BEIJING — China is pushing ahead with a sweeping plan to move 250
million rural residents into newly constructed towns and cities over the
next dozen years — a transformative event that could set off a new wave
of growth or saddle the country with problems for generations to come.
The government, often by fiat, is replacing small rural homes with
high-rises, paving over vast swaths of farmland and drastically altering
the lives of rural dwellers. So large is the scale that the number of
brand-new Chinese city dwellers will approach the total urban population
of the United States — in a country already bursting with megacities.
This will decisively change the character of China, where the Communist
Party insisted for decades that most peasants, even those working in
cities, remain tied to their tiny plots of land to ensure political and
economic stability. Now, the party has shifted priorities, mainly to
find a new source of growth for a slowing economy that depends
increasingly on a consuming class of city dwellers.
The shift is occurring so quickly, and the potential costs are so high,
that some fear rural China is once again the site of radical social
engineering. Over the past decades, the Communist Party has flip-flopped
on peasants’ rights to use land: giving small plots to farm during
1950s land reform, collectivizing a few years later, restoring rights at
the start of the reform era and now trying to obliterate small
landholders.
Across China, bulldozers are leveling villages that date to long-ago
dynasties. Towers now sprout skyward from dusty plains and verdant
hillsides. New urban schools and hospitals offer modern services, but
often at the expense of the torn-down temples and open-air theaters of
the countryside.
“It’s a new world for us in the city,” said Tian Wei, 43, a former wheat
farmer in the northern province of Hebei, who now works as a night
watchman at a factory. “All my life I’ve worked with my hands in the
fields; do I have the educational level to keep up with the city people?
China has long been home to both some of the world’s tiniest villages
and its most congested, polluted examples of urban sprawl. The ultimate
goal of the government’s modernization plan is to fully integrate 70
percent of the country’s population, or roughly 900 million people, into
city living by 2025. Currently, only half that number are.
The building frenzy is on display in places like Liaocheng, which grew
up as an entrepôt for local wheat farmers in the North China Plain. It
is now ringed by scores of 20-story towers housing now-landless farmers
who have been thrust into city life. Many are giddy at their new lives —
they received the apartments free, plus tens of thousands of dollars
for their land — but others are uncertain about what they will do when
the money runs out.
Aggressive state spending is planned on new roads, hospitals, schools,
community centers — which could cost upward of $600 billion a year,
according to economists’ estimates. In addition, vast sums will be
needed to pay for the education, health care and pensions of the
ex-farmers.
While the economic fortunes of many have improved in the mass move to
cities, unemployment and other social woes have also followed the
enormous dislocation. Some young people feel lucky to have jobs that pay
survival wages of about $150 a month; others wile away their days in
pool halls and video-game arcades.
Top-down efforts to quickly transform entire societies have often come
to grief, and urbanization has already proven one of the most wrenching
changes in China’s 35 years of economic transition. Land disputes
account for thousands of protests each year, including dozens of cases in recent years in which people have set themselves aflame rather than relocate.
The country’s new prime minister, Li Keqiang, indicated at his inaugural
news conference in March that urbanization was one of his top
priorities. He also cautioned, however, that it would require a series
of accompanying legal changes “to overcome various problems in the
course of urbanization.”
Some of these problems could include chronic urban unemployment if jobs
are not available, and more protests from skeptical farmers unwilling to
move. Instead of creating wealth, urbanization could result in a
permanent underclass in big Chinese cities and the destruction of a
rural culture and religion.
The government has been pledging a comprehensive urbanization plan for
more than two years now. It was originally to have been presented at the
National People’s Congress in March, but various concerns delayed that,
according to people close to the government. Some of them include the
challenge of financing the effort, of coordinating among the various
ministries and of balancing the rights of farmers, whose land has
increasingly been taken forcibly for urban projects.
These worries delayed a high-level conference to formalize the plan this
month. The plan has now been delayed until the fall, government
advisers say. Central leaders are said to be concerned that spending
will lead to inflation and bad debt.
Such concerns may have been behind the call in a recent government
report for farmers’ property rights to be protected. Released in March,
the report said China must “guarantee farmers’ property rights and
interests.” Land would remain owned by the state, though, so farmers
would not have ownership rights even under the new blueprint.
On the ground, however, the new wave of urbanization is well under way.
Almost every province has large-scale programs to move farmers into
housing towers, with the farmers’ plots then given to corporations or
municipalities to manage. Efforts have been made to improve the
attractiveness of urban life, but the farmers caught up in the programs
typically have no choice but to leave their land.
The broad trend began decades ago. In the early 1980s, about 80 percent
of Chinese lived in the countryside versus 47 percent today, plus an
additional 17 percent that works in cities but is classified as rural.
The idea is to speed up this process and achieve an urbanized China much
faster than would occur organically.
The primary motivation for the urbanization push is to change China’s
economic structure, with growth based on domestic demand for products
instead of relying so much on export. In theory, new urbanites mean vast
new opportunities for construction companies, public transportation,
utilities and appliance makers, and a break from the cycle of farmers
consuming only what they produce. “If half of China’s population starts
consuming, growth is inevitable,” said Li Xiangyang, vice director of
the Institute of World Economics and Politics, part of a government
research institute. “Right now they are living in rural areas where they
do not consume.”
Skeptics say the government’s headlong rush to urbanize is driven by a
vision of modernity that has failed elsewhere. In Brazil and Mexico,
urbanization was also seen as a way to bolster economic growth. But
among the results were the expansion of slums and of a stubborn
unemployed underclass, according to experts.
“There’s this feeling that we have to modernize, we have to urbanize and
this is our national-development strategy,” said Gao Yu, China country
director for the Landesa Rural Development Institute,
based in Seattle. Referring to the disastrous Maoist campaign to
industrialize overnight, he added, “It’s almost like another Great Leap
Forward.”
The costs of this top-down approach can be steep. In one survey
by Landesa in 2011, 43 percent of Chinese villagers said government
officials had taken or tried to take their land. That is up from 29
percent in a 2008 survey.
“In a lot of cases in China, urbanization is the process of local
government driving farmers into buildings while grabbing their land,”
said Li Dun, a professor of public policy at Tsinghua University in
Beijing.
Farmers are often unwilling to leave the land because of the lack of job
opportunities in the new towns. Working in a factory is sometimes an
option, but most jobs are far from the newly built towns. And even if
farmers do get jobs in factories, most lose them when they hit age 45 or
50, since employers generally want younger, nimbler workers.
“For old people like us, there’s nothing to do anymore,” said He
Shifang, 45, a farmer from the city of Ankang in Shaanxi Province who
was relocated from her family’s farm in the mountains. “Up in the
mountains we worked all the time. We had pigs and chickens. Here we just
sit around and people play mah-jongg.”
Some farmers who have given up their land say that when they come back
home for good around this age, they have no farm to tend and thus no
income. Most are still excluded from national pension plans, putting
pressure on relatives to provide.
The coming urbanization plan would aim to solve this by giving farmers a
permanent stream of income from the land they lost. Besides a flat
payout when they moved, they would receive a form of shares in their
former land that would pay the equivalent of dividends over a period of
decades to make sure they did not end up indigent.
This has been tried experimentally, with mixed results. Outside the city
of Chengdu, some farmers said they received nothing when their land was
taken to build a road, leading to daily confrontations with
construction crews and the police since the beginning of this year.
But south of Chengdu in Shuangliu County, farmers who gave up their land
for an experimental strawberry farm run by a county-owned company said
they receive an annual payment equivalent to the price of 2,000 pounds
of grain plus the chance to earn about $8 a day working on the new
plantation.
“I think it’s O.K., this deal,” said Huang Zifeng, 62, a farmer in the
village of Paomageng who gave up his land to work on the plantation.
“It’s more stable than farming your own land.”
Financing the investment needed to start such projects is a central
sticking point. Chinese economists say that the cost does not have to be
completely borne by the government — because once farmers start working
in city jobs, they will start paying taxes and contributing to social
welfare programs.
“Urbanization can launch a process of value creation,” said Xiang
Songzuo, chief economist with the Agricultural Bank of China and a
deputy director of the International Monetary Institute at Renmin
University. “It should start a huge flow of revenues.”
Even if this is true, the government will still need significant
resources to get the programs started. Currently, local governments have
limited revenues and most rely on selling land to pay for expenses — an
unsustainable practice in the long run. Banks are also increasingly
unwilling to lend money to big infrastructure projects, Mr. Xiang said,
because many banks are now listed companies and have to satisfy
investors’ requirements.
“Local governments are already struggling to provide benefits to local
people, so why would they want to extend this to migrant workers?” said
Tom Miller, a Beijing-based author of a new book on urbanization in
China, “China’s Urban Billion.” “It is essential for the central government to step in and provide funding for this.”
In theory, local governments could be allowed to issue bonds, but with
no reliable system of rating or selling bonds, this is unlikely in the
near term. Some localities, however, are already experimenting with
programs to pay for at least the infrastructure by involving private
investors or large state-owned enterprises that provide seed financing.
Most of the costs are borne by local governments. But they rely mostly
on central government transfer payments or land sales, and without their
own revenue streams they are unwilling to allow newly arrived rural
residents to attend local schools or benefit from health care programs.
This is reflected in the fact that China officially has a 53 percent
rate of urbanization, but only about 35 percent of the population is in
possession of an urban residency permit, or hukou. This is the document
that permits a person to register in local schools or qualify for local
medical programs.
The new blueprint to be unveiled this year is supposed to break this
logjam by guaranteeing some central-government support for such
programs, according to economists who advise the government. But the
exact formulas are still unclear. Granting full urban benefits to 70
percent of the population by 2025 would mean doubling the rate of those
in urban welfare programs.
“Urbanization is in China’s future, but China’s rural population lags
behind in enjoying the benefits of economic development,” said Li
Shuguang, professor at the China University of Political Science and
Law. “The rural population deserves the same benefits and rights city
folks enjoy.”
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