land reform: the first SZ paper of 2013

In its first document 2013 (2013年一号文件) Shenzhen announced that its intention to finish expropriating collective lands in order to transfer land use rights for high-end development to state owned real estate developers, like China Resources and Jingji. In official parlance its know as  land reform (土改), and yes, I’m starting to think I live in a post-ironic city.

The problem of Shenzhen urban villages is, of course, that they were not villages. Under Mao, they were incorporated into the state apparatus through collectivization. Villages became teams, several teams became a brigade, and groups of brigades constituted a commune. In turn, the communes were the basic administrative unit of Bao’an County, Shenzhen’s territorial predecessor. In short, the collectives had a modern bureaucracy, and did agrarian work in not quite primitive, but very rough conditions.

In 1978, led by liberalization in rural Anhui, teams and brigades throughout China began to dismantle, and Bao’an was no exception. Redeploying the administrative structure of the Maoist state, they created “new villages”, which continued to do agrarian work, but for collective profits. Traditional village relationships and historic identities facilitated this process. In Bao’an, however, the establishment of the Shenzhen SEZ meant that collectives could also invest in manufacturing and real estate development.

In 1992, Shenzhen incorporated the inner villages into the municipal apparatus and in 2004 the outer villages were incorporated. So technically, the villages, which had not been villages, were now urban neighborhoods. Except, they were also limited holding companies. And there’s the legal rub: Shenzhen urban villages were limited holding companies which owned investments that had been legally built on collective land, but now occupied state-owned land, creating a messy, grey area of compensation demands and property rights.  According to Shenzhen Urban Planning Chief, Wang Youpeng (王幼鹏),

The government cannot take [the land] back, and the collectives can’t use it (政府拿不回,集体用不了).

The Municipality’s convoluted description of the villages reflects this complicated history. In the first document of 2013, the villages are called “Former Rural Village Economic Organization Work Unit (原农村集体经济组织单位)” — hee! But here’s the not-so-funny point: The 2013 paper legalizes the direct transfer of collective lands to real estate companies. Previously, the villages negotiated with the Municipality, which in turn accepted bids from real estate companies. Now, the Municipality has stepped back from this role. Instead, the villages may negotiate directly with the companies.

In terms of asset transfer, it means that villages must remove their technically illegal buildings from municipal lands. Their are two compensation packages. Either, villages sell their buildings, giving half the price of the sale to the Municipal government, or the villages sell their buildings and give 70% of the price to the Municipal government, but receive up to 20% of whatever is subsequently built on the land.

Xi Jinping has come and gone. The Shenzhen People’s Congress has met and disbanded. Exhortations to study the Spirit of the 2013 18th National People’s Congress have proliferated throughout Shenzhen. And now we know what it means – there is a new means of legalizing the transfer of property and resources from the urban villages to Shenzhen Municipality, further concentrating property and resources in the hands of whoever happens to be in charge of negotiating this process on behalf of the People Party.

That said, after a surge in the stock market, the general response has been one of confusion. It seems the paper is unclear on how the process will actually take place.

it’s not in the mail — hee!

The other day, the department secretary attempted to mail copies of Architectural Worlds and two packs of playing cards to a friend in Switzerland. The journal went through, however, the cards did not. The reason given was that it is illegal to send playing cards through the post because they are used for gambling. Who knew?

It is legal to print, transport, and sell playing cards in China. Indeed, there are decks designed specifically for collectors. But there are no decks of cards in Chinese post offices — except perhaps for those in the hands of postal workers who are relaxing over a game or two!

According to Item 37 of the Chinese Postal Code (第三十七条  任何单位和个人不得利用邮件寄递含有下列内容的物品) the list of seven types of materials that cannot be mailed are: (1) treasonous materials; (2) state secrets; (3) false information that contributes to social unrest; (4) materials that inflame inter-ethnic hatred; (5) propaganda on behalf of cults or superstitions; (6) smut, gambling, and terrorist materials, and (7) any other content that is not in compliance with Chinese law. The complete postal code, along with the list of items that cannot be shipped in the Chinese post  is online.

the politics of backbiting

By now you have probably read that Shenzhen passed a new law that makes it more difficult to avoid the one-child policy by giving birth to a second child outside the country.

Between 2000-2009, it is estimated that the number of Chinese citizens having children in Hong Kong went from 709 to 29,766 annually and was still rising in 2010 and 2011. Indeed, some claim that today almost half of the children born in Hong Kong are born to Mainland families. Of this total, over 25% had Shenzhen hukou. Their children have Hong Kong identity cards, and although the parents must pay extra fees for schooling and medical care, nevertheless, they have avoided “second child fines (二胎罚款)” and other more drastic measures of enforcing the one child policy.

As of January 1, 2013, Shenzhen parents who have a second child abroad and then bring the child back to Shenzhen to raise for more than 1.5 years will be fined up to 219,000 rmb (US $35,000), which is roughly the current fine for second children born to parents with Shenzhen hukou. The fine is set each year by multiplying the average annual salary of the year before by 6 to 8 times. In 2011, the average salary was 36,505 rmb. This means that the 2012 Shenzhen penalties for second children are between 219,030 to 438,060 rmb.

This past spring, the Chinese news was full of speculation about how the government would handle the case of Olympic gold medalist Tian Liang, whose wife gave birth to a second child in Hong Kong. People wondered if Tian Liang would be fined as much as 2 million rmb and, more to the point, if he would loose his job, which is representing China in international track and field events. After all, ordinary government workers are not only fined for having a second child, but also loose their jobs. Thus, the Tian Liang case illuminated how it was possible for the wealthy and influential to avoid the consequences meted out to “common people” who gave birth to a second child in the Mainland.

Today, a friend told me about this new law as an example of the politics of backbiting, after all, it has been the rich and powerful who have taken advantage of Hong Kong hospitals to give birth to second children. Moreover, these are precisely the people who are targeted by ambitious underlings. He asked me to imagine how someone advanced within the government bureaucracy. Not on talent, but guanxi. However, when guanxi failed, it was possible to hire a private detective for 20,000 rmb to follow someone and document when and how they broke a law. He estimated that the first half of 2013 would be interesting to see how the newly pregnant rich and powerful handled the births of their second children; ordinary families became pregnant already prepared to pay second child fines.

Clearly my friend moves in nervous circles, where the law is used as a weapon of political infighting. This was, in fact, his point. Human rights and rule of law will not be established in China, he concluded, as long as careers were advanced and derailed through guanxi and/or backbiting.

“But people still accept this situation,” I commented.

He sighed, before saying, “China isn’t yet so corrupt that the people will risk their lives to overthrow the Party. There are still enough talented people in the government that society works. At some point, the balance will tip and we’ll be in revolt.”

“But now?”

“Now I’m just frustrated. I want out. But there’s nowhere to go.”

A catch-22, in fact. My friend plans to send his daughter to school abroad with the understanding that she not come back, unless it is to work for a foreign company; he believes she will be happier abroad than she could be in Shenzhen. He is not jumping, however, because he also knows the only place to earn the money necessary to launch his daughter abroad is his current, relatively high ranking position within a work unit of trusted guanxi and potential backbiters.

land reform, again.

An Old Shenzhener once complained to me that since the 1989 Crackdown, in Shenzhen “reform” has been too often interpreted to mean “refining the state system”, rather than actually reforming society. His point was simple. During the first decade of Reform, people had an opportunity to participate in and even direct the direction of development in Shenzhen. The fact of widespread participation made Shenzhen “special”. In contrast, after June 4th, Shenzhen became increasingly bureaucratized – like Beijing – and participating in social transformation was no longer possible for the common people. Instead, the Government had become the key social force and thus, social agency meant “works under the guidance of government bureaus” for the benefit of government officials and their cronies.

The Municipality’s latest “land reform (土改)” program illustrates the problem that aggrieved my friend. Last week, the government released three documents that legislate the scope and direction of land reform: The Comprehensive Plan to Reform Shenzhen Land Administration (深圳市土地管理制度改革总体方案), The Immediate Short Term Plan (2012-2015) of the Comprehensive Plan to Reform Shenzhen Land Administration, (〈深圳市土地管理制度改革总体方案〉近期实施方案(2012~2015年), and Notification of the Establishment of the Shenzhen Land Administration Reform Guiding Committee (关于成立深圳市土地管理制度改革领导小组的通知). Together these documents determine the target of reform, the method of reform, and the people who will interpret and implement land reform. Moreover, even a cursory reading the documents indicates that at stake in these documents is (1) finalizing the transfer of outstanding land rights from village holdings to the Municipality and (2) determining the status of informal property rights in urban villages so that (3) developers can more easily realize the goals outlined in the Municipality’s Comprehensive Master Plan, 2010-2020.

And there’s the rub: During the 1980s, villagers and various entrepreneurs collaborated to build the urban villages. My friend understood this situation be “true” or “ideal” reform because ordinary people could realize projects outside the purview of government plans. At the time, none of those projects were “informal” or “illegal” because the villages held legal land rights. He also thought that this freedom to develop land was the precondition for true social reform. He didn’t think that all villages had done a good job with the opportunity, but nevertheless believed that the idea of small-scale development and common participation was the point of reform. However, once the villages had been incorporated into the Municipal apparatus, that first round of development could be reinterpreted in terms of illegal buildings and informal property rights, alienating villagers and unofficial developers from participating in future development projects except as recipients of compensation packages.

Shenzhen property rights are a muddle that the Government needs to handle carefully to avoid aggravating extant (and growing) inequality. On the one hand, by incorporating village lands into the state apparatus and compensating villagers and independent landlords for their extant holdings, the Government creates ill will on two counts. First, people without hereditary land rights or informal property rights have no chance to benefit from this process. Second, with the exception of farmers, the process enriches government officials and corporate executives, which is the common sense definition of “corruption”. On the one hand, if the government were to reform property laws to allow for individuals to develop land, this would mean completely restructuring the state apparatus and concomitant property rights. This is what my friend would like to see – capitalist opportunities for individuals, rather than for government officials and large corporations. But this seems more a definition of “revolution” than “land reform” as it would mean redistributing rights to high-rises, shopping malls, neighborhoods, housing estates, and industrial areas.

Guanwai village lands were not only extensive, but also remain underdeveloped. Consequently, the experimental target of overall land reform in the 2012-2015 short term plan is Pingshan New District, while the experimental targets of “second round development (第二次开发)” are be Gonghe Community, Shajing Precinct, Baoan and Shanxia Community, Pinghu Precinct, Longgang.