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China cannot hide its debts by selling its land
A recent rash of anti-relocation protests in the cities of Nanjing, Beijing, and Shanghai reveals problems deeper than just bad development planning. Bejing, Nanjing, and Shanghai have seen increasingly desperate reactions to their development and relocation programs. Citizens who see the homes being demolished to make way for new development have gone from writing letters of appeal to local government agencies, to soaking themselves and the offending offices with gasoline, and burning themselves, and occasionally some government employees, to death.
City governments have responded by using increasingly violent eviction methods. “Stick Teams,” armed with clubs and garbed in camouflage clothing and red safety helmets, "block both ends of the alley, hit whoever they meet and smash whatever they see," driving residents out of their homes without any more possessions than they can carry.
Urban improvement is not the real cause for these forced evictions; it is the government’s attempts to recoup financial losses.
The four large Chinese state-owned banks (there are no private banks in China) have a very high defaulted-loan rate, generally believed to surpass fifty percent of all loans. These banks should have already gone bankrupt several times. How can they remain solvent? Some banks have hit upon the scheme of clearing and selling public land. Industry in the major cities is expanding rapidly, requiring more workers and more worker housing. Because the Chinese government owns all the land, income from the sale of public land can be transferred to the government-owned banks to replace defaulted loan income.
However, the actual situation is not that simple. Although urban residents do not hold title to the spaces they inhabit, they still need compensation for the loss of their residences, and to help them relocate to new homes. These displaced residents, mostly of the lowest economic classes, cannot afford any other dwellings; they cannot afford to live. Therefore, they are willing to risk their lives to protest the government’s actions.
When the cities tear down the poorer residents’ houses they do not offer sufficient compensation or provide new dwellings. Why not? The Three Gorges Dam project required relocating millions of people, and this was done successfully in just a few weeks. Why can the cities not follow suit?
Since the establishment of the current Communist government, more than 17 million people have been forcibly relocated for dam-building and other construction programs. These forced relocations also resulted in many violent protests, but rural areas offer available land, so the protests were less severe. The rural population is used to more primitive living conditions. It is said "A room can be dug out of a hillside; using three sticks as a brace, it can be carelessly covered with some branches, millet straws and so on.” But it is different in cities since land is difficult to find and living is expensive; city inhabitants without houses may not be able to find or make shelter like farmers.
Upon first seeing the “Stick Teams,” many citizens are shocked that their government would treat it own citizens this way. However, there is precedent. In fact, politicians often work together with criminals to conduct violent robbery Rural branches of the Chinese Communist Party hire ruffians to form "taxation groups" to forcibly collect taxes. These gangs steal domestic animals and property using threats and force; if people protest, they are seized and thrown in prison. One night not long ago in Shangcai County of Henan Province a gang of about 500 local government officials, public security guards and hired criminals and hoodlums attacked a village known as "the AIDS village," savagely beating and smashing whoever and whatever they saw. Stories like this are not uncommon, but because they are so extreme people who have not witnessed such incidents find them hard to believe.
By inconsiderate and outright illegal behavior, the government has made itself the enemy of the people. Rather than address the problems, government officials try to cover them up. The large-scale self-immolation in Nanjing, which claimed the lives of eight people, was reported on all the popular websites as soon as it happened. However, within a few hours all references to it were deleted on orders from the government. The Nanjing Municipal Propaganda Department sent faxes to all the major media outlets, officially prohibited any reporting of this incident, using the excuse that “it’ll affect social stability and solidarity.” The event was finally reported, in sanitized form, much later.
These land disputes are not minor matters. In 1911 the Qing dynasty government sold public lands for railroad construction, which aroused the whole nation into revolt. The road protection movement erupted in Sichuan Province and many other places, and led to the 1911 Revolution. If China’s land-use problems continue to intensify, it will be hard to predict how dire the consequences might be.
*Zhang Qingxi is a professor at the University of Taiwan Economics Department
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