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China's Rural Urbanization
Transcript of China's Rural Urbanization
Road to Modernity or Ruin?
After 2010 landslide kills 29 people in one village, Sha'anxi province unveils $16 billion plan to move 2.8 million people from mountainous villages to new towns
Qiyan Village, site of the landslide, is made into a model village for the program
Once a mountain village of 200 households, the new town in the valley below will house 6,000 residents
Despite promises of employment opportunities, most relocated residents have few opportunities to work or find new jobs
Case Study: Qiyan, A "Model" Village
The Emptying Countryside
China's Rural Urbanization
About 99% of rural households have children working outside the village in cities
New Socialist Countryside?
Water, Land, Development
In addition to "natural" economic incentives, the relocation of farmers is driven by a mix of policies/programs, including:
2. Hydrological engineering
3. Land tax structure
1. "Farmland to Forest"
subsidy: "turn farms to forest"
Farmers given about $15 per mu* (usually about $60 a year for their land) if they stop planting crops like corn or bean and plant trees instead. A typical well-off farmer salary is about $1000 a year including wages from family members
Stated aim is "greening", combating erosion and runoff, but other motives like land grabbing and mining are often involved
*6 mu = 1 acre
In many areas, wages sent back from outside account for 90% of village income
2. Send Clean Water to Beijing!
3. Land Transfer
Long history of efforts to modernize the countryside (1920's, 1950's)
1990's: Wen Tiejun's
"Three Rural problems"
advocates focus on rural problems holistically: peasants, village society, and agriculture, focuses attention on increasing gap between city and countryside
New Socialist Countryside
program: leadership pledges more investment in rural spending: farming subsidies, new construction, rescinding of the agricultural tax
China's North-South Water Transfer
Officials aim to reduce farming, agricultural runoff into rivers that will eventually feed Beijing and North China's growing water needs
New dams and reservoirs associated with the project have caused relocation of 3+ million rural residents
Priority is to feed urban China's water demand at the expense of rural water needs
All urban land in China is owned by the state, but development rights sold for 70 year periods
In 1994, Central government increased its share of local business tax revenue, causing local governments to rely more on selling land-development rights for revenue
City governments have also annexed surrounding rural counties, appropriating rural land for development in the process
"Even if city people go back to the countryside,
they are still city people, now their brains think differently."
“An objective rule in the process of modernization is we have to complete the process of urbanization and industrialization.”
In an effort to continue urbanizing without putting more pressure on existing megacities like Shanghai, central government policy now explicitly encourages the building of small and medium-sized towns and new cities to accommodate farmers from nearby villages who are relocated, often forcibly, from their homes. They are often provided with an apartment subsidy, but must take on debt to pay the rest.
Qiyan Village, Sha'anxi Province
Hanzhong, Sha'anxi Province
Lost 29 family members in the 2010 landslide that prompted officials to begin relocating villagers to new housing
"I am injured and I can't work and I am in debt for the house that I was promised would be provided free"
"Life was much better up in the canyon...We supported ourselves, now we have to pay so much money for various things, and we are reliant on the government."
"Better City Better Life"
-2010 Shanghai Expo Slogan
Director, McKinsey and Co. & Chair of Urban China Initiative
Shaanxi Provincial official
China's urbanization since 1979 has been largely driven by exodus of farmers to coastal factory cities in Pearl River and Yangzte delta
In 2011 China crossed 50% urban threshold
Wages suppressed to fuel export-focused manufacturing, high savings drives investment by government
Hukou system keeps most migrants from becoming full urban citizens, also thought to prevent slums in large cities (but not entirely)
The idealized rural household in 1951
promoting the benefits of land reform
the ideal household in 2012
Urbanization moves west, migration follows
After being unjustly compensated for the relocation process, over 100 villagers are in the process of submitting a petition to the city government alleging corruption by town officials and demanding better compensation
Qiyan Village Petition
After losing his entire family in a landslide, Lin was also harassed by officials for speaking out against the relocation process, and imprisoned in his own home when the Sha'anxi provincial governor inspected the village
Despite being injured and unable to work, does random jobs around the village to pay off the loans for his $20,000 home
Paradox of Village Organizing
Villages organize independently
Adjacent villages with similar issues rarely collaborate
Focus on specific, attainable issues of compensation rather than larger structural problems
"Inexorable" march towards Urbanization....
coffin-maker, Qiyan village
But many still remain......
Chinese Administrative Hierarchy
little cooperation or
nearby villages facing
"homes that were promised for villagers
are sold to wealthy people with
connections to the township cadres"
The Countryside Today
Despite 30 years of urbanization, China still has 650 million rural residents
What are the costs of an "urban life" ?
Yearly Costs $
* assuming 7% interest rate amortized in 3 years
Apt Down Payment
" Life is harder now because there are more fees"
Ms. Fang, 62, Qiyan resident
Government actively resettling farmers from remote regions to new towns in rural areas
250 million new urban dwellers by 2025
Urbanization is supposed to
fuel consumer demand
and funnel "surplus" rural labor into more productive and
higher-value added sectors
Government acknowledging need to close increasing gap between urban and rural incomes
Disposable Annual Income Per Capita
Urban Residents $4,000
Loss of Arable Land
Destroying cultural heritage
China per capita: $1,300
Sha'anxi Province per capita: $651
Sha'anxi Province household: $1,896
Rural Annual Disposable Income
not including additional food, transport, clothing costs
Total First Year Costs
2010 National Bureau of Statistics
Better life for whom?
What does it cost to be "urban" ?
Annual Cost $
Full Apt Cost: $22,000, gov't subsidy only covers $4700
Low-interest loan assuming 7% interest at 3 years
Farmers cannot learn skills for new jobs
Destroying Rural Communities
Creation of semi-urban underclass
A Better Way?
Security of land tenure for farmers
Limits on amount of land that can be appropriated
Shifting incentives for local officials (tax reform)
train-shed houses the trains that transport these workers to the city
apartment blocks warehouse the workers themselves
Is a New Socialist Countryside actually possible?
To the South and east!
641 million Urban Residents
160+ cities of 1 million people
Since 1980, 370 million peasants have moved to China's cities
600 million lifted from poverty in 30 years
What is our role as (American/Global) consumers, in fueling this violent process of migration?
True village autonomy
Fulbright U.S. Student Program
Sha'anxi Normal University
Will urbanization payoff?
*This is over a 10 year period, Calculated by taking ($8,000 per capita x 2.8 million residents) + ($2,500 x 2.8 million x 2 years) + ( 1500 x 2.8 million x 7 years)
But this is only if residents are able to afford these new lifestyles, a big IF...otherwise the government could end up having to pay for these new costs with social welfare payments
Cost of Relocation Program
Expected increase in Consumer Spending*
Forced urbanization involves
, but also
. Many farmers are told they will receive generous subsidies for new homes but are hit with unexpected costs and fees. Debt, over-work, and other stress results from trying to pay for a lifestyle that has been imposed upon them.
Farmers rarely compensated directly for value land because village land is owned collectively
1. An inanimate object worshiped for its supposed magical powers or because it is considered to be inhabited by a spirit
2. A course of action to which one has an excessive & irrational commitment.
China's "Urban Fetish"
Deng Xiaoping: Patron Saint of Pudong
"build a new countryside, initiate a new life"
Yanchuan County, Shanxi province
"The move is still too expensive for most people, so for now we remain in the canyon."
The Other Costs...