An era of riches but not for everyone

Sunday November 9, 2008
An era of riches but not for everyone
Beijing ExpressBy CELESTE FONG
CHINA’S fast-growing economy has no doubt ushered in an era of riches and sizzling hot growth.
But the divide between the rising middle class in major cities like Beijing, Shanghai and Shenzhen and the farmers in the countryside has been growing wider too.
According to a report by the state media Xinhua, the income gap between urban and rural populations has widened with an absolute gap of 9,646 yuan to 342 yuan respectively.
In 2007, per capita rural disposable income was 4,140 yuan with a year-on-year gain of 9.5% in real terms.
For 2008, a rise of 6% is expected based on the Chinese government’s annual report issued in March.
Workers in towns and cities earn three times more than farmers. The 2006 statistics showed that net income in the countryside was just 3,587 yuan per person.
And average city dwellers received an income of 3.33 times more than rural residents.
Since 1985, the income ratio has been growing bigger and this reflects an imbalance in social development.
However, the Communist Party of China (CPC) Central Committee announced last month a “breakthrough” in solving this imbalance by issuing a landmark policy document on rural land reform and development.
“Rural land reform is the key to raise farmers’ income. Farmers will benefit from the new policy on rural land reform,” Dr Huang Yanxin told about 30 foreign journalists last week at the International Press Centre here.
Dr Huang, the Department of Sectoral Policy and Law deputy director from China’s Agriculture Ministry, said the newly announced policy document would allow farmers to lease or transfer their land.
“The fundamental right of land remains unchanged,” he said, emphasising that farmers “have the management right, not ownership” of the land.
The farmers own the rights to use land that belongs to the collective, such as the village.
Dr Huang said farmers could lease or transfer land freely but the land must be used for agricultural purposes.
“No, they do not need to go through the village if the transfer or leasing is rightful and does not violate Chinese law,” he said in response to a question.
But Dr Huang added that the transfer or leasing must be put on record, or a record must be filed with the relevant authorities.
He pointed out that the reform would help improve economies of scale, productivity, agricultural yield and competitiveness.
“It’s still the biggest concern of the country to feed its 1.3 billion population,” said Dr Huang.
He also stressed that privatisation of land ownership would not help China as the problem is rooted to a lack of economies of scale, competitiveness and low productivity.
“We have the numbers (people) but not our land as each works on a small plot.
“Therefore, privatisation of land ownership will not solve the agricultural problem facing us,” he said.
On whether the land could be used as collateral to pool funds together, Dr Huang said that based on the policy, the land could not be used as collateral and, in fact, the value of farm land was very low compared to the cost of managing it by the financial institutions.
To solve the financial woes of farmers, he said, the government adopted a series of measures, including a rural micro credit programme.
Since the foundation of the People’s Republic of China, CPC has launched a thorough land reform programme in 1946 and several different land reforms thereafter – from hezuohua (the rural cooperative development) and renmin gongshe (People’s communes) to the jiatingchengbao (rural land family contract system) now.
And with the latest rural land reform, the Chinese government hopes to achieve its target of farmer’s per capita net income to 8,300 yuan by 2020.