Village and township enterprises are facing problems of labor shortage, said an official with the Ministry of Agriculture recently.

Some farmers are unwilling to work in factories because the pay is too low to be attractive, the official said.

The government has implemented a series of favorable policies to encourage rural people to engage in agriculture, and many township enterprises want to hire more experienced and skilled workers, the official said.

Figures show in the first quarter of this year, the added value of China's village and township enterprises grew 12.11 percent from the previous year to 1.2896 trillion yuan (161 billion U.S. dollars).

Most township enterprises are still weak in innovation, and the problem of blind investment still exist in some regions, the official said.