Disagreement on Building a New Socialist

UNCLAS SECTION 01 OF 03 GUANGZHOU 011468

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E.O. 12958: N/A
TAGS: EAGR PHUM SENV EIND SOCI PGOV CH
SUBJECT: Disagreement on Building a New Socialist
Countryside

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1. (U) Summary: A substantial number of Chinese rural
development experts at a major think tank conference
believed that the rural-urban gap is a startling eight to
one (when taking into consideration "public services")
instead of three to one. There was a virtual consensus
among conference delegates the rural sector is dangerously
underdeveloped and that public service improvement in areas
like agricultural production, education and medical services
is the key to building a "New Socialist Countryside." The
bigger challenge, however, remains with the questions of
governance reform: should the township government structure
be eliminated and should farmers be granted more rights?
Here there was no consensus but rather heated debate. End
Summary.


2. (U) Recently Beijing Emboff and Guangzhou Congenoffs
attended a two-day conference on rural governance issues in
Haikou, in China's southernmost province of Hainan,
sponsored by the China Institute for Reform and Development
(CIRD) and the International Republican Institute (IRI) and
enjoying German support. The title of the conference was
"Building up a New Countryside in China: Rural Governance
and Township Government Reform." The conference featured
speakers from the Chinese government (national, provincial,
municipal and county levels),state-sponsored research
councils, academics from Asia and America and foreign
diplomats.

Background on Rural Development Policies
--------------

3. (U) Since 1953, the agricultural sector has been
exploited in favor of industry. Today the Chinese Central
Government is concerned with the social and economic gap
between rural and urban areas stemming from this policy and
the unequal economic growth since the 1978 reforms. Since
2000, the Central Government has dealt with the problem
through such measures as making rural issues the "number
one" Party document, eliminating agricultural taxes and
mandating universal nine-year education in rural areas.
More recently, in his March 5 report on the work of the
government, Premier Wen Jiabao highlighted rural development
as the central goal of the 11th Five-Year Plan. The plan
calls for an increase of 14 percent on rural area spending
(equal to RMB 42 billion, or USD 5.25 billion),compared
with last year.

This Is a Public Service Announcement: "We Need Money!"
-------------- --------------

4. (U) Essentially the presentations at the conferences
dealt with three topics: 1) public service problems; 2)
township government reform; and 3) farmers' representation
and rights. A fundamental question throughout all the
lectures was "what is the source of the rural-urban gap?"
Lecturers acknowledged that the rural-urban income gap is
roughly three to one. Thus overall agricultural production
must increase. However, beginning with the opening speech,
many speakers considered deficiencies in "public service"
areas (hospitals, schools, police, etc.) as the real
contributor to rural poverty. One speaker estimated that if
these public services in cities were included in the urban-
rural comparison, the rural-urban gap is more likely to be
eight times to one. For example, Guo Jianjun of the Rural
Research Development Center reported that 86 percent of
villages have no road access, 300 million have bad drinking
water and 190 million live near environmental hazards. In
terms of education, urban residents study on average 8 years
while rural areas only 6.7 years. According to the
speakers, the public services such as education, health,
infrastructure and (according to some) population control
are all important areas in need of further development.


5. (U) Some of the later speakers described China as a
country with a "dual system" of citizens. The rural areas
are many generations behind urban areas and urbanites tend
to regard people from rural areas as second class citizens.

GUANGZHOU 00011468 002 OF 003


One speaker described how in most traffic accident cases,
urban victims get three times the compensation.


6. (U) The famous rural development scholar, Wen Tiejun, of
Renmin University, was concerned about the "Latin
Americanization" of China, i.e. the rise of urban slums.
Wen defended China's development plan as a monumental task
unparalleled in history. He argued that any country with a
rural labor force over 100 million will inevitably end up
with urban slums. His two main examples were India and
Brazil. China has a rural labor force of 500 million,
larger than the 430 million found in all the developed
countries combined. Thus Wen concluded that urbanization
will continue to challenge local governments' capacity to
provide public services.

Too Many Hands in "The Emperor's Rice"?
--------------

7. (U) One area of debate at the conference was whether the
township governance system should be eliminated. Some
speakers complained that China's government structure
suffers greatly from redundancy. For example, no other
country in the world has six levels of government (Note: In
China, these are: central government, province, prefecture,
county, township, and village. End note). One Chinese
researcher has estimated that government and party
bureaucrats eat way more than their share of "the Emperor's
rice." Of the 800 million countryside denizens, bureaucrats
constitute only 5.5 percent of the population, but consume
42.7 percent of total village agricultural production.


8. (U) However, a minority of speakers, such as Mr. Xiao
Jinchen of the National Development and Reform Commission,
argued for maintaining township governance. Xiao estimated
that China has 2,800 townships and 720,000 villages. Thus
each township governs about 256 villages. Mathematically
the township is the most efficient level of government and
without which, prefectures would be overburdened.

The Village Voice: Good or Bad?
--------------

9. (U) The final issue of serious discussion was about
farmer participation. One village leader from Hubei
province described the difficulties of working at the
grassroots level. He said that since the abolition of
agricultural taxes, village leaders are not paid on time, if
at all. Many leaders are depressed, lose hope, and are
forced to find "another living" (either another job or
possibly corruption). Describing the paucity of rural
government funds, he said that "even the wisest wife can't
cook without ingredients." Moreover, village leaders have
no real autonomy, as the township must approve all
decisions. This top-down approach means that village
leaders cannot always provide what farmers really need.


10. (U) Wen Tiejun raised the point that rural denizens
cannot be called "farmers" in China. The term "farmer"
denotes possession of property. In China no rural citizens
possess land property and thus it is more appropriate to
call them "peasants". A Zhejiang University legal expert
later described the legal differences for rural and urban
residents. Urban residents are free to sell their property
(i.e. the house or apartment, but not the land) to anyone,
including foreigners. Rural citizens can only "sell" land
within the village, where "sell" truly means to swap the
land. Rural residents can rent the land to peasants from
another village, only with a 2/3 majority agreement from the
village collective.


11. (U) Some of the more ideologically-minded Communist
Party cadres were unwilling to consider increasing farmers'
autonomy or land rights. For example, Xin Ming of the
Central Party School's Research Office, was adamantly
against the rise of farmer "interest groups". He believed
that the Party should decide the direction of rural
development and that China "can't be persuaded by farmer's
interests."

In a Land Far, Far Away...

GUANGZHOU 00011468 003 OF 003


--------------

12. (U) Although some of the lectures were useful, the
context and audience reaction during the conference were
perhaps more interesting. The CIRD conferences are held in
the isolation of Hainan, far from Beijing, and among a more
international crowd, some Chinese officials were encouraged
to be more critical of government policies than usual.
Audience members were laughing about government corruption
among local government Party leaders and the abysmal rural
educational system. Even the accompanying Guangzhou
Consulate FSN found some of the comments unusually bold.
During one of the question and answer sessions, a delegate
asked about the inability to implement nine-year compulsory
education. He asked, "If the government itself doesn't
follow the law, what should we do?" The Ministry of
Agriculture official flatly replied, "Reform!"

COMMENT: Keep the "New" Out of "New Socialist Countryside"
-------------- --------------

13. (SBU) In general, a conference like this is more useful
as a thermometer of China's domestic politics than as a
source of new information. For example, an April 7 New York
Times article, "Chinese Analysts Clash over Reforms",
demonstrates that in Beijing, Chinese intellectuals are
facing an internal dilemma about the nature of Communist
Party goals. More progressive thinkers are tired of the
redundant, top-down, corrupt model of Communist leadership
in the countryside. Instead they would like to grant rural
citizens more rights and decision-making power. Similarly,
even in Hainan, thousands of miles from Beijing's watchful
eye, old guard Communists remain unwilling to grant rights
to local farmers, hoping that the "New Socialist
Countryside" will be less "new" and more "socialist."


14. (U) This message has been cleared with Embassy
Beijing.

DONG