Tuesday, October 24, 2006

Though the government talks of making a more equitable society, China's peasants are still miserable


IT IS the end of a good harvest for crab apples in Dagucheng village, but the locals are not celebrating. Even after the central government's decision to scrap an ancient agricultural tax from this year, residents of the village, in a poor quarter of Hebei province 50 miles (80km) north of Beijing, say they will be no better off. A recent decision by the Communist Party to build a “socialist harmonious society”, in which peasants prosper and corruption fizzles, was met in the village with scepticism.
Rarely since the days of Mao Zedong has the party leadership formally declared such a utopian objective as it did on October 11th, by approving a document on building a harmonious China. For President Hu Jintao, whose speeches have been filled with calls for harmony since he took over as party chief four years ago, the document's adoption by the party's Central Committee was an important rite of passage. The next step, possibly next year at a five-yearly party congress, is likely to be the rewriting of the party's constitution to make harmony one of its goals. Mr Hu will then officially become one of the party's great “thinkers” alongside Mao, Deng Xiaoping and Mr Hu's predecessor, Jiang Zemin.

The full text of the document, published on October 18th, prescribes many ways to make China harmonious. They include promoting political reform (how is not said) and cracking down on domestic and foreign “hostile forces”. Another element, officials say, is creating a “new socialist countryside”, as distinct from the present one where corruption is rampant, health care and education are becoming prohibitively expensive and incomes are falling ever further behind those in the booming cities. Dagucheng's only non-agricultural venture, a canning factory, collapsed a few years ago. Average annual cash income per peasant is about the same now—around 2,000 yuan ($250)—as it was at the beginning of the decade, villagers say.
Since the party committed itself to reforming the countryside a year ago, it is difficult to identify much change. In some villages near Dagucheng, roads have been repaved. Abolishing the agricultural tax has saved the average peasant around 100 yuan a year. Next year, fees at Dagucheng's primary school (200 yuan a year) are supposed to be abolished as part of a nationwide campaign to eliminate them in the countryside for the first nine years of education. But like many rural schools, Dagucheng primary is meanwhile cutting costs by relying increasingly on unqualified teachers. Villagers are uncertain when they might benefit from a new health-insurance scheme that the government says will be available in 80% of rural counties by 2008. For now they have to pay market rates at the village's private clinics. But even when insurance becomes available, they will still have to pay between 35% and 60% of treatment costs themselves.
Li Fan, a consultant in Beijing, says that abolishing agricultural tax has been a blow to local government finances, notwithstanding increased subsidies from Beijing. He says his research in Hengyang, a county of central Hunan Province, earlier this year found that, in order to balance their budgets, governments were cutting various payments to peasants. These included rewards for having only one child and planting trees. Mr Li predicts that any gains peasants have made are likely to be offset by such measures within the next two or three years.
The Central Committee document establishes ambitious goals. The environment is to get “conspicuously better”. The widening gap between urban and rural areas is to be narrowed. Wealth is to be spread more evenly. Pensions are to be made available for everyone, not just those enjoying the privileged status of registered urban residents. In the build-up to the Central Committee meeting, the official media even praised welfare systems in northern Europe. The committee has set a date for achieving harmony in China. It is to happen by 2020.
Mr Hu needs to appear concerned about welfare issues. Party conservatives have become increasingly critical of the inequalities generated by China's rapid growth. There have been growing numbers of popular protests over matters such as corruption and the seizure of agricultural land by local governments. Mr Hu wants to consolidate his power and begin grooming his successors at next year's congress. To do this he will need to go some way towards addressing these grievances.
But China is not about to change course dramatically. Mr Hu can afford to spend more on the countryside, health care and education thanks to strong growth in government revenues. But he and other party leaders remain focused on the party's paramount objective: maintaining social stability. Although corruption, rural poverty and damage to the environment threaten this, party leaders are still more concerned about the danger of unemployment. China's roaring growth—driven by urban investment and exports—has helped contain this problem. In Dagucheng as in many Chinese villages, remittances from villagers who have found work in urban areas have helped to raise living standards considerably. At a meeting this week of China's top advisory body, a senior member said that job creation should be a “priority” in the building of a harmonious society. This year, the urban job market is expected to provide work for only 11m of 25m job seekers.
Mr Hu may take comfort from the recent findings of government statisticians in Beijing. Nearly 47% of residents surveyed said the capital was harmonious already, and nearly 43% said it was “generally” so. The city's “harmony index”, a separate effort to measure feelings in Beijing, has been rising 3.1% a year on average since 2001 (notwithstanding a notice recently erected by the police in your correspondent's neighbourhood warning women not to venture out unaccompanied). The party appears well on target.

Source: The economist

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