Down On the Farm is an interesting article in Newsweek about land reform and property rights in China. In some upcoming posts, I will highlight the importance of property rights in sustained economic prosperity.
China's rural residents are hurt by a simple fact: The country still lacks private-property rights. Chinese cannot legally own land. They can only obtain land-use rights—for 70 years in cities and 30 years in the countryside. On top of that, urban residents are allowed to sell those rights, while rural residents in practice have a much harder time doing so. The Rural Land Contracting Law, passed in 2002, was designed to end the tradition of reallocating rural land among households to reflect population changes—a practice that left farmers uncertain how long they would retain their plots and reluctant to invest in greenhouses, fisheries or other improvements. The law also gave leaseholders the right to initiate legal action to protect their leases. But the villages, and the CCP officials who run them, still retain ultimate authority over rural leaseholds, and land grabs by unscrupulous developers are a menace. "What happens when local officials want to sell off your farmland?" asks lawyer Wu Ge, a prominent Beijing-based rights attorney. "How do peasants fight the government?"
The answer is, with fists and fury. More and more Chinese are reacting violently to practices such as illegal eviction, inadequate compensation and rural land confiscation at the hands of powerful vested interests. Social unrest has escalated so dramatically in recent years that Beijing leaders acknowledge the stability of the regime itself is at risk.
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But genuine land reform would not erase a basic economic truth: Too many Chinese are chasing too little land. Although Chinese farmers make up one-eighth of the world's population, the country has less than 10 percent of the world's arable land. Even that is being nibbled away by residential villas and "special development zones." On a per-capita basis, each Chinese farmer now has less than half an acre of arable land, according to the RDI study, titled "The Rural Land Question in China." That's not enough to farm profitably.
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For China's leaders, the issue is control, not ideology. Privatizing land titles outright is impossible because they fear they'd lose control of the restless hinterland. Other obstacles to deep-seated reform include personal greed and competing political interests within the government. …
(Hat Tip to China Law Blog)
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