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Occupy Wukan Moves On

The protestors in Wukan, who for months have publicly campaigned against local officials and an illegal land grab, are moving on. They are planning a march to a nearby town, committed to enlarging their protest. Upping the ante means trouble for Beijing: the government doesn’t want to pay the political price that a harsh crackdown entails, but it absolutely cannot allow these protests to spread.

These protestors are determined. They’ve been active on the streets for months, even setting up roadblocks and arming themselves with homemade weapons. So far, local police and officials in Beijing have been cautious, trying to wait out the protests without turning the problem into a big national issue.

That ought to be possible: the protestors are attacking (allegedly) corrupt local officials rather than the national government or the system as a whole.  Beijing could dismiss a few leaders in the regional government and tell the protestors to go home. All might be well after that.

But Beijing needs local officials as well, and the practice of forced land sales is a bug not a feature of the Chinese government system. Valuable land is taken from villagers, sold on the cheap to friends of the local Communist Party, with the locals then forcibly removed or put to work. Chinese villagers have long opposed these policies, and periodically take to the streets in protest, but they persist because the national government has few other options to fund local government.

India has very similar problems, and some of India’s biggest and most explosive political protests are rooted in peasant resentment against forced land sales for factory development. The democratic polity of India hasn’t been able to manage these problems very effectively.  In China it is much harder for angry villagers to stop projects that they don’t like, but the basic problem in both countries is very similar.

The only way to promote economic development is to bring in factories or other large facilities.  To do that, many small family landholdings have to be sold — and generally that can only be done through forced sales.  Local authorities can realize enough from the difference between the prices paid to the peasants and the price charged to the factory to pay for the infrastructure improvements (roads, power lines and so on) that the factory requires.  But there are powerful incentives for local government officials to abuse this system in various ways, and governments ruling more than a billion people cannot monitor village developments very effectively.  And local officials are influential — whether in democratic India or one party China, powerful local bosses are part of the network that national leaders need.

However they choose to respond, Chinese officials needs to think carefully. By quelling the Wukan opposition, Beijing will buy time, but for how long? By allowing the protestors to march out of Wukan, to spread their message to other cities, or by cracking down harshly — Beijing risks widening discontent.

There are no easy answers to problems like this; for everyone’s sake let’s hope that the Wukan protestors and government authorities can reach a reasonable and just solution without further violence.  The stability of Asia rests on shaky foundations; there is gunpowder in the basement, and one of these days something big could go boom.

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  • steve

    “the practice of forced land sales is a bug not a feature of the Chinese government system.”

    Actually it is a feature not a bug – if you follow the thread, forced land sales are a critical part of funding local governments, allowing them to spend on infrastructure projects to keep the gdp growing and workers employed and quiet, providing contracts to companies, and so flowing through to support the (increasingly insolvent) banking system.

    Forced land sales provide a key input to keep the system running, and are actually escalating as the entire edifice gets creakier.

    But broadly, your narrative is quite correct.

  • Luke Lea

    So,is a complex industrial market economy even possible in a society that lacks basic property rights and the rule of law?

    I’ve always read that these were pre-requisites, certainly in the West. It’s one thing to develop special export zones manufacturing foreign products with an assured market overseas. But three-quarters of the Chinese population doesn’t live in these zones.

    All, or almost all, of China’s heavy industry is state owned, and half the GDP growth for the last couple of years reportedly was in the form of new state-owned infrastructure (freeways) and vast apartment complexes, many of which stand empty, and few of which can generate enough income to pay back the state-owned banks that financed them.

    It appears there is very little market price-information in China to coordinate an efficient allocation of capital resources. Which is a lot like the old Soviet Union. Can the Chinese miracle last? Is it wishful thinking to think so?

    I don’t know the answers to these questions, I frankly admit, because the information coming out of China is so sketchy. How can anyone speak with assurance? Have we bet the farm on a black box?

  • Kris

    Susette Kelo liked this article.

  • Soul

    When looking at the news, you ever get the sense that we’re not in Kansas anymore? I’m often finding myself surprised learning of who reads many of these writings, even sometimes what appears to be foreign leaders. A military bit the other day was a bit concerning.

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