CHINA: Rural Unrest Rooted in Land Rights Issue

By IPS Correspondents Reprint | | Print |

Antoaneta Bezlova

BEIJING, Mar 24 2006 (IPS) - “The core question of China’s farmers is land, and China’s reform began with rural villages”, Chinese Premier Wen Jiabao told legislators at the annual meeting of the National People’s Congress, this month.

It was a sobering admission to neglect of China’s vast and underdeveloped countryside, stretching over more than twenty years of headlong economic growth, that has now returned to haunt Communist party leaders, as the spectre of rural unrest.

During this legislative session of the parliament, Chinese leaders announced plans of “epoch-making significance” to reduce the burden on rural population as the key to easing brewing social tensions. They promised to boost rural spending and eliminate rural taxes. They said the crippled health-care system in the countryside would be given an infusion of cash. Primary education for rural children would be made free.

But one potentially significant measure in improving the lot of China’s rural residents – the reform of land rights, was shelved from the agenda of the national legislature. This often talked about and always deferred rural reform however, is the real test of the government’s commitment to helping the rural poor, experts say.

“Unless farmers are empowered to be the masters of their own domain, they will continue to be bullied by local governments and business interests – and become even more a destabilising force,” argues economist Xu Sitao, who advises the Economist Intelligence Unit Corporate Network in Hong Kong.

At present, farmers can only lease land for 25-30 years and cannot use it as collateral to borrow and invest in agricultural improvements that raise productivity.

“The next stage of rural reform must allow farmers to extend their land leases as an intermediate step towards outright privatisation,” says Xu, “or broaden the use of land to some non-farming, more lucrative activities.”

Land rights conflicts have been at the root of much of social unrest in China in recent years, particularly where agricultural land has been arbitrarily seized by developers (who often work hand-in glove with local governments) and cleared for industrial or residential projects.

Only a fraction of the land payments by developers reaches the affected farmers. Most of the money goes to local governments, which have the authority to convert farmland for non-agricultural use. The rest of the land payments go to the village committee, which again keep most of it with only a pittance being used to compensate the farmers.

Cheated of their plots of land, which they view as their most fundamental asset, peasants have resorted to rioting. Such protests have grown increasingly violent and widespread in recent years, despite Beijing’s demand for local officials to end abuses.

In 2004, the ministry of public security reported 74,000 violent incidents, up from 58,000 in 2003, and 17 of them involving more than 10,000 people. The 2005 reports showed another jump to 87,000 incidents of “public order disturbances”, up 6.6 percent from 2004.

Land grabbing would be severely punished, Premier Wen Jiabao vowed at the National People’s Congress. “We must respect farmers’ wishes and avoid formalism and coercive orders,” he told legislators.

While Wen pledged that land rights of farmers would be protected, he stopped short of saying whether they would be in any way extended or reformed.

The lack of progress on reform of land rights has now been identified as one of the reasons for the failure of the legislature this year to consider a long-discussed property law. The law – delayed now at least for another year, would have solidified a 2004 amendment to China’s Constitution that only vaguely calls for protecting property rights.

But one of the real problems with the current draft is that it fails to address the farmers’ land ownership issue, admits Yang Jingyu, legal expert with the Legal Committee of the National People’s Congress.

“We (at the committee) have received many opinions about this and there is a consensus that we need to conduct further study,” Yang told Beijing’s daily Xinjingbao in an interview.

The lack of land property rights not only lies at the heart of rising rural instability but is also one of the main constraints on rural income growth.

The disparity between urban and rural incomes in China is large: annual disposable income in urban areas in 2005 was 1,304 US dollars, but in rural areas it was only 400 US dollars – just 31 percent of the urban figure.

Some two-thirds of China’s 1.3 billion people still live outside major urban centres, and almost half earn their living there. Yet rural areas have profited least from the economic boom of recent years, partly because of the extremely low productivity of agricultural work. Although agricultural production accounted for 47 percent of total nationwide employment in 2004, it accounted for only for 15.2 percent of GDP.

The limited nature of the land usage rights also means farmers are unable to diversify to more profitable, non-agricultural industries.