effectiveness because members can determine priorities according to their needs. Even this aspect is more influential than indirect benefits such as dividend distribution. Fifth, government support must be on target. This finding may be counterintuitive, where capacity building through training is far more influential than mere financial assistance. Technical and managerial training directly enhances the cooperative’s service functions for members. These findings indicate that cooperatives will only survive if supported by strong internal capacity and appropriate support. However, when those prerequisites are not met, cooperatives become vulnerable to losing their basic functions.