China’s economic growth model is built on its self-proclaimed “four magic weapons” for success: real estate, mining, the stock market and finance. These four elements have a direct correlation to the nature of social unrest in China, which includes farmers resisting government land appropriation, urban residents resisting forced relocation and significant concerns about breeches in environmental safety and protection.
If one examines the details of social unrest throughout the past ten years in China, one would find out that they have a strong correlation with China’s economic growth model.
Since the late 1990s, China’s economic growth model has focused on real estate, mining, the stock market and finance as the four magic weapons for China’s economic development. These have directly influenced the nature of social unrest in China, including farmers resisting government land acquisition, urban residents resisting forced relocation and the accelerating of environmental rights-related protests.
It can be concluded that the Chinese government’s way of siphoning resources dictates China’s public policy, which in turn has shaped China’s economic development model, influencing the nature of the resulting social unrest.
The Government’s Pocket and the People’s Survival
As the supporting industry of China’s economy, real estate provides half of China’s local government’s revenue, but it also drove about 80 million Chinese farmers from their land, and 3.7 million urban households out of their homes.
In order to act in concert with land acquisition and forced relocation, all local level government has come up with their own related regulations, such as “XXX City Relocation Management Regulations,” etc. Under such policy practice, robbery is legalized, and the rebellion of landless farmers and homeless urban residents has become the two major contributors to the social unrest of the past ten years.
The number of unrest incidents related to environmental protection is on the rise as well. Just take the paraxylene chemical plant construction project as an example, which has already triggered a march in Xiamen City and a “peaceful city protection” campaign in Chengdu City.
Besides anti-pollution protests carried out by urban residents mentioned, more and more farmers have become involved, making environmental issues another major category of protest, in addition to anti-land appropriation by the government, that in protest factor is running at about 30 percent, and anti-village committee corruption, that is at about 30 percent.
In coal production provinces such as Shanxi province, the high frequency of coal mining disasters have become the norm for the area: the tense social environment has high level cadres viewing the position of “Shanxi governor” as a troublesome promotion.
It is correct to say, if the Chinese economic growth depends on certain industries, the social unrest related to those industries will be intensified in the extreme. But the Chinese government keeps its eyes shut on this phenomenon, because its revenue heavily depends on such industries.
Taking the local government revenue’s dependence on real estate as an example, Shanghai is a typical example because 61.84 of its revenue comes from real estate industry, while only 4.15 percent of its revenue comes from its enterprises. In local governments elsewhere, the income from real estate accounts for 40 to 60 percent of their total revenue.
The prosperity of high pollution index industries is closely related to the central government’s economic policy.
Since the beginning of this century, the central government started giving strong support to high resource consumption industries, and large numbers of chemical plants were constructed. If one checks the list of China’s annual top 500 taxpayer enterprises starting in 2005, one can see most of them are heavy-duty chemical plants under the central government’s control, while the petro-chemical plant has played a huge role in major pollution disasters of recent years, such as the incident of Jilin Chemical Company’s benzene plant’s pollution of the Sungari River.
The top 500 taxpayer list actually reveals the serious flaws of China’s economic development model: high energy consumption and heavy pollution. China’s future generation will have to pay for the current prosperity, struggling for its very survival.
A Fire Rescue with Dry Hay
In order to handle those issues of unrest (or “mass incidents,” as the Chinese government refers to them) the central government has invested large sums of money and manpower. Investment related to “public security” will be increased in 2009 to 120 billion yuan (approximately US$ 17.5 billion) a 28.5 billion (US$ 4.17) jump from last year’s figure.
After the large-scale training of over one thousand county party chiefs at the end of last year, the training for 3,080 county level police directors was begun in February, with police forces being dispatched all over the country to find out the “source of social conflicts.” But no matter how many measures are implemented, it won’t solve the root of the problem. Judging from the economic development policies carried out at the local government level, new social conflicts will be continuously generated.
Logically, during the recession would be the best time to adjust the economic structure, however, government entities at the local level are still holding on to their old “magic weapons.”
One thing that the current “warm up” in the real estate market in cities such as Nanjing, Suzhou, Changzhou and other cities have in common is that local government spares no effort to help the real estate developer overcome challenges, including giving administrative compensation to house buyers.
During the recession, some local level government entities are still pushing out new land releases. Hanting District government in Weifang City, Shandong province, even released a red tape document to request all deputy section chief levels and higher level cadres to help developers sell houses, even as the conflict due to forced land appropriation continues to break out in various places.
Heavily-polluting industrial projects, such as the fore-mentioned paraxylene chemical plant project in Chengdu City, has been listed as a project of national priority; the local government is busily clearing all “obstructions” to speed up its construction.
And as an environmentalist, Mr Tan Zuoren, who initiated the “peaceful city protection” campaign, has been arrested and charged with the crime of “endangering national security,” which was obviously an action used to intimidate people, forcing them to desist in their resistance.
It is fair to say, there is an irreconcilable conflict between the Chinese government’s social stability index and its economic development model.
If the Chinese government continues to promote real estate as its supporting industry, it will definitely result in more loss of farmland and the demolishing of more residential houses, contributing to more landless farmers and more houseless urban residents; even while the popularity of heavily-polluting industries causes the further deterioration of the living conditions of the Chinese people.
These circumstances would only continue to generate more social conflicts, and the government would consequently need to spend more money to maintain the so-called “stability.” When would such a vicious cycle come to an end?
Since the four magic weapons can still generate income, it would be very hard for the policy makers to throw them out, even though they know such an economic structure will pose serious consequences for the future.
But, now is the best opportunity for China to reform its economic development structure. Even a not quite so fast development route that gives people a peaceful live, would be much better than the current fast development model, which generates countless social conflicts.
Read original article in Chinese.
