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Urbanisation with “Chinese characteristics”

Rural-urban integration and the land question

by Uwe Hoering, July 2013

Changing agricultural land to urban or industrial use can be highly profitable. But it creates numerous protests, like in Wukan, where in December 2011 violent clashes between farmers and authorities occurred. Recognition of the dramatic contradiction between rapid urbanisation and limited resources, and the desire to participate in the increasing value of land, rural townships, collectives and municipalities have created ingenious models, how to facilitate such changes and mitigate conflicts.

Growing cities, infrastructure and industrial zones all eat into China's land, especially in the economic powerhouses in the South East with its fertile soils and highly productive rice and other food production. With the decentralisation and urbanisation policy of promoting new urban conglomerates in other regions of the country, this development is repeated in other parts of the country. With soil erosion and water scarcity taking a further toll, availability of fertile agricultural land is already close to the “red line” of 120 million hectares, drawn by the government to protect food security. It is being estimated, that around 200.000 hectares of land are requisitioned from China's farmers every year, and an estimated 40 to 50 million farmers have lost their land since the mid 1990s.


“Land revolution”

Changing agricultural land to urban or industrial use can be highly profitable. But it creates numerous conflicts, like in Wukan, where in December 2011 violent clashes between farmers and authorities occurred. Farmers protest all over the country against low compensation and forced evictions, when village authorities lease or even sell land that belongs to the collective. Apart from injustice, farmers not only loose their right to use land and their income, but also land as a token of security, because they still don't enjoy the same social security system and benefits like urban citizens. While rural land – agricultural fields as well as village lands – is still collectively owned, which restricts possibilities of land transfers, a commodification process takes place with all benefits of income generation and profiteering.

Recognition of the dramatic contradiction between rapid urbanisation and limited resources, and the desire to participate in the increasing value of land, rural townships, collectives and municipalities have created ingenious models, how to facilitate such changes and mitigate conflicts. There are a number of decentralized approaches or modes of rural „urbanisation with Chinese characteristics“ - as Anna Ahlers, research fellow of the „Forum Internationale Wissenschaft“ at the University of Bonn calls it -, how to reconcile urbanisation and agricultural development, increasingly blurring the line between rural and urban. Some of these state organised management methods for land use and land use changes were presented at the conference “Rural China under New Leadership” (ECARDC XI) in April 2013 in Würzburg. Others are described in the book “China's Urban Billion”: While focussing on the challenges of further urbanisation, the author Tom Miller sees the dawning of a „third land revolution“.


Villages in the city

One of the cases, Miller describes, is the fate of Bajiacun in northeast Beijing, one of hundreds of “villages in the city”. Engulfed by the ever-expanding capital city, occupying the fields, it became a rural enclave, providing low cost accommodation for thousands of migrant workers and rent income for the villagers themselves. At the beginning of 2010, Beijing officials identified 677 villages within or on the fringes of the city's urban borders, marked by the outermost Ring Road, which they estimated were home to 630,000 permanent local residents and some 2.8 million migrants. With the demolition of Bajiacun in 2010, rural construction land turned into urban land, giving way for new apartment blocks. All permanent local residents – who collectively own the land on which the village was built – retained their land-use rights, Miller reports, each got a sizeable lump sum as compensation for their demolished property, and they take a share of the new rental income. If all the urban villages in Beijing will have been relocated, set for 2020, the urban area of the city will have expanded by half its current size again, Jane Hayward of the School of Public Policy and Management, Tsinghua University calculated, with the reclaimed areas designated not only for urban construction, but also for agricultural production, greenbelts and tourism.

If lucky, villagers will turn into urban landlords, adapting their collective organisations into shareholder companies, with far reaching self-administration mechanisms as in the “Guangdong model of rural transformation”. During the 1980s, Guangzhou government decided to cover large rural area east of the city into urban Guangzhou, most of the farm land was requisitioned by the government. Apart from financial compensation and provision of jobs, the government returned 5 to 8 per cent of the land to the village for development of collective economy, mostly for hotels, shops and open markets. Fengbo Chen from South China Agricultural University in Guangzhou described in his case study “The transition of rural collective organization in urban area”, how collective physical assets, the collective land use rights and the investments from individual villager were capitalized into a shared pool, and the members of the collective organisation became shareholders. Still they could not sell, transfer or mortgage the stock. Thus, this Rural Community Joint-Share Cooperative System (RCJSCS) “combines the characters of collective ownership and market economic organization”.


Creating “new” land

A similar process like in Bajiacun and Guangzhou, where rural land was converted into urban construction land, is used to “create 'new' land”, as Miller says. This is in line with the government policy, that urban developers have to provide an equal amount of agricultural land as compensation. In Chengdu and Chongqing, where pilot schemes to integrate urban and rural communities started in 2007, collectives of farmers are convinced to agree to vacate their homesteads and move into new housing that takes up less space. Then rural construction land is re-cultivated and returned to agricultural use. Government agencies issue a credit, known in Chongqing as dipiao, for the amount of new agricultural land created. The almost revolutionary innovation is to auction the land credit on the city's rural property exchange, a gleaming huge new building, documenting the ambitious scheme. Real-estate developers who wish to build on a greenfield site approved for urban construction must first purchase a land credit for the equivalent amount of farmland. This can be a way to raise rural incomes, but primarily it helps to boost city governments coffers, says Miller: „For government officials, the brilliance of the system is that it speeds up the process of urbanization while simultaneously creating funds to finance it“ (77).

Too, it helps to keep the “red line” by creating additional agricultural land, suitable for large-scale farming, because it is not fragmented like the land used for traditional farming under the Household Responsibility System. This was introduced at the end of the 1970s to give individual families land use rights to small patches of fields of the collectively owned land. It initially gave a huge boost for agricultural productivity and freed up rural labour, but also resulted in a pattern of smallholder agriculture in which “economies of scale” are hard to realise.

Metropolitan agriculture

Even in a city like Shanghai, agricultural production plays a new role in the planning process of the city development as part of rural-urban integration, or as Jane Hayward pointed out “more accurately” of “combined urban-rural planning”. Though the contribution of agriculture to the economy has dramatically dropped with the expansion of the urban sprawl, the metropolis in 2008 still had a food self-sufficiency of 50 per cent for vegetables, 20 per cent for pork meat, and 10 per cent for grains. As Etienne Monin from Pantheon-Sorbonne University in Paris in his presentation with the seemingly contradictory title “The Agricultural Policy of Shanghai Municipality” outlines, part of the on-going spatial planning process there is the intention of ”building a modern agriculture fitting with the international metropolis”, as Hu Yanzhao, Director of the Shanghai Agricultural Committee is quoted.

The objective of a “metropolitan agriculture” development strategy has different aspects: Citizens needs for safe and quality food, green recreation and safe environment, concern for multi agricultural functions like economical, ecological and services, and the implementation of the reform policy of a New Socialist Countryside. Schemes like the Langxia township modern agricultural park or Songjiang New Town provide large areas as consolidated farmland, for cattle farms, grain production, agro industries and ecological and landscape areas. South and North of the main urbanised areas of Shanghai, vast stretches of the still remaining dominant agricultural landscape are designed for water conservation, agricultural production and forests and wetlands – at least if the planners and the Shanghai Agricultural Committee will have their way.

Little Donkey farm

Different from the top down approach of plans like in Shanghai, there are also grass roots attempts to mitigate the rural-urban divide like Community Supported Agriculture, inspired by initiatives in the US and Europe. Urban consumers, upset by various food scandals, support farmers in the peri-urban areas with capital and their own labour in exchange for agricultural produce and the experience of rural life and work. Another intention is not just to save agriculture and food security, but to keep the traditional Chinese farmers alive and prospering. Though such initiatives become increasingly popular like the “Little Donkey Farm” on the outskirts of Beijing, it remains to be seen, which real impact they will have on a larger scale.

Urbanisation as driving force

Compared to developments in many other countries with unplanned urbanisation and neglect of rural areas, the concept of “combined urban-rural planning” is fascinating. Urbanisation thus becomes not only a driver for modernisation of agriculture and rural areas, but also for more flexible approaches towards land ownership and land use changes. Connected to this, it stimulates changes in the Hukou system of rural vs. urban place of residence with its restrictions on freedom of movement and settlement and the unequal access to social services, which Tom Miller covers extensively in his book as well as Athar Hussain and Wei Gong from the London School of Economics in their paper “Hukou – Structure, Recent Changes and Their Implications”, presented in Würzburg.

Obviously, integrated or  “combined” rural-urban planning is part of the larger on-going processes to modernising agriculture in China by consolidating land holdings, turning collectives into agricultural companies that either farm their lands themselves or hand them over to private companies, with contract farming becoming one way of integrating agriculture into industrialised production, marketing and value chains.

Still, all these attempts, pilot schemes and models to integrate rural und urban development stop short of the sensitive and hotly debated issue of outright privatisation of agricultural land. Not only the Communist Party is solidly against this, but also many observers and academics feel, that it might hasten the alienation of agricultural land further and contribute to the creation of a landless proletariat. On the other hand, Tom Miller is pessimistic, that without this the urbanisation policies will succeed: Leaders “must reform collective land ownership, introduce private property rights, and ensure these rights are properly enforced. Unfortunately, it is very doubtful whether any of these reforms are possible under China's current political system.”



11th European Conference on Agriculture and Rural Development in China (ECARDC XI), “Rural China under New Leadership”, April 11-13, 2013. Old University of Würzburg, Germany

Tom Miller, China’s Urban Billion. The story behind the biggest migration in human history. 2012 (Zed Books)