China approves plan to give peasants state-owned land

THIRTY YEARS after setting out on the capitalist road, China's ruling Communist Party has approved proposals that aim to give…

THIRTY YEARS after setting out on the capitalist road, China's ruling Communist Party has approved proposals that aim to give 700 million peasants state-owned land.

The plans, passed on Sunday at a plenary session of the party's central committee, could allow farmers to exchange their plots of land or use the sites as collateral for loans. It is hoped that the measures will boost rural incomes, improve productivity and help households to raise the money required for individuals to get access to the cities.

As the world economy tumbles into recession, the government appears anxious to ease its dependence on the export trade by strengthening domestic demand. Spreading the wealth to the countryside, officials say, will allow farmers to buy more goods; it will also release resources for spending on rural health and education, another priority for Beijing.

China's countryside was at the centre of the party's efforts to rejuvenate its economy in 1978, but within a decade the focus had shifted to the industrialised east. Instead of improving life on the farm, the priority was to move half a billion under-employed rural workers to millions of building sites along the eastern coast.

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The urban construction boom has already swallowed up farmland as well as farm labour, so legislators are hoping that the new measures will improve productivity and meet growing urban food demand. That, in turn, will help head off surging food prices, a component of the country's recent inflation scares.

Despite the urbanisation programme, China's peasantry still makes up more than 55 per cent of the total population. The government believes another 300 million farmers need to relocate to the heaving urban centres over the next 20 years.

Meanwhile, the gap between the urban rich and the rural poor has continued to widen. The latest official statistics show that per capita, city incomes are 3.3 times higher than those in the countryside, the biggest since reforms began in 1978.

As China shifts inexorably towards the "socialist market", the party continues to try to reconcile the requirements of capitalism with the shibboleths of its Maoist past, and government experts have rejected talk of "privatisation".

The proposals will not formally break with the principles of collectivisation. Land will continue to belong to the state, but the "leases" that were introduced by reformers in 1978 could now be lengthened to 70 years, giving farmers far greater freedom over what to do with the land.

When it was launched, the "household responsibility system" allocated plots of collectively owned land to individual families for periods up to 30 years, allowing families to make decisions about what to grow and to reap the profits.

The proposals on the table this week could give farmers far greater scope to let land or borrow against it.

Observers say the development will mark a full break from the country's "semi-feudal" past by freeing farmers from the grass-roots party committees, which have remained responsible for allocating land-use rights, but that the government's real priorities might lie elsewhere.

Xu Xianglin, professor at the Communist Party school, said: "Hu Jintao, [ the country's president] discussing land transfer problems, said they [ the new measures] were aimed at achieving economies of scale."

That could cause problems. Sceptics believe that without a social safety net in the countryside, the system will merely persuade indigent farmers to sell up cheaply to big agricultural conglomerates. - ( Guardian service)