I Finally Understand Why Chinese Farmers Are So Poor

September 25, 2009 11:48 pm Last Updated: September 26, 2009 12:48 am

The Chinese Communist Party (CCP) has controlled China for 60 years. The communist party’s economic reform started 30 years ago. According to an official CCP report, China’s GDP ranks number three in the world. Yet the majority of Chinese farmers are very poor. I’ve always wondered about this, but I’ve never understood why.

The CCP has attempted economic reforms in the farmlands, but their attempts have always failed. Is it really so hard to change the economic structure in rural areas? After I studied the supposed reforms, I realized that the CCP doesn’t really want to change things, but intends to keep the farmers poor. I’ve based this conclusion on investigation and analysis, not political bias.

Why would the communist party want farmers to be poor? My study indicates they intend to maintain access to a large number of cheap labor (including “migrant” workers). Furthermore, they are able to maintain psychological control over the farmers by keeping them economically dependent on the CCP.

Cheap labor makes low prices possible, giving the communists access to vast foreign reserves. Cheap products from China have dominated the U.S. and European markets. The CCP’s foreign reserve is number one in the world, but Chinese farmers are struggling to make ends meet. Historically, it’s traditional for farmers to rebel and overthrow corrupt ruling classes in China. For this reason the CCP has exerted a lot of effort to control the farmers, keeping them at the bottom of the social ladder, insuring that they don’t have the strength or will to revolt.

According to a report recently published by the National Bureau of Statistics of China, the country’s income has increased 985 times since the CCP took over. Yet in the category of per capita income, China has only gone from "low" income to "below average" income. This is the result of the CCP’s biased economic policy, which keeps the farmers in rural areas extremely poor, and average workers in cities poor. Those who become rich are a small minority.

So how did the CCP keep the farmers poor? One essential method is price control on agricultural products. No matter how hard farmers work, their incomes remain substandard, since they can’t sell their produce for a decent price. In the large area of Central Western China and South China, average yearly household incomes are often less than 5,000 yuan ($600).

Even a lot of the people in the cities, like workers in the manufacturing and service sectors, are relatively poor. In Guangdong Province, many workers earn as little as 700 or 800 yuan ($85 to $120) a month. In ostensibly well-developed areas like Shenzhen City, the average income is only 1,500 yuan ($200) a month.

This keeps China supplied with a very cheap labor market, which in a certain sense provides economic stability for those at the top. Chinese people are afraid of being poor, so as long as there is even a small opportunity to earn money, they’ll work very hard.

This creates a declining condition for foreign investors. For years, China has been the world’s sweatshop; low salaries, long hours, poor working conditions, no welfare, and pollution and waste. Foreign investors can do whatever they want. China has become a paradise for investors. China’s GDP skyrocketed due to foreign investment. Many economic experts say, “China has made miracles!” But do they know how? There’s no other country in the world that could bear such a cheap labor market!

Due to the low produce prices, farmers are unwilling to work the land. The CCP can’t let those prices increase because the majority of people in cities are also on the edge of poverty. If food prices go up, the CCP will have to provide assistance for people in the cities, which will cause inflation. The situation is out of control!

And what adjustments have the communists made? In recent years they’ve reduced or waived agricultural taxes. Though many farmers were encouraged by this development, it was actually a method the CCP used to placate the farmers and keep them poor and working.

Conversely, executives running CCP controlled monopoly companies have strong ties to high-ranking communist party officials. There are companies of this type in real estate, communication, petroleum, aviation, transportation, and energy and water resource sectors. In these markets, the CCP can increase prices at will to maintain high profits.

Take the real estate market for instance. In recent years urban real estate prices have risen radically. The CCP is steadily siphoning money from more well-to-do classes. A prime example is Beijing, where real estate prices doubled in less than a year. Though some might think they’re doing very well because they can afford a house that costs one million yuan (over US $120,000), think about it. What have they bought? Does it really belong to them? They’ll only be allowed to live there for so long. Most Chinese people can’t afford an apartment, even after years of hard work. Heavy losses in the stock market also took a weighty toll on investors. Therefore, those living in cities and townships are really no better off; they’re merely a tiny bit more prosperous than the farmers.

Summarizing China’s economic development over the last several decades, the reality is that the CCP alone has reaped the benefits, and stolen the wealth created by the Chinese people.

Read the original Chinese article.