Friday, January 9, 2009

china’sRuralReform:crisisandOngoingDebate

china’sRuralReform:crisisandOngoingDebate

china’sRuralReform:crisisandOngoingDebateDale Jiajun WenDespiteChina’sdramatictransformationinthelastthreedecades, itscountrysideisinastateofcrisis.Thisstudyexaminesthedark sideofthecountry’seconomic“miracle”,lookingintothevarious adverseeffectsthathavefollowedthebreak-upofcommunesin ruralareasandanalysingtheircauses.Italsoexaminesthe contentiousissueofprivatisinglandownership,whichissfavoured bythosesympathetictoaneoliberalagenda,andreportsonrecent grassrootsandgovernmenteffortstorebuildcommunities at the village level.Dale Jiajun Wen (dale.wen@gmail.com) is an activist with theInternational Forum on Globalisation, San Francisco.China has undergone a dramatic transformation in threedecades of economic reform. One of the most often heardclaims is that it has shifted from being an agrarian coun-try to an industrial one. As China rapidly becomes factory to theworld, few would think twice about this statement. But it is nottrue. In terms of gross domestic product (GDP), China’s industrial output was already twice that of agriculture by 1976. In termsof population, the rural population was about 80% in 1976 and it is more than 60% today. So if one looks at output, China wasalready an industrial nation in 1976; if one looks at the population,China was and still is an agrarian state.Despite China’s “economic miracle”, its vast hinterland is in astate of crisis. Experts have coined the term “three-dimensional rural problem” (agriculture, peasants, and rural areas) to sum-marise a multitude of troubles, such as stagnant incomes, declin-ing public services, overstaffed but inefficient local government,rampant corruption, declining social capital, a degraded environ-ment, escalating crime, and growing protests and demonstra-tions. In China, the rural crisis is generally recognised as themost urgent challenge facing the government. In this paper, I will trace the history of rural development in China, analyse the root causes of the present crisis, report on grass roots efforts to rebuild communities and discuss the hotly debated issue of land privatisation. 1 The Plight of Rural areas and its MakingDeng Xiaoping’s reforms began with China’s rural areas in thelate 1970s. Initially, agricultural output and rural incomeincreased significantly, a fact that was used to justify furtherreforms in rural as well as urban areas. But economic growth inrural areas slowed down considerably in the mid-1980s. By thelate 1980s and early 1990s, most rural areas were in a state of stagnation or even degeneration. Today, China’s rural areas facean unprecedented crisis.1.1 De Facto Privatisation of agricultureBefore 1978, most Chinese farmers were organised into collectivecommunes. Several studies found that about a third of the com-munes were doing very well, another third showed potential butwere facing some problems, and the bottom third had seriousmismanagement problems and were stagnating.1Based on this data, some communes required serious reform, including possi-bly new forms of organisation and management, but the majorityonly needed fine tuning. Nevertheless, from 1978, the entirecommune system was put through a major overhaul.The first step was the implementation of the family contractsystem. This system broke up the communes and gave land
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china since 1978Economic & Political WeeklyEPWdecember 27, 200887contracts to individual families. They were obliged to sell acertain amount of grain to the state at a set price and pay certaintaxes, but could keep everything else. In September 1980, thegovernment took another major step when it ordered the de-collectivisation of agricultural production. This involved a series of measures to replace the commune-based system with a family-based household production system. While a majority of officials and farmers in the bottom third of the communes welcomedthe top-down reform, many of the other farmers were critical.However, officials who opposed the plan were persuaded or pres-sured to change their position, while the stubborn ones werefired and replaced.Privatisation of the agricultural sector in China is only partial:the land itself is still the communal property of villages; only theright to use it is contracted to individual families and this can betraded under certain conditions. The communal ownership of land is probably the most important factor preventing increased land concentration and the emergence of large numbers of land-less farmers. We will visit this issue again later, as the privatisationof land is probably the most hotly debated subject in rural China.1.2 short-term Boom and its Real causesIncreasing agricultural output and incomes made the earlyreform years (1978-84) rural China’s golden years. The officialnarrative still attributes the rural boom largely to decollectivi-sation. Justin Yifu Lin, a current World Bank chief economist andsenior vice president, put forward this explanation in his doctoral thesis “China’s Rural Reforms: Theory and Empirical Evidence”.2However, such neo-institutional economic interpretation of theearly “success” of China’s rural reform becomes questionablewhen one looks closer at the facts.More than two-thirds of the increase in agricultural outputwas achieved before 1982, the year decollectivisation was car-ried out on a large-scale. In 1979, the government raised the price it paid to farmers for the grain they were obliged to sell to the state by 20% and offered a 50% premium on grain above the required quota.3Needless to say, the price hike contributed more to an increase in peasant income than the growth of agricultural output. During this period, Chinese agriculture was also transformed by the introduction of chemical fertilisers, pesticides, and hybrid seeds, which was made possible by the industrial and technological build-up of the pre-reform era. A highly successful hybrid rice strain was developed in 1975 and subsequently rolled out. High-yielding varieties (or more precisely, high response varieties, as a high-yield requires high input) worked wonders, thanks to the water works and irrigation system built in the pre-vious 30 years. Between 1978 and 1984, the use of fertilisers more than doubled, helping farmers achieve record harvests. And the chemicals have remained vitally important until today. According to Philip Huang of the University of California at Los Angeles, the average use of chemical fertilisers increased from 6.15 kg/mu (15 mu=1 hectare) in 1980 to 21.55 kg/mu in 2003, an increase of 348%. Based on calculations of fertiliser effect by Dwight Perkins, a political economist at Harvard, this increased use should have pushed up grain production by 189.5 kg/mu.4However, the actual increase during the period was only 119.5 kg/mu (from 203.5 kg/mu in 1980 to 323 kg/mu in 2003).5So if we exclude the “wonders” created by chemical fertilisers, thecontribution of all other factors is actually negative.1.3 The Rise of chemical-Based agricultureAs mentioned above, the implementation of the family contractsystem coincided with a “green revolution” in Chinese agricul-ture, and the latter was largely responsible for the short-term rural boom. But there are no free lunches – the same technical factors also contributed to the stagnation that followed. After the stateprice control on agricultural inputs was lifted in the mid-1980s,prices skyrocketed. In two years, fertiliser prices rose 43% and pesticide prices rose 82.3%.6And they continued to rise by morethan 10% a year throughout the 1990s. When the price of fossilfuel soared in early 2008, fertiliser and pesticide prices went upby more than 60% in many places. By now, farmers were trapped in a vicious circle, compelled to pump more chemicals into theirfields to keep up yields while the soil lost organic matter. All thesechemicals have created a huge environmental problem in rural China, polluting waterways and damaging people’s health. Formany peasants, the “miracle” chemicals have become both aneconomical and environmental liability.Another factor that contributed to the short-term increase inhousehold incomes was the exploitation of communal assets. Forexample, there was no control over the rampant cutting of trees,which had been planted by communes over the previous 30 years as roadside windbreaks to prevent erosion. In merely four years,between 1985 and 1989, there was a 48% decline in the areacovered by windbreaks nationwide.7The de facto privatisation of agriculture has had profound long-term environmental and economic effects. Given the highpopulation density, family farms are often smaller than one hec-tare, or even half a hectare. This stands in the way of achievingeconomies of scale, and utilising equipment once owned collec-tively, such as tractors. Such inputs are too expensive for individ-ual families. So, many villages experienced demechanisation inthe initial years of privatisation. And as farmers put more labourinto tasks once done by machines, they have had to cut back onother types of work, including good environmental practices likethe application of organic and green manure. Compared to thecommunes, the family farms are also much more vulnerable tonatural disasters and market fluctuations, which again puts pressure on farmers to overtax the environment. The small size of the farms leads to other environmental problems. As one farmerobserved, “When I apply pesticide, the pests simply migrate tomy neighbour’s field; the next day, when he applies pesticide,all the pests come back to my plot. We end up wasting a lot of chemicals while achieving very little.” In many villages, even thetiny family farms are spatially fragmented, posing further diffi-culties for integrated management. Following demands that landdistribution be fair and equal, a family may have a high-gradeplot of land at one end of a village and a low-grade plot at theother end, with a medium-grade plot somewhere in between.Some villages have a different scheme: each family is allocated achunk of land, and the plots are rotated over the years. But this
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china since 1978december 27, 2008EPWEconomic & Political Weekly88creates the problem of farmers losing the incentive to invest inland and soil fertility for long-term gain.1.4 negative impact on WomenThe family contract system has also had a negative social impactwith the male heads of households being designated contractholders. Such restoration and strengthening of the old patriar-chal tradition has had serious implications for women.8In thecollective labour arrangement, women’s contributions were offi-cially acknowledged and rural women enjoyed unprecedented participation in public affairs, as reflected in a famous slogan of the time – “Women can support half of heaven”. The communesalso provided a public space for socialising. In the well-run com-munes, collective labour was often quite enjoyable: elders told stories, young people engaged in friendly competitions, andpeople sang songs while working. Or even flirted, giving rise tomany romances and marriages.9The disappearance of this has thrown women back into the constraints of their families and many patriarchal traditions have returned. Not surprisingly, inmany villages, young women are the first to leave in search of jobopportunities in the cities as nannies or assembly line workers.1.5 DecliningPublicservicesDecollectivisation would not have been so catastrophic if thegovernment had invested in rural collective institutions, such as health and marketing cooperatives that could work with familyfarms and supply the services and functions earlier provided bythe communes. But this did not happen. Government expendi-ture on agriculture, as a percentage of total national expendi-ture, has been in steady decline since the 1980s. From 10.5% inthe period 1976-80, it had fallen to 5% in 1981-85, and 3.3% in1985-90.10Though the total infrastructure investment increased several fold in the reform era, the share of infrastructure invest-ment in the rural sector decreased from 10.6% in 1979 to 2.8% in1992, and 1.7% in 1994.11In addition to direct monetary invest-ment, the government used to provide plenty of human resourcesupport for the good of the rural public, including water works,flood and drought management, healthcare, and public education.Most of these programmes deteriorated or completely evaporatedin the reform era.Starting in the mid-1980s, the effects of rapid appropriation of communal capital and declining investment in rural infrastructurebegan to be felt. Tree farms were cut down and the loss of wind-breaks resulted in more soil erosion. Declining canal networks and other water works led to a loss in productivity and increasing vulnerability to droughts and floods. For example, deforestation inthe Yangtze and Songhua river basins accelerated greatly since thelate 1970s,12which eventually resulted in flooding in the 1990s.Under the family contract system, water control infrastructuresuch as small dams and canals remained under collective man-agement. Yet the collectives experienced a massive decline ininvestment capital while simultaneously being stripped of theirauthority and assets.13While water works fell into disrepair and decline due to the lack of labour and capital, it often lead toserious overdraft of alternative water resources (for example,over-pumping of groundwater) in many areas.Many state-guaranteed entitlements for individuals have alsodeclined during the reform era. For example, those who could not work and did not have family support had the “five guaran-tees” of food, clothing, shelter, education and a decent burial. .They still exist nominally, but have deteriorated considerablywithout the institutional support of a collective economy. Thedeclining entitlements undermine state legitimacy and reducethe government’s leverage to carry out its policies. Take the birthcontrol policy. Due to the small acreage of arable land per person,most of China’s peasants are acutely aware of population pres-sure and support the government policy in principle. Yet recentsocial changes, which have resulted in neglected elders withoutfamily support, or rural women with eroding rights, have givenrise to a conflicted mentality in farmers, Summing this up, onesaid, “I hope everyone else abides by the one-child policy (somore land will be available per person), but I want to have a son,I want to have more kids”. As birth control is so vital to the long-term sustainability of China, the government has to resort tocombative means to implement it.With declining support from the central government, rural ex-penditure is increasingly financed by local taxation and fees. Sowhile local government services are in decline, expenditures and taxes continue to rise. Several empirical studies find that in themid-1990s, various taxes and fees added up to a fourth or even athird of peasants’ income, much higher than the 15-20% levied onthe communes in the collective years.14The fundamental reasonis that de facto land privatisation has fragmented Chinese rural society, and administration costs are much higher than before.Further, fragmented village communities have lost their collec-tive power and fall prey to the unchecked bureaucratic power of rural cadres and their corruption.15Rural fragmentation is also cited as a reason for the rise incrime. According to Dongping Han, a US sociologist who grew upin rural China,The collective created a new community spirit in rural China, and people cared about each other’s well-being. It was very hard for criminals to operate in the countryside when there was strong coherence in acommunity. The individual household system destroyed the rural community created by the collective institutions, which created anenvironment more susceptible for crimes.16He points out that while the rural police force has quadrupledin size, most cases go unsolved, reflecting the fact that crime has become a social problem beyond the control of the police.1.6 collapseofRuralhealthcareBefore 1980, China’s healthcare system developed under thesocialist planned economy. By 1980, more than 90% of thepopulation was covered by state or collective healthcare systems.Between 1949 and 1978, average life expectancy rose from 35 to68 years; and infant mortality dropped from more than 200 per1,000 to 42 per 1,000, one of the fastest improvements in theworld during that period.17Despite its huge population, Chinawas the first developing country to eradicate smallpox and polio.By the late 1970s, China’s two key health indicators (life expectancyand infant mortality) were not only much better than the averagefor low-income countries, but also better than the average for
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china since 1978Economic & Political WeeklyEPWdecember 27, 200889middle-income countries. In 1978, at the World Health Organisa-tion (WHO) conference “Health for All by the Year 2000 in Alma-Ata”, China’s primary healthcare system was featured as a model for the world.18Much of this achievement could be attributed tothe innovative “barefoot doctor” system. Each rural communityhad a local doctor who provided basic healthcare. This systemwas a cost-effective measure geared to provide preventive and routine healthcare to villagers and the treatment of more seriousdiseases was undertaken by higher level clinics.The dissolution of the communes led to a medical “free fall” forthe rural population. The barefoot doctor system and collectiverural clinics crumbled without the support of necessary infra-structure. It is estimated that a third of the public health organi-sations (clinics, hospitals, monitoring stations and the like) belowthe county level are on the brink of bankruptcy and another thirdhave collapsed. Though the total number of hospital beds has grown significantly in the last 20 years, their numbers have fallenor stayed the same in rural areas. They have decreased on a percapita basis in seven poor provinces – Guizhou, Tibet, Qinghai,Hubei, Hunan, Jiangxi, and Xinjiang. In 1998, per capita govern-ment spending on healthcare was 130 yuan for urban areas and 10.7 yuan for rural areas. Between 1993 and 2000, the rural sharein total healthcare expenditure fell from 34.9% to 22.5%. From1975 to 2001, the total number of rural doctors fell from 1.5 mil-lion to about 1 million, and the total number of rural nurses fell from 3.28 million to only 2,70,000. Many doctors and nurses whoare still serving in the villages were trained 30 years ago, withlittle further training since then. When they retire, who will carryon their work? As Mao once commented in 1960s (before helaunched a big public campaign to publicise the barefoot doctorsystem), the public health ministry is serving the urban elites once again.Diseases that were once under control, such as tuberculosisand schistosomiasis, are making a comeback. The occurrencerate of tuberculosis has quadrupled in recent years. New diseasessuch as Aidsare spreading rapidly due to illegal blood selling andneedle sharing. Many poor farmers in central China have con-tracted Aidsby selling blood and estimates of their numbers rangefrom 2,00,000 to several million. Because of the collapse of rural health monitoring, no exact estimate is available. According tothe World Bank, China’s mortality rate for children under fiveyears, regarded by United Nations Children’s Fund (UNICEF) as the single best indicator of social development, stopped decliningin the early 1980s and stagnated until 1991. In addition, the per-centage of rural children with very low height for age (anindication of malnutrition) increased from 1987 to 1992.19China’s progress in average life expectancy and infant mortal-ity has slowed down so significantly since 1980 that it has beenlagging behind many other countries in the improvement of thetwo key public health indicators. Average life expectancy only in-creased from 68 years in 1978 to 71 years in 2003. Even this tiny“progress” was largely due to urban improvement: the urban lifeexpectancy (79 years) is approaching the level of Organisationfor Economic Cooperation and Development (OECD) countries,while rural life expectancy is only 67 years. During the so-called “economic miracle”, China’s improvement in the two key publichealth indicators has been less than the average improvement of low-income and middle-income countries, and the world aver-age. In the WHO’s World Health Report 2000, China ranked 188out of 191 countries in terms of fairness in financial contributionto health and 144 out of 191 countries in overall performance of the healthcare sector.20In summary, the Maoist era broughthealth to Chinese people, while the reform era has almost liqui-dated its achievements for quick money.1.7 education as a Form of cultural colonisationRural education has also suffered greatly in the reform era. Apartfrom financial problems like diminishing funds and skyrocketingtuition fees, it has gone through a dramatic regression towards elitism in the last two or three decades. This makes it muchharder for rural children to get a good education and widens thedivide between the mass of Chinese peasants and the urban elite.To better understand this, let us briefly examine the history of education in China. Education has played an important role inChinese history ever since the “imperial exam system” (Ke Ju ZhiDu) was introduced 1,400 years ago. From 605 to 1905, imperialrulers used the system to select the best educated to be stateadministrators. At its birth, the exam system was far moreadvanced than the hereditary systems in many other parts of theworld, and it made a significant contribution to Chinese civilisa-tion. But as history progressed, it became a tool of the educatedelites to promote their self-interests and became a barrier toequality and democracy. Though the exam system was officiallybanished in 1905, the elitist tendency fostered over centuries was not so easy to shake off. During the first 17 years of communistrule (1949-66), despite of the strong egalitarian tendency of thecentral government, most of primary and secondary educationwas focused on perfecting exam-taking skills – the goal of a studentwas to pass the national college entrance exam and thereby moveup the social ladder. The system was essentially a re-installationof a system very similar to the imperial exams. Not surprisingly,rural education made little progress. In his paper “Impact of theCultural Revolution on Rural Education and Economic Develop-ment – The Case of Jimo County”,21Dongping Han documented that a county of 7,50,000 people only produced 95 high school graduates a year during 1966-76; more importantly, more thanhalf of the graduates left the countryside for good.Many are familiar with the disasters brought about by theCultural Revolution, but many positive changes took place dur-ing the period as well. Rural education was one of the majorbeneficiaries. The privilege of the educated elites and their strong-hold on education policy was challenged and shattered duringthe Cultural Revolution. The educated elites were required tolearn from workers and farmers though regular participation inmanual labour; an “open door education” policy was imple-mented where working people were actively involved in theeducation process. As a consequence, primary and secondaryeducation in rural areas exploded – the above-mentioned countyproduced 2,362 high school graduates a year in comparison to95 in the previous years.22A “popular model” of education wasdeveloped in response to the demand of peasants. Schools in-troduced new sets of textbooks with local legends and local
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china since 1978december 27, 2008EPWEconomic & Political Weekly90knowledge; experienced workers and farmers were invited togive lectures and contribute to curriculum design. In a papertitled “Professional Bias and Its Impact on China’s Rural Educa-tion: Re-examining the Two Models of Rural Education and TheirImpact on Rural Development in China”,23Dongping Han de-scribed some of the better-run rural schools of that time.Since the village school was completely under the control of the local community of the village, the content and structure of education had been completely transformed. There was a high level of integrationbetween education and village life at the time. The curriculum was oriented towards rural needs. For example, the important lessons and experiences farmers accumulated over the years entered the languagetextbook, like when it was time to plant wheat, to plant beans and sweet potatoes, how to take care of different crops. These materials were not only useful to rural students but were also much easier forrural children to learn … Students studied the fundamentals of inter-nal combustion engines, generators and electric motors, and waterpumps, and how to operate and repair these machineries. Instead of studying traditional biology and chemistry, students studied plant genetics. Students in Fuqian village middle school experimented in theirown fields the crossing of two different corn crops to see the result. Inmathematics classes, students studied how to measures the volume of piles of grain, a pile of organic fertiliser and the size of a piece of land, as well as principles and rules of book-keeping for the collective farm.The transformed schools became an important part of villagecommunities and helped to centre attention on village life; most of the energy and effort was focused on building the local economyand improving community conditions. There were documented cases where people gave up better paying jobs in the cities to comeback to the countryside because they preferred the environment:other than the short busy seasons, farmers only worked four tofive hours a day and working in nature was much less stressful.All this changed in the reform era. Deng’s famous quote“Education should be oriented towards modernisation, the world and the future” was used by the educated elite to restructure thecurriculum. In the name of quality control and standardisation,national standard textbooks were adopted. Local content wasfully eliminated and working people no longer had a say in theeducational process. The national college entrance exam was reintroduced in 1978 and has once again become the mostimportant yardstick for evaluation. As an example of what is be-ing taught and tested in today’s schools, here are a couple of mul-ti-choice questions from the 2002 college entrance exam.(1) Frankfurt is Germany’s(a) Most populated city(b) Biggest harbour city(c) Biggest airport hub(d) Biggest hi-tech centre(2)WhichofthefollowingcountriesbelongstotheEuropeanUnion,is next to North Sea and Baltic Sea, and is not using the euro?(a) Sweden, (b) Germany, (c) Denmark, (d) PolandMillions of children are forced to memorise trivial facts aboutdistant western countries while learning nothing about theirown communities – the detachment and alienation has gone sofar that some high school students in villages I visited did noteven know whether their own parents kept chickens or ducks as part of their livelihood. Many educational materials carry theimplicit message that everything urban is modern and desirable;everything rural is backward and despicable, and should bediscarded as fast as possible to achieve modernisation – or moreprecisely, Americanisation. Farmers’ traditional attachment tothe land is considered a stupid sentiment that has to be replacedby upward mobility at all costs. For the majority of rural childrenwho have little chance of entering college, education becomes irrelevant after learning to read, write, and count in the first fewgrades. Combined with rising tuition fees, this has driven manychildren out of schools. One case study by Dongping Han foundthat the high school enrolment rate of a rural county haddropped from more than 70% in 1976 to less than 10% in late1990s.24Those who are lucky enough to enter colleges eitherleave the countryside for good, or come back as governmentemployees or officials. Needless to say, it is questionable whethertheir education has prepared them to be community leaders and decision-makers.In short, the elitist model of education has become an activeagent for cultural colonisation of the rural areas. While it hasinspired a few to be fierce competitors in the catch-up game, ithas demoralised the majority and helped to poison the spirit of community. In many rural areas, the brain drain and labour drainare so severe that some Chinese sociologists have coined the term“empty nest villages”: the most capable escape by entering col-lege; the young and healthy become migrant workers; those whoare left behind are predominantly women with heavy familyburdens, elders, children, and the handicapped. Young and healthymigrant workers spend their best years building highways and skyscrapers for urban centres, toil in sweatshops, or serve asdomestics for the urban middle class. Yet with minimum labourprotection and no social safety net, most of them will be cast back to the countryside when they become old, sick or injured – which is quite common given the harsh labour conditions they often face.Educational problems like skyrocketing tuition fees havecaught the attention of the general public and the government. InMarch 2005, Prime Minister Wen Jiabao announced a new policyabolishing fees for 14 million students in China’s poorest counties.Since 2007, primary education (nine years) has become free forall rural students. But the government still needs to realise thatbesides fees, the style and content of education is also a vital problem. This is best exemplified in the case of Tibet. The Chinesegovernment has poured a huge amount of aid into Tibet in thelast 30 years. So, unlike other areas, most schools in Tibet haveremained free, and in some places parents are even paid to send their children to school. Yet, many children are not going toschool, especially in traditional communities of nomadic pasto-ralists. The mainstream media often blame the problem on par-ents, saying they are backward and do not understand the impor-tance of education. Nothing is further from the truth. Many herd-ers still have fond memories of the horseback schools or tentschools in Mao’s era. As their names indicated, these mobileschools travelled with the nomads and were integrated into theircommunity life. But today’s schools are centralised and settled,which means a pupil has to live away from his or her parents. Theproblem goes beyond the high living cost or separation fromfamily. In the words of some parents, “Today’s school only teaches a child to be lazy and picky. The family tent is no longer good for
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china since 1978Economic & Political WeeklyEPWdecember 27, 200891him, traditional food is no longer good for him, and tending toanimals is a stupid task for him. When a child comes back fromschool, he just thinks everything is wrong and does not want todo anything”. These parents are not backward or stupid. Many of them would like their children to get an education, but they alsounderstand that the current system of education is destroyingtheir children instead of empowering them. The problem is withthe educators who fail to deliver the type of education mostwanted and needed in rural areas.2 WTO accession – aFurther Blow to Rural economyChina entered the World Trade Organisation (WTO) in December2001. As the peasantry was too fragmented to be a viable political force, the Chinese government made huge concessions in theagricultural sector during the accession negotiations. Once theWTO rules are fully implemented, China’s agricultural marketwill be more open than those of Japan or South Korea. Ever sincethe country opened its borders to cheap, highly subsidised agri-cultural commodities from industrial nations, the already ailingrural sector has been further challenged. While the full impact of the WTO on China’s agriculture is yet to be assessed, here I presenttwo case studies, on sugar cane and on soya bean.2.1 The Taste of sugar is not always sweetAccording to the China’s terms of accession to the WTO, tariffs foragricultural imports had to be reduced from an overall average of31.5% to 17% by January 2004. As the domestic prices of mostagricultural products were higher than international prices, thiswas a big blow to many agricultural commodities, as exemplifiedby the case of sugar cane.Second only to cotton and oil seeds, sugar cane is one of China’s most important commodity crops. Guangxi, one of the poorest provinces in southern China, is the country’s leading producer of sugar cane. Sugar cane farming accounts for more than 8% of the region’s total agricultural output, and the sugar processing industry accounts for 10%t of total industrial output.25Twenty-six million peasants in Guangxi depend on sugar cane and integration into the world market has been quite disastrous for the region.In October 2001, domestic sugar prices started to plummet inanticipation of the WTO accession; in six months, the pricedropped by 35%.26Government revenue fell significantly, andmany processing plants were adversely affected. But farmerswere the hardest hit because much of the loss was transferred onto them in the form of a much lower sugar cane price. Sugar caneprices plummeted from 250 yuan per tonne to about 190 yuan per tonne between 2002 and 2003, then to 170 yuan per tonne for 2003 and 2004.27With the production cost estimated at around 138 yuan per tonne,28the profit was marginal. It is note-worthy that in 2004 both the domestic and international priceof sugar rose due to increased demand. But the higher sugarprice did not translate into a higher sugar cane price for thefarmers, showing that small growers are increasingly disadvan-taged in the globalised commodity market. As China joins theglobal trade network, the commodity chain that connects producers to consumers has become longer. Now the long linkinvolves trading companies and major retailers in other countries,making producers more vulnerable to added uncertainties and askimming off at each segment of the chain.As shown in the ac-companying table, thesugar cane farmers inGuangxi are losing outnot because their pro-duction cost is high, butbecause of the unfairsubsidies paid by richcountries. It has beenestimated that the Euro-pean Union (EU) subsidy alone depresses the world sugar priceby 10-20%.29Some Chinese WTO proponents have argued that more food imports will be good for China’s environment: with more cheapfood imports, Chinese farmers will no longer need to farm somuch land and it can be restored to its natural state as grassland or forest. Even if we forget about issues like food security or thereal cost of transporting food over long distances, such predic-tions have little to do with reality. Despite depressed prices,sugar cane acreage in Guangxi has increased in the last several years: from 0.53 million hectares several years ago to 0.77 millionhectares in 2004.30Nationally, a total of 1.36 million hectares of sugar cane was planted in the 2004-05 season, a year-on-year in-crease of 6,667 hectares.31Apparently, local people and the localgovernment have chosen to increase the area under sugar cane tomake-up for the diminishing profit.2.2 The‘invisiblehand’oftheMarketLargely a commodity crop, soya bean production in China hasbeen exposed to the forces of the world market in recent years,with drastic consequences. Soya bean has a long history in China,where it was domesticated almost 5,000 years ago. The legendaryEmperor Shennong (literally, the Emperor of “Magic Agriculture”)included soya bean as the only legume in his list of five life-sustaining grains. Millennia of cultivation have produced anenormous range of varieties, as well as a vast body of indigenousknowledge concerning it. Until the 1990s, China had a long historyof exporting soya, and it had been largely self-sufficient until the early 2000s. But after the accession to the WTO, the tariff for soya imports was cut to 3%. Since then, soya imports havesoared. In 2003, soya imports reached 20.74 million tonnes (dou-bling within three years), and China became the world’s biggestsoya importer. In 2005, soya imports were 26.5 million tonnes,1.6 times domestic production. Most of the imports are geneti-cally modified (GM) soya from the US, Brazil and Argentina. Soyabean has become one of the few food items which China depends on imports for – in 2007, imports accounted for more than two-thirds of domestic consumption.Media attention has mostly focused on soya bean-producingcountries. On 28 April 2008, German magazine Der Spiegel ran anarticle “The Struggle to Satisfy China and India’s Hunger”. In it,soya production in Brazil, which is driving deforestation and push-ing hundreds of small farmers into bankruptcy, was described as TablesugarProductioncostPerTonneUnit (Yuan/Tonne)SugarProductionInComparisonCost Per Tonneto GuangxiGuangxi2,230.44Thailand1,900330.44Brazil1,700530.44EU5,623-3,392.56US3,100-869.56World average4,400-2,169.56Source:ResearchCentreforEconomics,Guangxigovernment.
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china since 1978december 27, 2008EPWEconomic & Political Weekly92“a culture of death”. According to the article, “From the Río de laPlata to the Amazon, the Chinese are sucking the markets forsoya beans dry. Large segments of the state of Mato Grosso arealready covered with a green, pesticide-drenched monoculture.”The other side of the story, which plays out in China and has received far less attention, is unfortunately just as sad. Soya beanproducers in China have not only been assailed by surging im-ports, but also suffered from declining exports. In the mid-1990s,China used to export more than 1 million tonnes of mostly organicsoya beans a year to South Korea and Japan. In recent years, theexport has steadily dropped to 2,00,000-3,00,000 tonnes a year,partly because the buyers are concerned about genetic contami-nation by China’s GM soya imports. Needless to say, soya beanfarmers in China are devastated. In the north-eastern province ofHeilongjiang, about 20 million small farmers used to grow about40% of the country’s soya beans. According to a news report inSeptember 2006, the soya bean price in Heilongjiang haddropped to 28 cents a kilogramme in 2005. This was below theproduction cost even if the cost of labour was not included.Consequently, in 2006 alone, the province saw the area undersoya bean cultivation shrink by 25%. The shrinkage continued in2007 by at least 5%. Millions of soya bean cultivators scrambled to switch to other crops, or simply abandoned their land to jointhe crowds of migratory workers.During this transition, a few major players on the international market did not fail to make a tidy profit, while operating side byside with big governments, as often happens in the WTO and other“free trade” arrangements. Towards the end of 2003, the US and China were on the brink of a trade war due to the large trade deficitrun up by the US. To reduce the tension, Chinese Prime MinisterWen Jiabao visited the US in December 2003 and announced thatthe Chinese government would send delegates to purchase agri-cultural products, primarily soya and cotton. Such an announce-ment could be regarded as a laudable peace offer, but in the modernfinancial world, no such good deed goes unpunished. Before theannouncement, the monthly average of soya bean futures on theChicago Board of Trade was $7.70/bushel. It soared to $9.82 and $9.89/bushel in March and April 2004, respectively when theChinese made the bulk of their purchases. Then it declined rap-idly and reached $5.93/bushel in August 2004. In comparison,the monthly averages of soya bean futures in April 2003 and April2005 were only $6.04/bushel and $6.23/bushel respectively,more than 35% below the April 2004 price. While all this wasperfectly legal, it made waves in China, and the so-called “soyabean crisis” will be remembered for a long time to come. A studyby the Chinese Academy of Science has estimated that Chinaoverpaid at least $1.5 billion for its soya during this period.Eventually, it was the domestic oil mills in China which becamethe biggest losers. The overpriced soya beans from the US werepassed on to them and put them into a serious financial squeeze.In 2005, big agribusinesses came to the rescue, massively buyingout the Chinese oil mills. Today, the big four in agribusiness(ADM, Cargill, Bunge and Louis Dreyfus) are estimated to controlabout 85% of the market, as they partly or solely own 64 of the90 large-scale soya bean oil mills in China. This kind of marketconcentration has made the soya bean oil market in China quitevulnerable to market manipulation, as shown by price surges: thesoya bean oil price increased from 5,000 yuan/tonne to 8,000yuan/tonne in just two months, between September and Novem-ber 2006. Needless to say, mills controlled by the big agribusi-nesses often prefer GM soya growers from North America or LatinAmerica to domestic growers, as the former are vertically inte-grated into their global operations. This has delivered a furtherblow to local growers.Since China’s accession to the WTO, Chinese soya bean growers,oil producers, and consumers have all been losing out to biginternational agribusinesses. Another loser in this so-called “freetrade” is the future of soya bean itself: with the rapid and massivebankruptcy of huge numbers of small growers, the incredible bio-diversity of soya varieties and the indigenous knowledge associ-ated with them are dying out. To neoliberal scholars, all thismight appear as necessary adjustment costs during a shift tomore cost-efficient soya bean production and distribution. But if all the external social and environmental costs were counted,this drastic and rapid shift of soya bean production from tradi-tional farmlands in China to former rainforests in Brazil would most likely show up as what it really is: a disaster.2.3 Who Will Feed china and how to Feed china?When it comes to the three major food crops – rice, wheat and corn – China is still more than 98% self-sufficient. Given thatglobal rice trade is only about 10% of annual rice consumption in China, one barely dares to imagine the kind of storm it could generate domestically and internationally if China gave up self-sufficiency and expected the global market to feed it, as someneoliberal economists have been proposing.The claim that US-style industrial farms are more efficient is nothing but misleading: they are only more efficient when weconsider the return on capital, but if we consider return per land area, peasant farming is much more efficient. With only 9% of the world’s arable land, the Chinese peasantry has been feeding21% of the world’s population. There is no overstatement forsuch achievement. As land is the most crucial factor for agricul-ture in populous countries like China and India, nothing but sheerstupidity would let capital return dictate agricultural policies. If we ever achieve the best return on capital according to freemarket rule, many people would be without food. Unfortunately,this is where the world is heading to with the WTO rules.So far, the negative impact of the WTO on major food crops is generally much less than that of commodity crops like sugar caneand soya bean because a large part of the harvest is for self-consumption, thus making it less vulnerable to market influences.But this may not continue for very long unless the fundamentalthreats to small peasants posed by international trading regimes like the WTO are addressed.3 exceptions and some hints of hopeThe rural crisis has helped to create a seemingly “indefinite”supply of cheap labour that has largely fuelled China’s boom inthe last 20 years. Yes, the hinterland crisis and the boomingcoastal export zones are two sides of the same coin, the lattercould not exist without the former. Yet one cannot help asking:
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china since 1978Economic & Political WeeklyEPWdecember 27, 200893what have these hard-working people got in return? While themost capable and lucky among the migrant workers (certainlyless than 20% of them) may eventually realise their urbandreams, one should not forget the opportunity cost for them and their communities. If they devote their youth and hard work tobuild their own villages and their own region, maybe they and their children will not have to leave for distant cities in desperatesearch for a better life.This is the case in some villages which are exceptions to thegeneral rural crisis. It is estimated that there are 7,000-10,000villages that have continued with the cooperative communemodel by resisting the top-down pressure to break up. It is re-ported that most of them are doing much better than their priva-tised neighbours: living standards have improved without largesocial polarisation and public education, healthcare and otherbenefits have been maintained and improved. For example, inNan Jie village, a well-known collective, even the full cost of col-lege education is now being paid by collective funds, a facilityenvied by many urban dwellers. Instead of leaving for big citiesin search of greener pastures, about 70-80% of the collegestudents from Nan Jie return to work and live in the village aftergraduation. But these collective villages only account for 1-2% of the rural population, a small minority.On the positive side, the communal ownership of land has continued and this offers some hope of reviving collective farm-ing, or at least the communal provision of certain basic services.Many older villagers had accumulated rich experiences in thecollective era; they could be remobilised to build up the commonsonce again.Recognising that the current model of industrialisation andurbanisation is neither scalable nor sustainable for China’s hugepopulation, some rural experts have put forward plans to revivethe spirit of community and empower rural people to rebuild apeople-centred and community-based local economy. Over theyears, many peasants have also reached similar conclusions andhave started to self-organise and explore alternative means to asustainable and dignified livelihood. Answering these calls, somescholars and activists have joined the peasants to form a looselyconnected, yet vibrant New Rural Reconstruction Movement.The roots of this movement are old and diverse. Y C James Yen, aChinese educator and social activist, developed an integrated pro-gramme of education, livelihood, public health and self-governancefor rural development in China during the 1920s. This was the startof a rural reconstruction movement that Yen and his colleagues later adapted to other developing countries. Liang Shuming, aConfucius scholar, led another rural reconstruction experiment innorthern China until the Japan invasion in the 1930s. The NewRural Reconstruction Movement draws its inspiration from theseand other movements, like the cooperative/commune experienceof the Maoist era and the Kerala People’s Science Movement.Scholars and activists have organised seminars on topics suchas organic agriculture, permaculture, ecological building with local materials, community organising, and rural cooperative build-ing. The seminars are free for peasants – the only requirements are junior high school education and an interest in communitybuilding. Selected trainees are given seed money (in the form of micro credits) to start rural cooperatives, credit unions or otherorganisations back in their villages. Periodically these traineesare brought back together for re-entry programmes where theyshare experiences. So far, graduates have founded more than30 village cooperatives or other types of cultural and civicgroups across China. Some of these cooperatives and other non-governmental organisations (NGOs) have initiated community-supported agriculture, linking consumers in big cities to organicfarmers in the countryside. On the policy level, several academics and progressive officials have successfully pushed for China’s cooperative law, helping rural cooperatives gain more legalprotection and governmental support.Besides these projects, a vital aspect of the movement is bring-ing the agrarian perspective back to the development narrative.During the last quarter century, the discourse on modernisationin China has been predominantly about copying the industriali-sation and urbanisation model of the west. West-centred and urban-centred education has fuelled a brain drain and labour drainfrom the villages, contributing to the rural crisis as well as thegrowing number of sweatshops in the coastal regions. Migrantrural youths bear the most horrendous abuses in export-oriented factories as they are convinced that there is no future in theirown villages. With so many young people leaving, this becomes aself-fulfilling prophecy. Fortunately, the rural reconstructionmovement is challenging this kind of cultural colonisation.Professor Wen Tiejun, who is generally considered the spiritual leader of the movement, is one of the few Chinese intellectuals who are openly questioning the west-centred developmentparadigm. In his 2004 books, Deconstruction of Modernisationand What Do We Really Need?, he emphasises China’s resourceconstraints and describes how the vast hinterland has served as an internal resource and labour base to fuel the hyper-growth of the coast. Without another hinterland to exploit, the remainingrural population cannot copy the western modernisation path.He and his colleagues have formed rural focus groups in morethan a hundred college campuses across China, bringing studentvolunteers in touch with the rural reality – a powerful antidoteto elitist and urban-biased education.Many aspects of traditional Chinese culture, including har-mony with nature, community values, and a sense of sufficiencyinstead of an endless pursuit of wealth and consumption, arebeing re-evaluated in a more positive light by many advocates and practitioners of the movement.With the mad rush towards “modernity” in recent years,peasants’ bonds with the land and within rural communities havealready been seriously weakened. An Jinlei, a long-time organicfarmer and a volunteer instructor, is trying to restore the love of land and community among his fellow peasants. While teachinggreen techniques, he emphasises that organic agriculture is notjust about money-making by eliminating chemicals or takingadvantage of a niche market. Farming is a way of life instead of abusiness for profit. A good farmer is a humble steward: he deeplyappreciates the land and what it offers, and takes good care of it inreturn; he realises all animals and plants are connected with us asprecious life forms, and thus works with them, not against them.Moreover, instead of competing for market advantage, fellow
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china since 1978december 27, 2008EPWEconomic & Political Weekly94farmers work with each other to be a healthy people on a land ingood physical condition. Such a vision of reconnecting with the land and each other may sound sentimental to hard-headed economists and industrial agriculturists, but it is really nothing but down-to-earth. As the driving force for the rural reconstruction move-ment, it maybe China’s best chance of solving its rural crisis.To give the Chinese government due credit, there have beenmany positive changes since President Hu Jintao and PrimeMinister Wen Jiabao took office in 2003. The previous govern-ment had emphasised that “development is the absolute need”,implying that development is the paramount goal overridingeverything else. In contrast, the new leadership has advocated that the country use “scientific development” and “people-centred development” to build “a harmonious society”, signalling a possiblerethinking of China’s trend towards neoliberal economics. Accord-ing to the Eleventh Five-Year Guidelines (2006-2010), the goal ofrural development is to build a new socialist countryside withhigher productivity, improved livelihood, a higher civilisationwith greater socialist ethics, tidy appearance and democraticmanagement. While the real meaning of these phrases may bevague and up for interpretation, some real changes are happening.So far, the government has removed all rural taxes, made primaryeducation free for all rural children, and initiated efforts to re-build a cooperative healthcare network. However, there are manyreported problems at the implementation level – after all, the struc-tural problems created in the last 30 years cannot be addressed overnight by an infusion of money alone. It remains an open ques-tion whether these progressive central directives will be carried out successfully or not, as they are often opposed by entrenched interests that have permeated many levels of local government.4 Land Privatisation and Real DemocracyWhile there are grass roots efforts to rebuild communities andgovernment measures to improve public welfare, fierce battles are being fought over the landownership issue. There are power-ful interests both inside and outside China which use everyopportunity to push for land privatisation. The typical argumentoften goes like this:Communal landownership is handicapping rural growth because it isincompatible with free market principles. The government should move one step further from de facto privatisation (the family contractsystem) to total privatisation where land rights can be traded freely.The more capable farmers can then accumulate more land and achieveeconomies of scale; and the less capable can sell their land and use thecapital to move into other professions. This will improve the allocationof resources, further speed up the labour flow from rural to urbanareas, and facilitate rapid industrialisation and urbanisation. Givenhistorical facts and current reality, it is highly questionable whetherany of this will happen. Private landownership is a given in many de-veloping countries, yet massive numbers of landless farmers and urbanslums are a much more common phenomena than rural prosperity. InChina’s history, during the last 2,000 years, private landownership was the norm in most times and places, yet it repeatedly led to peasantrevolution and bloodshed. In the last 20 years, a massive migration of labour from rural to urban areas has taken place and is still taking place– there are as many as 150 million to 200 million rural migrants working incities or export zones. But only a minority of them makes enoughmoney to support a family in the city; it is estimated that more than85% of parents have to leave their children back in the villages.In recent years, with rapid industrialisation and urban sprawl,there have been many cases of illegal land enclosures and landdisputes. Almost without exception, mainstream western mediaoutlets report such incidents as consequences of communallandownership, and prescribe privatisation as the remedy.32Nothing is further from the truth. So far, landless peasants makeup only 5% of the rural population in China. This is a small fractionwhen compared to that of other developing countries, includingEgypt, India, and Brazil, where landless peasants represent 20%to 30% or even more of the rural population. This difference is largely due to the successful land reforms that were carried outin the 1940s and 1950s, and the communal landownership thatpersists until today. The vital role of communities can be clearlyseen in virtually all land disputes – villagers combine forces todefend their land, whether it be against corrupt officials or roguedevelopers. If land were privatised, each family would have todefend its own, and would be much more helpless in the faceof official abuse, natural disasters, or market fluctuations andmanipulations. And the west would be much less likely to ever hearof their plight. So why are western media so eager to promote land privatisation as a cure, even though it is a “cure” more deadly thanthe disease? Luke Erickson, a long-term observer and researcherof rural issues around the world, has suggested33that these reports draw on the policy analyses of the US-based conservative thinktank Cato Institute and Rural Development Institute (RDI), whichhave long supported land privatisation in China and elsewhere,touting it as the solution to poverty and social unrest.34As neoliberal ideology has dominated the Chinese intellectual scene for the last quarter century, there is no shortage of CatoInstitute and RDI followers among Chinese intellectuals. Many of them have joined forces to push for land privatisation. Whilemuch of such “advocacy” is under the pretense of peasant interests,it really serves the interest of China’s ruling elites. Li Changping,a former rural official who made his name in the 1990s by boldlyspeaking about the rural crisis to former prime minister ZhuRongji, recently pointed out that if the state adopts a policyallowing the privatisation of land, many cadres will become biglandlords overnight while many peasants will soon be rendered landless.35He said, “The rural community in China today collec-tively is heavily in debt totalling several hundred billion yuan.The creditors who make loans to individual peasants or local governments are primarily members of the officialdom andtheir relatives or friends. If land privatisation is carried outnationwide, then much of the land will be surrendered to payfor the loans they have made. What will be left then for thepeasants’ families?”However, despite such dire warnings, there is a massive andwell-coordinated media effort both domestically and internation-ally to lobby for land privatisation. In October 2008, a partyconference communique received a great deal of press attention.It acknowledged many problems created by ultra small familyfarms, and outlined rules for internal transfer (within villages) of land usage rights. In reality, there was nothing new about thedocument: such internal transfers are a common practice inmuch of the countryside, and have been codified into Chineselaw since 2002. The “new” measures that emerged in the recent
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china since 1978Economic & Political WeeklyEPWdecember 27, 200895party document were word-for-word the same as those in the old2002 law. However, many analysts saw it as a step furthertowards land privatisation. And there is a growing chorus urgingthe Chinese government to liberalise landownership for increas-ing production and pulling hundreds of millions of peasants into the more prosperous urban economy. One such example is areport titled “China to Create Market for Land Rights in Effort toBoost Farmers’ Prosperity”, which appeared in the Wall StreetJournal on 20 October 2008. The International Fund for ChinaEnvironment, a business-funded environmental group based inWashington DC, went so far as claiming carbon mitigation creditfor advancing land privatisation.36Meanwhile, the South ChinaPress Corporation, a neoliberal news outlet nicknamed “the CNNChina branch” by many Chinese readers, has carried many articles along similar lines to drum up the support for land privatisation.Are these views based on simple misunderstandings of China’s rural situation, or are they disguised advocacy for the entrenched interest of the ruling elites? While there are always some well-intentioned do-gooders who might be misguided, the lattercannot be ruled out. During a rural development conference insummer this year, I met a Chinese historian whose major work is documenting the cooperative history of Chinese peasantry inthe last century. He complained bitterly about the media bias against peasants organising themselves. When President Hu Jintaovisited rural villages in his province, he emphasised at length theneed for peasants to develop cooperatives and build a collectiveeconomy (which this historian heard with his own ears), yet thepresident’s speeches were never reported in the newspapers. AGoogle search reveals that maybe he was exaggerating a bit: thespeeches were sometimes reported, but usually only in passingwith a couple of phases, and never elaborated. It stands in starkcontrast to the media enthusiasm on the October communique. Ifthe mainstream media really cares about peasant welfare, as theyoften claim, why are they so indifferent to or even silent againstpeasants’ cooperatives? This is a revealing example of the powerdynamics in current China: even the president cannot make him-self heard or taken seriously when he talks about the need for acooperative economy. So one cannot but suspect that the wholemedia frenzy about land privatisation is to test the water, to manu-facture a “consensus” to further push the neoliberal agenda.Another revealing fact is that land privatisation and directelections are often advocated as part of a packaged solution bythe same group of people. One most recent example is an openletter titled “Charter 2008”, put on the Internet on 10 December2008, signed by more than 300 self-proclaimed “liberals” and “progressives”. The letter demands political, legal and constitu-tional reform. Among other things, it advocates land privatisationand direct elections to all levels of government. Some readersmay ask: is there anything wrong with direct elections? Well, theproblem is that direct elections often do not work without theright institutional support and an accumulation of enough social capital. And land privatisation actually works against the build-ing up of institutional support and social capital. Village-levelelections have been experimented with extensively in rural Chinafor more than a decade, with support from both the governmentand foreign NGOs. It is well known in research circles that thistopic is one for which funding can be easily be obtained, becauseUS interest in it is so strong. While goodwill and efforts to fostercivil society and democracy from the west are laudable, oneshould understand that democracy does not consist of electionsalone. A local researcher observed,Most of the young and capable people leave for the cities, that one canbarely find a good candidate who is willing to serve. As village life is increasingly controlled by faraway markets or corporations, there is solittle a village head can do anyway. So, many elections only expose oreven exacerbate the problems, without solving them. In some cases,the elections only legitimate clan control or even mafia control of avillage. According to my field research and estimation, about 80%of the elections should be considered failures because they do notimprove village life and are often destructive instead. I am all for demo-cracy, but I am increasingly doubtful if this is the way to achieve that.His observation is candid and accurate. I know a number of activists who have experimented with village-level elections one way or another at some point, but so far all their stories aredisappointing. Many were disillusioned and dispirited in theprocess, one was literally driven out by angry villagers, anotherwas confronted by a rhetorical question: “If direct election is sucha great thing, why are you not implementing it in the cities? Whydo you have to come here and use us as guinea pigs?” Once anolder peasant told me,There is nothing new about elections. We already had elections duringcommune times: the brigade leaders had to be elected (a typical bri-gade at the time consisted of one or a couple adjacent villages). Evenan elected leader had to listen to us in daily management, for affairs like the assignment of work points and allocation of communal funds.An average villager could always intervene and even complain. If enough villagers complained against a particular cadre, a new elec-tion could be called for right away, instead of waiting for the nextscheduled election.His words are thought-provoking: contrary to popular views inthe west, the participatory democracy he experienced during theMaoist era was more real and concrete compared to the elections today. If China wants to build real democracy, it needs to learnfrom its own experiences and listen to the people in communi-ties, instead of repeating buzz words from the west. Fortunately,instead of repeating western clichés like “land reform that pro-motes private ownership of land” and “the right to hold periodicfree elections”,37many people on the ground are working towardsreal solutions to China’s rural crisis. These people come fromdiverse ideological backgrounds,38yet the general consensus is toreclaim the commons as the first step: revive the community spirit;develop local institutions like cooperatives, credit unions, women’s association, elders’ councils, peasants’ performance troupes and other social or cultural organisations; and rebuild a community-based economy. By reclaiming and rebuilding the commons,people will gain more control of their local resources and theirown livelihoods, and they will be empowered to develop theirown form of democratic institutions and processes.5 Rural china at the crossroadsIn a 2005 seminar39on China, Joseph Stiglitz commented, “As China’s experience shows, partial and gradual privatisation ismore beneficial than sudden 100% privatisation”. It is probablymore accurate to say that partial and gradual privatisation is less
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china since 1978december 27, 2008EPWEconomic & Political Weekly96harmful, compared to the shock therapy that was experienced bythe former USSR and the eastern bloc. But as evidence pours in,the detrimental effect of even partial privatisation of China’s rural sector is undeniable. The tiny family farms that resulted fromde facto privatisation are very vulnerable to natural disasters and market fluctuations. Between 2000 and 2002, the incomes of 42% of rural households decreased in absolute terms. Less funds from the central government and the fragmentation of rural soci-ety have lead to declining public services: irrigation canals andother water works have fallen into disarray; public healthcare has deteriorated or disappeared completely; education has becomeprohibitively expensive; and the crime rate has gone up several fold. Instead of empowering and enriching rural communities,an elitist education is exacerbating the brain drain and labourdrain. All these are nothing but typical symptoms of a “tragedyof no commons”.Still, the continuing communal ownership of land offers a social safety net and some hope for rural revival, even though it hasbeen seriously undermined in the last three decades. This is espe-cially true in this time of global economic crisis. It is estimated thatwithin the last two months (from mid-October to mid-December),more than 10 million migrant workers have returned home afterlosing jobs in the coastal export zones. Fortunately, they still havea piece of land and a village to return to. If land had been priva-tised, these people would have had no place to turn to, and Chinawould have witnessed bigger social turmoil than Greece orThailand right now.The growing rural reconstruction movement shows people onthe ground are waking up to the problems, and are taking actionto strengthen communal landownership and the community ingeneral. Government slogans like a “socialist new countryside”and the president urging peasants to build collective economies also signal a possible rethinking and adjustment of governmentpolicies. On the other hand, there are strong entrenched interests both inside and outside the country, which have benefited enor-mously from China’s neoliberal transformation of the last quartercentury. They would like to see the country further its market-oriented reform and continue its liquidation of the commons, evenwhile western countries nationalise their financial sectors. This is the background of the ongoing debate on land privatisation.Can grass roots workers and the Chinese leadership reclaim thecommons, as they have shown a desire to? Or will the crusadersof privatisation have a field day? The answers to these questions are crucial to China’s future.Notes and references1 See for example, William Hinton’s The Great Re-versal – the Privatisation of China 1978-89 (1990),M Chossudovsky’s Towards Capitalist Restoration? Chinese Socialism after Mao (1986),andJMuldavin’s Mining the Chinese Earth” (1986).2 After getting his PhD from the University of Chicago, Justin Yifu Lin founded the China Centrefor Economic Research of Beijing University and became an important architect of China’s market-oriented reform.3 Martin Hart-Landsberg and Paul Burkett (2005),China and Socialism, Monthly Review Press, 43.4 Philip Huang, Small Peasant Families and RuralDevelopment in Yangtze River Delta (book in Chinese),252-53.5 China Statistical Yearbook, various years.6 C F Mobo Gao (1999), Gao Village: A Portrait of Rural Life in Modern China, University of HawaiiPress.7 China Rural Economy Statistical Yearbook 1992.8 Yan Hairong’s “Spectralisation of the Rural: Re-interpreting the Labour Mobility of Rural YoungWomen in Post-Mao China”, a detailed study onthe subject, is in American Ethnologist, 30 (4):578-96, 2003).9 See descriptions in Gao 1999.10 Kam Wing Chan (1994), Cities with Invisible Walls:Reinterpreting Urbanisation in Post-1949 China,Oxford University Press.11 Yan Hairong, “The Empty Rural Areas and EmptyObject” in Readings (a Chinese journal), July2005.12 J Zhang (1985), The Economic Study of ChineseForestry (book in Chinese), Northeast ForestryUniversity Press.13 China Rural Economy Statistical Yearbook 1992.14 Cao Jingqing (2000), The China Along the YellowRiver Bank, Shanghai Literature Press.15 Gao 1999.16 Han Dongping, “Rural Reform and the Future of Rural China”, at http://chinastudygroup.net/index.php?action=front2&type=view&id=5317 World Bank, WDI-CDROM 2003.18 Joan Kaufman, “Information for Health: TheHarvard HIV/AIDS Initiative in China”, at http://www.novartisfoundation.com/pdf/NFSD_Symp_04_Presentation_Joan_Kaufman.pdf; Yuanli Liu and Joan Kaufman, “Controlling HIV/AIDS in China:Health System Challenges”, at http://www.ksg.harvard.edu/cbg/asia/HIVAIDS%20papers/9%20-%20 Liu-Kaufman1%20(4-final).pdf19 Azizur R Khan and Carl Riskin (2001), Inequality and Poverty in China in the Age of Globalisation, Oxford University Press, 95.20 Minqi Li and Andong Zhu (2004), “China’s PublicServices Privatisation and Poverty Reduction:Healthcare and Education Reform (Privatisation)in China and the Impact on Poverty”, UNDP PolicyBrief, Beijing.21 Han Dongping (2001), “Impact of the Cultural Revolution on Rural Education and EconomicDevelopment – The Case of Jimo County”, ModernChina, January.22 Ibid.23 Han Dongping, “Professional Bias and Its Impacton China’s Rural Education: Re-examining theTwo Models of Rural Education and their Impacton Rural Development in China”, at http://www.chinastudygroup.org/article/2/24 Ibid.25 “Bitter Sugar – How Unfair Trade Hurts China’sSugar Industry?”, Oxfam Hong Kong BriefingPaper, 2003.26 Ibid.27 Brian Calvert (2004), “Guangxi’s Globalisation Gap”,China Pictorial, November, at http://www.china-pictorial.com/chpic/htdocs/English/content/200411/6-1.htm28 As in fn 25.29 A study done by the South African Sugar Associa-tion, as cited in “The Rough Guide to the CAP”,Catholic Agency for Overseas Development(CAFOD).30 Nan Fan Daily, 10 July 2004, “Guangxi wants toreduce sugar cane acreage from 11.5 million mu to8 million mu”, at http://www.nanfangdaily.com.cn/southnews/tszk/nfncb/zw/200407120202.asp31 “Nation’s Sugar Shortage to Grow in 2005”, China Agriculture for Trade and Economy, at http://www.cafte.gov.cn/english/NEWSROOM/1873.asp32 Examples include “China’s Premier Blames Risein Rural Unrest on Land Grabs by Local Officials”by Richard McGregor, Financial Times, 21 Janu-ary 2006; “Losing the Countryside” by Jamil Anderlini, Financial Times, 19 February 2008; “China’s farmers protest a key Mao tenet” byPeter Ford, Christian Science Monitor, 22 January 2008; “Farmers Rise in Challenge to Chinese Land Policy” by Edward Cody, Washington Post, 14 January 2008.33 Luck Erickson, “Land from the Tiller: The Pushfor Rural Land Privatisation in China”, at http://chinaleftreview.org/index.php?id=5834 Zhu Keliang and Roy Prosterman (2007), “Secur-ing Land Rights for Chinese Farmers: A Leap For-ward for Stability and Growth”, 15 October, TheCato Institute, Centre for Global Liberty and Pros-perity at http://www.cato.org/pub_display.php?pub_id=8745. Zhu is the Cato Institute’s Beijing pro-gramme manager and Prosterman is the founderof the Rural Development Institute.35 Li Changping, “Be Cautious When Talking aboutLand Privatisation”, at http://chinaleftreview.org/index.php?id=4036 Such twists are not so hard to understand onceone knows the huge profit potential behind certainprojects in the name of CDM (Clean DevelopmentMechanism). For example, in a country wherethe average landholding is less than half a hec-tare, a single British consortium has “acquired”2,50,000 hectares of land for carbon offset agro-forestry. Fortunately for Chinese peasants but un-fortunately for many entrepreneurs who would like to fund more such projects, extreme cases like this are not so common yet, thanks to the pro-tection of communal land ownership. So besides rural development and peasant welfare, climatenow becomes another excuse to ditch collectivelandownership.37 Direct quotes from “Charter 2008”, whose authors are being promoted as the latest freedom fighters from China by New York Times and the like.38 To give an incomplete sample, I have encountered Gandhian, Maoist, Marxist, Confucian, Buddhistand Christian thought in this diverse group.39 Speaking at “China’s Economic Emergence: Progress,Pitfalls and Implications at Home and Abroad”,Weatherhead East Asian Institute, Columbia Uni-versity, 7-8 April 2005.

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