Hu at pains to keep China from peasants’ revolt

[Jonathan Lassen <jonathan.lassen@gmail.com>]

(crossposted from the csgboston list - can't find the article on
lexis-nexis, and it's not publicly available on FT's site)

Hu at pains to keep China from peasants' revolt
By Richard McGregor
The Financial Times
Published: September 7 2005

When Cheng Li, a China scholar, recently studied the 22 leaders
closest to president Hu Jintao, he found none had experience in
foreign trade or finance. The coterie, in charge of ministries in
Beijing and provincial governments, all served in the Communist Youth
League, long a Hu power base, and all have their roots in rural
politics.

The Chinese economy is more exposed to global trade, and dependent on
reforms of its financial system, than at any time in its modern
history. But in Mr Hu's China, nothing is seen as more valuable to a
leader than an appreciation of the way about 800m, or two-thirds, of
Chinese live, on tiny family farms and in small townships.

When he sets off to North America today - a trip that takes in Canada,
Mexico and a New York meeting on the sidelines of the United Nations
with US President George W. Bush - Mr Hu will be greeted as the head
of a rising superpower rather than a man struggling to manage a
fractious, semi-rural underclass. Yet, since coming to office in early
2003, Hu and Wen Jiabao, the premier, have largely eschewed Shanghai
and other booming coastal metropolises and headed to the west and
north-east, to the poor hinterland and the crumbling rustbelt.

"Hu's strength is not his understanding of the outside world but of
the real China - that is, rural China," says the Shanghai-born but New
York-based Prof Li.

To differentiate themselves from their predecessors, whose power base
was in Shanghai, Mr Hu and Mr Wen have travelled down coal mines, held
impromptu meetings with migrant labourers, embraced HIV-positive
patients and cut farmers' taxes. This last decision, the government
said with a flourish, had abolished a tax system started "more than
2,000 years ago" with imperial grain levies. In short, the pair have
made a fixation out of acknowledging the deep fissures between rich
and poor, the coast and the hinterland, and the cities and the
countryside, that opened during the breakneck development of the
previous decade under Jiang Zemin.

"In rural areas, economic development remains at the level of 100
years ago, while medical costs are at the level of the modern cities,"
says Mao Shoulong, of Renmin University in Beijing. "In this sense Hu
and Wen are facing many new problems and many new political conflicts,
and that has forced them to make themselves into a different kind of
government."

Mr Hu's government already has a powerful whiff of the kind of trouble
that might lie ahead, with a surge in protests in China in the past
two years, almost as if the downtrodden masses are taking the
leadership at its word and demanding that their complaints should be
addressed. The protests have all sprung from local grievances -
villagers protesting at the theft of land or pollution of their water
supply, a farmer with cancer who could not afford medical treatment
blowing himself up on a bus, and a mob surrounding a police station
demanding that a rich businessman should be handed over for beating up
a local citizen.

Proof that the increase in protests was real, and followed a pattern,
came from Zhou Yongkang, the public security minister, who said
recently that the annual number of "mass incidents" had risen from
about 10,000 a decade ago to 58,000 in 2003 and 74,000 last year -
when they involved 3.6m people. "These seem to be social problems, but
they can all be traced back to political problems," says Mr Mao, who
despairs about finding a political solution in the current
environment. "If a single drop of fire can ignite a national riot,
then no rational politics can be formed."

The Beijing government's enviable economic record, of consecutive
years of high-speed growth, has given its leaders a deal of
confidence. "We hope we will be able to maintain this growth and fast
development, but of course, not too fast," says Zheng Bijian, a Hu
confidant and a former deputy head of the Communist party school. Mr
Zheng's view is characteristic of senior leaders, who believe they
have the tools to calibrate gross domestic product growth, so that it
motors along at about an annual 7-9 per cent, the speed needed to
create the 15m jobs every year that would absorb new entrants to the
labour market.

But this confidence is qualified by respect for Chinese history, in
which periods of prosperity and placidity have always been punctuated
by violence and upheaval.

Central and local governments in China have had extensive experience
in handling protests in the past 20 years, mainly in the form of
protests by redundant workers outside factories that had been
bankrupted by pressure from the market reforms launched in 1979.
People who persist with protests have always been brutally treated and
usually jailed.

Most protests have, however, been handled more subtly than might
appear from the outside. Rather than immediately employing violence
and arbitrary arrest to silence demonstrators, local authorities have
used methods ranging from verbal cajoling to small cash payments to
get people to move on.

The latest wave of demonstrations about local abuses of power is
different from protests outside failing factories in another important
fashion - the protests are increasingly feeding off each other,
powered by information ex¬changes through the internet.

In Taishi village in the relatively wealthy province of Guangdong in
southern China, hundreds of villagers have in recent weeks staged a
sit-in protesting at the confiscation of their land for a property
development. A few years ago, this would have been an isolated issue.
But a pro-democracy activist network supporting the Taishi protests
issues regular e-mails with information about the campaign and
statements from the villagers. When they began a fast last week, the
villagers announced on the internet: "We want democracy! We want
justice. We want rule of law! We are the master of the country and are
free to choose our own future."

According to the activists' statement, the Taishi protests "mark the
start of a campaign for political democracy" to show the benefits that
can come from local participation in government decision-making. "The
peaceful and rational stance held by the villagers signals the
resurgence of Gandhi's non-violence method among China's grassroots,"
the activists said in another web posting.

The beginnings of organised opposition to, or protest against,
Communist party rule are a flashing red light for the authorities,
even if the central government itself has consistently acknowledged
the root causes of the demonstrations. The impulse of Beijing is to
blame the local authorities for mistreatment of farmers, sometimes
with good reason. "The major decisions [taken in Beijing] are usually
headed in the right direction, but then you get local officials who
distort the policies or who fail to implement them at all," says Xue
Lan, of Peking University.

Corruption is another main factor. Land deals almost invariably enrich
local officials, as they have the power to convert farm land - which
cannot be bought and sold, and thus has little value - into commercial
real estate, which can be traded on the open market for large profits.
"The farmers have assets, in the form of land, but no right to trade
them," says Mr Mao.

While a private housing market has thrived in cities in the past
decade with the encouragement of the government, Beijing has refused
to allow agricultural land to be traded in the same way. The
government fears farmers would quickly sell their lots and have
nothing to fall back on should they leave the land and head to cities
looking for work. Keeping the land off the free market is, in effect,
an attempt to maintain a safety net for farmers.

But for all the abuse of their powers, local officials are also
captive of China's economic development model, in which they are
benchmarked according to how rapidly they can expand the local area's
GDP. According to Andy Xie of Morgan Stanley in Hong Kong, the easiest
way to create growth is through fixed investment. "Also, popular
opinion views the physical transformation (of a locality) as the most
important benchmark for the success of a government," says Mr Xie.
"Hence, political incentives are heavily biased towards fixed
investment."

Local officials striving for high GDP figures habitually aid and abet
the confiscation of farming land, which costs little money, and do not
police polluting factories for fear that they will move and take their
jobs elsewhere.

China's higher-than-average rates of investment (which have accounted
for about half of GDP growth in the past two years) are not just a
domestic problem any more. As one of the main drivers of the recent
surge in exports, now the cause of anguish in the US and Europe,
Chinese domestic economic incentives have a global dimension as well.
"When there is excess capacity, it is inevitable that government will
promote exports by keeping currency low or providing financial
incentives," says Mr Xie. "But, when export growth absorbs the excess
capacity, the same political incentive could lead to another wave of
excess capacity."

Local protesters, then, are not just challenging the rule of local
party officials, which itself can bring harsh retribution. They are
also battling an economic development model that sweeps all before it,
in both urban areas and the countryside.

A debate over the need to rebalance China's economy - from investment
to consumption, from energy-intensive industries to a "greener" model,
and from the creation of wealth to the fairer distribution of it - has
been under way for more than a year. At the same time, managing the
country and the economy has become more complex because of new
interest groups, including foreign investors, all demanding that their
concerns be addressed.

The debate about how to adapt the political system to this new
landscape has lagged and, at a national level, has been suppressed at
Mr Hu's insistence. Institutions such as the courts have been kept
under the control of the party. Non-governmental organisations, mainly
on the environment and Aids, have been left in a legal limbo out of
fear that they might develop into independent political entities.

As a result, says Peking University's Mr Xue, when it comes to the
protests, "there is not a whole set of rules" on how to address such
problems. "You need to be more responsive - the policies need to come
from below. And certainly, this government is more responsive to
hearing from people at the bottom," he says. "But the problem is that
there are so many voices."

Tony Blair said after visiting Beijing this week that China's economic
growth and modernisation, typified by its 100m registered internet
users, had created "unstoppable momentum" towards greater political
freedom. If Britain's prime minister had spent his time not in the
gleaming modern cities but out in the countryside, and seen the
protests, his views might have been reinforced.

Mr Hu and his supporters, however, have reached the opposite
conclusion. For them, both China's success in the coastal cities and
the upheaval in many rural communities is evidence of the need for the
kind of "stability" that only single-party rule can provide.

A new push to enforce the unwritten rules

When Lu Xuesong was dismissed from her position as a teacher of
Chinese cinema at an arts college in Jilin province in May, she was so
angered at the school's refusal to say why that she posted a plea on
the internet. All her materials, she said, had been approved by the
authorities.

"If there exist unwritten rules that caused me to be treated unfairly
and unjustly, then I have to follow my conscience to complain and
protest to defend the truth," she wrote in an open letter posted on
the internet.

Her plea struck a chord, especially with liberal academics fretting
over whether they, too, could be dismissed because of something they
might have said in front of students.

Since Hu Jintao came to power in 2003, a chill wind has blown through
the Chinese media and academia. Symbolic of this new mood was a
journalistic award handed out this year to the writer of an editorial
in Liberation Daily, the official Communist party paper in Shanghai.
Written by Ji Fangping, the chief editorial writer, the article
attacking "public intellectuals" was awarded "column of the year" for
2004 by the party-controlled journalists' association in the city.

It also reflected the thinking of top leaders, marking the start of a
campaign against local commentators who had been increasingly making
their voice heard on social and political issues.

Ms Lu's open letter roused many academics and internet users to her
defence, making her a cause celebre in the fight for free speech.
"What is the taboo that has blocked and suffocated Ms Lu? It is
hypocrisy that dominates today's society," wrote Ai Xiaoming, a
professor in Guangzhou, southern China, in an essay posted on an
internet bulletin board that spurred many other contributions.

Another, anonymous, contributor said the treatment of Ms Lu was
evidence that, despite the "abolition of ideological crimes", you
could still be punished at will for speaking your mind. "They do not
tell clearly how far you can go. On the contrary, they just keep the
boundary dark, so they are free to take action whenever they want,"
the contributor wrote.

Amid such attacks, the college in Jilin posted a public explanation on
the internet. Ms Lu had thought her sacking might have come because
she had shown a film about a counter-revolutionary, but the college
was more specific. It said a student had become dispirited by her
support in class for Falun Gong, the outlawed religious sect, and her
discussion of a website detailing mass resignations from the party.

But that did not kill the debate, to the surprise of some of her
supporters. "Two or three years ago, once the government mentioned
Falun Gong, that would have been the end of the debate," says Xu
Youyu, of the Chinese Academy of Social Sciences. But many were now
unmoved by such a charge.

In the wake of Ms Lu's case, a number of academics say they are more
wary than ever about their students informing on them. Certainly,
there is no shortage of help available for Chinese state security in
tracking people they believe have not toed the line, however blurry it
may be. Reporters Without Borders, an international media watchdog,
quoting Chinese court documents, said this week that Yahoo of the US
had passed on details about a personal e-mail account that allowed the
authorities to arrest a journalist who had sent out information about
press restrictions.

Prof Xu says support for free speech campaigns and the like in China
remains thin. "We do not have freedom of speech, and such a situation
will last for a relatively long time, because the authorities are able
to control most things."

He adds: "It is not the biggest problem for most ordinary people. And
most professors are quite rich - they don't want to pay any cost by
campaigning on an issue like that."