On June 2, Sound of Hope Radio, an independent Chinese-language radio network, invited the well known economist and Chinese affairs expert Cheng Xiaonong to talk about why the Chinese regime is so eager to demolish homes and acquire land. The interview with him is now published in two parts.
Yu Shan: In recent years, forced demolitions carried out by local governments have been a root cause of social instability and led to various violent social conflicts. To stop this situation, earlier this year, the Chinese regime introduced new laws and regulations regarding forced demolition.
The Bureau of Land and Resources released an emergency notice; the Ministry of Public Security claimed a ‘zero tolerance’ on forced demolition, but cases of forced demolition continue to happen.
What caused these local officials and law enforcement officers to neglect the public interest and resort to violent methods to demolish people’s homes? What is the real reason? Today we invited well known economist and Chinese affairs expert Cheng Xiaonong to give us an analysis.
Hello! Mr. Cheng.
Cheng Xiaonong: Hello! And Hello to listeners of the Sound of Hope Radio!
Yu: Many people in China have been closely following the issue of illegal land acquisition and forced demolition by local governments in recent years. Earlier this year, the Chinese Communist regime also released some new regulations trying to prevent forced demolitions.
However, reality seems to show that the new regulations did not have much of an effect and that local governments carried on despite the order.
In the first quarter of this year alone, there were almost 10,000 cases of illegal land acquisition, a 2.3 percent increase compared to the first quarter of last year. Regarding this, the Bureau of Land and Resources released an emergency notice requiring that local governments employ strict management to prevent forced demolition, but this still has had no effect.
What has really caused today’s situation? Why are the local governments so eager? What is the motivation? We are going to talk about this today.
Before we get into the main topic, can Mr. Cheng first explain to our listeners the new regulation titled “Regulations for Expropriation and Compensation of Houses Built on State-owned Land.” Does privately owned land exist in China? What is this concept of state-owned land?
Cheng: Before 1978, for thousands of years, land in China was privately owned. No matter whether it was during the era of emperors, during the Nationalist Government era after feudalism ended in the early 20th century, or during Communist rule before 1978, it has always been so.
In rural areas, the land was collectively owned by the villagers, but collective ownership is still private, not public—not owned by the government. In cities, except for streets and government buildings, all residential buildings were the property of the house owners, which means they were private possessions. However, all this suddenly changed in 1978.
In 1978, some farmers in rural areas started what was called the Contract Responsibility System (household responsibility system). The idea was that farmers were to be given quotas of land by the government.
Many key figures of the central government, including Deng Xiaoping, all opposed this system. At the time, Zhao Ziyang in Sichuan and Wan Li in Anhui supported this system, which was welcomed by the farmers. However, most officials in the central government opposed it.
In this situation, the National People’s Congress modified the Constitution, and added the sentence, “Land of the People’s Republic of China is State owned.”
The general public did not know about this. Also, the government did not compensate anyone after making this change. For many house owners, such as those in the countryside whose families had held the house for generations, suddenly they only owned the building, the land underneath was no longer theirs anymore.
Since that time, all land in China has been state owned. However, that so-called “state-owned” does not allude to the central government, but specifically to the local governments. This means all land within the jurisdiction of the local government is owned by the local government, which also means that the local governments can freely allocate land.
During the 1990s, the conflicts were not so large because the local governments did not forcibly demolish homes on a large scale. Forced demolitions actually started in the late 1990s and have continued until now. Now, the problem is getting even worse.
Yu: That means, even if you buy a house in mainland China today, the land underneath is not yours?
Cheng: This is a phenomenon unique to China, that for the first time in the world, buying the house doesn’t come with the land underneath. I know that anywhere else in the world, the land underneath belongs to the house owner, so the government has no rights over it. That is true in the United States, Canada, and Japan, but not in China.
Chinese regulations state that when a resident buys a house, he has the right to use the land, but not ownership rights, and there is a due date associated with the usage rights.
This time limit is 70 years, according to the regulation, but the government doesn’t really respect this time limit. Last year, an official from the Ministry of Construction said to the public media that all houses in China constructed before 1995 are of bad quality and all of them should be torn down.
This means, if this statement was implemented, then for those who bought the house before 1995, while still within 70 years, the government might still demolish the house. In other words, this 70 year usage limit is an empty promise. If the government doesn’t respect it, then the 70 years disappears into thin air.
Suppose someone built a house before 1995, but the government wants to reacquire this land for other purposes, then the government has the right to demolish the house. This means the money that this person spent to buy the 70 years of usage rights is out the window.
Let’s say the government builds a new residential building on the same land and this person wants to continue living there, then he has to buy the land for the second time; paying for the land use for a second time. We know that the value of the building is limited, usually only less than 40 percent of the purchase price, the rest is mainly for the land. So, if the government wants to, it can reacquire the land many times to take money from the building owner.
Yu: From the cases reported of violently demolishing houses, we see the violence of the demolitions is not only done by the real estate agents, but local governments and law enforcement officers are involved in many cases.
Media in China reported that though some of the forced demolitions are done by the real estate agents, if there hasn’t been the local government behind the demolitions, they could not have happened.
For example, in the case of the self-immolation related to a forced demolition that happened in Jiangxi Province on Sept. 10, 2010, the law enforcement officers had threatened the owner, “If you don’t tear down the house, you might not know how you die tomorrow.”
From these cases, we can see the government and law enforcement officers manipulate things behind the scenes. Why, then, is the government so keen on it?
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