China Labour Bulletin appears in the following article. Copyright remains with the original publishers.
China's Lawmakers Consider Plans to Ease Rural Ire Over Wealth
Bloomberg
3 March 2006
Chinese farmer Liu Dongqing says he's paying so much in taxes to the local government that he can no longer make a living growing soybeans and wheat.
"We depend on the land to live," said the 53-year-old resident of Yongfu village in China's northeastern Heilongjiang province. A fourfold increase in land-use fees in the past five years means "we're working for nothing."
Even as China's economy grew 9.9 percent last year to overtake the U.K. as the world's fourth largest, an estimated 200 million of its people live on less than $1 a day. Policies to raise rural incomes and soothe resentment over a widening wealth gap will top the agenda when China's lawmakers gather for their annual session on March 5.
"The issue is inequality," said Stephen Green, Shanghai- based economist with Standard Chartered Plc, a British bank that makes about two-thirds of its profit in Asia. "Poverty begets poverty. There are some areas in China where some people haven't been able to improve their conditions." To address those concerns, Premier Wen Jiabao will outline plans to relieve the tax burden on farmers, boost spending on rural areas and protect farmland from being seized for development.
China's economy expanded more than tenfold since the late Communist leader Deng Xiaoping adopted pro-market policies in 1978. Progress has come at the cost of corruption, environmental degradation and growing disparities between the cities and countryside, where two-thirds of China's 1.3 billion people live.
Income Gap
Disposable incomes in rural areas were 3,255 yuan ($405) last year -- less than a third of those in towns and cities. The gap, which doubled in the past 25 years, is continuing to widen. Urban incomes rose 9.6 percent to 10,493 yuan per person in 2005, outpacing a 6.2 percent increase for rural dwellers.
Eliminating social inequality is a "key priority for the coming five years," President Hu Jintao was cited by state television as saying on Oct. 11.
China witnessed 87,000 protests involving more than 100 people last year -- more than 200 per day, according to the Ministry of Public Security in Beijing. The number rose from 74,000 the previous year and 10,000 in 1994. Many are fueled by anger over pollution or the seizure of farmland for development.
Almost 3,000 delegates from around the nation will assemble for the two-week National People's Congress meeting at Beijing's Great Hall of the People. Delegates will focus on "new ways to protect the land rights of farmers," said Andy Rothman, China strategist for Credit Lyonnais Securities Asia in Shanghai. "They're suffering at the hands of corrupt or incompetent local officials."
A `Socialist Countryside'
China's government last month unveiled a package of tax cuts, spending plans and new laws under the slogan of a "new socialist countryside," the centerpiece of President Hu and Premier Wen's efforts to close the income divide.
The government, which abolished the national agricultural tax on Jan. 1, plans to divert more than 100 billion yuan of revenue previously earmarked for urban projects to schools, irrigation and medical services in rural areas this year.
"Are we to continue relying on the rural masses for industrialization and urbanization?" Chen Xiwen, deputy director of the Office of Central Financial Work Leading Group, said in Beijing on Feb 22. "The urban and industrial economy will now work to drive the countryside forward."
Under pressure to plough urban wealth into rural areas, the government even plans to send city-based teachers for one-year stints in the countryside, a policy not seen since the Cultural Revolution.
Land Rights
The proposals are "underwhelming" because they stop short of allowing farmers to own their land, said Robin Munro, Hong Kong-based research director for China Labour Bulletin, a group that campaigns for workers' rights. "The government hasn't taken any far-reaching, ambitious steps," Munro said.
Unlike urban residents, who can own real estate, China's farmers are allowed only to lease land, leaving them prey to local officials who can requisition plots and profit by selling them to developers for factory or real estate projects.
The government won't give farmers full property rights because it's concerned they will sell their land, according to CLSA's Rothman, creating a class of landless peasants that might be an even greater threat to social stability.
Instead, the government will pass laws that "commit money from rural land leases to basic infrastructure projects benefiting farmers and prohibit the funds from going to township or urban projects," according to government Web site China.org.
In Yongfu, a village of 300 people who live in thatched houses made of packed mud, there's little sign that fees paid to the Fujin city government 50 kilometers (31 miles) away have benefited the local community. The nearest road is 3 kilometers away down a dirt track.
Dollar a Day
Liu must pay 2,700 yuan for the right to farm his land this year, a third of his likely income of 7,000 yuan to 8,000 yuan, he said in an interview on Feb. 27. That will leave Liu and his wife the equivalent of less than $1 a day each to live on.
China has 200 million people living below the $1 poverty threshold, according to World Bank 2004 estimates. Heilongjiang was the fifth-poorest of China's 31 provinces and major cities, with average disposable income of 7,471 yuan per capita in 2004, according to the National Bureau of Statistics.
Liu lists other grievances against the city government, including demands for arbitrary fees such as the 60 yuan each villager was told to pay for a "house permit" several years ago. He said he's skeptical any measures passed by the Congress in Beijing will improve lives in Yongfu.
"The central government's policies are good, but don't get passed down to the local level. The corruption is too bad," said Liu, quoting a Chinese proverb: "The mountains are high, and the emperor is far away."