shaohua
the Kangxi Emperor alerted his officials to a ‘serious problem’. ‘It has been nearly 68 years since our dynasty [the Qing] was established. The people have lived in peace and the population has grown by the day, yet the acreage of farmland has not increased accordingly. One person’s land is now farmed by several families. How can they make an adequate living?’, the Emperor asked, and went on to stress: ‘We must find solutions.’footnote1 At the time, China’s population was between 100 and 150 million, the highest it had ever been, but this was only the beginning of a long period of steady demographic growth. A century later, the country had 360 million inhabitants.footnote2 This was an era of general prosperity for Imperial China, yet the problem of supporting a large and growing population with limited farmland posed an unrelenting challenge to Kangxi and his successors.
China today is a vastly different country. Rapid economic growth, urbanization and dramatic industrial expansion over the past four decades have transformed a poor country into the second largest economy in the world. Yet over 40 per cent of the population—about 564 million people—still live in the countryside, with an additional 173 million migrant workers moving back and forth between rural and urban areas.footnote3 In other words, more than 700 million people continue to rely on land for at least part of their livelihood. The challenge confronting Kangxi three hundred years ago is still relevant to contemporary China.
Land in China has historically been the focus of intense political struggles. Dynastic transitions in the imperial era were often catalysed by attempts to consolidate land, leading to peasant rebellions that precipitated the fall of the old regime. In the 20th century, the Communist Party mobilized peasants around the demand for land reform as a prelude to seizing state power in 1949. In recent decades, social tensions have been running high in the countryside, with agricultural taxes and land expropriation the leading causes of unrest. Peasants’ land rights and the direction of the agrarian economy are among the most contentious issues for the party-state today, far more so than urban economic questions. Land problems are closely related to those of food security, environmental sustainability, government revenue and the housing market; the future shape of Chinese society depends in good part on how they are addressed.
This essay will examine four distinct positions that have emerged on the land question in 21st-century China, exploring the key divisions between them—not least on the character of urban development—and five socio-economic scenarios that may result. It will also consider briefly why the Chinese paths from the country to the city may differ from those of Japan, South Korea and Taiwan. First, though, it may be useful to sketch the evolution of land policy under the People’s Republic of China—and, in particular, its switchbacks over the past decade.
1. from decollectivization to rural crisis
After 1949, the cpc carried out sweeping land reforms that redistributed nearly half of all farmland—116 million acres—as well as draft animals, farm implements, houses and grains, from landlords to peasants. This effectively eliminated the landlord class, giving rise to a peasant economy in which households became landowner-cultivators.footnote4 But this situation was short-lived: from 1955, the party-state mandated that peasant households should operate collectively, forming cooperatives to which their land ownership and use rights were transferred. Then, in 1958, in an attempt to catch up with industrialized countries and accelerate China’s transition to a communist society, the cpc launched the Great Leap Forward, under which these farming cooperatives were organized into larger units, People’s Communes. The failure of the Great Leap forced the party-state to adjust its rural policies, and in 1961–62 it reorganized these structures into a three-tier hierarchy, consisting of communes, brigades and production teams—the basic unit, comprising twenty to thirty households—which remained in place until the end of the Mao period.
In 1978, the Chinese government launched the Reform Era policies that gradually replaced the planned economy with a market system. The countryside underwent a process of de-collectivization as the new Household Responsibility System was introduced, communes were abolished and collective farms divided up between households, on an equal basis; most villages continued to re-adjust land allocation according to changes in household size (births, deaths and marriages) until the late 1990s.footnote5 Peasant households regained their land-use rights, though land ownership was still held collectively by the village or production team.footnote6 The reforms were a striking economic success: agricultural output grew at over 8 per cent a year between 1978 and 1993, while rural non-farm output expanded even faster, at nearly 23 per cent. By 1993, there were over 24 million rural enterprises—some collective, some private—which together employed 125 million labourers.footnote7 This was due in part to the rural infrastructure and non-farm collective enterprises that had been built up in the Mao period, not to de-collectivization alone; rising grain prices and adoption of new technologies, including chemical fertilizers, also played an important role.
After 1992, Chinese government priorities shifted to the big cities, which were given a gigantic boost by easy credit access and favourable tax and land-use policies, while rural areas were neglected and starved of investment.footnote8 This urban bias of state policy had pernicious effects on the rural economy: industry in the countryside stagnated; vital infrastructure, such as irrigation, was left to crumble; everyday expenses—agricultural taxes, medical fees, school tuition—became a heavy burden for peasant households. This precipitated the beginning of a serious rural crisis and many peasants, despite retaining their land-use rights, were forced to leave their farms to seek work in the city.footnote9 At the same time, government policy switched to permitting, and then actively promoting, the transfer of land-use rights—first between households within the same village and later, with the passing of the Land Administration Law in 1998, between households in different villages. Local governments often quietly supported the transfer of land to agribusiness companies, even though at this stage central government still discouraged the practice.footnote10
City governments, meanwhile, spurred on by the preferential treatment of metropolitan areas and the creation of an urban-housing market in 1998, expropriated large tracts of surrounding farmland for urban expansion. This led to intense local struggles, since it deprived tens of millions of peasants of their ownership and use rights, which were transferred to the state (all urban land is state-owned in China). Local governments would then hand these use rights to industrial-commercial enterprises or real-estate developers, often at a much higher price than the compensation given to the peasants.
The growing rural crisis eventually prompted the Chinese government to change tack. From 2004 onward, under its programme to ‘Build a New Socialist Countryside’, it abolished agricultural taxes and introduced farming subsidies, development funds and rural-infrastructure projects. The emergence of a new urban middle class, boosting demand for agricultural produce, also helped to mitigate the crisis. Farming became an increasingly profitable business, drawing more capital investment. Meanwhile, the neoliberal reforms of the 1990s had transformed many state-owned agricultural enterprises into private agribusiness companies, some of these now foreign-owned, as China’s accession to the World Trade Organization in 2001 lifted some of the restrictions on foreign investment. After 2004, agrarian capital, both domestic and foreign, became a powerful force in China.footnote11 Controls on land transfers were loosened further, as the central government pushed to consolidate China’s farmlands and modernize its agriculture, while agrarian capital lobbied for greater flexibility on transfers in the interests of profit-making. In 2008, the cpc took a significant step in this direction by announcing a policy of land titling (土地确权), alongside measures to create larger units of agricultural production. Voices advocating the outright privatization of farmland grew louder.footnote12
Meanwhile local governments were pursuing a wide range of tactics to expropriate villagers’ holdings, and the urbanization of rural lands continued unabated. In the 1990s, urban expansion was mostly concentrated in the coastal provinces, but from the early 2000s, growing swathes of inland areas were expropriated and built over with industrial parks or urban real estate, triggering a growing wave of unrest. By the mid-2000s, land expropriation accounted for 65 percent of rural protests,footnote13 many of them involving thousands of villagers and often met with violence by the police. After the 2008 financial crisis this tally may have grown, as China’s economic stimulus triggered new rounds of land expropriations for urban real-estate development.footnote14 However the government ceased releasing figures on mass protests soon after this point.
New Land Reform and after
In 2013, the new Xi–Li administration introduced what was dubbed the New Land Reform, facilitating the transfer of villagers’ land-use rights to large producers and investors in a further move to consolidate farmland and scale up agriculture.footnote15 Significantly, the new law added a third category, ‘contract rights’, to the existing rights of collective ownership and land-use in operation since the 1980s. In effect, this separated the right to contract farmland from the right to use it. Rural households hold both rights—contract and use—but the new legal distinction meant that villagers could now be forced to transfer their land-use rights to private or corporate farms. The new guidelines also stipulated that large agricultural units be given priority in receiving subsidies and financial support, and removed restrictions on bank-credit access for big farms and agribusiness companies, which would now be allowed to utilize land-use rights as collateral.
This increased access to credit—one of the main reasons why agribusiness lobbied for the New Land Reform—also favoured the banks, since the financialization of rural land, including non-farmland residential and industrial zones, offers them a vast new supply of financial assets. It was hoped that throwing these new assets onto the market would reboot the financial expansion of the past two decades, which was largely based on the marketization of urban land and booming real estate. As Xiaoqiang Zhou, the president of the Chengdu Branch of the People’s Bank of China noted in an interview in March 2016, a key goal of the New Land Reform was to ‘activate these dormant rural assets’.footnote16
Land transfers duly proliferated. Between 2012 and 2017, the proportion transferred rose from 21 to 37 per cent of total farmland. Many of these transfers occurred between households, but research suggests that agribusiness companies and corporate farms now control at least 20 per cent of all farmland.footnote17 According to the Ministry of Agriculture and Rural Affairs, by 2017 some 40 per cent of all farmland was being used for ‘moderate-scale’ agricultural production—that is, farms at least ten times larger than the average.footnote18 The central government appeared to be pushing for a thoroughgoing consolidation of land through its policies on transfers, agricultural upscaling and the financialization of land-use rights. This was a boon for local governments that had long aimed at large-scale rural-land concentration.footnote19
In 2017, however, the Party appeared to change course, announcing a strategy of ‘Rural Revitalization’ (乡村振兴战略), which involved significant adjustments to the New Land Reform project. Although it still stressed the importance of large agricultural units, the ‘Rural Revitalization’ policy emphasized the need to integrate small households into modern agriculture. It included proposals to develop non-agricultural rural sectors, encouraging ‘urban talents’—both urban citizens and migrant workers—to settle in the countryside and lifting restrictions on land use by rural industries.
In sum, there has been a pendulum movement in China’s rural-land policy in recent years. Having initially encouraged the transfer and consolidation of farmland, the Xi–Li administration later appeared to rein this in, with policies to protect smallholders. To understand what lies behind these reversals, we need to consider the arguments of the four main camps that have emerged in the debates over the land question and their varying degrees of political influence.
2. camps and interests
Five years ago Xuefeng He, a leading scholar on rural development, identified three positions on land policy in China: free-market advocates, mainstream policymakers and small-farmer supporters.footnote20 The New Land Reform was chiefly backed by the first two camps, the free-marketeers and policymakers. Yet although they agreed on the need for large-scale agriculture and relocating villagers to cities, they come from different intellectual traditions and diverge on privatization. The first position sees the absence of a free market as the main reason for rural under-development; it calls for land privatization so that villagers can sell or mortgage their holdings and move to the city, allowing unchecked flows of capital into the countryside, and labour into urban areas. This school of thought, indebted to the forms of neoliberalism that took root in China in the 1990s, has had a notable impact on government policy, especially on the push to marketize rural-land assets.footnote21
The position that predominates among mainstream policymakers, meanwhile, has its origins in post-war state-led modernization theory and understands economic development as a process of industrialization and urbanization, with the permanent outmigration of rural surplus labour. Though discredited in many countries, this theory is still highly influential among Chinese policymakers, whom we might therefore dub the agricultural-modernization camp. For them, the shift to large-scale agricultural production is key, since they see small farms as regressive and inefficient—‘scattered’, ‘weak’, ‘backward’—and responsible for lowering agricultural productivity and preventing the application of modern technologies.footnote22 However, the modernization camp is cautious about pushing for such scaling up, as they recognize that small-scale farming is still vital to the livelihoods of hundreds of millions of villagers and that many migrant workers cannot find decent employment in the city. They also want to protect collective ownership, so that the government can control the modernizing process; hence the New Land Reform sanctioned the transfer and financialization of land-use rights while retaining collective ownership.
The last of He’s three camps—and the one with which he himself identifies—champions the land rights of small farmers. It argues that the prevailing system should be retained, as its combination of household farming and waged urban employment ensures rural stability while also creating a cheap industrial-labour force that gives the Chinese economy a competitive global advantage.footnote23 While many Marxist scholars view migrant workers’ semi-proletarian status as evidence of their exploitation by capital, He casts it in a more positive light. Some supporters of the small-farmers camp also follow Alexander Chayanov’s view of the peasant economy, contending that small farms can utilize the land more efficiently than large agribusiness companies.footnote24
To these three camps can be added a fourth—the camp for rural reconstruction (乡村建设学派).footnote25 Omitted in He’s classification, the influence of this school has been growing over the past two decades. It shares common ground with the small-farmer supporters—both advocate for the protection of peasant land rights—but rejects the claim that small farms are more productive than large capitalist ones. Rather, rural reconstructionists argue that the expansion of capitalist agriculture will undermine peasants’ livelihoods because large agrarian capital has a considerable advantage over small farmers in the markets for agricultural inputs and products, even if it does not have an edge in agricultural production. This camp is strongly against the privatization of farmland, as this would break up village communities and render small farmers even more vulnerable. Its solution is not to preserve the status quo, but to organize small farmers into cooperatives to increase their bargaining power in the market.footnote26 Scholars and activists in the rural-reconstruction camp have had some success in influencing government policy. Prominent among them are Tiejun Wen and Changping Li who drew attention to the rural crisis in the early 2000s, partly prompting the Chinese state’s programme to ‘build a new socialist countryside’ and support for rural cooperatives.footnote27
3. development models
The positions of the four camps on land transfers, rural development and urbanization are summarized in Table 1. On the critical question of transfers, the neoliberals and agricultural modernizers are in favour of transferring land from villagers to large farms and agribusiness companies, while the rural reconstructionists support transfer to rural cooperatives, and the small-farmer camp opposes large-scale transfers altogether. These differences have much to do with each school’s view of urbanization. A key faultline dividing those who support land consolidation from those who oppose it is the question of whether the displaced villagers will be able to make a better living in the city. In order to weigh these different perspectives, it is helpful to examine recent trends in rural-urban migration and the conditions that await migrant workers in the cities.
Image
Advocates of privatization argue that land expropriation is in the villagers’ interest because urban wages are higher than their farming income. In this view, the relocation of former farmers to the city would contribute to urban expansion and stimulate economic growth, while those who remain in the countryside would be able to increase the size of their farmland and their income. This is similar to the dual-economy model proposed by developmental economist Arthur Lewis, a blueprint for developing countries in the post-war period.footnote28 Lewis’s model was premised on the assumption that urban areas would provide livelihoods for rural labourers displaced by the industrialization of capitalist agriculture. This may have been the case for early-industrializing economies, but it was never a reality for the majority of countries in the global South, where jobs in the city were poorly paid and often too scarce to absorb the total amount of excess labour, forcing peasants into the informal sector where they eked out a living in urban slums. Since the late 1970s, the model has ceased to apply even to developed countries. As neoliberal reforms led to the gradual replacement of secure jobs in the formal economy with precarious work in the informal sector, unemployment and under-employment surged, giving rise to social polarization and a swelling underclass that has been called the ‘precariat’. In the global South, the problem of precarity has been even more widespread and intractable.footnote29
Lewis’s dual-economy model forecasts large-scale rural-urban migration, but fails to consider the marginality and precarity of migrant workers once they arrive in the city. In China, these workers are mostly employed in low-paid, often dangerous sectors such as construction, mining and assembly-line factories, none of which offers secure employment. Workers are forced to change jobs frequently, according to the vicissitudes of supply and demand; in the aftermath of the 2008 crisis, 25 million migrant workers lost their jobs and returned to the countryside.footnote30 Only a small minority are covered by urban-welfare programmes: as of 2014, fewer than 17 per cent had pension insurance, roughly 18 per cent had health insurance and barely 30 per cent had work-injury insurance.footnote31 These low rates of enrolment are partly due to the fact that most migrant workers are not entitled to an urban hukou (household-registration status). But in many cases, neoliberal reforms since the 1990s have either eliminated or privatized the welfare benefits once associated with urban hukou, replacing them with social-insurance programmes based on personal contributions. Meanwhile, the reform of state-owned enterprises resulted in millions of urban workers being laid off. The lowest-paid urban workers are not much better off than migrant workers, receiving only basic pension insurance and healthcare. As a result, few migrant workers—only 11 per cent, according to one survey—are willing to change their hukou status when given the opportunity, especially if it entails relinquishing their rural land, which still plays an important role in economic sustenance and social support.footnote32
The level of precarious employment in China attests to the inability of its capitalist model to provide sufficient jobs for its large population. This poses a direct challenge to the solutions proposed by the free-market and modernization camps. China’s astonishing growth has slowed in recent years, further undercutting the capacity of urban sectors to create employment. As a result, the annual growth rate of the migrant labour force has slowed from 5.4 per cent in 2009–10 to a mere 0.6 per cent in 2017–18 (Figure 1). Furthermore, not all these workers have migrated to the city—only 135 million of them did so in 2018, a number that is little increased from previous years.
Image
This is the context for the government’s recent moves to provide more support for small farmers. Although the modernizers want to scale up agriculture, they also want to avoid a situation where displaced villagers can’t make a living in the city, leading to social unrest and undermining the legitimacy of the regime. Recent policy documents and speeches testify to these concerns. A 2018 government document noted that, despite rapid urbanization, a large population living in the countryside would continue to be a ‘basic reality of China’ (基本国情) for many years to come. Echoing the supporters of small-scale farming and rural reconstruction, a 2019 paper affirmed that small households were the basic unit of agricultural production and played a number of positive roles: supporting cpc rule, stabilizing rural society, creating rural employment, protecting the environment and preserving rural culture.footnote33
China today is a vastly different country. Rapid economic growth, urbanization and dramatic industrial expansion over the past four decades have transformed a poor country into the second largest economy in the world. Yet over 40 per cent of the population—about 564 million people—still live in the countryside, with an additional 173 million migrant workers moving back and forth between rural and urban areas.footnote3 In other words, more than 700 million people continue to rely on land for at least part of their livelihood. The challenge confronting Kangxi three hundred years ago is still relevant to contemporary China.
Land in China has historically been the focus of intense political struggles. Dynastic transitions in the imperial era were often catalysed by attempts to consolidate land, leading to peasant rebellions that precipitated the fall of the old regime. In the 20th century, the Communist Party mobilized peasants around the demand for land reform as a prelude to seizing state power in 1949. In recent decades, social tensions have been running high in the countryside, with agricultural taxes and land expropriation the leading causes of unrest. Peasants’ land rights and the direction of the agrarian economy are among the most contentious issues for the party-state today, far more so than urban economic questions. Land problems are closely related to those of food security, environmental sustainability, government revenue and the housing market; the future shape of Chinese society depends in good part on how they are addressed.
This essay will examine four distinct positions that have emerged on the land question in 21st-century China, exploring the key divisions between them—not least on the character of urban development—and five socio-economic scenarios that may result. It will also consider briefly why the Chinese paths from the country to the city may differ from those of Japan, South Korea and Taiwan. First, though, it may be useful to sketch the evolution of land policy under the People’s Republic of China—and, in particular, its switchbacks over the past decade.
1. from decollectivization to rural crisis
After 1949, the cpc carried out sweeping land reforms that redistributed nearly half of all farmland—116 million acres—as well as draft animals, farm implements, houses and grains, from landlords to peasants. This effectively eliminated the landlord class, giving rise to a peasant economy in which households became landowner-cultivators.footnote4 But this situation was short-lived: from 1955, the party-state mandated that peasant households should operate collectively, forming cooperatives to which their land ownership and use rights were transferred. Then, in 1958, in an attempt to catch up with industrialized countries and accelerate China’s transition to a communist society, the cpc launched the Great Leap Forward, under which these farming cooperatives were organized into larger units, People’s Communes. The failure of the Great Leap forced the party-state to adjust its rural policies, and in 1961–62 it reorganized these structures into a three-tier hierarchy, consisting of communes, brigades and production teams—the basic unit, comprising twenty to thirty households—which remained in place until the end of the Mao period.
In 1978, the Chinese government launched the Reform Era policies that gradually replaced the planned economy with a market system. The countryside underwent a process of de-collectivization as the new Household Responsibility System was introduced, communes were abolished and collective farms divided up between households, on an equal basis; most villages continued to re-adjust land allocation according to changes in household size (births, deaths and marriages) until the late 1990s.footnote5 Peasant households regained their land-use rights, though land ownership was still held collectively by the village or production team.footnote6 The reforms were a striking economic success: agricultural output grew at over 8 per cent a year between 1978 and 1993, while rural non-farm output expanded even faster, at nearly 23 per cent. By 1993, there were over 24 million rural enterprises—some collective, some private—which together employed 125 million labourers.footnote7 This was due in part to the rural infrastructure and non-farm collective enterprises that had been built up in the Mao period, not to de-collectivization alone; rising grain prices and adoption of new technologies, including chemical fertilizers, also played an important role.
After 1992, Chinese government priorities shifted to the big cities, which were given a gigantic boost by easy credit access and favourable tax and land-use policies, while rural areas were neglected and starved of investment.footnote8 This urban bias of state policy had pernicious effects on the rural economy: industry in the countryside stagnated; vital infrastructure, such as irrigation, was left to crumble; everyday expenses—agricultural taxes, medical fees, school tuition—became a heavy burden for peasant households. This precipitated the beginning of a serious rural crisis and many peasants, despite retaining their land-use rights, were forced to leave their farms to seek work in the city.footnote9 At the same time, government policy switched to permitting, and then actively promoting, the transfer of land-use rights—first between households within the same village and later, with the passing of the Land Administration Law in 1998, between households in different villages. Local governments often quietly supported the transfer of land to agribusiness companies, even though at this stage central government still discouraged the practice.footnote10
City governments, meanwhile, spurred on by the preferential treatment of metropolitan areas and the creation of an urban-housing market in 1998, expropriated large tracts of surrounding farmland for urban expansion. This led to intense local struggles, since it deprived tens of millions of peasants of their ownership and use rights, which were transferred to the state (all urban land is state-owned in China). Local governments would then hand these use rights to industrial-commercial enterprises or real-estate developers, often at a much higher price than the compensation given to the peasants.
The growing rural crisis eventually prompted the Chinese government to change tack. From 2004 onward, under its programme to ‘Build a New Socialist Countryside’, it abolished agricultural taxes and introduced farming subsidies, development funds and rural-infrastructure projects. The emergence of a new urban middle class, boosting demand for agricultural produce, also helped to mitigate the crisis. Farming became an increasingly profitable business, drawing more capital investment. Meanwhile, the neoliberal reforms of the 1990s had transformed many state-owned agricultural enterprises into private agribusiness companies, some of these now foreign-owned, as China’s accession to the World Trade Organization in 2001 lifted some of the restrictions on foreign investment. After 2004, agrarian capital, both domestic and foreign, became a powerful force in China.footnote11 Controls on land transfers were loosened further, as the central government pushed to consolidate China’s farmlands and modernize its agriculture, while agrarian capital lobbied for greater flexibility on transfers in the interests of profit-making. In 2008, the cpc took a significant step in this direction by announcing a policy of land titling (土地确权), alongside measures to create larger units of agricultural production. Voices advocating the outright privatization of farmland grew louder.footnote12
Meanwhile local governments were pursuing a wide range of tactics to expropriate villagers’ holdings, and the urbanization of rural lands continued unabated. In the 1990s, urban expansion was mostly concentrated in the coastal provinces, but from the early 2000s, growing swathes of inland areas were expropriated and built over with industrial parks or urban real estate, triggering a growing wave of unrest. By the mid-2000s, land expropriation accounted for 65 percent of rural protests,footnote13 many of them involving thousands of villagers and often met with violence by the police. After the 2008 financial crisis this tally may have grown, as China’s economic stimulus triggered new rounds of land expropriations for urban real-estate development.footnote14 However the government ceased releasing figures on mass protests soon after this point.
New Land Reform and after
In 2013, the new Xi–Li administration introduced what was dubbed the New Land Reform, facilitating the transfer of villagers’ land-use rights to large producers and investors in a further move to consolidate farmland and scale up agriculture.footnote15 Significantly, the new law added a third category, ‘contract rights’, to the existing rights of collective ownership and land-use in operation since the 1980s. In effect, this separated the right to contract farmland from the right to use it. Rural households hold both rights—contract and use—but the new legal distinction meant that villagers could now be forced to transfer their land-use rights to private or corporate farms. The new guidelines also stipulated that large agricultural units be given priority in receiving subsidies and financial support, and removed restrictions on bank-credit access for big farms and agribusiness companies, which would now be allowed to utilize land-use rights as collateral.
This increased access to credit—one of the main reasons why agribusiness lobbied for the New Land Reform—also favoured the banks, since the financialization of rural land, including non-farmland residential and industrial zones, offers them a vast new supply of financial assets. It was hoped that throwing these new assets onto the market would reboot the financial expansion of the past two decades, which was largely based on the marketization of urban land and booming real estate. As Xiaoqiang Zhou, the president of the Chengdu Branch of the People’s Bank of China noted in an interview in March 2016, a key goal of the New Land Reform was to ‘activate these dormant rural assets’.footnote16
Land transfers duly proliferated. Between 2012 and 2017, the proportion transferred rose from 21 to 37 per cent of total farmland. Many of these transfers occurred between households, but research suggests that agribusiness companies and corporate farms now control at least 20 per cent of all farmland.footnote17 According to the Ministry of Agriculture and Rural Affairs, by 2017 some 40 per cent of all farmland was being used for ‘moderate-scale’ agricultural production—that is, farms at least ten times larger than the average.footnote18 The central government appeared to be pushing for a thoroughgoing consolidation of land through its policies on transfers, agricultural upscaling and the financialization of land-use rights. This was a boon for local governments that had long aimed at large-scale rural-land concentration.footnote19
In 2017, however, the Party appeared to change course, announcing a strategy of ‘Rural Revitalization’ (乡村振兴战略), which involved significant adjustments to the New Land Reform project. Although it still stressed the importance of large agricultural units, the ‘Rural Revitalization’ policy emphasized the need to integrate small households into modern agriculture. It included proposals to develop non-agricultural rural sectors, encouraging ‘urban talents’—both urban citizens and migrant workers—to settle in the countryside and lifting restrictions on land use by rural industries.
In sum, there has been a pendulum movement in China’s rural-land policy in recent years. Having initially encouraged the transfer and consolidation of farmland, the Xi–Li administration later appeared to rein this in, with policies to protect smallholders. To understand what lies behind these reversals, we need to consider the arguments of the four main camps that have emerged in the debates over the land question and their varying degrees of political influence.
2. camps and interests
Five years ago Xuefeng He, a leading scholar on rural development, identified three positions on land policy in China: free-market advocates, mainstream policymakers and small-farmer supporters.footnote20 The New Land Reform was chiefly backed by the first two camps, the free-marketeers and policymakers. Yet although they agreed on the need for large-scale agriculture and relocating villagers to cities, they come from different intellectual traditions and diverge on privatization. The first position sees the absence of a free market as the main reason for rural under-development; it calls for land privatization so that villagers can sell or mortgage their holdings and move to the city, allowing unchecked flows of capital into the countryside, and labour into urban areas. This school of thought, indebted to the forms of neoliberalism that took root in China in the 1990s, has had a notable impact on government policy, especially on the push to marketize rural-land assets.footnote21
The position that predominates among mainstream policymakers, meanwhile, has its origins in post-war state-led modernization theory and understands economic development as a process of industrialization and urbanization, with the permanent outmigration of rural surplus labour. Though discredited in many countries, this theory is still highly influential among Chinese policymakers, whom we might therefore dub the agricultural-modernization camp. For them, the shift to large-scale agricultural production is key, since they see small farms as regressive and inefficient—‘scattered’, ‘weak’, ‘backward’—and responsible for lowering agricultural productivity and preventing the application of modern technologies.footnote22 However, the modernization camp is cautious about pushing for such scaling up, as they recognize that small-scale farming is still vital to the livelihoods of hundreds of millions of villagers and that many migrant workers cannot find decent employment in the city. They also want to protect collective ownership, so that the government can control the modernizing process; hence the New Land Reform sanctioned the transfer and financialization of land-use rights while retaining collective ownership.
The last of He’s three camps—and the one with which he himself identifies—champions the land rights of small farmers. It argues that the prevailing system should be retained, as its combination of household farming and waged urban employment ensures rural stability while also creating a cheap industrial-labour force that gives the Chinese economy a competitive global advantage.footnote23 While many Marxist scholars view migrant workers’ semi-proletarian status as evidence of their exploitation by capital, He casts it in a more positive light. Some supporters of the small-farmers camp also follow Alexander Chayanov’s view of the peasant economy, contending that small farms can utilize the land more efficiently than large agribusiness companies.footnote24
To these three camps can be added a fourth—the camp for rural reconstruction (乡村建设学派).footnote25 Omitted in He’s classification, the influence of this school has been growing over the past two decades. It shares common ground with the small-farmer supporters—both advocate for the protection of peasant land rights—but rejects the claim that small farms are more productive than large capitalist ones. Rather, rural reconstructionists argue that the expansion of capitalist agriculture will undermine peasants’ livelihoods because large agrarian capital has a considerable advantage over small farmers in the markets for agricultural inputs and products, even if it does not have an edge in agricultural production. This camp is strongly against the privatization of farmland, as this would break up village communities and render small farmers even more vulnerable. Its solution is not to preserve the status quo, but to organize small farmers into cooperatives to increase their bargaining power in the market.footnote26 Scholars and activists in the rural-reconstruction camp have had some success in influencing government policy. Prominent among them are Tiejun Wen and Changping Li who drew attention to the rural crisis in the early 2000s, partly prompting the Chinese state’s programme to ‘build a new socialist countryside’ and support for rural cooperatives.footnote27
3. development models
The positions of the four camps on land transfers, rural development and urbanization are summarized in Table 1. On the critical question of transfers, the neoliberals and agricultural modernizers are in favour of transferring land from villagers to large farms and agribusiness companies, while the rural reconstructionists support transfer to rural cooperatives, and the small-farmer camp opposes large-scale transfers altogether. These differences have much to do with each school’s view of urbanization. A key faultline dividing those who support land consolidation from those who oppose it is the question of whether the displaced villagers will be able to make a better living in the city. In order to weigh these different perspectives, it is helpful to examine recent trends in rural-urban migration and the conditions that await migrant workers in the cities.
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Advocates of privatization argue that land expropriation is in the villagers’ interest because urban wages are higher than their farming income. In this view, the relocation of former farmers to the city would contribute to urban expansion and stimulate economic growth, while those who remain in the countryside would be able to increase the size of their farmland and their income. This is similar to the dual-economy model proposed by developmental economist Arthur Lewis, a blueprint for developing countries in the post-war period.footnote28 Lewis’s model was premised on the assumption that urban areas would provide livelihoods for rural labourers displaced by the industrialization of capitalist agriculture. This may have been the case for early-industrializing economies, but it was never a reality for the majority of countries in the global South, where jobs in the city were poorly paid and often too scarce to absorb the total amount of excess labour, forcing peasants into the informal sector where they eked out a living in urban slums. Since the late 1970s, the model has ceased to apply even to developed countries. As neoliberal reforms led to the gradual replacement of secure jobs in the formal economy with precarious work in the informal sector, unemployment and under-employment surged, giving rise to social polarization and a swelling underclass that has been called the ‘precariat’. In the global South, the problem of precarity has been even more widespread and intractable.footnote29
Lewis’s dual-economy model forecasts large-scale rural-urban migration, but fails to consider the marginality and precarity of migrant workers once they arrive in the city. In China, these workers are mostly employed in low-paid, often dangerous sectors such as construction, mining and assembly-line factories, none of which offers secure employment. Workers are forced to change jobs frequently, according to the vicissitudes of supply and demand; in the aftermath of the 2008 crisis, 25 million migrant workers lost their jobs and returned to the countryside.footnote30 Only a small minority are covered by urban-welfare programmes: as of 2014, fewer than 17 per cent had pension insurance, roughly 18 per cent had health insurance and barely 30 per cent had work-injury insurance.footnote31 These low rates of enrolment are partly due to the fact that most migrant workers are not entitled to an urban hukou (household-registration status). But in many cases, neoliberal reforms since the 1990s have either eliminated or privatized the welfare benefits once associated with urban hukou, replacing them with social-insurance programmes based on personal contributions. Meanwhile, the reform of state-owned enterprises resulted in millions of urban workers being laid off. The lowest-paid urban workers are not much better off than migrant workers, receiving only basic pension insurance and healthcare. As a result, few migrant workers—only 11 per cent, according to one survey—are willing to change their hukou status when given the opportunity, especially if it entails relinquishing their rural land, which still plays an important role in economic sustenance and social support.footnote32
The level of precarious employment in China attests to the inability of its capitalist model to provide sufficient jobs for its large population. This poses a direct challenge to the solutions proposed by the free-market and modernization camps. China’s astonishing growth has slowed in recent years, further undercutting the capacity of urban sectors to create employment. As a result, the annual growth rate of the migrant labour force has slowed from 5.4 per cent in 2009–10 to a mere 0.6 per cent in 2017–18 (Figure 1). Furthermore, not all these workers have migrated to the city—only 135 million of them did so in 2018, a number that is little increased from previous years.
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This is the context for the government’s recent moves to provide more support for small farmers. Although the modernizers want to scale up agriculture, they also want to avoid a situation where displaced villagers can’t make a living in the city, leading to social unrest and undermining the legitimacy of the regime. Recent policy documents and speeches testify to these concerns. A 2018 government document noted that, despite rapid urbanization, a large population living in the countryside would continue to be a ‘basic reality of China’ (基本国情) for many years to come. Echoing the supporters of small-scale farming and rural reconstruction, a 2019 paper affirmed that small households were the basic unit of agricultural production and played a number of positive roles: supporting cpc rule, stabilizing rural society, creating rural employment, protecting the environment and preserving rural culture.footnote33
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