MEAN STREETS: SOCIAL STRAINS PLAGUE CHINA'S "URBAN

C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 021991

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/17/2031
TAGS: PGOV PHUM SOCI CH
SUBJECT: MEAN STREETS: SOCIAL STRAINS PLAGUE CHINA'S "URBAN
VILLAGES"

Classified By: Political Section Internal Unit Chief Susan A. Thornton.
Reasons 1.4 (b/d).

Summary
--------------


1. (C) New Chinese "shantytowns," onetime rural
villages swallowed by China's expanding cities, have
become a hot topic in China. Often not incorporated
into their official urban jurisdictions, these former
rural districts are administrative vacuums, lagging on
provision of urban public services and providing a
haven for unsavory elements that linger outside the
reach of city police. Longtime residents are making
good money as landlords, renting to the poorest
migrant workers and cramming as many renters as
possible into their properties. Because the
shantytowns often stand on coveted real estate and the
risk of demolition persists, though, villagers are
unwilling to launch improvement programs, leaving
sanitation sketchy, infrastructure dilapidated and
schools nonexistent. Scholars worry that the extreme
conditions could emerge as a threat to social
stability. End Summary.

There Goes the Neighborhood
--------------


2. (C) A special report in the prominent national
weekly Outlook magazine last February recounted that
most of China's showcase cities have dozens of "urban
village" shantytowns. Beijing alone has 331, the
article related, with a total population of about
715,000. Such districts are also proliferating in
Wuhan, Guangzhou, Xi'an, Wenzhou and other cities.
Migrant workers who arrive from the countryside in
search of good jobs in construction or services form
the bulk of urban village residents, said Zhang
Zhanxin (protect),a scholar at the Chinese Academy of
Social Sciences who focuses on urban development. The
ratio of migrant workers to long-term residents in the
slums is often as high as 10 to one. Cheap housing is
the main attraction. While most newcomers are single,
some arrive with families in tow, while others summon
their spouses and children from the countryside after
banking a few good paychecks, Zhang said.

A New Underclass?
--------------


3. (C) Pronounced social stratification arises in
these communities, the Outlook report maintained.
Many original residents who have lived in the area for
generations have now become landlords. They reside in
nicer apartments or houses and rent living space,
sometimes shabby shacks built as extensions on their
own homes, to migrant workers. Often te landlords
can earn enough to live solely off rent income, "and
they just sit around playing mah-jongg all day," Zhang
of CASS said. Meanwhile, their migrant neighbors work
long hours and live in the simplest conditions,
usually without toilets or running water. Zhang
warned that migrant children growing up amid such
stark differences risk becoming resentful, possibly
leading to conflict or criminal behavior.


4. (C) Crime has already emerged as a problem in
urban villages, scholars told us. Because the areas
have a fuzzy administrative status, they lure
organized crime figures and petty criminals who want
to slip through the cracks, said Li Qiang (protect),
dean of the Tsinghua University School of Humanities.
Petty theft and muggings are prevalent in Beijing
shantytowns, the Outlook article reported. But more
sophisticated crime rings also take root in slums, the
piece recounted, citing a case in which People's Armed
Police raided an apartment in a Wuhan shantytown and
arrested a Hunan couple who were in business selling
fake identification cards, residence permits and other
official papers. The police seized some 2000 bogus
documents, which the pair were allegedly offering for
RMB 15-30 (USD 1.88-3.76) apiece. Experts note that
migrant workers with unsteady incomes living amid
scofflaws is a combustible blend. In the urban
villages, the culture of criminality risks creating "a
spawning ground for a new underclass" that could
threaten social stability in cities, Li said.

Migrants, Slumlords Need Each Other
--------------


BEIJING 00021991 002 OF 003



5. (C) Despite the volatile mix, the mutual
dependence of migrants and landlords keeps a lid on
tensions for now, contacts said. The former need an
inexpensive place to live; the latter want a steady
income. Migrants themselves tend to view living in
urban villages as a necessary evil, said Wei Wei
(protect),a State Department International Visitor
grantee and president and founder of Little Bird, an
NGO focused on migrant workers' issues. With low
rents and landlords willing to turn a blind eye to
residence registration requirements, shantytowns often
offer the only viable housing option for a newly
arrived laborer. (Note: One of the Central
Government's reasons for maintaining the
discriminatory residence permit system is to prevent
the emergence of precisely this kind of slum by
discouraging an even greater inflow of migrants to the
cities. End note.) Even the smallest apartment in a
decent neighborhood is out of range, and most regular
landlords will not lease to migrants, Wei Wei related.

Village Officials Ignore Public Works
--------------


6. (C) As a rule, migrants have no say in how the
slums are run, Wei Wei said. In line with the
districts' administrative status as "villages," civic
decisions generally fall to village committees, the
same governance setup that exists for villages in
rural areas. The local committee has the authority
(usually with the approval of the local Party chief)
to decide how the area's land is used, Zhang of CASS
said. Urban zoning laws do not apply, so local
officials can opt to build on the land and then rent
out living or retail space. (Note: In contrast, the
residents' committees that normally constitute local
administrative units in cities are less relevant to
locals' lives. The committees have no land to control
and rely on city government for public works
initiatives. End note.) Many urban villages stand on
coveted real estate, heightening the risk that
developers working with the surrounding city's
government and local officials will succeed in
appropriating the land from the villagers and force
residents to relocate, Zhang said.


7. (C) While the high value and uncertain future of
urban village real estate discourages villagers
themselves from making improvements, the autonomous
status of these villages cuts them out of urban
improvement projects funded by the surrounding
municipality, Zhang pointed out. Urban villages are
therefore left with sketchy sanitation, dilapidated
infrastructure and nonexistent schools, said Tian
Yurong (protect),a professor at Beijing Institute of
Technology who researches relocation issues and is a
State Department Human Rights and Democracy Fund
grantee. There are few incentives to improve living
conditions in these areas in the current environment,
Zhang remarked.


8. (C) The plight of the shantytowns appears to be
getting high-level attention in the Central
Government, which has made addressing the kind of
social inequality that prevails in urban villages a
main policy objective. The Party-run Guangzhou Daily
ran a long article in May recounting State Councilor
Hua Jianmin's visit to an urban village in Guangzhou.
The piece quoted Hua as saying, "We should do a good
job of remodeling urban villages and improving public
security and administration of rental housing for
migrant workers."

Winners and Losers in the Slums
--------------


9. (C) The message has not translated into action in
Beijing's Xingfu'er urban village. Xingfu'er lies a
five minute walk from the trendy nightclubs that
fringe Worker's Stadium, not far from the Canadian
Embassy. Surrounded by office buildings and luxury
apartment towers, Xingfu'er spreads across a four
square-block area. One-story brick houses crowd
narrow alleys. Many of the houses sprout plywood and
corrugated tin additions, as small as alcoves, that
migrants rent as living space. Indoor plumbing is a
rarity, forcing the area's several hundred inhabitants
to rely on public toilets.


10. (C) On a recent visit to Xingfu'er, poloff spoke
with a resident surnamed Wang, who declined to give

BEIJING 00021991 003 OF 003


his first name. Wang, who grew up in the
neighborhood, was on a walk to check in on a "chess
center" he operates in one of the alleys where
residents can rent game boards and mah-jongg tiles.
He also rents rooms to migrant workers in the house in
which he was raised, a source of income his parents
never had. Wang said he worries that the neighborhood
will be demolished to make space for a development,
which would be a major setback for his livelihood.
While he might get some compensation for his family
homestead, it would not be enough to buy real estate
anywhere else in the city.


11. (C) The circumstances of another resident, a
migrant woman who works at a fruit stall in a
Xingfu'er alley, were meaner. She said the extreme
poverty of her hometown in Anhui and the promise of
better work opportunities prompted her move to
Beijing. Declining to give her name, she said she and
two other migrants share a pair of small rooms in a
house around the corner from the fruit stall. She
griped about the conditions, complaining that the
rooms have no heat, no kitchen and no running water.
The total rent is RMB 1,000 per month, or about USD

125. Despite these difficulties, she contended that
Xingfu'er suits her needs, or at least her budget.
"It is all I can afford," she said.
Randt