China's urbanization process has reached a critical juncture. Inequality between town and country is producing explosive revolts surrounding the cities. The problem of how to contain these revolts is at the core of policy making and is reflected in conflicts inside the Central Committee of the ruling Communist Party.
The latest pronouncement on agricultural reform is intended to lower the income gap between town and country and double the yearly income of peasants from $600 US to $1200 by 2020. This is to be carried out by increased spending on public infrastructure, social security, pensions, medical care and education in the rural areas. The proposals include the provision to extend land use rights to the peasants from 30 to 70 years and make them legally tradable. Following the Central Committee meeting which was said to have approved this move, an announcement was released which barely mentioned the reform. Some days passed before the details were released, indicating that a split opened up in the Central Committee.
The Xinhua news agency confirmed this, "When the document was drafted, some have argued that the new policy might create a few landlords and landless farmers who will have no means for a living. And arable lands to be used for non-farming purposes, might threaten the country's food safety. To ease such fears, the CPC Central Committee also provided in the document that the country would carry out "the most stringent farmland protection system" and urged local authorities to firmly safeguard the 1.8 billion mu (120 million hectares) minimum farmland set line." 19 Oct 2008
Cash from the sale of land rights is supposed to facilitate urbanization. The peasants who sell their land use rights, will have money to move to the cities as workers or petty traders. The land rights transferred to companies and state entities will then be developed both as extensions to urban expansion and as industrial agriculture. The state seeks to emulate infrastructural development of the east coast creating hundreds of intermediate size cities in interior provinces to cater for approximately 10 million new migrants a year.
The background to this is that rural rebellions have escalated over recent years. Yu Jianrong director of the Rural Development Institute's Social Issues Research Center at the Chinese Academy of Social Sciences gave explicit warnings to the Chinese leadership of a revolutionary crisis developing in the countryside and new proletarian zones in the interior provinces.
"In the next decade or two, China will likely enter a period of frequent social conflict. Peasants are likely to join hands with workers and members of the lower intellectual class and confront the elitist alliance that dominated society, creating political, economic and social upheaval in China. To prevent social unrest from triggering a revolution, it is imperative to address issues of social injustice as well as create the effective channels for their expression." China Security Spring 2007 p3
Land requisition has been the primary source of rural conflicts in recent years. In areas surrounding the expanding cities, government land seizures for urban development are carried out with scant regard for the formal legal rights of the peasants, and with compensation below market rates. Local governments in much of China seize land simply for its potential as a revenue source, from rental or leasing to industrial or real estate groups.
Village level cadres often find themselves fighting alongside peasants and rural workers in fierce battles, against municipal and county governments, real estate developers and administrators of development zones. These conflicts have been prevalent in more developed regions where land use prices are high. Protests have changed form, from appeals to higher authorities, to “demonstrations, parades, or other forms of civil disruption including sit-ins at the door step of government buildings or on high ways and railways to obstruct the flow of key transportation." (ibid p7) Violent reaction by local governments have exacerbated the conflicts.
"Leaders are feeling the heat from these peasant activities and have begun to adjust policies to accommodate their demands. This change is not due to a sudden moral awareness or compassion for the miserable plight of the peasants. Rather, it is because peasants' direct confrontation of local governments has shaken the foundations of governance of this nation." (ibid p8) In Hunan province demobilized and retired soldiers formed a 100,000 strong "anti-corruption brigade" of laid off workers, poor peasants and lower class intellectuals. Yu Jianrong postulates that the 20 million former soldiers who live in rural areas may coalesce into a revolutionary leadership in the interior.
The Congress of the All China Federation of Trade Unions this week announced that membership has reached 209 million, 9 million above their target for September and an increase of 16 million since January 2008. A third of all migrant workers, 67 million, have joined the union.
Though state controlled, demands are growing that the Union take more militant action, Labour disputes have been rising 20 per cent a year in recent years, reaching 410,000 disputes last year. Following the introduction of the new Labour Law in January 2008, many thousands ofexport oriented companies closed down, or moved to where the labour is cheaper, e.g. Bangladesh, India or Thailand. Now that many export markets are frozen, factory closures are accelerating. At the Hong Kong owned toy maker, Smart Union in Guangdong province, thousands of workers lost their jobs last week, when the bosses shut shop and ran away. Thousands of angry workers have been gathering outside the township government demanding that it pay their back wages, even though the company is a privately owned company. The way that local governments create joint ventures, take rental revenue, sell land use rights and enrich themselves by deals with private companies make government agencies the natural target of the workers whose bosses flee the country.