Land Reforms and the Conflicts over the Use of Land: Implication for the Vulnerability of Peasants in Rural China

Abstract

Statutes and policy documents, as well as open-ended interviews in Zhejiang, China, were used to identify key aspects of rural land law reforms in China to help develop the national economy. It has been observed that despite its positive effect on general rural economic development such development is compromised by extensive corruption that harms peasants’ interests. Peasants face new forms of exploitation by local governments and businesses, as well as environmental damage caused by over-exploitation of land and resources that becomes a serious hurdle for sustainable development in rural areas.

Keywords

Land rights communal/collective ownership development China

Over the centuries, law has played a significant role in economic and social development that has paved the way for the existence and perpetuation of the human society. In this article, I use statutes, policy documents and in-depth interviews in Zhejiang, China, to examine whether the Chinese land reforms that were designed to promote economic development have coincided with peasants’ fundamental interests. This study adds empirical evidence to the debate surrounding the role of law in rural development. The marketability-based perspective, held by a number of policy commentators, has defended the role of formalised property rights to improve the availability of collateral to farmers in developing nations for them to secure loans to finance capital investment (de Soto, 2000). The security and rights-based approach, however, argues that land titling made no substantial difference to levels of rural socio-economic development in an efficient and equal way (Bernstein, 2002; Manji, 2010). Some scholars present evidence to suggest that formalised land rights may be inappropriate for the poorest and most marginalised, and may have negative impacts on their security and well-being by creating unaffordable costs (Kingwill et al., 2006). The debate also reflects different understandings of the concept of ‘development’ in policy and academic forums. In this paper, development is not defined as merely an economic term measured by infrastructure and GDP, but rather as a sociological term that emphasises improved quality of life. Central to this definition are poverty and inequality reduction, health improvement, increased access to high-quality primary and secondary education, increased civic participation, guaranteed human rights and cultural integrity, as well as environmental sustainability (Aziz et al., 2015; Wickeri and Kalhan, 2009).

China provides a unique setting for studying the impact of land law reforms on rural development. It is one of the largest developing nations and the fastest growing economy in the world, yet remains non-democratic and ruled by a single political party: the Communist Party. The Chinese legal system is a socialist system of law modelled primarily on the former Soviet Union’s Civil Law model. Although in the past two decades China has imported some basic elements from the English legal system, its emphasis on codified law is still obvious. China’s rapid economic development has been achieved partly through rural land law reforms with the introduction of a family-based contract system, the so-called household responsibility system that provided peasants with land use rights, linking rewards closely with their farming performance on land. This reform has formalised Chinese peasants’ land rights so as to allow limited development of rural land markets in the country. Nonetheless, rural lands are still owned by the village collectively, rather than by individual peasants or their households.

Based on documentary data and semi-structured in-depth interviews, this empirical study finds some evidence that legally secure land rights have led to rural economic development in general. My findings, however, present somewhat of a paradox. First, although land rights are becoming formalised through a number of reforms, Chinese rural land law still lacks certainty. As some scholars have found, the legal uncertainty in Chinese law is mainly due to China’s non-democratic system that has changed law very quickly according to the Communist Party and government’s pragmatic purposes (Lubman, 2006; Wang, 2003). Such uncertainty of law leaves too much space for local officials to interpret peasants’ land rights based on their own interests. Many Chinese local officials and village cadres as well as central land administrators have established interest coalitions in enforcing rural land laws and local development programmes at the cost of peasants’ welfare and development. The lack of credible governments in China in the non-democratic system makes the prospect of rural communities’ development unclear.

Second, related to the first point, there are a number of channels through which corruption can clearly have a detrimental effect on local communities’ development through subversion of the land law. A number of village cadres have been reported as corrupt, and therefore tend to do the bidding of higher-level officials and business executives rather than that of fellow villagers in land transactions. After losing their lands without sufficient financial compensation, many Chinese peasants still live in poverty and many have migrated to urban areas to look for menial jobs. Third, the threats to local communities’ socio-economic development also emanate from the incredible judiciary. China’s court system is far from an independent body that can curb government power. When peasants’ interest was affected by governments or companies, they could seldom win their claims. Fourth, Chinese peasants’ participation in the decision-making process regarding their land rights and development is very low. The decision-making process regarding peasants’ lands in China has been characterised by the complete exclusion of peasants’ participation. Despite the existence of formalised land rights, without peasants’ ex ante participation, there is no guarantee that peasants’ interests will be addressed in the development programmes. Finally, despite general urban and rural economic growth resulted from land reforms, peasants face new forms of exploitation by local governments and businesses. Environmental damage caused by over-exploitation of land and resources becomes a serious hurdle for sustainable development in rural areas. The security and rights-based theoretical work regarding the role of land law in development serves as a basic framework for my findings.

The debate on law’s role in land reform

Despite the promising research on law and development, the literature of land tenure, land law, and land reform and their relation to development has produced two very different conceptualisations regarding whether formalised land rights have led to more efficient and just social and economic development than other arrangements. The marketability-based approach argues that formalised titles can make land transferable and fungible, generate more efficient land markets, increase peasants’ investment and productivity, and hence promote economic development (de Soto, 2000).

One of the most well-known advocates of the marketability-based approach is the Peruvian economist Hernando de Soto (1989, 2000), who famously argues for the importance of formalised property rights in promoting economic prosperity. Specifically, he finds in his study of Peru that poorly defined property rights lessened land users’ incentives to make long-term investments and hampered their capacity to use their property to secure loans to finance their investment projects. Therefore de Soto suggests that informal property rights be codified into a written and legal system as formalised land titles.

Since the beginning of the 21st century, formal land titling programmes have been launched by international financial institutions and development agencies as a way to promote economic growth, alleviate poverty and establish the rule of law in developing countries (Galiani and Schargrodsky, 2010; Manji, 2010). For example, the World Bank issued its policy research report Land Policies for Growth and Poverty Reduction in 2003 (Deininger, 2003), which endorsed the marketability-based approach by advocating formalised property rights of rural land as a pre-condition for economic development. The Bank argued that peasants’ ability to use land as collateral for formal credit may enhance their social mobility. Since 1980s, the Bank, along with other major international development agencies, has invested billions of dollars into land titling projects hoping to alleviate poverty in developing countries (Barros, 2013). In 2008, the Bank reiterated the importance of legalised property rights and went further to simplify the call for ‘financial inclusion’ to broaden access to credit for the poor (Manji, 2010).

From a slightly different way, a number of scholars hold that the unsecured land tenure reduces peasants’ investment incentive in the land, especially in long-term, land-saving investments (Deininger and Jin, 2002; Jacoby et al., 2002). Some literature also points to the fact that peasants’ investment may be encouraged if formalised property rights make it easier for them to rent land to gain profits, especially in areas where rural non-agricultural employment is economically important (Liu et al., 1998). Formalised land tenure, accompanied with creation of alternative employment opportunities, allows out-migration of redundant labour from agriculture (Lerman et al., 2004).

The security and rights-based approach, in contrast, asserts that formal, legal and freehold land titles may not necessarily result in security of land tenure and efficient land markets and hence promote rural development (Bernstein, 2002; McAuslan, 1985). Rather, formalised titles may lead to further exploitation of already marginalised groups. In many cases, informal property rights may be more secure because of their social embeddedness in kin group or other community control (Kingwill et al., 2006). The claim that formal land titling facilitates access to credit and reduce poverty is highly contested, on various grounds.

For example, Woodruff (2001) states that ‘the gains from formal titling envisioned by de Soto depend on the outcome of three separate transformations. Property has to be transformed into collateral, collateral into credit, and credit into income’ (Woodruff, 2001: 1219), and that potential leakage can occur in each of these transformations. He argues that access to credit needs more than just formalising property rights, but requires a set of complementary reforms. Manji (2001) emphasises the importance of effective implementation of new land laws in altering land relations. In another word, mere laws in books which are not accompanied by effective enforcement of such laws may not bring about expected development. Based on his study in Zambia, Brown (2005) argues that corruption may lead to improper implementation of formal property rights that harms rural development.

Empirical evidence on the links between formalised land titling and poverty alleviation and economic growth is mixed, with the main issue being the effectiveness of formalised titling on the security of land tenure. Some scholars find that land titling does not automatically result in higher levels of security and protect people from eviction and expropriation of their land. Holders of land titles do not in fact have easier access to credit; and poor families with formal land titles are often as reluctant to seek loans as banks are reluctant to provide loans to them (Musembi, 2007; Payne et al., 2009). Some studies do suggest positive connections between titling and poverty reduction, although less strong than expected. For example, a field study in Argentina indicates that ‘entitling the poor increases their investment both in the houses and in the human capital of their children’ (Galiani and Schargrodsky, 2010).

The way in which land titling is formalised has also raised inequality issues. Patrick McAuslan, who had advised on land law-making in several African countries, described in details the opposition he had encountered when trying to ensure gender equality in land rights and access to credit (McAuslan, 2010). For example, the commercial banks in Uganda claimed that national economic development would be threatened by providing women with equal access to land and credit. The banks’ view was supported by Uganda’s President Yoweri Museveni (Manji, 2010). Even after protective provisions for women’s rights to land were enacted, governments and banks may in practice deny such rights. In addition, although international institutions have committed to poverty alleviation through their titling projects, the use of land as collateral for credit may expose the poor and women to new risks by creating debt for them to repay (Manji, 2010). Land reforms in Africa based on the colonial model have certainly not been geared to improve the living standard of the rural poor (McAuslan, 2006).

Theoretical perspectives and empirical evidence on land titling and development in China are similarly mixed and inconclusive. Based on surveys and statistical analysis, some scholars have found that more than 40% of Chinese peasants lack written documentation to certify their land titles, so that local governments can frequently take or sell their lands. Where land rights have been formalised in the form of land contracts or certificates, peasants do make mid- and long-term investments to promote rural development. They estimate that formalised land rights represent the value of $1.2 trillion in peasants’ hands (Prosterman et al., 2009). Other scholars, however, argue that formalised land rights may cause environmental damage and over-exploitation of land that ultimately harm peasants and hinder sustainable development (Zhao, 2015).

In the same vein, Xu (2012, 2014) suggests that private property seems to be in constant conflict with public interests and social concerns in China. Therefore, by examining an empirical example in Wugang, she emphasised the importance of integrating the community lens proposed by Roger Cotterrell (1996) – relations of community – into studies of land reform and development to build up links between economic development and aspects of social development. Murphy and Xu (2008) find that the party government’s direct interference in the land market has blurred the boundary between public and private property and become a key factor in increasing the number of landless peasants in China. Their study also suggest that land-related corruption or rent-seeking is popular in land approval and bidding processes controlled by central and local governments.

It is within this land reform and development debate that peasants’ land rights and development in China is best analysed.

Methodology

This study is part of a larger research project comparing rural and indigenous land rights internationally. Qualitative methods were used in the study to obtain a detailed and nuanced understanding of Chinese land law reforms and peasants’ views on their impact. A number of statutes and policy documents produced by the Communist Party and government agencies in China provide the basic data for the study. These are empirically complemented by in-depth interviews with members of Chinese rural communities. My interview sample consists of four villages in Zhejiang, China with different levels of economic development and marketisation. The Province of Zhejiang is an important setting for this type of research, mainly because there were a number of reported cases of violence between peasants and local governments or companies regarding land rights in Zhejiang during the last three decades. This study attempts to look into the controversial land rights issues by getting first-hand perceptions of rural residents in the province. For this particular study, 25 peasants and peasant workers were randomly selected from a list of over 100 recommended village members using a chain referral sampling method (see Riley, 2006 for further details of the application of this method to the study of rural issues). In total, 9 women and 16 men were interviewed, ranging from 20 to 63 years old.

Each interview, conducted by the author in 2013 lasted from 30 to 75 minutes (average length 60 minutes). The researcher also had the chance to conduct interviews with five land law implementers, two senior local prosecutor and two judges, each for 60 minutes, in order to gain some inside views on land reform. To ensure that interviews were systematically conducted and allowed for meaningful comparison, an interview guide was designed to lead discussion of key themes (Mason, 2002). It covered a diverse range of land rights, agricultural and socio-economic issues. The interview guide was semi-structured to allow respondents to bring up new topics and comments that were not covered by the guiding questions. For instance, when respondents were asked about the marketisation of rural land since 1987, most of them discussed the loss of arable land and advocated the use of chemical fertiliser and pesticide to increase grain production, even though these topics were not specifically covered in the interview guide.

To ensure spontaneity and confidentiality the interviews were not tape-recorded. Instead, the author wrote down detailed notes during the interview, and summarised and analysed them immediately after the interview, and generalised them after all interviews were completed. Each interview transcript is considered in comparison with other transcripts in the sample to understand peasants’ individual and collective experiences and views. Some verbatim quotations, excerpts from the interviews, are presented in the paper for two reasons. First, these excerpts represent a view commonly expressed by many respondents. Second, the excerpts illustrate the themes being described in a detailed manner.

Results are reported and discussed around two main periods of land reform in China: 1) rural land reform since 1979 and 2) further marketisation of rural land since 1987.

Rural land reform since 1979

At the end of the 1970s, with the launching of the economic reform, China faced the need for a rural land law reform, which was expected to eliminate the inherent inefficiency of communist collective agriculture. The Chinese government introduced a family-based contract system, the so-called household contract responsibility system (HCRS) stipulated in the Central Government’s Orders for Agricultural Work in 1982 (Dong, 2009).

This rural land law reform established a new land tenure system in which the ownership of rural land and the usufruct rights of land are divided. The usufruct rights of land plots are formally contracted to peasants’ households while the ownership of land remains with the newly established township (reshaped from the People’s Communes). According to the law, the plots were allocated to peasants’ households according to the number of people in a household. The families were generally allowed to make their own production decisions and sell their surplus products as they wished after paying certain amount of agricultural taxes to the state and making a contribution to the collective welfare funds of their villages and towns. By the end of 1984, 5,690,000 production teams or villages (99% of all the production teams) across the country had adopted the HCRS system, and 184 million farm households (96.6% of all the farm households) signed household farm contracts and hence became relatively independent rural land users (CPC Literature Research Office, 2013).

Table 1.

Percentage Distribution of respondents’ opinions from the interviews.

	Agree	Strongly agree	Oppose	Strongly oppose	Didn’t answer
Do you agree that the collectivisation of land after 1949 had generally improved rural development and your personal/family life?	12%	0	8%	64%	16%
Do you agree that the rural land reform (HCRS) between 1979 and 1987 had generally improved rural development and your personal/family life?	32%	36%	24%	8%	0
Do you agree that marketisation of rural land since 1987 has generally improved rural development and your personal/family life?	28%	8%	36%	28%	0
Do you agree that you had to leave your home village because you had lost your arable land?	8%	32%	24%	0	36%
Do you agree that the compensation for the land seizure is adequate and fair?	16%	0	44%	40%	0
What’s your opinion on the credibility and ability of village leaders to protect your land rights?	12%	4%	28%	56%	0
What’s your opinion on the credibility and fairness of land administration departments in dealing with your land issues?	8%	0	20%	68%	4%
What’s your opinion on the credibility and ability of courts to solve your land lawsuits?	16%	0	36%	48%	0

Honoured as the second land law revolution in China, the HCRS has proved a great success in rural economic development, by providing individual performance-based incentives and rewards, eliminating the phenomena of free riding, and reducing the cost of monitoring labour at a collective farm. Although integrated evaluation of the impact of this reform on all dimensions of rural development is very difficult due to the lack of recorded data in China, the success of the HCRS can still be measured from some dimensions. First, as a result of this law reform, China’s agriculture has experienced dramatic development in agricultural outputs. The fundamental problem of feeding the large rural (and also urban) population, which had puzzled China for several centuries, was solved at least in a basic way. Between 1978 and 1984, output of grain increased at annual rates of 4.8%, compared with the average rates of increase of 2.4% per year from 1952 to 1978 (National Statistics Bureau of China, 1985). By providing the land usufruct rights to peasants’ households, the government largely improved peasants’ ability to satisfy their subsistence needs.

Yet the benefit of the HCRS is not limited to satisfying peasants’ subsistence needs. Household budget surveys published in Zhejiang provincial statistical yearbooks indicate that peasant sell an increasingly substantial proportion of their agricultural output in nearby town markets after 1979. In Zhejiang, peasants’ net per capita income increased from RMB 219 in 1980 to RMB 549 in 1985, growing 2.5 times. The major portion of the increase came from the household plot.

The attitudes of interviewed peasants and peasant workers are mixed but generally suggest that the HCRS has had a positive impact. A total of 68% of the interviewees reported that their families were happier and better off than in the period of collective farms. In further interviews, some of the respondents who had negatively commented on the impact of the HCRS reform admitted that they had received economic benefits from the reform but criticised the increasing income inequality after the reform. Most of the respondents complained about the ban on freely selling, leasing or using their land as collateral for loans. They would welcome further privatisation of land and full ownership of their land plots that prohibit the state-forced land seizure.

In June 1986, the National People’s Congress passed the first national land administration law of China (hereafter ‘LAL’), which represents a key element in the program of rural land law reform that began in 1979. The LAL confirmed that land in rural and suburban areas including house sites and private plots of cropland and hilly land is owned by farm collectives authorised by the state. Peasants may obtain land usufruct rights through signing land contracts with the collective, but are prohibited from selling, leasing or transferring their land plots. However, the LAL for the first time provides that the government, at least at county level, may officially designate the land for non-agricultural use. When land seizure is initiated for state construction purposes, the government must give compensation to rural collectives for expropriating rural land. Organisations and individuals may also obtain rural land for business projects subject to approval by the land administration department at or above the county level. The land user shall, depending on who owns the land and who has the land-use right, enter into a contract for the use of the land with the land administration department, the rural collective economic organisation, or the villagers committee, and pay compensation according to the contract. Although such compensation is not based on the market value of land but arbitrarily determined by the land administration department, the compensation system set a foundation for the future marketisation of land in China.

However, there is a major problem in the land seizure and compensation framework under the LAL: individual peasants may not directly enter into a contract for the expropriation of their land plots and hence get compensation when the land is taken away by the government or businesses. The compensation goes to the rural collectives (many times the village government) that seldom benefit peasants in a fair manner.

The courts, consistent with legislative actions and government policies, have further eroded benefits to individual peasants. For example, from 1982 to 1987, the courts in Zhejiang denied more than one hundred peasants’ claims for compensation to individual households, and held that only the rural collective had legal rights to obtain and dispose of the compensation for land expropriation, collectively owned by all peasants in the village. The interviews also confirmed peasants’ dissatisfaction with the court system.

Furthermore, due to the prevalence of corruption at all levels of government, many Chinese local officials and village cadres as well as central land administrators, charged with implementing the land law, have established interest coalitions in enforcing rural land laws and local development programmes at the cost of peasants’ welfare and development (see also Murphy and Xu, 2008). There are a number of channels through which corruption can clearly have a detrimental effect on local communities’ development through subversion of the land law. For example, officials at different levels may embezzle the compensation funds to rural collectives, which obviously harm the interest of farming households. They also receive kickbacks from real-estate companies to reduce such compensation. From 2000 to 2006, the Central Commission for Discipline Inspection (CCDI), the CPC’s top internal-control institution, disciplined 8698 officials for corruption in land law implementation, and referred 1221 officials to the procuratorate for criminal prosecution (CCDI, 2007). Commenting on corruption cases involving officials in Zhejiang province, a senior prosecutor in charge of corruption cases in the province stated:

Due to the overheating housing markets, not only corruption has exploded in land deals, but also the amounts of money involved in such cases have become extremely large and anything up to one million yuan is now considered unremarkable. (Interview transcript case 010)

China has been notoriously characterised by extensive corruption during its current transformative decades. A huge number of village cadres have been reported as corrupt, and therefore tend to do the bidding of higher-level officials and business executives rather than that of fellow villagers in land transactions. In addition to the personal financial connections between the cadres of different levels, local officials may also be unwilling to punish corrupt village cadres because they rely on village cadres to control peasants. The cases exposed are just the tip of the iceberg, the structure within which land law implementers work actually encourages corruption (Cheng, 2012). As one local LAB official admitted in the interview:

Yes, I would frankly say, I believe everybody working in land departments use our power to get money. I, unlike others, will tell you the truth, I can make half million yuan a year in addition to my salary. Because we are monopolies, both me and my wife are lucky to work for state monopolies. (Interview transcript case 019)

According to surveys conducted by Chinese scholars, local government agencies in the country are experiencing a high level of distrust due to recent crises such as corruption and peasants’ increasing tension with local authorities in cases of land expropriation (Zhou, 2010). The distrust is becoming an indispensable part of Chinese peasants’ life and is eroding governments’ credibility. Therefore, despite the Communist Party’s promise to further protect peasants’ land rights, the lack of credible governments in China in the non-democratic system makes the prospect of rural communities’ development unclear.

The compensation system, accompanied by corrupt officials, has been and continues to be problematic; and it is frequently cited as the number one reason for increasing conflicts over rural land and violent clashes between officials and peasants (Cai, 2003). The socio-economic development of rural China has substantially lagged behind in the reform period, largely due to the repeated and numerous encroachments upon peasants’ land interests. According to a recent study, as many as 130 million peasants have lost their land since the reform. A large-scale survey covering 17 provinces and 662 towns indicated that about 17.6% of the interviewed peasants whose land was taken said that the government forced them to give up the land (Zhang, 2014). After losing their lands without sufficient financial compensation, many Chinese peasants live in poverty and many have migrated to urban areas to look for menial jobs. According to official statistics, in 2012 alone, 163 million peasants nationwide left their hometown and migrated to cities for work, the majority of whom were those who lost their land (National Statistics Bureau of China, 2013). As Mrs Long, a 55-year-old woman who was working at a construction site in Wenzhou with her husband, commented in the interview:

My family was contracted 10 mu arable land [one mu equivalent to 0.1647 acres]. But more than half of it was taken by a real-estate company in the 80s. The village head told us we would get fair compensation, but we only received fifty thousand yuan [1 yuan is equivalent to 0.16 USD]. Our village head is very greedy, corrupt, colliding with real-estate people or copper smelters since 80s. Many village heads are like him in the province. We don’t have land for farming, so the only thing we can do is to find jobs in cities. But it’s becoming harder and harder, and the only thing we can do is to sell our labour there at a cheap price. (Interview transcript case 024)

As some Chinese scholars have pointed out (Zhu, 2011), the problems are also strongly related to Chinese peasants’ exclusion from the decision-making process regarding their land rights and development. According to Chinese laws, Chinese peasants must be consulted on any land transactions and compensation. In practice, however, Chinese peasants are politically weak. The governments can practically do whatever they wish without much worry. The marginalised status of peasants again lies in the party-led political arrangements that shape the context in which the governments, village cadres and peasants interact. The decision-making process regarding peasants’ lands in China has been characterised by the complete exclusion of peasants’ participation. Without peasants’ ex ante participation, there is no guarantee that peasants’ interests will be addressed in the development programmes. Although peasants frequently object to the land transactions, such resistance has always been oppressed through criminal law or mere arbitrary detention by the local government.

Further marketisation of rural land, 1987 to the present

A significant feature of the rural land law before 1987 was that land was regarded as a resource that did not have value in itself and could not be traded in the market. Nevertheless, with further economic reform and increasing demand for lands by domestic and foreign investors, land transfer based on market competition became necessary.

In April 1988, the Constitution of the PRC was amended by removing the words banning the transfer of land and adding the sentence ‘the right of land use can be transferred in accordance with the law’ in Article 10. This provision was incorporated in Article 2 of the amended Land Administration Law (LAL) in December 1988, which also specified that the state applied a system of compensated use of state and collectively owned land. According to Article 47 of LAL, ‘compensation for expropriated cultivated land shall include compensation for land, resettlement subsidies and compensation for attachments and young crops on the requisitioned land’.

A further legislative initiative marketising Chinese land was not reached until May 2002, when the Ministry of State Land and Resources (previously the LAB) issued National Administrative Regulations No. 11, which requires all transfers of publicly owned land to commercial users to be conducted through public tender and auction. By June 2007, the State Council prohibited all land for private uses (including industrial) from being transferred through administrative decisions or negotiation. This marked completion of the shift from administrative land allocation to market competition. Land for non-agricultural use is no longer allocated and supplied free or at an administratively negotiated price. It is leased through market competition among land users, although such competition may still be compromised by many under-the-table deals (Birney, 2014).

The third phase of the rural land law reform, characterised by the establishment of a land market, has significant effects on socio-economic development. First, the marketisation of land use right has undoubtedly produced greater land revenue for the government. On average, local governments collect about one-quarter of their revenue from land use right sales. Sales of land use rights increased from 231.3 billion yuan (US$37.7 billion) in 2001 to 1423.6 billion yuan (US$232.2 billion) in 2009. Major metropolitan areas in Zhejiang, such as Hangzhou and Ningbo, obtained about 100 billion yuan (US$16 billion) in recent years (National Bureau Statistics of China, 2010). Second, the dominant position of the state in the land market facilitates the steady development of the land market and increases some macro social benefits of land use, such as public education and public health programmes, as confirmed by my interviews with peasants and rural officials. Third, the private sector clearly benefits the most from the shift to land market competition, which has in turn boosted China’s economic growth. With the emergence of rich property developers who take suburban and rural land, one-third of the national economy comes from real estate and related industries (Roberts, 2013). Another important outcome of reform emerges from the attitudes of the relatively rich peasants in my sample. A total of 36% of the respondents agree that marketisation of rural land since 1987 has improved rural development and their general standard of living. These respondents are mostly from rich suburban areas near Hangzhou and Ningbo, where real-estate companies have paid much higher compensation than in poor rural areas. Peasants there can therefore get a relatively higher share of compensation from local collectives.

Nevertheless, in general, China’s recent rural land law reform has produced a number of negative effects on rural communities’ development and peasants’ well-being. First, the rapid occupation of agricultural land by various kinds of businesses and the massive land degradation resulting from the land marketisation has deprived peasants of the fundamental resource available for sustainable agricultural development. According to official statistics, over 34 million Chinese peasants lost their lands from 1987 to 2001. The State Council predicted that 110 million peasants would lose their lands from 2000 to 2030, half of whom would also become unemployed (Li et al., 2005). According to the National Bureau of Statistics, from 1996 to 2008, the arable land in the country lost to capital construction and housing amounted to about 10 million hectares (National Bureau Statistics of China, 2010). With only 7% of the world’s arable land, China must feed about 22% of the world’s population. The Chinese government estimates that it is necessary to maintain 120 million hectares for grain production until 2020 in order to keep self-sufficient in food production. However, the country’s arable land has already fallen close to this level and may further decline to 117 million hectares by 2015 if the urbanisation speed is not controlled (Siegel, 2015). Many peasants left the farm to work in rural factories or move to the city because it was hard to make a living after losing their arable land. In Hangzhou alone in Zhejiang, 52% of the peasants who lost their lands are also unemployed. Some 40% of the respondents in this study lost their arable land and had to leave their home village. Mrs Niu, a 45-year-old woman who moved to the city with her husband in 1991, explained why the couple had to leave their village:

As you can imagine, the conditions in this village were not good at that time…of course it’s still not good today. We have two children and four parents of both sides to support. We relied merely on growing crops for our living, which was extremely difficult for us. What is even worse is that our farming land was expropriated for a new industrial park by the township. So we had to leave our village to find a job in the city. And it’s hard for us, because we don’t have high education. We had to leave our children and parents behind. (Interview transcript case 022)

Moreover, the existing arable land continues to be degraded through soil erosion, decreased soil fertility and industrial pollution, which is further exhausting the land productive capacity for agricultural development. The total eroded area in China has reached 2.67 million square kilometers, 27.8% of the total land area of the country, with 1.7 million square kilometres or 18.1% of the total land area desertificated. Every year, about 133,000 hectares of arable land is lost by desertification mainly due to the overuse of land and forest by the industry sectors. As available agricultural land has largely declined, peasants’ demand for high grain output per hectare has increased, which has resulted in the overuse of fertilisers and pesticides that could lead to a dramatic decrease of agricultural production (Qinglian, 2007). Most respondents in the interviews did recognise the harmful consequence of overusing fertilisers and pesticides, but argued that it needs to be understood that they are under great pressure to produce the best possible deal from the limited arable land and, as Ms Feng, a 30-year-old woman, said:

First, we need to make a living on so limited agricultural land. It would be totally a sacrifice business if we choose to use normal fertilisers and not to use pesticides for crops, because a majority of consumers choose to buy the non-environmental-friendly agricultural products with lower prices, even those with high pesticide residues. So if you don’t want the abuse of pesticide and other chemicals, we should be compensated. (Interview transcript case 09b)

It is clear that the benefits of the socio-economic development are distributed in an unequal way. Based on rough estimates for the total rural land expropriation value from 1990 to 2005 in Zhejiang, only 10% went to peasants, 30% went to village governments, 50% went to businesses, and 20% went to local township, municipal and provincial governments. In my sample, most of the respondents who had been expropriated their land plots only got 20,000 to 30,000 RMB yuan (approximately US$3,000–4,600) per acre in the form of a one-time buyout, which is obviously insufficient for the landless peasants to maintain their standard of living, job placement, social security and medical needs. According to Zhejiang Provincial Government’s estimates in 2012, despite the province’s leading position in national economic development, about 3.5 million people in rural areas in Zhejiang still live in poverty, with an annual net income per capita of 4,600 yuan (approximately US$710), occupying 10.9% of the province’s rural population (Xinhuanet, 2012).

Some peasants luckily became rich as they received high compensation from land expropriation but at substantial cost to their health and social development in general. For example, the rapidly increasing rates of cancer, birth defects and other pollution-related diseases are a major concern for peasants in many areas of Zhejiang. Chinese and Western media have reported a total of 459 Aizheng Cuns or cancer villages across 29 of China’s 31 provinces (Cheng, 2012). In the past five decades, Zhejiang has transited from subsistence farming to heavy industry so become a major province of land expropriation. In one village in my study, cancer is responsible for 80% of all deaths. From 1995 to 2009, 72 people died of cancer, with the youngest aged only 25. More than 20 chemical plants, occupying most of the village’s agricultural land, dump more than 2000 tons of pollutants into the village’s water supply on a daily basis. Mrs Yu, a 50-year-old woman in that village, commented on the high price peasants had to pay for the industrial expansion in the village:

Yes, it’s my home village, but it’s a cancer village now. Our families have been here for hundreds of years. But now I don’t want to stay any longer in this village. My husband was taken by cancer. And now my sister was taken too. Officials and businesspersons are only interested in grabbing and exploiting our land to make huge profits for themselves. We received some compensation for the lost land, but such an amount is nothing when the factories caused cancer in us. Look at here, the river has turned red, but nobody in the government or industry actually cares. (Interview transcript case 15)

In many cases, peasants have failed in their petitions to the local government opposing the polluting businesses, since the governments depends on such businesses to keep the increasing GDP for their economic and political benefits. As told by several respondents in the interviews, the official reason frequently provided by the government not to take serious actions against the polluting factories was that the complaining peasants had no scientific evidence associating the cancer cases with the dumped pollutants. For peasants who work in the rural enterprises, they themselves rely on the polluting companies for income which is often higher than earnings from farming on the limited arable land (Liu, 2010). Mr Fan, a 25-year-old worker in a local smelter, commented:

Definitely, definitely, we would like to work in our rural businesses. We all know our copper smelters have no safety measures and cause harm to our health. You can see the mountain here has no green plants at all, and this is surely the polluting effect of our factory. But health for us is too luxurious. We should make money to support ourselves and families. (Interview transcript case 10)

The problems discussed above have been caused by a variety of factors, yet one of the most significant factors might be the vaguely defined land ownership system. The Ministry of Agriculture clearly identified the vague concept of titling as the key problem for the unequal and non-sustainable development (South Rural Daily, 2015). According to LAL, rural land is owned by a rural collective. In theory, peasants can collectively decide to maintain or apply to sell, rent or develop land. However, the law does not define what a rural collective is in regards of the land ownership. In fact, the main aspects of land property rights such as land rent and sale decisions have been mostly made by local government officials. Despite the provision in the LAL that rural land may not be taken for non-agricultural purposes without the permission of the state, the transaction of land for non-agricultural use is usually approved by the village or township cadres. Therefore, collective land ownership in China means that the cadres of a village or town collective have the most power in deciding land use right and land conversion for industrial purposes (Cai, 2003). In the interviews, 84% of the respondents had negative opinion on the credibility and ability of village leaders to protect their land rights. Without full land ownership, peasants cannot develop a sustainable land use plan for their own well-being.

More and more land seizures and unfair compensation to individual peasants have resulted in significant discontent among peasants and increasingly more instances of violence and rural riots as discussed above (Qinglian, 2007). In particular, poor, old, and female peasants are most vulnerable to the devastating impact of land seizures. In my interviews, 84% of the respondents either disagreed or strongly disagreed that the compensation for the land seizure is adequate and fair. Mr Yang, a 64-year-old peasant, who had experienced a rural riot in his village in 2015, told the story:

The township government expropriated more than 100 acres land from our three villages without informing us of the transaction at all, without obtaining our signatures. This is how the transaction was conducted: the village heads sold our land plots to the township government, which in turn sold them to private companies. In the name of township development, they collided with each other to eat our lands. Up to date, we haven’t seen a single cent of compensation. Tens of villagers appealed to the higher authorities, but ended in vain. A few of them were even arrested by police, which inflamed villagers and resulted in a protest last year. This time, police arrested more villagers and took them into custody in last December. Without land, without other financial sources, we feel hopeless now. (Interview transcript case 21)

Conclusions

The lesson to be learned from the findings in this study can be summed up like this: in China, land law has been both a positive instrument to national economic growth and a hurdle to socio-economic development in the case of Chinese peasants. Despite the rapid economic growth benefited from land law reform, many peasants are still suffering exploitation, poverty, discrimination, and environmental damage to their land and health. Law has been a framework to facilitate industrial sectors’ economic decision-making but unfortunately at the cost of particular rural communities’ development. It is clear that Chinese peasants are treated unfairly by their governments, Congress and legislatures, courts, and the whole society.

From the first look, the findings in this study seem consistent with the security and rights-based approach in the way that security of land rights underpin capital, resources, confidence and dignity, which in turn fuel socio-economic growth and development. However, land rights rest on the rule of law system and institutions, which themselves rest on groups of interests in a society. In China, many formal and informal institutions have been playing significant roles in hindering healthy, equal and sustainable rural development in China, including uncertain law, incredible government enforcement of land rights, corrupt public and corporate officials, non-independent judiciaries, as well as the exclusion of peasants from land policies and deals. In conclusion, it can be assumed that although the aim of the law on the surface might include such legal values as ensuring equal protection, any law reforms in practice, facilitated by formal and informal institutions, will always promote socio-economic development for certain powerful interest groups in society, but may hinder welfare and development of some powerless groups. This has been part of Chinese rural land law reforms.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was partially supported by East China Normal University under the International Visiting Researcher Fellowship.

Author biography

Hongming Cheng is an associate professor of Crime, Law and Justice in the Sociology Department at the University of Saskatchewan. His research and teaching cover a variety of areas including white-collar crime, business ethics, corporate governance, commercial law, food safety, social control, policing, and transnational crime. His recent publications include “Cheap Capitalism” (2012, British Journal of Criminology, the 18th most-read article in the journal according to June 2013 data), “Factors Influencing Public Satisfaction with the Local Police: A Study in Saskatoon, Canada” (2015, Policing: An International Journal of Police Strategies and Management), and Financial Crime in China:Developments, Sanctions, and the Systemic Spread of Corruption (2015, McMillan/Palgrave).

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