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October 23rd, 2008
China Approves Rural Land Reform

In the latest milestone of China’s embrace of a market economy, the Communist Party announced a much-anticipated land reform plan this past Sunday.  Under the current system, all rural land is communally owned by village collectives controlled by local Communist Party officials, and plots are parceled out to farmers through 30-year land-use contracts.  With the new policy, for the first time, farmers will be able to subcontract, lease, and transfer these land-use rights.  Though stopping short of outright privatization, the reform will allow farmers, who make up more than 55% of China’s total population, to use land as collateral to secure loans, invest in irrigation, expand plot sizes to create larger, more efficient farms, and otherwise boost agricultural productivity.

The new changes, aimed at narrowing the growing gap between urban rich and rural poor, are expected to improve rural living standards.  President Hu Jintao and other party leaders pledged to double disposable income by 2020 for China’s 700 to 800 million farmers – who currently earn less than $600 a year on average. By better protecting property rights, the reforms could also help reduce the social tensions and riots that have resulted from corruption within the present system, with property developers conspiring with local officials to illegally seize farmland in exchange for little to no compensation.  Of the tens of thousands of rural protests that occur in China annually, nearly half relate to land grabs.

A Chinese entrepreneur reacted with skepticism on the New York Times blog: “The new legislation was intended to give the land to individual peasants, but given the workings of the Chinese government, it will most likely take many “chops” and red tape before a peasant is allowed to do what he wants on the land. Each chop will have a price on it. The law might have just given corrupt officials a series of good excuses to take bribes. It is good that the legislation is moving toward privatizing land-use rights, but I am rather doubtful whether it will work out as the government had envisioned. Most Chinese regulations get terribly distorted in the process of execution.”

The official mouthpiece of the Communist Party, Xinhua News Service, acknowledged that critics “have argued that the new policy might create a few landlords and many landless farmers who will have no means for a living.” To ease such fears, the government is promising a “stringent farmland protection system” and urging local officials to impose strict limits on development.

In 2002, WIDE ANGLE’s To Have and Have Not introduced viewers to the winners and the losers of China’s economic miracle, from nouveaux riches businessmen in Beijing to rural farmers in Sichuan Province.

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