Enoch Caudwell, "China's Landless"

China’s Landless
by Enoch Caudwell

Since the 1990s, at least 40 million farmers in China have lost their land.

This process is being driven by what the article below calls the "bureaucratic-commercial interest group." Local bureaucrats need to have a "good record" if they are to advance in their careers. A "good record" implies rapid GDP growth from industry, as well as modern buildings, roads, and other visible infrastructure. This requires land, so the peasants must go, and at a cheap price if the investments are to be profitable for both investors and the government.

Several large-scale disturbances over the past year have revealed the depth of social contradictions this process has created. The violent repression of peasants defending their land in Shengyou and Hanyuan has put focus on the widespread fact of peasants being pushed off their land.

The following is an abridgement of an article from Xinhua’s "Semi-Monthly Talks." The piece is an expose of corruption and collusion in Hanyuan County, Sichuan Province, located about 300km from Chengdu, the provincial capitol. Corruption is not rare in China, but the protest that took place in the county in November 2004 was anything but common. Angered by the government's insistence on carrying out a large-scale hydroelectric project without giving fair compensation to the displaced, over 100,000 residents of the county rebelled against the government, and briefly took over the county seat. Armed police and the army were called in, and order was restored after a violent clash that reportedly left many peasants dead or wounded. Mention of the protest is studiously avoided in the article, but the piece manages to give us a key to understanding why it happened in the first place.
Black Money

Hanyuan County, in Sichuan Province, was the home to a network of corrupt officials and enterprise owners that stretched to the highest level of the county government and far into the county's industrial structure. The factories in the county were controlled by two brothers of the Peng family, and together with county officials, they controlled the political and economic affairs of the county, at one point overtaking the Party in terms of governing ability. The level that the collusion reached is staggering.

Within a few short years, the "bureaucratic-commercial interest group" in the county had completed its primitive accumulation, extending its control over the county's metallurgy, petrochemical, construction and mining industries. The paid-up capital of companies under the interest group's control reached 200 million yuan, accounting for 76.92% of the total SOE registered capital in the county, and 64.30% of the total registered capital (including state and private capital). By 2004, various members of the Peng family had gained control over mines, power stations, and other enterprises. Little surprise, then, that the common people said: "The Pengs own Hanyuan."

According to a report by the Sichuan Party Discipline Committee, Hanyuan cadres at the county and township level frequently used their political positions for economic gain, setting up companies, opening mines, building hydroelectric plants, etc.

The collusion and corruption in Hanyuan's political circles led to chaos in the economy and society. The streets surrounding the county's best hotel were filled with massage parlors, hairdressing boutiques, brothels disguised as dance halls, and passersby in the area were often accosted by prostitutes. A member of Hanyuan's Party Committee told this reporter that the hotel was owned by a relative of one of Hanyuan's county leadership, and was a haven for prostitution and gambling.

The Sichuan Provincial Party Committee swiftly "cleaned out" the "bureaucratic-commercial interest group" in Hanyuan at the end of December 2004. The people were elated with the Party's actions, but the "cleaning-up" of the county will take time.

The investigation by the Sichuan Provincial Party Committee confirmed that the source of the "transformation of political power into capital" was the marriage of officials' rent-seeking with the willingness of businesses to bribe officials for special treatment.

The development of hydroelectric resources has been a focal point of the expansion of "power capital" in Hanyuan. The Peng family constructed seven power stations in Hanyuan County, with a total installed capacity of 11,000 kilowatts. These plants depended on the cooperation of county officials from the start, for licensing, land acquisition, and approval. The Party Secretary of the township in which the power plants were constructed said, "The compensation standard for this area is 3,000 yuan per mu for non-irrigated land, and 8,000-10,000 yuan per mu for irrigated land. But after the county government stepped in, the compensation was lowered to 2,000 yuan per mu."

Enoch Caudwell is an independent scholar chronicling China's primitive accumulation.