THE June sun shines brightly on the golden wheat stubble of the north China plain. The small village of Luxin, about 240 kilometres southwest of Beijing, has had a bumper harvest. Women can be seen drying grain on the flat roofs of their homes, while children play in the heaps of wheat straw along the streets. Life is good. Families have ample stocks of flour and money in their pockets. But it was not always so. Twenty years ago, according to villager Liang Xiaoxiang, 74, there was the spectre of hunger and cold, and sandstorms often buried crops and wells. The transformation of Luxin, with a population of 1,800, is typical of changes in rural China since the late 1970s, when family-based farming replaced the people's commune production system in a rural reform initiated by Chinese paramount leader Deng Xiaoping. In the early 1980s, the villagers banded together with others in Xinle county to shift the huge sand dunes which covered a third of the land. The sand was used to fill low-lying areas. Soil was recovered and spread 30 centimetres deep. Preferential policies were introduced to encourage farmers to contract for the rejuvenated land. These included exemption from grain purchases by the state and the supply of seeds, chemical fertiliser and diesel oil at favourable prices. To boost crop production, 72 motor-powered wells have been dug in Luxin to irrigate the farm land. Each household is provided twice a year with a newsletter from an agro-technique promotion station, based in the county seat. The newsletter, which the local people call the ''how to do it'' paper, specifies the best sowing dates, crop density, the amount of different chemical fertilisers needed, how often to irrigate, and the best reaping dates. ''We like the 'how to do it' paper because it helps us produce more grain,'' said 50-year-old Liu Laohei. In 1982, he could only produce 150 kilograms of wheat per mu (one-fifteenth of a hectare), but in recent years the yield had more than doubled, he said. ''Now we wouldn't have to worry about food supplies, even if we had not reaped an ear of wheat for five years,'' said Mr Liu's wife. She said the family had more than 3,000 kg of flour stored in the village's mill. Pointing at her seven-room brick house with a courtyard, she said when she married her husband 26 years ago, they had only two rooms. ''Life is really different now, especially for the young people,'' she said. Her son and his wife, who live in the same courtyard, have recently bought a colour television and replaced their traditional kang, a heatable brick bed, with a plank bed. As their son works for a construction team in the county seat, the older Lius look after 17 mu of contracted farm land and are content with a black-and-white television. The per capita income of Luxin villagers is 1,500 yuan (about $2,000), according to the village head, Yao Qingchen. This is slightly more than the national average in rural areas. One in three Luxin households owns either a tractor or a truck. About two thirds have a colour television, 95 per cent have a washing machine, and one third own a refrigerator. Last year, the villagers reaped 1.2 million kilograms of wheat and corn - double the yield of 1982. Ten village enterprises established in the past decade made a profit of 900,000 yuan in 1992. Mechanisation of farm work has created a surplus of manpower in rural China. More and more people are engaged in other trades. In Luxin, the 10 enterprises include two cement product factories, a flour mill and a machinery repair workshop, employing 205 people. Their earnings account for one third of the village's total income. Another 350 people are involved in various service trades, such as transportation, food processing, running restaurants, selling garments and raising chickens and pigs. A water tower has been built to provide running water, a clinic has been established for the sick, and two new buildings have been erected to cater for school-aged children. In the next few years, the village plans to build a kindergarten, a cinema, a cold storage plant and another two factories, he said.