Disagreement on Building a New Socialist

UNCLAS SECTION 01 OF 03 GUANGZHOU 011468 SIPDIS SENSITIVE SIPDIS STATE FOR EB, R, EAP/CM, EAP/PD, DRL STATE PASS USTR USDOC FOR 4420/ITA/MAC/MCQUEEN, CELICO, DAS LEVINE USPACOM FOR FPA E.O. 12958: N/A TAGS: EAGR PHUM SENV EIND SOCI PGOV CH SUBJECT: Disagreement on Building a New Socialist Countryside (U) THIS DOCUMENT IS SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY. NOT FOR RELEASE OUTSIDE U.S. GOVERNMENT CHANNELS. NOT FOR INTERNET PUBLICATION. ¶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