Without such documents a market could not take off. Regulations dating back at least to 1997 have obliged officials to issue them. But Landesa, an American NGO, says a survey it conducted in mid-2010 in 17 provinces, along with Renmin University and Michigan State University, found that only 44% of respondents had a complete set of certificates. One in three had no documents at all. In April the central government urged the whole country to finish issuing the certificates by the end of 2012. Dayi county, chosen by Chengdu as a trailblazer for land reform, says it got the job done by the middle of last year. But one peasant fumes that officials never bothered to give her any documents and seizedher house and farmland a few months ago for a development project. “Liu was a great landlord,” she says. “I wish officials today were like him.”
Both Chengdu and Chongqing have gone a step further. They have set up markets for rural land derivatives, allowing farmers who create new land for agricultural use (by giving up some of their housing plots, for example) to sell the right to use an equivalent amount of rural land for urban development. Thus a developer who wants to build on a greenfield site that has already been approved for urban construction bids first for a “land ticket”, or dipiao, which certifies that such an area of farmland has been created elsewhere. The regulations say farmers get 85% of the proceeds: good news, in theory, for those in remote, dirt-poor areas who would otherwise have no chance of cashing in on the value created by urban expansion.
This is hardly revolutionary. Especially for Chongqing’s Mao-loving party chief, Bo Xilai, doing good by the peasantry would seem a canny move. But because the notion of the collective persists, the system is wide open to abuses. Local officials have considerable incentives to force farmers to give up housing land and move to more compact dwellings in order to create land for dipiao trading (some of the proceeds of which also go to village authorities). The dipiao markets in Chongqing and Chengdu have done little more than add a layer of complexity to a widespread trend in many parts of China that has often added to peasants’ grievances.
Reform might quickly be exploited by the very forces it is meant to constrain: rapacious local governments and developers
In the name of building a “new socialist countryside” (a slogan launched in 2005), local governments have been corralling farmers into new apartment blocks in order to free up land which they can use for profitable purposes. Officials have justified the practice as a way of reducing incentives for local governments forcibly to appropriate farmland and sell it to developers. Two million peasants a year have lost their land this way in the past five years, a senior government adviser in north-east China said in March. The new strategy often means the farmers are crammed into apartments with no backyards to raise chickens or store tools, and they face a longer journey to their fields.
Though officially sanctioned, the dipiao markets are viewed warily by the central leadership. Late last year Chengdu’s market was suddenly closed down. No clear explanation was given, but a Chinese scholar says higher-level officials worried that dipiao were being traded without land having first been converted to agricultural use. The risk, central officials feared, was that it would never happen at all. The market reopened in April, but the central government remains cautious. In Chongqing only 10% of the government’s annual sales of undeveloped rural land are subject to the dipiao system.
Thoroughgoing land reform, of the sort that would enable farmers to cash in on the value of their farmland and establish permanent and prosperous lives in cities (and at the same time encourage larger-scale farming), thus remains stuck. One obstacle is ideological: for all their economic pragmatism, many in the party still regard collectivism as a sacred principle. Privatisation remains a dirty word. A more practical worry is that reform might quickly be exploited by the very forces it is meant to constrain: rapacious local governments and developers. These, it is feared, would take advantage of any changes to persuade farmers unaware of land values to sell their holdings at less than market rates. The numbers of poor, landless peasants would soar, creating huge instability.
Reformers in Beijing argue that most farmers are far cannier than officials suspect. But the global financial crisis has strengthened the case for caution in the minds of party leaders. As many as 20m workers returned to the countryside when the crisis broke in 2008 and China’s exports slumped. Having farmland to go back to, many officials believe, kept the unemployed migrants from taking to the streets. As officials often say in China, “stability trumps everything.”