Ongoing Rural Issues and Responses

In terms of legitimacy, one of the CCP’s biggest headaches has been rural restructuring. There was pandemonium as the CCP decentralised power. The local governments that assumed control (whose main role had been economic development) had a tendency to be stingy with resources and the cadres’ formerly pastoral roles turned coercive. This form of government was given names like ‘bureaucratic capitalism’, ‘corporatist’ and ‘clientalist’. It was all about attracting business locally and the additional decollectivist role was now to enforce the ‘three state quotas’: grain procurement, family planning and local taxes. This stingy environment led to a serious squeeze in poor areas on expenditure on education, healthcare and other important areas that was untenable in terms of legitimacy. ‘Extra’ charges (but never on business that was so courted) designed to ‘ease the squeeze’ were no more popular.

The township of Qipan in Hubei provides an interest case study of the issues faced and results:

Location - Hubei, mid-Yangzi basin;

Main Agricultural Activity - Rice paddy production;

Average Family Farm Size - 10 mu (1.65 acres);

1998 Average Income - 1,910 Yuan per capita;

1999 Value of Rice Yield - Y360/mu;

Inputs (seed, fertilizer, etc.) - Y170/mu;

Government Taxes and Charges - Y230/mu;

Net Loss - Y40/mu;

School Fees - Y600/year primary,

Y1,200/year junior high;

Health - 75% of the population can’t afford to see a doctor (no medical insurance possible);

Result - New Year 2000 approximately 25,000 (out of 39,000 population) or 75% (85% of the labour force) upped stumps together and abandoned the village to seek work in urban areas.

This illustrates the crisis in agriculture in many places rather neatly: the cost of inputs was too high; tax and fee burdens were heavy; the population to land ration was too high (farming was inefficient) and returns for agricultural products were too low. It was simply uneconomical in many places that were being farmed to farm small farms (especially when the city cousins were doing relatively so well).

It must be said however that inroads had been made into rural poverty. In the period 1990 to 2004 the percentage of the rural population living in poverty dropped in UN terms (given a Y2,900 adjusted poverty line as at 2004) from over 30% to 10% and in Chinese terms (an adjusted 2004 Y668 poverty line) from around 10% to around 3%. Nevertheless (for virtually the first time not being the result of famine) from 1995 the rural population fell (from around 850 million to around 750 million in 2004 while the overall population rose from 1.2 billion to 1.3 billion) as migration to cities intensified.

Within the countryside, as agricultural employment declined from around 1990 (to just over 300 million in 2004 from a peak of over 350 million in 1990) the slack was taken up somewhat by the growth of employment in the TVE sector (which had nearly 150 million rural employees by 2004 - up from around 30 million in 1990). A new ‘floating’ rural labour force now approached a sizeable 150 million extra people available (which had virtually not existed at all when Deng first came to power).

“Floating” was at first a pejorative used by the party because this group was unemployed and didn’t have the official hukou that would permit them to legally look for employment and accommodation in any city (they were not anchored). They were still officially in the countryside but were actually likely in the cities seeking employment in unregulated markets. Later the CCP was more accepting of (and less scathing in their remarks concerning) this group as it proved to be an economically useful and needed ‘reserve force’ of labour for the cities. This most vulnerable floating group typically carried their lives around in bags to the job queues. In the cities they were: numerous and poor so easily replaced; unrepresented so easily exploited; lacking the urban hukou so accorded few urban rights; and considered less civilised and so treated as second class citizens generally.

The CCP came up with a statement of the issues as part of attempting to find the solution to all of the above. They were referred to as “the three rural problems” or “the three problems (san neng - 三農)”. Here they are:

1) Agriculture - stagnation in productivity and efficiency, declining

incomes, high tax burden;

2) Countryside - surplus labour, land management and local governance

(village elections);

3) Peasants - low ‘quality’, poor levels of education and skills, health,

etc.

The campaign the CCP came up with was called “Building a New Socialist Countryside”. More private and public cooperation would be allowed.

The CCP reduced taxes and remarkably completely abolishing the State Agricultural Tax in 2005 for the first time in literally thousands of years. These were central measures that left local taxes in place for the time being. The central state also dramatically increased its infrastructure (e.g. water, roads and power) investment and spending in the health, education and welfare sectors. This was made possible by a major growth dividend. The local sector was streamlined and this eventually also led to reduced local taxes. Farmers were also giving new access to training in business practices and new technology.

After 1978 and Decollectivisation, land usage had become a problem as the average eastern Chinese family farm was allocated a mere ¼ acre block (800m²) – the size of a typical Sydney suburban block. There were now literally millions of tiny family farms in China. This was still inefficient (though productivity had been improved by the private system) so private shareholder cooperatives and companies were now permitted to be formed. People were also now allowed again to rent out their farms enabling others to increase their effective holdings and achieve better scale. To keep employment levels up, the government encouraged many farmers to shift to growing more labour intensive crops (such as fruit and vegetable for the Japanese market and food processing). The idea here was that China had an international comparative advantage in the cheapness of its labour (relative to the cheapness of its land) and just then also had a convenient abundance of unused labour in the countryside.

The government also noted that the price of land for agriculture was inflated by competition in its use for industrialisation, urbanisation and tourism (e.g. for resorts and golf clubs) and that lack of fair compensation to farmers for forgone land had produced the majority of all protests and protest movements directed against government policy. So this was virtually the main problem for CCP legitimacy in China. This farmers’ rights issue also raises issues of democracy that I’ll examine in the next post where I’ll also see what was in the CCP’s mind in that regard in the cities.

Globalisation and Legitimacy

So what sustains party legitimacy in a globalised China of Jiang and Hu that is no longer recognisably Communist to many? Who runs China therefore and under what ideology if any? I’ll consider those questions in this post and in the next I’ll consider the very important question of what the key problems are in the vital countryside and the action the CCP is taking in attempting to resolve them.

Many in the West predicted that the CCP would go the way of the Communist parties of Eastern Europe. Evidently they saw the breakdown of Communist ideology as necessitating an end to the rule of Communist parties. I may ask why the CCP alone has been able to maintain its legitimacy but I should also allow that it may not be for all time. Nevertheless it has remained in power and there must be a reason.

The CCP has given thought to this question and has come up with five basic reasons for its legitimacy:

1) It has fostered and maintained enormous levels of economic growth;

2) Consequently living standards have increased [although inequality has also increased markedly, of course];

3) Especially from the mid 1990s, it has tried to promote its aims as nationalist and in the national interest (they point to what they promote as a successful history);

4) They are able to maintain social stability in accordance with their ‘neo-authoritarian’ and ‘Asian Values’ philosophies; and

5) They are working on improving their ethical standards and stamping out corruption.

Perhaps the most promising of these bases of legitimacy in the medium term is the appeal to nationalism but it is a double edged sword.

The powerful ‘culture fever’ that erupted following the CR was partly about reasserting pride in China’s imperial past and national pride generally at China’s historical and ongoing global status and is a positive asset to China as well as CCP legitimacy. Yet pride in turn has depended upon the recent advance in living standards to a large extent and has been dampened by a sense of humiliation at the unfairness of US hegemony and the success of Japan. The expected return of Taiwan to the Chinese fold has become a symbol of the reversal of that humiliation and Taiwan is not necessarily expected to be the be all and end all of that process. Japan is still sometimes seen as an enemy and not sufficiently punished for various war crimes.

The CCP is ‘cashing in’ on these feelings of humiliation in order to promote the sense of unity that it feels is in its immediate interests. This can be seen as necessary to provide the ostensible raison d’être for a post-Marxist CCP government but here is where nationalism has become a two edged sword. The government can also be criticised for the pace at which it addresses the humiliation of a great nation or fails to sufficiently represent the national interest well enough generally. Examples of this problem of popular nationalism include the reaction to WTO negotiations in 2001 (where the CCP was accused of giving away too much) and accusations that China has been too soft on Japan over wartime atrocities.

The CCP’s reaction to the above potential threat to its legitimacy has been to learn the lesson of Tiananmen. Party thinkers in leadership tend to see the lesson as: cracking down hard and early on dissent promotes stability.

Their verdict on Tiananmen has remained unchanged in recent years (despite recent talk of a re-evaluation) as evidenced by the extended prison terms (11 years) meted out to various democracy activists more recently (such as those of the China Democracy Party) and not since commuted (the re-evaluation of the ‘incident’ is yet to materialise).

The approach to the Falun Dafa (Falun Gong) is another result of this reaction. Practitioners were declared an ‘evil cult’ in 1999 and suppressed following a sit-in protest of around 10,000 of them following a scathing editorial against the group. The protest saw them surrounding Zhongnanhai (the residential area in central Beijing near Tiananmen reserved for much of the CCP high leadership). The evil seems to be that it is a challenge to CCP ideology. The group is critical of much of what the current CCP government seems to stand for. Jiang was the main hardliner at the time when it came to cracking down on what is actually a fairly harmless breathing practice called qigong. For more on suppression of this group, go to the group’s own websites.

The other issues being cracked down on are ethnic in nature and concern the Tibetans mainly in Tibet and the Muslims (mainly Uighur and mainly in Xinjiang (called East Turkistan or Uighurstan especially by some separatists)). The “War of Terror” almost couldn’t have come at a better time from the point of view of the CCP. The Chinese government now feels it more or less has the cover it needs to crack down as necessary and it does crack down (whether real terrorism is involved or not) as necessary. Of course China hasn’t been alone in revelling in the cover provided. Russia and Israel are two other notable cases, not to mention the US itself.

Who is in power (if not Marxists) is another question. The year 2002 marked a changing of the guard when Hu came to power but also most of the Politburo was also replaced.

Jiang finished his term as Party Secretary in 2002 (relinquishing that role to Hu) but provided some of the answers to that question as he left this formal role with his Three Represents.

The CCP constitution was amended in 2002 so that the ideology of the party was now formally: Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important Ideology of “the Three Represents (三个代表)”. This last was what the party now stood for (represented). It stood for the most advanced forces of production, the most advanced culture and the fundamental interests of the broadest mass of the people. The shift here was that this suggested it was no longer a party explicitly of workers; it could also be the party of their bosses, and of intellectuals and artists. It now represented ‘advanced elements’ (who by virtue of being that were now also the only people eligible to be members of the party – so you could also be a worker and not eligible) rather than revolutionaries – the revolution was now over. This really just formalised what had already become the practice.

The leadership as I’ve mentioned was also shaken up. Hu assumed the leadership although he was the second youngest of the nine Politburo Standing Committee members.

All but one of the group were also qualified engineers (predominantly from the one technology university that Hu trained in engineering at, Qinghua) – the outlier, Wen Jiabao, was a geologist (trained at the Beijing Institute of Geology). Wen’s case shows that it was possible to be mentored in the party by a discredited leader (Zhao Ziyang in Wen’s case) and still reach the second or third highest rank in the PRC. Only Hu was kept on from the previous group and he was also the only member remaining who had been mentored by Deng. Most had been mentored by Jiang. There’s a joke in China that Qinghua produces China’s leaders and Beida (Beijing University) produces its prisoners. Here’s the group:

Name	Age	Profession	University	Mentor
Hu Jintao	59	Engineer	Qinghua	Deng Xiaoping
Wu Bangguo	61	Engineer	Qinghua	Jiang Zemin
Wen Jiabao	60	Geologist	Beijing Institute of Geology	Zhao Ziyang
Jia Qinglin	62	Engineer	Hebei Engineering College	Jiang Zemin
Zeng Qinghong	63	Engineer	Beijing Institute of Technology	Jiang Zemin
Huang Ju	64	Engineer	Qinghua	Jiang Zemin
Wu Guanzheng	64	Engineer	Qinghua	Jiang Zemin
Li Changchun	58	Engineer	Harbin Institute of Technology	Jiang Zemin
Luo Gan	67	Engineer	Beijing Institute of Iron & Steel	Li Peng

So it’s a technocratic group that have been well mentored in the business of government in the new China and that embraces the new business elites (who might otherwise become an opposition). The training of the group is not in political change, it’s in technocratic problem-solving and that is their focus.

This currently suits the business elites with whom they are intimately linked so it’s not yet in the interests of the business middle class to challenge the political position of this type of problem-solving state. From the orthodox Marxist point of view it is also still possible to view the business class as powerful and imaginative allies provided they remain securely yoked to the benefit of the CPP dictatorship. The times in China are indeed still interesting for Marxists today. To paraphrase Sun Zi, the CCP is keeping its friends close and its (at least potential) enemies closer. And the policy is currently working as the potential enemies are currently being kept happy with the amount of (close) influence they are able to have upon reforms as they occur.

In 2006, the CCP launched the “eight glories and eight disgraces (八榮八耻)” campaign. This is aimed at promoting compliance among the population and it was at least partly designed to be learnt about by rote by schoolchildren. This is how to be a good Communist today. Here are the eight of both:

1. It is glorious to adore the fatherland; it is a disgrace to harm the fatherland;

2. It is glorious to serve the people; it is a disgrace to disserve the people;

3. It is glorious to respect science; it is a disgrace to be ignorant and unenlightened;

4. It is glorious to work hard; it is a disgrace to be indolent;

5. It is glorious to promote unity and mutual help; it is a disgrace to be self-seeking;

6. It is glorious to be honest and trustworthy; it is a disgrace to be mercenary and profit-grabbing;

7. It is glorious to be disciplined and law abiding; it is a disgrace to violate laws and disciplines;

8. It is glorious to be willing to struggle; it is a disgrace to be sybaritic.

The next post will be on the rural issues that continue to plague China (and CCP responses).