Domestic consumption, however, has not yet gotten back on track. The government indicated that it intends to unleash domestic demand by facilitating the extension of e-commerce and delivery services to rural areas. That followed China's dual-circulation development pattern that takes the domestic market as the mainstay and appears to integrate itself with the rural revitalization goal, said analysts.

Towns with particular agricultural strengths and clusters of leading agro-industries with unique advantages are also on the list of policy supports, they said.

The Sun-founded startup has expanded production lines from making mushroom breeding sticks to processing byproducts, such as mushroom pastes and mushroom chips.

According to Yang Lei, head of Tongchuan city government's finance department, fiscal subsidies have been increased to support rural development and improve the system of commercial services for agriculture, which focuses on establishing a modern system of business operations in the agricultural sector.

Sun said: "Local villagers showed high interest and they are very keen to join the mushroom-growing projects. In such businesses, they can be their own boss. They can rent greenhouses, hire workers and share profits. My company offers the farmers advanced technology and consultancy services, and we control the quality of products."

The startup is exploring ways to promote sales of mushroom-related products. Online sales and exports of the breeding sticks are among the options being seriously considered. Sun has received orders for 300,000 sticks from South Korea and for 2 million sticks from the United States and Japan so far.

Wei Zhaofeng, Miaowan's government chief, said local authorities have integrated and coordinated the use of fiscal funds to build new bases to grow mushrooms. Their ownership belongs to village collectives that entrust management to private companies, and collect contract fees from individual business owners, said Wei.

With financial support from the local government, Shiitake Mushroom Town will see an expansion of bases this year. More villagers can rent the greenhouses in Miaowan and its neighborhood and invest in the emerging business niche. "This will be the leading business segment for local residents to increase their income," said Wei.

The edible fungus industry is labor-intensive but low planting threshold and quick returns are its advantages. Through them, it is easy to provide poor people with jobs and incomes. It is one form of work from home, she said.

"We are developing innovative methods to support the rural revitalization strategy, and wish to take advantage of fiscal actions at the grassroots level as that's the key. It requires improvements to county-level fiscal management," said Yang.

Last year, the city-level fiscal management expanded functions and involved agricultural credit financing guarantee and agriculture policy insurance to strengthen financial support for large-scale agriculture production.

The government's administrative groups at the county-level promoted local leading industries, and the top five counties by economic performance received rewards and subsidies of 3.5 million yuan from fiscal funds, according to Yang.

In 2020, Tongchuan city's 359 village collectives notched up 220 million yuan in operating revenue, with revenues of 16 of them exceeding 1 million yuan each, Yang said.