Chinese Farmers
Lately, there has been much debate in China on the country’s widening income inequality that economic reform in the past twenty years has brought out. I read a few articles online. I thought they made interesting points, although I did feel suspicious that debates regarding fundamentals and national identity erupt like this. It is an interesting coincidence that the National People’s Congress is convening this week; that a draft law with regards to property rights protection was being submitted and expected for passage, and now the legislature requires more “revision.”
One piercing issue regarding income inequality is the poverty of rural population compared to their urban counterparts, especially the coastal cities. More than half of China’s population is rural, so this is a problem. Conservatives use this as a teary example that market economy left the majority of Chinese population behind, that capitalism is deeply flawed.
For their claim to be at all valid, we must compare how Chinese farmers fared before the economic reform. After the Chinese Communist Party liberated our nation thanks to the farmers’ massive support in the 1940’s, China followed the Soviet Union’s economic policies in trying to build up an industrial economy. Investment goods were heavily subsidized. As a result, agricultural products were under-priced, leaving the Chinese farmers poor as the dirt they stood on. This trend continued even during the Great Leap Famine in 1958-1962, and history sees Chinese farmers the first dying from starvation—talk about irony. At the onset of Cultural Revolution in the early 1960’s, the government shoveled young urban population to rural areas. From an economics perspective, the industrialization was really not working out, and agriculture was expected to absorb urban surplus labor. I have not read about the productivity of the urban young, but I cannot imagine a sudden large influx of labor is productive. Honestly, farmers were at the short end of the stick then, too. It is hard to argue market economy is the culprit.
Land is the fundamental of agriculture. It is thus ironic that rural poverty is somehow used to argue against property rights legislation. If anything, granting farmers property rights to the land they sow on would boost their enthusiasm and increase their wealth, but I can understand this proposal too infringing to the fundamentals. How about giving them usage rights? In urban areas, people have usage rights to their properties. Government more or less respects usage rights, and treats the owner of such rights as rightful leasee of a perpetual rent. If the rent were to terminate, the leasee would be compensated at the market rate. This is one way to circumvent the ideologies and give people energy to participate in economic activities. Maybe it would help if the government respects farmers’ usage rights too? It seems short on that so far.
When farmers do not have property rights of land on their belt, labor is their entire wealth. In the past 10-15 years, urban areas see a large influx of rural labor coming to work in the most grueling, murkiest sectors. Most of them just want to earn higher wages in the cities to subsidize folks back home. Unfortunately, China has immigration restrictions that work like the green card in the US, except that the restrictions are on our cities. Without the “green card”, rural workers cannot settle down in urban areas, cannot switch to better jobs, have no access to public health for themselves or educational system for their children. They are literally second-class citizens, working hard but earning little and prejudiced against. To me, this is another source of widening income inequality. Such labor immigration restrictions, if anything, are antithesis of market economy. If socialist intellectuals want to call off economic reform and set our country back on their high horses, please remove those immigration restrictions at least—they are neither products of market economy nor should be associated with socialism.
The government is now worried about social unrest in the rural areas and conservatives are blaming everything on the income inequality index. I do not think a large urban-rural income ratio will necessarily cause social unrest. In general, people look at how their neighbors fare when their own lives are stagnated, but when they are moving forward themselves, they do not give a damn about their neighbors. As long as the government provides protection to the rural population and maybe a little economic stimulation, the farmers will be happily living forward. Chinese farmers are the simplest, kindest and most peace-loving people you will meet on this planet. Duly protection will go a long way.
One piercing issue regarding income inequality is the poverty of rural population compared to their urban counterparts, especially the coastal cities. More than half of China’s population is rural, so this is a problem. Conservatives use this as a teary example that market economy left the majority of Chinese population behind, that capitalism is deeply flawed.
For their claim to be at all valid, we must compare how Chinese farmers fared before the economic reform. After the Chinese Communist Party liberated our nation thanks to the farmers’ massive support in the 1940’s, China followed the Soviet Union’s economic policies in trying to build up an industrial economy. Investment goods were heavily subsidized. As a result, agricultural products were under-priced, leaving the Chinese farmers poor as the dirt they stood on. This trend continued even during the Great Leap Famine in 1958-1962, and history sees Chinese farmers the first dying from starvation—talk about irony. At the onset of Cultural Revolution in the early 1960’s, the government shoveled young urban population to rural areas. From an economics perspective, the industrialization was really not working out, and agriculture was expected to absorb urban surplus labor. I have not read about the productivity of the urban young, but I cannot imagine a sudden large influx of labor is productive. Honestly, farmers were at the short end of the stick then, too. It is hard to argue market economy is the culprit.
Land is the fundamental of agriculture. It is thus ironic that rural poverty is somehow used to argue against property rights legislation. If anything, granting farmers property rights to the land they sow on would boost their enthusiasm and increase their wealth, but I can understand this proposal too infringing to the fundamentals. How about giving them usage rights? In urban areas, people have usage rights to their properties. Government more or less respects usage rights, and treats the owner of such rights as rightful leasee of a perpetual rent. If the rent were to terminate, the leasee would be compensated at the market rate. This is one way to circumvent the ideologies and give people energy to participate in economic activities. Maybe it would help if the government respects farmers’ usage rights too? It seems short on that so far.
When farmers do not have property rights of land on their belt, labor is their entire wealth. In the past 10-15 years, urban areas see a large influx of rural labor coming to work in the most grueling, murkiest sectors. Most of them just want to earn higher wages in the cities to subsidize folks back home. Unfortunately, China has immigration restrictions that work like the green card in the US, except that the restrictions are on our cities. Without the “green card”, rural workers cannot settle down in urban areas, cannot switch to better jobs, have no access to public health for themselves or educational system for their children. They are literally second-class citizens, working hard but earning little and prejudiced against. To me, this is another source of widening income inequality. Such labor immigration restrictions, if anything, are antithesis of market economy. If socialist intellectuals want to call off economic reform and set our country back on their high horses, please remove those immigration restrictions at least—they are neither products of market economy nor should be associated with socialism.
The government is now worried about social unrest in the rural areas and conservatives are blaming everything on the income inequality index. I do not think a large urban-rural income ratio will necessarily cause social unrest. In general, people look at how their neighbors fare when their own lives are stagnated, but when they are moving forward themselves, they do not give a damn about their neighbors. As long as the government provides protection to the rural population and maybe a little economic stimulation, the farmers will be happily living forward. Chinese farmers are the simplest, kindest and most peace-loving people you will meet on this planet. Duly protection will go a long way.
posted by Kishuki | 10:36 PM
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