At Large

China’s No. 1

The PRC gets serious about property rights.

By 2.24.08

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"Secure property in hand leads to peace in mind," said Mencius, an ancient Chinese philosopher, when asked how to manage a country.

The central government of China, facing a daunting task of building a harmonious society and developing the country in a balanced way, issued the No. 1 Central Document, its first major policy directive of the year, on the eve of the New Chinese Year. The document is unprecedented in its concern for land rights, and the degree of detail it devotes to specific mandates to protect the land rights of the 700 million rural Chinese.

This document is Beijing's strongest response yet to the disturbing fact that farmers' individual land rights remain insecure a quarter-century after the breakup of the collective farms, discouraging investment in land improvements and facilitating rampant land expropriations and irresponsible urban development.

Insecurity of farmers' land rights slows agricultural development and greatly affects farmers' peace of mind. In the first nine months of 2006, 17,000 cases of "massive rural incidents" (often violent protests) were officially reported, involving about 400,000 farmers. Land grievances were their top complaint.

With the widening gap between rural and urban development, more than 200 million farmers have migrated to cities, especially to developed coastal areas, seeking a better livelihood. Still other forms of upheaval result from this growing "floating population," as just witnessed in the toxic combination of natural disaster and transportation paralysis.

For the most part, the central government is actually not to blame for farmers' insecurity and a lagging agricultural sector. A series of national laws have been adopted to strengthen farmers' land rights since the 1990s.

The problem lies with local implementation: farmers' land rights are illegally "readjusted" away based on household population changes, reassigned to "outside developers," or taken by the cadres and sold for enormous profit to non-agricultural users. In a kind of double whammy, local governments exercise virtually unfettered power to expropriate farmlands for urban biased development, with grossly insufficient compensation to the farmers.

AGAINST THIS BACKDROP, most of the tremendous wealth generated by China's reforms over the past three decades has not flowed into the countryside. The official rural-urban income ratio has worsened to 1:3.28, even without considering many social benefits available only in cities. Without secure property rights that would encourage them to make long-term and productivity-enhancing investments in land, many farmers choose working in developed cities.

One does not need to look far for counter-examples: after Japan, South Korea and Taiwan completed their post-war land reforms and ensured the security of farmers' land rights. Their rural economies roared ahead, resulting in a prosperous countryside that has helped moderate mass migration to cities, spreading it over two or more generations.

The 2008 Central Document now sends a powerful signal of change, assuring farmers' land rights in an unusually extensive and forceful way. Highlights include:

* Local governments and collective cadres must strictly implement legal rules on prohibiting readjustment and taking-back of farmers' land rights for selling them to non-villager developers.

* No land expropriations by local governments will be approved unless and until all procedural safeguards are satisfied, compensation is deemed adequate and fully delivered to the hands of affected farmers, and a social security safety-net is in place.

* Land rights certificates, which are the ultimate proof and documentation of land rights, must be issued to every farm household.

* For the first time, the Central Document calls for establishing a rural land rights registration system that provides further assurance and security to farmers.

THE IMPLEMENTATION of these policies will meet considerable local resistance, and it will require determination and ingenuity to pull it off. Beijing will have to put teeth in the policy. Political careers of local officials should be tied closely with their implementation of these pro-farmer initiatives. Serious consequences should be imposed, including removal from official posts, fines, civil or even criminal liabilities.

Last summer, several Ministries launched a joint campaign to inspect and rectify rural land violations. More than a thousand local officials were sanctioned over a three-month period as a result.

There should also be independent and comprehensive monitoring of local progress. Relying on self-reports from local governments on matters like this has been proven grossly inadequate. Sending independent inspection teams to the field will generate essential first-hand information, but it is not practical to have inspection teams everywhere.

The World Bank, my colleagues and I at the Rural Development Institute, and others have applied another useful approach to such monitoring of farmers' land rights -- including large-scale sample surveys -- over the past decade. A further option is to create channels, such as telephone hotlines, by which farmers can instantly report violations as they occur. News media and grassroots NGOs should be encouraged to monitor and report freely.

Finally, in the medium term, an accessible and reasonably independent judicial system needs to be established along with legal aid services for farmers. Local courts can hardly serve as an impartial forum to address farmers' complaints at present, because they are largely appointed and funded by local governments that are often the wrongdoers in land disputes. This link must be severed.

Meanwhile, legal professionals should be encouraged to provide independent legal aid services to aggrieved farmers, to at least partially mitigate the present judicial failure.

The clear implication of this powerful new document is that Beijing finally means business on securing land rights in farmers' hands. Grassroots development and "peace in mind" should follow.

Li Ping is head of the Beijing Representative Office and a staff attorney with the Seattle-based Rural Development Institute, which contributed the recent Cato Institute policy paper "Securing Land Rights for Chinese Farmers."

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