China's Rural Economy and the Rule of Law

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  • This article was downloaded by: [University of Hong Kong Libraries]On: 10 October 2014, At: 14:28Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

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    China's Rural Economy and the Rule ofLawElizabeth PondPublished online: 29 Sep 2011.

    To cite this article: Elizabeth Pond (2011) China's Rural Economy and the Rule of Law, Survival:Global Politics and Strategy, 53:5, 89-106, DOI: 10.1080/00396338.2011.621635

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  • According to the statistics, Pan Kebiao should be unhappy. As a Fengyang county peasant, he is at the wrong end of Chinas highly inequitable distri-bution of wealth. Urban Chinese now earn, on average, 3.23 times as much as Pan and his 700 million fellow farmers, a disparity on a par with the United States, Latin America and Russia, and a stark contrast with more egalitarian Europe and Japan.1

    Yet Pan is content, even ebullient. The decollectivisation of Chinas farm-land that started surreptitiously in Fengyang county in Anhui province 33 years ago has let him grow and sell more wheat and rice, trade in his water buffalo for a small tractor to plow his eight-tenths of a hectare, and even, this past January, buy a Xiali car and earn extra money as a odd-job driver between planting and harvest. He is not sure whether he actually possesses the paper contract for his renewable and transferable 30-year lease from the local government, but he has no doubt that the land rights will be his to bequeath to his niece. Nor does he worry about urban seizure of contiguous cropland in this still predominantly rural county.2

    Qian Yunhui, by contrast, was extremely discontented with the lot of the farmers he was responsible for as a local Communist Party leader. His village of Zhaiqiao was too close to urban sprawl. While Chinas rapid industri-alisation had made it the worlds largest manufacturer and second-largest economy, it also spurred land grabs by hard-pressed city administrations that suddenly had to provide apartments, roads, water and electricity for

    Chinas Rural Economy and the Rule of Law

    Elizabeth Pond

    Elizabeth Pond is a Berlin-based journalist and author.

    Survival | vol. 53 no. 5 | OctoberNovember 2011 | pp. 89106 DOI 10.1080/00396338.2011.621635

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  • 90 | Elizabeth Pond

    their burgeoning populations. Yueqing town officials expropriated farm-land belonging to Zhaiqiao villagers in 2004 and built a power plant on the site without, according to local media and bloggers, compensating peasant leaseholders. For six years Qian objected, petitioning local and national offi-cials and organising peasant protests. He served two stints in jail, and in December 2010 he was killed in, according to local media, a staged truck accident.3

    Pan and Qian illustrate the positive and negative impact of Chinas meteoric economic rise on the peasants who still constitute a majority of

    Chinas 1.3 billion people, and their experiences reflect, in microcosm, Chinas tentative steps away from reliance on personal power connections toward, perhaps, the rule of law as the arbiter of social and economic conflict. Not that premier Deng Xiaoping intended such legal consequences three decades ago when he launched his pragmatic market reforms in Fengyang county. Those

    consequences came after his death, from the dynamic he started. First came a rural miracle that lifted an astounding half a billion peas-

    ants out of extreme poverty, and then the better-known miracle of high-rise Shanghai and Beijing, with their new urban billionaires and a middle class numbering in the hundreds of millions.4 Along the way came a progressive codification of rural land-rights law, with fledgling lawyers emerging to contest illegal municipal expropriation of cropland, though they sometimes paid for their audacity in prison.

    The decollectivisation of the planned economy soon brought the dis-parity between rich and poor to one of its lowest levels in Chinese history, through a fast-rising standard of living rather than the equality by famine earlier wrought by Mao Zedongs rapacious confiscation of grain. Land-rights reform cut Chinas rate of extreme poverty from 65% to 4% between 1981 and 2007, and a realistic target was set of full elimination of want by 2015 in what World Bank economists praised as the most rapid poverty reduction in human history.5 Dengs grant to farmers of secure tenure on their plots not only gave them a source of discretionary income, but also made China the worlds largest agricultural producer by the end of the

    They paid for their audacity in prison

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    twentieth century.6 Now it is playing a pioneering role in establishing rule of law in a land that is far more used to instrumental, top-down rule by law, as Communist officials term it in English.

    Maos legacy and Dengs reforms The Communists won their civil war with the Nationalists in 1949 in part by promising to dispossess big landlords and give peasants private owner-ship of equal plots. As the party fulfilled its promise, the average farmers income rose by 85%, and harvests by 70%, with total grain production in 195657 amounting to close to 200m tonnes.7

    At that point the experiment ended abruptly; the Communists re- appropriated land to form huge communes of 4,000 families each. The states monopoly buyer even confiscated seed grain and family food stores, induc-ing the worst man-made famine in history. From 1958 to 1962 at least 45 million peasants died prematurely. Excess deaths reached 6% of the popula-tion in Anhui province and a horrifying 25% in Fengyang county, as militias slaughtered starving peasants who dared to eat rice in their paddies (like locusts, eyewitnesses said) before grain collectors could confiscate it. Some 20m peasants nationwide moved, illegally, to the better-fed cities, but the vast majority were chained to their villages by the hukou registration system that barred them from moving their residence.8

    After Mao died in 1976, it took Deng two years to defeat his ultra-left rivals and break up collective farming. Deng deliberately began his opening up to market reforms in the countryside, endorsing a clandestine meeting of 18 peasants in Xiaogang village in Fengyang county in 1978. Risking accusations of counter-revolution and their very lives, the 18 affixed their thumbprints to an agreement to re-divide communal farmland into individ-ual plots under household contracts, according to the reverent narrative posted in the Xiaogang museum. At the time, Chinas main export was still hogs bristles.

    The pilot was deemed a success. In 1979 the Chinese Communist Party Central Committee stopped labelling landlords, rich peasants and their children enemies of the people and substituted the idea of economic development for the principle of class struggle.9 In 1981/82 the Household

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    Responsibility System was adopted nationally, a tacit acknowledgement of the success of smallholding land reform in Japan, Taiwan and South Korea after the Second World War. Private property remained taboo, but new guarantees of tenure of long-lease land rights would grow over the years to approximate private property rights.

    With this, the Chinese economy began its three-decade run of 10% annual growth. Grain production rose 8.6% per year and soon returned to 1950s levels. By the end of the twentieth century Chinas yields per hectare were well above the world average, with wheat yields higher than the US average.10

    In a way, Chinas stunning industrialisation, compressing a process that took the West one-and-a-half centuries into one-and-a-half generations, is less surprising than this incipient bridging of the Middle Kingdoms

    urbanrural divide. In the countryside as well as the city, Beijings economic rise has defied Western development orthodoxies. It has demonstrated that long-term lease-hold of state-owned cropland can respond to market incentives as if it were private property. It showed, as Harvard sociologist Martin King Whyte put it, that life-long communist bureaucrats could successfully direct the transformation from an increasingly inefficient cen-

    trally planned system to a vibrant market economy.11 And it has spurred a rights-awareness movement that could be a precursor to eventual rule of law, especially with the nearby example of thriving democracy in Taiwan.

    Deng, a wily peasant and survivor of lethal party infighting, began both economic and political adaptations to the requirements of a modern economy. The experiment of household responsibility in Fengyang county set the pattern for the trial-and-error procedure commonly identified with the Chinese aphorism of crossing the river by groping for stepping-stones.12 The shifts he wrought in the party structure and approach perpetuated the reform process after his departure from the political scene. In a bloodless displacement of elites, old ideologues were eased out by term and age limits on senior officials; bringing younger, better-educated professionals into the party bureaucracy; and stimulating an informal funnelling of alternative policy options into the halls of power by think-tank mandarins.13

    Beijings rise has defied development orthodoxies

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    The result could not have been more different from the post-Communist Russian evolution of a vertical power structure and top-down micromanage-ment. Instead, Deng re-moulded single-party governance to accommodate de facto decentralisation, competition between regional pilot projects before decisions on national programmes, and even, to some extent, dissenting voices on policy.

    Extension of land tenureThe advance of individual land tenure, the centrepiece of Dengs rural reforms, was gradual. The first formal Central Committee policy document on agricultural land-use rights was only issued in 1984, after Dengs initial reforms had already lifted some 200m Chinese out of destitution and sub-stantially reduced the urbanrural gap to 1.8:1 from 2.5:1 in 1978, putting China firmly among the worlds more egalitarian nations such as Germany, Sweden and Japan.14 The document extended the tenure of farm families on their land for a period of 15 years during which their rights could not be terminated without their consent. It even gave lessees the formal (if unim-plemented) right to transfer their leasehold to others.

    From the mid-1980s on, as rural economic growth decelerated and foreign investment flowed into the ShanghaiHong Kong corridor, the gap in income and standard of living between the nouveau riche urban coast and the hinterland again widened. By 2010 inequality had surpassed that of the United States.15 Yet farmers incomes and standard of living neverthe-less rose dramatically from their low base, while the land rights that assured their livelihood expanded incrementally.

    In 1985, after a bumper 300m-tonne harvest convinced leaders that the countrys 7% of arable land could actually support its 1bn population, China eliminated obligatory production and sale of grain to the state. Beijing increasingly let the market set grain prices and raise farmers profits.16 Then, in 1993, despite Dengs retirement from politics the previous year, a party policy document extended agricultural leases to 30 years on expiry of origi-nal contracts.

    In the mid-1990s, however, municipal land-taking was triggered as a side-effect of fiscal reform, as the central government reversed earlier allocations

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    of tax revenue, drastically cutting the share given to local administrations. This dried up the budgets of cities and towns just as they faced burgeoning infrastructure expenses to support the booming economy.

    Since municipalities could not levy substantial real-estate taxes, they increasingly resolved their fiscal problems by expropriating adjacent farmland with little or no remuneration for the peasants, then leasing it to developers at a high mark-up. They could do this because all land in China is owned by the government. While the central government owns the bulk of the land, each city or township owns huge tracts that radiate tens of miles around urban agglomerations and incorporate neighbouring cropland.

    Local bosses and the developers who profit from the transactions contend that urban expansion is inevitable and that the high prices for formerly rural land are, as in Western economies, driven by the added value from com-mercial investment. But activists for farmers whose land is taken with only paltry (or no) compensation base their protests not only on an appeal to common justice, but also on a novel assertion of statutory rights.

    Although this appropriation of land defied the national pro-peasant policy on land tenure, the central government did not intervene, then or later, yet it steadily continued to expand legal rights on paper. In the late 1990s, as the grain harvest surpassed 500m tonnes, reform legislation belat-edly caught up with more mutable policy in specifying, for the first time, a 30-year agricultural land tenure protected by law and banning large plot reallocations by local officials.

    This, according to Ping Li, a one-time farmer and now senior attorney of the Beijing branch of the Seattle-based Landesa rural development institute, was a significant step. He notes the paltry legal code inherited from Maos socialist China, the desire of todays government to establish the secure property rights needed for what is now a largely capitalist economy, and the essential role of cropland laws in achieving this goal. China is devel-oping a legal system from scratch for the market economy, he explains.17 He and fellow campaigners for legal protection of farmers land rights are gambling that, just as the law caught up with policy, so will enforcement eventually catch up with the law.

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    In the twenty-first century the central government has continued to strengthen land rights. The Rural Land Contracting Law of 2002/03 pro-hibited reallocation of farmland by local government fiat during the new three-decade contract term and required two-thirds village-assembly approval even for the small plot adjustments permitted after natural dis-asters. It further mandated the issuing of written leasehold contracts and certificates to farmers and guaranteed the rights of transfer and compen-sation for any land taken by the state or local government for non-farming purposes.18 Among other benefits, this law quickly increased land values in villages by 30%.19

    In 2003, as Chinas younger, technocratic fourth genera-tion of leaders were emerging, the scion of an Anhui family, Hu Jintao, became president. He reinstated rural priorities after Jiang Zemins decade-long focus on advancing the urban elite and rapid wealth creation. On Hus watch the National Peoples Congress passed a constitutional amendment specifying that while the state may, in the public interest, expropriate private prop-erty of citizens, it must make compensations for their loss. And in 2005 Hu set the goal of building a harmonious society, which he described in terms of ensuring villagers an equitable share in the economic upsurge.

    More concretely, in unacknowledged reaction to a series of peasant protests over agricultural taxes in the early 2000s, the national govern-ment abolished these taxes altogether in 2006.20 Two years later it passed a property law that, for the first time, defined farmers rights as usufructu-ary, implied renewed leasehold rights in perpetuity, specified that the local township or other collective that owned the land must act on behalf of local farmers (rather than taking land by fiat), and specifically allowed aggrieved farmers to file lawsuits against seizure of their land. Cheng Li, head of China studies at the Brookings Institution, said the law represented a strategic shift toward ending Chinas century-long [ruralurban] dual economy.21

    In 2008 the Central Committee also passed a resolution calling agricul-ture a strategic industry and expanding farmland transfer rights, although mortgages were still banned.22 The government further budgeted much of its $590bn stimulus in response to the global financial crisis to rural infra-

    The law increased

    land values by 30%

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    structure. At the same time, the more than 130m migrant workers who were by now employed illegally, without hukou, in southeastern factories and building sites became the main drivers of rising rural consumption levels by sending back to their families mobile phones, refrigerators and money for education of their siblings or paving local roads.23

    Prospects There are any number of economic, political and social dangers for Chinas rural policy.

    Even as China races to become the world strongest economic power the pressures of that maturing economy will decelerate the growth that has so far raised all boats, and could disappoint expectations inflated by the success of recent decades. The brilliant no-loser mode of marketisation, which eschewed the Washington Consensus on swift dismantling of ineffi-cient state-owned enterprises and let Communist CEOs keep their sinecures alongside the burgeoning private enterprises, could succumb to clashes of interest and clientelist corruption.24 China, like so many developing nations before it, could get stuck in a middle-income trap if it does not build legal and other institutions to sustain complex evolution. The urban real-estate bubble could burst. The $1.7 trillion debt from runaway municipal borrow-ing during the stimulus in 2009 (equal to some 30% of GDP) will stress the banking system.25 The consequences of Dengs one-child policy instituted in 1978 will include the imminent end of the explosive growth of the labour force that has fed industrial production. Chinas membership in the World Trade Organisation will mean competition from imports for farmers and small rural enterprises. Air and water quality, and falling water tables, will get worse (and constrict crop yields) before they begin to improve. Inflation is gnawing at the budgets of even self-sufficient peasants who buy only meat and fish from outside the family. Migrant workers from villages who have not acquired city hukou, moreover, are still treated as second-class citi-zens. They sleep in their employers restaurants or in 12-bed dormitories at their factories or in underground air-raid shelters. They live in uncertainty; they can be expelled overnight when the government wants to tidy things up for events such as the Beijing Olympics or Shanghai Expo.

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    Some of these issues are being resolved pragmatically, if slowly and messily. Chongqing and Shanghai are experimenting with modest real-estate taxes that might eventually relieve the pressure on city revenues (if not the sheer land pressure of expanding cities). Fengyang county has already filled eight square kilometres of its new industrial park with glass factories and boasts that it is the most important producer of non- conventional thermos liner in Asia. This and other inland trophy industrial parks are beginning to provide jobs for youths from regional villages who would previously have drifted to the big coastal cities.

    Then, too, the hukou restrictions on mobility have been breached irrevo-cably in practice in the past two decades by the demand of factories for 220m construction and assembly-line workers. This floating population was, quite rightly, classified as urban in the 2010 census and they are gradu-ally receiving a modicum of health insurance and other social benefits, if not yet the full social net of hukou rights. As of last year, their children have a right (sometimes honoured, sometimes not) to attend elementary schools in their cities of real residence.

    But the main problems the widening coastalinland divide, rampant municipal expropriation of land without market remuneration, and the dys-functional legal system are less amenable to resolution by improvisation. A 2010 Landesa survey of farmers concluded that, while China has made important absolute progress in improving the lives of the countrys 200 million farming families via the impact of tenure reforms, the relative gap between the cities and the countryside has steadily increased by virtually every measure, including per capita income, consumption, education, and life expectancy.26 Above all, it is this cleft, dramatised by peasant protests against land grabs by local officials and the awakening of rights awareness, that exercises the leadership in Beijing.

    Why the alarm? Some Western academics think Beijings nervousness is exaggerated. Harvard Sociology Professor Martin King Whyte, citing opinion polls that show the social contentment of upwardly mobile Chinese to be well above the levels of downwardly mobile Americans, is sceptical of the partys angst

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    about a social volcano. He grants that the leadership senses that there is a more and more unruly society that is likely to protest, but adds that, from my perspective, this is misplaced.27 Harvard Government Professor Elizabeth Perry contends that peasant and workers protests do not exhibit a rights consciousness that threatens the government, but only a subservient rules consciousness.28

    Whether justified or not, the leaderships anxiety seems to arise from a mix of shock at the political loss of control (and party splits) during the 1989 Tiananmen demonstrations, widespread public perception of an epidemic of official corruption, the unnerving example of the spontaneous Arab

    Awakening in 2011, and the folk narrative of Chinese history as a discontinuous cycle of decay of successive dynasties into corruption and eventual peasant revolt. These strands have fused into a fear about a peasant threat to the current regime.

    Beijings response is schizophrenic. Most basically, the party hierarchy tells city administrations to multiply

    wealth fast. But, at the same time, it caters to peasants with ever-stronger legal guarantees of farmland tenure. And when city cadres produce wealth by the easy route of expropriation of cropland (sometimes violent and often illegal) to convert to commercial property, the central government does not enforce its own laws. The central leadership has mandated the voluntary consent of leaseholders before land is taken from them, yet local authori-ties override such safeguards with impunity. The law lets farmers sue for restitution for their land even before exhausting foot-dragging adminis-trative appeals, yet Beijing does nothing to level the playing field between powerful local party cadres and disorganised and poorly informed farmers. Nor does it take measures to reduce pervasive political influence and cor-ruption in the still rudimentary justice system, or to override local courts near-universal refusal to accept such cases in the first place. The party hier-archy may know that they need impersonal rule of law, especially property law, to build trust and predictability for settling commercial disputes in the modern economy they are hurtling toward, yet they still look the other way when local police or hired thugs beat up or jail peaceful demonstrators. And

    Beijings response is schizophrenic

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    their own reflexive resort to force in suppressing urban protests tacitly con-dones local violence against protesters.

    An important catalyst for land-law reform has been the surprising toler-ance of the party hierarchy for unorthodox academics in think tanks run by or associated with the party. Nowhere is this tolerance more evident than in rural issues. The leadership has learned to live with a much wider spectrum of policy debate than in earlier years, suggests Lei Guang, associate profes-sor of political science at San Diego State University. The one red line is that mandarins must not contest the dominance of the party.29 Whyte traces this proto-plurality of ideas in part to the old tradition that educated Chinese have culturally derived moral obligations to society (and should be lis-tened to).30

    Chen Xiwen, for example, an alumnus of the Chinese Academy of Social Sciences Rural Development Institute, and now the chief Communist Party drafter of land legislation as head of the Central Leading Group for Rural Work, repeatedly advocates a fairer ruralurban balance and a better deal for farmers and migrant workers. In a press conference and interviews with Chinese media in early 2011 Chen highlighted the increasing legal pro-tection for farmers leaseholds. He stressed new restrictions on municipal expropriation of farmland, new procedural requirements that any such land taking be open and transparent and be carried out only with the approval of an assembly of the affected farmers, with compensation at market prices for rural families who are forced to abandon their homes, and with judicial appeal against eviction orders. He called for real implementation of these measures, an increase in migrant workers social benefits to bring them closer to full urban levels, and more effective barriers to diverting cropland to commercial use.31

    Yu Jianrong of Chens old Rural Development Institute is far blunter than Chen on the sensitive issues of requisition of farmers land and the need for a less politicised rule of law. In a lecture before the Beijing Lawyers Association in December 2009, he pegged the unofficial number of mass incidents of protest (both rural and urban) at 90,000 per year from 2006 onwards. He championed peasants who had been dispossessed of their land by local governments and objected especially to the eighty or ninety

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    percent of land cases in which mafias enforce expropriation. He scorned any stability secured by a monopoly on political power on the part of the Communist Party, stressed the need for property rights and rule of law, and, citing Perrys distinction between rights awareness and rules aware-ness, passionately endorsed the former. Even though only a tiny fraction of Chinas rural population were involved in protests, Yu warned that the longer authorities use violence to repress demonstrations, the more they will turn their fears of peasant instability into self-fulfilling prophesies.

    Yu quoted conversations in which he asked farmers in democratic Taiwan what they would do if local officials demolished their houses without approval. All answered indignantly that that would be impossible, and if it happened, they would take their contracts of ownership to court to get restitution, and if the court didnt rule properly, they would phone their elected legislators, who would either help them achieve justice or be voted out of office in the next election. Who can say that Chinese culture is incom-patible with Western institutions, Yu asked, to sympathetic titters from his audience of lawyers, if Chinese farmers in Taiwan can answer impossible! to the questions of whether the government might demolish their houses without their approval, a judge might not accept their suit and a legislator might refuse to make an investigation?

    He stoutly defended peaceful protests when peasants interests and rights are violated by local governments: this form of resistance uses the states own laws to achieve its ends and thus reveals a more clear under-standing of the abstract legitimate rights and interests or citizens rights of peasants. In this respect, he said, peasants have something to teach intel-lectual elites about civil rights.32

    A similar role, surprisingly, is played by the American non-governmental organisation Landesa. For almost half a century it has supported alleviation of rural poverty around the globe by urging land reforms that give peas-ants their own plots to feed their families, escape the cycle of debt and earn enough extra money to educate their children. The institutes hallmarks are cooperation with host governments (local ownership is a given) along with legal aid in writing land laws, programmes informing farmers of their rights, and pragmatic fieldwork showing consistently that individual land rights

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  • Chinas Rural Economy and the Rule of Law | 101

    and rising rural incomes benefit governments by increasing agricultural output and social tranquility. Landesa became engaged in China in 1987, a few years after Dengs opening up. In the past decade it has conducted five grassroots polls of farmers in collaboration with Renmin University and Michigan State University.

    This year, the latest poll, in a first for any foreign-sponsored survey, was published in the Chinese Academy of Social Sciences Rule of Law Bluebook. The 2010 figures showed a steady rise in the overall market value of crop-land and farmers trust in the security of their tenure. They revealed that the income of those who made investments to improve their own plots in 2009 increased by an average of $3,136. Those who invested (overwhelmingly the ones who possessed land-rights contracts or certificates) raised the overall value of Chinas farmland by at least $69bn, more than 12% of total rural income that year, or more than three times the governments rural subsi-dies.33 The survey found that 37% of villages experienced at least one case of appropriation in the last two decades, despite the legal guarantee of 30-year land rights to leaseholders. Some 29% of affected farmers were not notified in advance of expropriation, and 58% were not consulted on their compen-sation. Landesa called the growing requisition of farmers land alarming.34

    * * *

    The party hierarchy, which has reflexively fudged the issue, may soon have to make a fundamental choice between its contradictory tracks in the countryside, between strengthening the rule of law by enforcing legal protections or reneging on its initial liberation of the peasantry from mil-lennia of stasis. For now, though, municipal requisition of cropland shows every sign of increasing, while the central governments ambivalence about this trend shows no sign of abating. Last year land-rights sales for non- agricultural use brought $464bn into city and town coffers, for some 70% of all local government revenue.35 Many of these transactions violated Chinas emerging land legislation, including the law banning reduction of todays total farmland of 1.826bn mus (roughly 120m hectares) to below 1.8bn mus through 2020.

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    Despite the lack of enforcement of rural land law, Landesa, the Chinese Academy of Social Sciences Rural Development Institute and the partys Central Leading Group for Rural Work all anticipate that rule of law will increasingly supplement and perhaps eventually supplant the more traditional settlement of rural land disputes by guanxi (connections to per-sonalised networks of influence and power). Landesa now urges, as the next stepping stones, delivery of land-rights documents to all farm families, with womens names recorded; incorporation into rural legislation of the legal safeguards introduced in 2010 for urban land rights, with a narrow definition of what public purposes justify expropriation, a minimum level of compensation requiring informed consent from affected farmers and a mandatory court order before evictions; formal designation of farmers 30-year land rights as perpetually and automatically renewable; and, of course, an increase in enforcement actions against local authorities on land violations.36

    That is a tall order, and it is not at all clear that the new generation of leadership due to take over 70% of key party positions next year, which will need a further two years to consolidate power, will be as bold as Deng was. Candidates for senior posts, far from raising real policy issues, have tended to engage in a polemical Mao-vs-Confucius surrogate debate. Chongqing party secretary Bo Xilai, one of the princelings whose fathers were senior officials in the pre-Deng era, has for example touted the chairmans Little Red Book and anonymous others have successively installed and removed Confuciuss statue at Tiananmen Square. If this power struggle splits fac-tions and paralyses policy for the next three years, it could seriously hamper Chinas adaptation to the needs of its new economy.37 Cheng Li of the Brookings Institution, a keen observer of leadership factions, even dares speculate that the party will be gone within ten years.38 But China is full of surprises. The Communist Party has displayed a knack for reinvent-ing itself while steering the countrys swift rise to second place among the world economies. And grassroots Chinese have displayed a considerable knack for eclectic pragmatism.

    Whatever happens will be too late to save Qian Yunhui. But it is not too late for Pan Kebiaos niece, or for one grandmother who borrows an ancient

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    flat-bed tricycle to pedal to the Fengyang market every day to sell her soup greens and enjoy the bustle. Her children now take care of the rice, wheat and vegetable farming on their eight-tenths of a hectare; they possess the precious paper contracts to their cropland, and they grow enough produce both to feed the family and to sell. She has her house and a close family and doesnt begrudge the new rich their luxury dwellings. Her son works in a factory in his spare time. Her children and grandchildren have not gone hungry as she did growing up; they have more colourful clothes and will enjoy a better life. After savouring the companionship at the market each day she pedals home in the afternoon, and, in one of the more unexpected tributes to ongoing improvement in village life, reads her Bible and thanks the Lord for sending China the Communist Party, President Hu Jintao and Premier Wen Jiabao to abolish the farm tax.39

    Notes

    1 Communiqu of the National Bureau of Statistics of Peoples Republic of China on Major Figures of the 2010 Population Census (No. 1), National Bureau of Statistics of China, 28 April 2011, http://stats.gov.cn/english/newsandcomingevents/t20110428_402722244.htm.

    2 Authors interview, Fengyang county, April 2011.

    3 Xiyun Yang and Edward Wong, Suspicious Death Ignites Fury in China, New York Times, 28 December 2010.

    4 Different economists use differ-ent definitions of the middle class. But by 2008 some 150 million credit cards were in circulation, and in 2006 Merrill Lynch projected a middle class of 350m, or almost a third of the adult population, by 2016. See also Cheng Li (ed.), Chinas Emerging Middle Class (Washington DC: Brookings, 2010).

    5 World Bank, China and the World Bank, Country Overview, http://www.worldbank.org/en/country/china/overview; and Laurence Chandy and Geoffrey Gertz, Poverty in Numbers: The Changing State of Global Poverty from 2005 to 2015, Brookings Policy Brief 2011-01 (Washington DC: Brookings, January 2011), http://www.brookings.edu/~/media/Files/rc/papers/2011/01_global_poverty_chandy/01_global_poverty_chandy.pdf. One estimate puts the total number of Chinese rescued from poverty over the three decades to 2008 at over 635 million total. Zhong Wu, Phil Karp and Yan Wang, Chinas International Poverty Reduction Center as a Platform for South-South Learning, World Bank Development Institute Special Report, October 2010, p. 33, http://siteresources.worldbank.org/WBI/

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    Resources/213798-1286217829056/wu.pdf. World Bank and Chinese statistics do not always mesh, as they set different poverty lines. The World Bank designates daily income under $1.25 worldwide as extreme pov-erty. Chinas poverty line is below a daily income of one dollar. The gross estimate of poverty reduction is com-parable, however.

    6 Barry Naughton, The Chinese Economy (Cambridge, MA: MIT Press, 2007), p. 269.

    7 Roy L. Prosterman, Robert Mitchell and Tim Hanstad (eds), One Billion Rising (Leiden: Leiden University Press, 2009), pp. 278, 283.

    8 Frank Diktter, Maos Great Famine: The History of Chinas Most Devastating Catastrophe, 19581962 (New York: Walker & Company, 2010), especially pp. 211, 238, 306f, 31719. This study was based on the first examination of thousands of central and provincial documents by a professional historian outside party ranks after new legisla-tion made them available to outsiders.

    9 Cheng Li (ed.), Chinas Emerging Middle Class, p. 91.

    10 Barry Naughton, The Chinese Economy, p. 265.

    11 Martin King Whyte, Paradoxes of Chinas Economic Boom, Annual Review of Sociology, vol. 35, 2009, pp. 37192.

    12 There is no evidence that Deng used this metaphor to describe his reforms, but it has been used by others in this context for three decades.

    13 Melanie Manion shows in her Retirement of Revolutionaries in China: Public Policies, Social Norms, Private Interests (Princeton, NJ: Princeton

    University Press, 1993) that Deng effected his purge not only by establishing new retirement rules, but also by turning these rules into norms.

    14 Shaohua Chen and Martin Ravallion, How have the Worlds Poorest Fared since the Early 1980s?, World Bank Policy Research Working Paper no. 3341, 2004, http://ideas.repec.org/p/wbk/wbrwps/3341.html. Chinas Gini coefficient of income disparity for 1983 was 0.28 compared to 0.28 for Germany, 0.25 for Sweden and 0.25 for Japan; see Naughton, The Chinese Economy, p. 217.

    15 Chinas Gini coefficient rose to 0.4 by 2000 and 0.47 by 2010, compared to the United States 0.45. Countrys Wealth Divide Past Warning Level, China Daily, 5 December 2010, for Chinese figure; CIA World Factbook for US 2007 statistic. Differing data bases and calculation models make compar-isons inexact, and the figures for 1984 given in note 14 cannot be compared directly.

    16 Dennis Tao Yang and Yuanfang Li, Agricultural Price Reforms in China: Experience from the Past Three Decades, Agroalimentaria, vol. 14, no. 27, JulyDecember 2008, pp. 1323, http://redalyc.uaemex.mx/redalyc/pdf/1992/199216329002.pdf.

    17 Authors interview, Beijing, 6 April 2011.

    18 Naughton, The Chinese Economy, pp. 2468.

    19 Klaus Deininger and Songqing Jin, Securing Property Rights in Transition: Lessons from Implementation of Chinas Rural Land Contracting Law, Policy Research

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    Working Paper no. 4447 (Washington DC: World Bank, 2007), http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2007/12/17/000158349_20071217115543/Rendered/PDF/wps4447.pdf. Since the 1980s villages have held direct, con-tested popular elections.

    20 For the saga of two journalists who interviewed Anhui peasant protest-ers and wrote a bestseller about them, only to be blacklisted and sued for libel, see Philip P. Pan, Out of Maos Shadow (New York: Simon & Schuster, 2008), pp. 26993.

    21 Cheng Li, Hu Jintaos Land Reform: Ambition, Ambiguity, and Anxiety, Chinese Leadership Monitor no. 27, 9 January 2009, https://www.hoover.org/publications/china-leadership-monitor/article/5506.

    22 Ibid.23 For the intangible urbanrural

    convergence that migrants further promote as agents of transformation by bringing skills, capital, com-modities, and information to their home villages, see Rachel Murphy, How Migrant Labor is Changing Rural China (Cambridge: Cambridge University Press, 2002). For a sym-pathetic portrayal of how rural teenagers and young women expe-rience their own abrupt liberation from the village in the Dongguan and Shenzhen sweatshops, see Leslie Chang, Factory Girls (New York: Random House, 2008).

    24 For a Western formulation of Chinas no-loser reform, see Lawrence J. Lau, Yingyi Qian and Grard Roland, Reform without Losers: An Interpretation of Chinas Dual-Track

    Approach to Transition, Journal of Political Economy, vol. 108, no. 1, February 2000, pp. 12043.

    25 Chinas muni mess, Financial Times, 29 June 2011.

    26 Zhu Keliang, Roy Prosterman, Jeffrey Riedinger and Ye Jianping, Status of Farmers Land Rights in Todays China Findings and Preliminary Recommendations from a Seventeen-Province Survey, 2011 Bluebook on Rule of Law (Beijing: Chinese Academy of Social Sciences, 2011). The question-naire was answered by 1,564 farm families in 17 provinces covering 83% of the rural population.

    27 Authors telephone interview, 8 March 2011. See also Martin King Whyte, Myth of the Social Volcano: Perceptions of Inequality and Distributive Injustice in Contemporary China (Stanford, CA: Stanford University Press, 2010); and Martin King Whyte (ed.), One Country, Two Societies: RuralUrban Inequality in Contemporary China (Cambridge, MA: Harvard University Press, 2010).

    28 See Yu Jianrong, Maintaining a Baseline of Social Stability, speech at the Beijing Lawyers Association, 26 December 2009, http://chinastudygroup.net/2010/04/yu-jianrong-on-maintaining-a- baseline-of-social-stability/.

    29 Authors telephone interview, 8 March 2011. See also Lei Guang, Bringing the City Back In: The Chinese Debate on Rural Problems, in Whyte, One Country, Two Societies, pp. 31134.

    30 Authors telephone interview, 8 March 2011.

    31 Chen Xiwen Collective Land Acquisition to Protect the Long-term Livelihood of Peasants, China News

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    Agency, 30 January 2011, http://more-humility.blogspot.com/2011/02/chen-xiwen-collective-land- acquisition.html; Chen Warns Past 12 yrs Cropland Reduced by 8.33m Hectares, Bloomberg, 19 April 2011, http://www.menafn.com/qn_news_story_s.asp?StoryId=1093407674; and Migrants Losing Out on Benefits, Shanghai Daily, 28 March 2011.

    32 Yu Jianrong, Maintaining a Baseline. 33 Zhu Keliang et al., Status of Farmers

    Land Rights in Todays China.

    34 Ibid.35 Henny Sender and Jamil Anderlini,

    Land Price Fall Threatens Local Finances, Financial Times, 2 June 2011.

    36 Zhu et al., Status of Farmers Land Rights.

    37 See Kenneth Lieberthals comments in the Brookings conference transcript, 9 May 2011.

    38 Authors interview, Washington DC, 9 March 2011.

    39 Authors interview, Fengyang county, April 2011.

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