August 7, 2004

RIDING THE DRAGON:

Farmers' Rising Anger Erupts in China Village: Land Seizures, Stagnation Fuel Unrest (Philip P. Pan, August 7, 2004, Washington Post)

Hundreds of police stormed this village in central China before dawn last Saturday and fired rubber bullets into large crowds of unarmed farmers who had threatened a protest in the provincial capital, injuring dozens in one of the most violent clashes known to have taken place in the Chinese countryside in recent years.

No villagers were killed, but residents said about 10 were hospitalized with serious injuries, including a woman who was shot nine times in the back and another who was shot five times. As many as 50 other villagers suffered moderate injuries, residents said, and a local doctor said dozens of police officers were hurt.

At least 100 government officials moved into a school in this village outside Zhengzhou, the capital of Henan province, to calm tensions in the aftermath of the July 31 incident and to hush it up. But witnesses described what happened in surreptitious interviews in villagers' homes Thursday, and others provided details by telephone or in Zhengzhou. One resident provided digital photos of his bloodied neighbors and of ammunition collected on the street the next morning.

The confrontation is a reminder of the stark challenge that rural unrest poses for the Communist Party, which took power in China 55 years ago in a peasant revolution but is now struggling to contain rising anger in the countryside over high taxes, official corruption and farm incomes that are stagnating even as the national economy booms.

Here in Shijiahe, a relatively prosperous hamlet of corn fields and vegetable farms about 400 miles southwest of Beijing, villagers are protesting another problem that has emerged as an explosive issue in rural China: the seizure of farmland by local officials to build roads, dams, factories or real estate projects, often for personal profit.

In part because the state still owns all land in China and has granted peasants only long-term leases to their plots, local officials managed to take control illegally of at least 300,000 acres from 1.5 million farmers between 1999 and 2002, according to conservative estimates by the Land and Natural Resources Ministry. And official police statistics show a rising wave of protests over such land transfers.


Amid China's Boom, No Helping Hand for Young Qingming (JOSEPH KAHN and JIM YARDLEY, 8/01/04, NY Times)
His dying debt was $80. Had he been among China's urban elite, Zheng Qingming would have spent more on a trendy cellphone. But he was one of the hundreds of millions of peasants far removed from the country's new wealth. His public high school tuition alone consumed most of his family's income for a year.

He wanted to attend college. But to do so meant taking the annual college entrance examination. On the humid morning of June 4, three days before the exam, Qingming's teacher repeated a common refrain: he had to pay his last $80 in fees or he would not be allowed to take the test. Qingming stood before his classmates, his shame overtaken by anger.

"I do not have the money," he said slowly, according to several teachers who described the events that morning. But his teacher — and the system — would not budge.

A few hours later, Qingming, 18 years old, stepped in front of an approaching locomotive. The train, like China's roaring economy, was an express.

If his gruesome death was shocking, the life of this peasant boy in the rolling hills of northern Sichuan Province is repeated a millionfold across the Chinese countryside. Peasants like Qingming were once the core constituency of the Communist Party. Now, they are being left behind in the money-centered, cutthroat society that has replaced socialist China.

China has the world's fastest-growing economy but is one of its most unequal societies. The benefits of growth have been bestowed mainly on urban residents and government and party officials. In the past five years, the income divide between the urban rich and the rural poor has widened so sharply that some studies now compare China's social cleavage unfavorably with Africa's poorest nations.

For the Communist leaders whose main claim to legitimacy is creating prosperity, the skewed distribution of wealth has already begun to alienate the country's 750 million peasants, historically a bellwether of stability.

The countryside simmers with unrest. Farmers flock to the cities to find work. The poor demand social, economic and political benefits that the Communist Party has been reluctant to deliver.

To its credit, the Chinese government invigorated the economy and lifted hundreds of millions of people out of abject poverty over the past quarter century. Few would argue that Chinese lived better when officials still adhered to a rigid idea of socialist equality.

But in recent years, officials have devoted the nation's wealth to building urban manufacturing and financial centers, often ignoring peasants. Farmers cannot own the land they work and are often left with nothing when the government seizes their fields for factories or malls. Many cannot afford basic services, like high school.

This year, the number of destitute poor, which China classifies as those earning less than $75 a year, increased for the first time in 25 years. The government estimates that the number of people in this lowest stratum grew by 800,000, to 85 million people, even as the economy grew by a robust 9 percent.

No modern country has become prosperous without allowing some people to get rich first. The problem for China is not just that the urban elite now drive BMW's, while many farmers are lucky to eat meat once a week. The problem is that the gap has widened partly because the government enforces a two-class system, denying peasants the medical, pension and welfare benefits that many urban residents have, while often even denying them the right to become urban residents.

Even in a country that ruthlessly punishes dissent, some three million people took part in protests last year, police data show. Most were farmers, laid-off workers and victims of official corruption, who blocked roads, swarmed government offices, even immolated themselves in Tiananmen Square in Beijing to demand social justice.


That the Right has made a foolish fetish of the supposed dispassionate wisdom of markets and business is nowhere more apparent than in the fact that the same folks who express extravagant worries about the condition of the American economy don't bat an eyelash at the idea of pumping money into a China which is one spark away from imploding.

Posted by Orrin Judd at August 7, 2004 4:22 PM
Comments

Huh? Speaking as a market fetishist, I will not take China's implosion as a rebuttal.

Posted by: David Cohen at August 7, 2004 5:25 PM

Right on, David. Individual 'fetishists' can make dumb decisions, surely enough. However, no one should be under the illusion that the market is perfect...merely that it is the best coordinator of limited & imperfect information.

Posted by: Bruce Cleaver at August 7, 2004 5:39 PM

Not a rebuttal, but a caution. Markets aren't any more rational than any other human endeavor.

Posted by: oj at August 7, 2004 6:08 PM

Although accompanied by suffering and injustice, in the long run, building roads, dams, and factories is the best thing that could happen to rural China.

Posted by: Michael Herdegen at August 7, 2004 9:02 PM

Michael:

Read about it--they aren't building roads damns or factories that are useful--they're just makework. At least Roosevelt generally boondoggled where people were.

Posted by: oj at August 7, 2004 10:16 PM

Sounds like the government is losing the "mandate of heaven." Anyone familiar with Chinese history will know the likely outcome.

Posted by: jd watson at August 7, 2004 10:27 PM

oj:

Yes, it's likely that much of it isn't rationally placed, but infrastructure always brings opportunity.

Someone, sometime, will make some of it productive.
That will be somewhat better than hauling another turnip crop to market over dirt roads.

Posted by: Michael Herdegen at August 8, 2004 1:57 AM

Michael:

Why?

Posted by: oj at August 8, 2004 7:53 AM

"Markets aren't any more rational than any other human endeavor."

Depends. In the absence of herd behavior (admittedly often a part of markets), it is amazing how close a market can get to a knowable fact, without knowing what that fact is in advance.

For example--ask, say, 20 people to guess your weight, without knowing what anyone else has guessed. The answer, an average of all the responses, is very likely to be within a fraction of a pound of the actual value.

Posted by: Jeff Guinn at August 8, 2004 9:46 AM

Jeff:

A market and a consensus are not the same thing. If nineteen out of twenty choose Spears over Bach, what conclusion do you draw about music?

Posted by: Peter B at August 8, 2004 11:16 AM

The problem isn't the dams and roads, It's the Govt. built business centers, such as Shanghai, built by central planning for business before the businesses exist; a hollow shell of an economic program and govt. market manipulation. They're a long way from modern capitalism and their greatest mistake is limiting the expertise that comes with foreign investment. They don't trust the market, they try to manipulate it; a hangover from collectivism. They need to go all the way forward or give up and slide back into Communism to retain control. Unfortunately, control seems their bottom line.

Posted by: Genecis at August 8, 2004 1:23 PM

Best for whom, Bruce?

Posted by: Harry Eagar at August 8, 2004 2:40 PM

This is no different than the aristocracy driving the peasants off the land in Britain in the 18th century in order to raise sheep. The most productive use of property will drive off the others. It is not moral, but inevitable. We did the same with family farmers in America in the 1980's, in the form of bankruptcy sales and evictions.

I'm reminded of the case of a South Dakota farmer who was disposessed and ended up shooting and killing the local banker who had held the sale. They had been lifelong friends before that.

Posted by: Robert Duquette at August 8, 2004 3:47 PM

oj:

You and I may, (or may not), prefer to be backwoods subsistence farmers, but historically, the masses have not wanted such, and so it's "better", as defined by the people who actually have to live in rural China, to have industry and good roads.

Posted by: Michael Herdegen at August 8, 2004 3:52 PM

They don't have and won't have industry and good roads--they have road building and unused roads.

Posted by: oj at August 8, 2004 4:20 PM

It would be hard to build a road in most of China that would remain unused.

Posted by: Harry Eagar at August 8, 2004 4:39 PM

Peter:

There is no consensus, since no one knows the others' guesses.

But it does indicate that, given certain constraints, markets are capable of producing very accurate information.

As for Spears over Bach, that indicates if I want the best return out of my entertainment industry investment, then going with Bach would be pretty darn silly.

Posted by: Jeff Guinn at August 8, 2004 8:29 PM

That's what they said about the Cumberland Road.

Posted by: Harry Eagar at August 9, 2004 10:45 PM

And EuroDisney

Posted by: oj at August 9, 2004 10:51 PM

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Posted by: fiorcet at November 17, 2004 12:33 AM
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