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2008-10-31 18:35:20
Oct 23rd 2008
From The Economist print edition
AGAINST the ear-piercing screech of the global economy hitting the brakes, what sounded like a piece of good news could still be heard this week. China’s Communist Party unveiled its plan to double, by 2020, the disposable income of the 750m people in the Chinese countryside. One way it hopes to achieve this is through land reform. The party’s propagandists hailed this as a “landmark” decision, even drawing parallels with an event for which 30th anniversary celebrations loom: the launch of China’s reforms, with Deng Xiaoping’s rise to political ascendancy in December 1978. Sadly, there is less to the new reform than meets the eye. As so often with long-awaited party pronouncements, much of the “breakthrough” is already common practice and the toughest issues are skirted. The actual reform is rather minor.
At least, however, it is aimed at the right target: the obstacles preventing farmers from exchanging their land, and building bigger, more economic, landholdings by consolidating the “noodle strips” of family plots they have held since the break-up of the old rural communes. These obstacles have indeed suppressed productivity, incomes and social mobility in the countryside, and contributed to the widening gap between town and country. Removing them would be a huge boost to China’s economy. Introducing a proper market in agricultural land would also do much to reduce one of the main sources of social tension in China: land-grabs by local authorities for which peasants are often poorly compensated, if at all. Every year, there are tens of thousands of protests across China by the disgruntled dispossessed.
China’s cities have set the example. There the housing market has been in effect privatised for a decade. Land is state-owned but easily traded on long leases. The resulting boom in home-ownership has been a huge factor in the emergence of a prosperous middle class-now grappling with the unfamiliar horrors of a falling market .
The new plan promises something similar in the countryside. It allows farmers “to lease their contracted farmland or transfer their land-use rights”. Since decollectivisation and the introduction of Deng’s “household-contract responsibility system”, rural land has been held by individual families. But it has remained “collectively” owned. Farmers have been granted 30-year leases, or land-use rights, which the party is now promising to make easier to transfer. That, however, is already allowed by law and has been happening for years.
The “new” proposals are not explicit on this, but a senior official has since suggested that leases may be made longer than 30 years. Yet the shortness of most peasants’ contracts-if they are lucky enough to live in places where local officials have got around to handing them out-is only one part of the problem. The party does not propose lifting the legal ban on farmers’ mortgaging their land and houses. So it will remain difficult for them to raise money to up sticks. Nor does it tackle the biggest issue: “collective” ownership, which the party decrees must not change. This may be partly for fear of making a near-reality of private landownership, which would undermine one of the last vestiges of the party’s communist heritage.
What collective means in theory is rather woolly; in practice, much less so. It often refers to a bunch of party-approved village apparatchiks arrogating ownership rights for themselves. It is their stitching up of deals, pocketing of kickbacks and fleecing of farmers that provokes so many protests. Besides safeguarding their interests, the latest plan also preserves strict limits on the transfer of arable land. To preserve “food security”, China has set a minimum area for the country’s farmland-120m hectares, just below the present level.
It is on the non-arable “construction” land that the latest policy offers something new. It extends an experiment tried in Guangdong province, allowing such land to be traded without first going through government acquisition. In practice, of course, farmers will still be hostage to the whims of the collective and its often ugly human faces. Only a far more fundamental political reform would solve that problem: defining collective more precisely and opening the top job in the village, the party secretaryship, to genuinely competitive elections, ideally including non-party candidates.
It is a shame that such a reform is not on the cards; and that, even without it, the party’s approach to land reform is so timid. But, recalling those epochal reforms of 30 years ago, it is worth remembering that they too tended to come in baby steps rather than great leaps, and often were formulated retrospectively. In tiptoeing gingerly around one of the last Maoist shibboleths-collective landownership-the party may yet be sowing the seeds of the rural transformation it promises.
