Wednesday, Aug 23, 2017, 6:30 AM CST – China

Politics

Urbanization

Changing Hands

Chen Xiwen, one of China’s most prominent specialists on rural affairs, strongly opposes recent proposals to overturn China’s land ownership system and allow urbanites to buy the rural residential land left unattended by migrant workers

The hundreds of millions of Chinese migrant workers who have left their rural hometowns to man the nation’s assembly lines have not only lifted themselves out of poverty, they have also earned China a place in the “higher middle income” club. Now these workers are expected to drive the country towards becoming what officials have termed a “moderately prosperous” society, with the goals of doubling the country’s 2010 GDP and average per capita income by 2020. As Chinese Premier Li Keqiang likes to say, urbanization is “where we will find the greatest potential for domestic demand and the most powerful force for sustaining economic development.”                        

The government is aiming for 200 million more people, mostly migrant workers and their families, to settle in cities within five years. If this goal is realized, by the end of 2020, China’s urban population will have exceeded 800 million and will make up about 60 percent of the country’s total population.

However, migrant workers themselves do not seem to be on board with this plan. A report released by the Chinese Academy of Social Sciences on April 6 shows that more than half of migrant workers from China’s less-developed midwest are considering returning to their rural homes when they get older, and only one-third plan to continue living in a city in the future.

A recent policy encouraging migrant workers to buy apartments in smaller cities has fueled the controversy surrounding China’s path to urbanization. At the same time, many urbanites and analysts argue that it is unfair that urban dwellers are prohibited from buying rural homes and land from migrant workers who decide to move to cities. Under China’s land ownership system, rural residential land does not belong to the State, but instead belongs to a collective of villagers who are registered citizens of that specific village. It cannot be sold to an outsider.

Does urbanization necessarily mean mass migration from rural to urban areas? For those who choose to move to cities for work, what happens to the land, houses and families they leave behind?

Recently, a number of economists and officials have put forward the idea of opening up the sale of unused rural land to anyone who would like to develop it. Chen Xiwen, deputy director of the Central Rural Work Leading Group, is strongly against this. Chen is one of the most influential policymakers and experts when it comes to China’s rural affairs. In an exclusive interview with NewsChina, he provided insight on the long-term effects China’s urbanization efforts may have on its rural land and rural lifestyles. In his opinion, village life can be more appealing than city life. He added that rural areas are important because they produce food and ecological products. Therefore, he thinks China should take other paths to urbanization and not put rural residential land up for grabs.

 

NewsChina: Migrant workers from rural areas are encouraged to become urban homeowners to reduce the amount of unsold real estate in urban areas. What are your thoughts on this?

Chen Xiwen: It is hard to expect rural residents to do this. If they could, they would have done so long before there were incentives in place. I do not understand how they could be expected to be the main consumer force that will reduce unsold urban housing inventory.

It is a Chinese cultural value that property should be owned, not rented. However, why not rent the vacant, unsold space to migrant workers under a special arrangement brokered by the government? How can people from rural areas afford to buy urban apartments that exceed the budgets of many urban residents? Instead, a better option is to develop a property rental market, as utilization of property helps reduce the cost of unsold inventory more than ownership. The government can turn some vacant properties into indemnificatory housing by either renting or buying them, or offering tax rebates and preferable bank loan interest rates to incentivize potential developers. [“Indemnificatory housing” is a Chinese term that includes low-income housing, affordable housing and fixed-price housing, among other forms.] The government can also give incentives to real estate agents to buy vacant homes and rent them to migrant workers at capped prices. Any of these methods would make it easier to solve the excessive urban housing issue than just asking migrant workers to buy urban apartments outright.

It has been suggested that rural residents could afford urban apartments if they sold their rural homes to urban residents. This simply would not work, due to the huge price gap between urban apartments and rural houses. If urban residents had to pay the same prices for a rural house as an urban apartment, why would they want to buy a rural house at all? For rural residents, the money earned from selling their homes is far below what it costs to buy an urban one.

Due to these reasons, I do not think destroying the long-standing, fundamental rural land ownership system to alleviate the glut of urban housing is the right choice.

 

NC: It does not make sense for a migrant worker with a family to settle down in a city alone. How can workers’ families become urbanized as well?

CX: It probably will take more than a generation to bring about the urbanization of the families of migrant workers. Take Shanghai for example. Many young men who grow up within a few hundred kilometers of the city get married in their villages, build houses with the support of their parents, then leave those homes for jobs in Shanghai. In six or seven years, they are able to rent apartments in Shanghai, enroll their children in a Shanghai school and move their wives into their Shanghai homes. They return to their rural hometowns to visit their elderly parents during Chinese New Year, increasing the frequency of these visits as their parents get older. They need to keep both their rural houses and rented urban apartments. Their strong physical and emotional attachment to their rural roots may last until their parents die and their children grow up and have their own children.

It is not possible to speed up this process through rapid economic growth. In fact, when the economy develops to a certain degree, people will increasingly make decisions based on non-economic factors, such as human nature and emotions.

 

NC: The rural-urban [socioeconomic] gap is expected to narrow and ultimately be eliminated during the urbanization process. What do you think the government should do to facilitate this?

CX: In developed countries, the process of urbanization is not separate from industrialization, it is the direct result of industrialization. In China, it has been made a separate concept. Big cities are regarded as too crowded, so rural residents are encouraged to live in smaller cities and urban towns. But why would they go to those smaller cities and towns when they lack adequate infrastructure and public services?

Indeed, rural residents would go anywhere, not necessarily the biggest cities, if they could find jobs, housing, basic public services, guaranteed social security and education for their children.

When other countries urbanized, they mainly went through two different paths. The first can be seen in Latin American countries. They have some of the highest proportions of urban residents in the world. However, these countries often have severe levels of urban poverty. Big enterprises have been encouraged to build large-scale plantations of bananas, coffee beans and soybeans, all of which are mainly exported. Farmers lost their rural homes and moved to the cities, where many of them ended up in ghettos.

The other path is that of some Western countries with lower urbanization rates. In Germany, for example, 60 percent of the population live in small towns of no more than 20,000 people. The government provides small towns and big cities with similar public services, so people can [take pubic services out of the equation when] choosing where to live. In Japan, if families with school-age children relocate, the education authority in the city to which they move has the responsibility to enroll the children in a local school within three days. It does not make sense for us to encourage rural residents to move to cities when we do not offer the same services as Germany and Japan do in these examples.

All in all, a key question needs to be answered. Should we first bring rural residents into cities and put them in [an unequal] two-tiered structure while we gradually improve their urban living conditions? Or should the government first provide equal public services between rural and urban areas, leaving the decision of whether to move to cities to rural people themselves?

‘Better city, better life.’ This phrase [which could also be translated as “The city makes life better”] was the official motto of the Shanghai Expo in 2010. I specialize in rural affairs, and I am strongly opposed to this idea. I still think about a poster at the expo put up by the village of Tengtou in Zhejiang Province, which said: “The city yearns for country life.” Tengtou has earned a lot of money through agritourism. Six years have passed since the expo; I’m sure many urbanites have shared this yearning for beautiful rural areas like Tengtou since then.

 

NC: However, it is also a waste of resources when migrant workers leave their rural houses vacant and unused. What can they do with the land on which their houses are built if they are not allowed to sell it?

CX: There are several practices in reality. The land can be reclaimed as arable land to expand or improve agriculture. In some special cases, the land can become new homes for the rural poor. For example, many people in rural Pingluo in Ningxia Hui Autonomous Region in China’s northwest left their houses and farmland after they went to work in nearby cities. Meanwhile, some residents of the Xihaigu area in Ningxia’s south, an area that had been plagued for years by extreme poverty and drought, needed to be relocated to more hospitable regions. A deal was then brokered by the [regional] government so that Pingluo residents transferred their houses and the land beneath them to migrants from Xihaigu, receiving compensation in return.

However, this should not be just a simple exchange. Firstly, Pingluo villagers must recognize the membership of the newcomers [which entitles them to collective ownership of the land]. Secondly, Pingluo residents who abandoned their houses and land need to have their hukou [residence permit] registered to the urban area in which they now live, with access to all the public services that come along with an urban hukou. Otherwise, if these Pingluo residents no longer have a home or land in Pingluo, to where should their hukou belong? These issues still have to be resolved.

The most common practice so far is for the village to rent migrant workers’ unused houses and renovate them into resorts or nursing homes. This can be seen in areas around Beijing as well as in Zhejiang and Guizhou provinces.

Non-rural residents should not covet rural residential land. The examples I mentioned here show exactly how the land resources can be used without being sold.

It is true that many people expect reforms that will make it possible for urban residents to buy rural land and build whatever they want on it. I don’t think this would be good for China, nor is it allowed in many other countries. While some are looking forward to this kind of land reform, I do not think such a change will ever happen.

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