The Dragon's Surprisingly Ambivalent Reform

Thirty years ago, land reforms in China launched the country’s economic rise, initiating a process that enriched urban dwellers at the expense of the rural peasantry. Nowadays China is one of the most unequal countries in the world, and urban-rural divides are at the core of many institutional bottlenecks that hinder the attainment of broad, equitable progress. In fact, land issues encapsulate one of modern China’s major contradictions: while the market is now king in most economic spheres, land is still collectively owned and its usage heavily restricted by the state. Urban land can be traded with very long leases that are, in practical terms, as good as outright ownership (manifold state abuses such as forced dislocation aside), whereas rural land is still owned by village committees that rent small plots to peasants on 30-year leases. Land cannot be mortgaged and selling usage rights or building can be legally problematic. As peasants cannot own land or use it as collateral, credit is all but impossible to obtain and little incentive exists to improve the lots, let alone consolidate them. This creates productive inefficiencies and jeopardizes China’s food security.

Furthermore, the village collective-state-corporation alliance makes the system prone to corruption and clientelism. Illegal, and often violent, land seizures by local officials and developers remain endemic. In numerous instances, farmland is seized for urban expansion and industrialization without sufficient compensation given to farmers, while local officials siphon off profits further fueling resentment. Thus, according to the East Asia Forum “illegal land requisitions take place in the order of tens of thousands a year,” causing an increasing number of peasant protests. In other instances and despite technically being illegal, plot sizes are reallocated among villagers based on family size, even in cases where leases have not expired. Divorced and widowed women are especially vulnerable to these practices.

Because land issues encompass so many of China’s major economic, social, political, institutional and environmental challenges, land reform is urgent. Thus, the Communist Party’s announcement of land reform attracted much media coverage. The reform hinges on two major features: first, to allow peasants to engage in unrestricted trade, purchase, and sale of land-use contracts within regulated markets; and second, to extend those contracts to up to 70 years. Combined with other measures, this is intended to increase income in the countryside. However, the reform is much more modest than the celebrated ‘breakthrough’  language accompanying the agreement implies. The basic principle of ownership will remain unchanged. Village committees, controlled by party  cadres, will still own the land and direct its usage rights. Further, the transfer of usage rights is already allowed legally (with some limitations) and has become a common practice in recent years.

After the initial media hype, quiet enveloped the reforms, suggesting hints of discord within the top echelons of the Communist Party. Opponents of the reform had argued that moving closer to land ownership would solidify Western capitalism and thus undermine the party’s authority, while proponents had stressed that improved property rights could improve rural-urban income disparities, appease social unrest, and stem the waves of peasants migrating to the cities.

But even if the party could agree on enhanced  land rights, this would only be a first step. As the Countries at the Crossroads report stated in 2007, those rights would need to be protected by a more independent legal system that can combat governmental corruption and hold police accountable when they use excessive force. Without a reformed legal system, after all, the principles of stability and predictability that the reform hopes to encourage will not develop. Further, village elections – the only level where Chinese citizens can directly vote for their representatives – would need to be more competitive and less influenced by the Communist Party’s control to secure a fair distribution of the land. Reforming the legal system and improving governmental transparency would not only appease 800 million Chinese farmers, but would help this potentially transformative reform move from word to deed.

Photo Credit: Flickr user rentonr

Comments

[philippines property]

It would need to be more competitive and less influenced by the Communist Party’s control to secure a fair distribution of the land,this is one of important things if ever you need to inform about land matters.

by:stephen

[Philippine real estate]

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