Problems with China's New Ubranization (2)

Original article in Chinese:
无就业,“新城镇化”=制造流民 ——“新城镇化”的难点(二)
by He Qinglian on February 7, 2013.

Starting from the Industrial Revolution of the British Empire, the urbanization process around the world had never just been simply a migration of people. It is instead a modernization process that is closely related to the industrialization, the modernization of agriculture and the expansion of service industries. The most important issue of all is job opportunities.

This article examines the ineluctable issue of China's “new urbanization”: where do the job opportunities for the rural population that move into cities and towns come from?
Without job opportunities, “new urbanization” is but the continuation of the “village demolition campaign”.

The “dammed lake of currency”, the investments and real property bubble left behind by the previous administration is in fact just one of the problems of rapid urbanization. Issues that affect the quality and safety of urban living are as follows: the lack of job opportunities in medium- and small-sized cities result in overburdening in major mega-cities such as Beijing and Shanghai, making them unable to take in more population (Beijing's smog could be seen as a warning); the construction of public facilities in cities badly lag behind the speed of urban expansion, in particular the education and transport facilities in new towns are so inadequate that they seriously inconvenience the residents; the huge number of bridges and roads that were poorly constructed and frequently collapsed; the coarse and shabby work of underground water-pipes in cities across China that leads to flooding whenever there is heavy rainfall; the massive number of apartments built upon contaminated lands that have not yet been purified and pose adverse impacts on the health of the people...

While the issues mentioned above are grave and troublesome in nature and are tormenting the Chinese people, they are nowhere as imminent as this issue: the vast number of peasants who were forced to move into cities without a job. In the past five years, forcible urbanization—dubbed “village demolition campaign” or “village annihilation campaign”—had been carried out in more than twenty provinces and cities in China, turning tens of millions of peasants into displaced persons in cities.

Under normal circumstances, faced with so many problems left behind by urbanization, a government should in any case stop, improve the situation and make up for the aforementioned defects before they consider pushing for “new urbanization”. But the policy of the Chinese government has the Chinese characteristics of not allowing skepticism. Whatever problems from the past are problems of the past, they do not affect the implementation of the “new urbanization”. 

Recently, officials of the Ministry of Housing and Urban-Rural Development of the People's Republic of China (MOHURD) drew an attractive blueprint on paper. They claimed that with “new urbanization” as the engine to drive growth in industrial economy, there will be a new consumption of 900 billion yuan and a new investment of 6,489 billion yuan, which will contribute 2.6 percentage points of GDP growth, accounting for 37.15% of the total GDP growth.

Over the years, China's economy has seen “zero growth in employment”. Some had done the arc elasticity calculation and found that in the 1980s, with every percentage point of GDP growth, the employment would increase by 0.3 percents. However, from the 1990s onward, that changed to a drop by 0.1 percentage point with percentage point of growth in GDP. Put simply, that means while the GDP surges rapidly each year, it hardly creates any new job opportunities. In each years fresh graduates from colleges and graduate schools face difficulties in finding a job; the middle-aged and older peasants who do not have professional skills would lose what they rely on for basic survival if they lose their land.

The “new urbanization” that is all set to go, regardless of what new contents might be added to it—say for example supporting measures on the transfer of land, the increase in land compensation, or even allowing peasants to switch their rural registered household accounts into urban ones—would only be a continuation of the “village demolition campaign” and that is tantamount to producing more displaced persons so long as the employment issue of the peasants who are forced to move into cities is not solved.

China's Urbanization differs from that of other countries
The process of urbanization in China differs from other developing countries. In other developing countries, the process is as follows: during the industrialization process, the modern economic sectors in cities increase and redundant work force in villages gradually move to cities to work in those sectors. This gradual migration of rural population to cities is the process of urbanization. In this process, major changes to the socio-economic structure and the growth in job opportunities are the main prerequisites for the development of urbanization.

The process of urbanization in China over the past decade is a “pseudo-urbanization” that stem from the surge in the real property sector's demand for land. The characteristics of this is that, before new industries emerge, the government, out of their local fiscal needs, uses their administrative power to forcibly expropriated land from peasants in rural regions and demolished huge numbers of apartments in cities, force-starting the urbanization process. In the process, officials and real property developers conspire and profit to excess. The peasants who lost their land, even if their rural registered household accounts have been changed to urban ones, could not find a job and became wanderers in the cities. Before the village demolition campaign began, there was already as many as 120 million of these landless and jobless peasants.

Although cities in China, big or small, have long been over-developed, the three wagons that drive the Chinese economy has long ceased to work, the local governments need fiscal revenue, and so finding them new GDP growth points became the predominant task of the governments and the academics who serve them. At the moment there are plenty of articles that discuss the benefits of the “new urbanization” and how it differs from similar policies of the past, some have even envisaged the new consumption and growth in the service sector after the “new urbanization” is implemented. Nonetheless, they have all sidestepped a problem: how to create jobs? If there no employment, the consumption and the service sector would be like flowing water without its source. Once the peasants use up their land compensation, where do they get their spending power? And how would they have money to pay for the services?

Therefore, at a time when specialists making grand statements on the benefits of “new urbanization”, a paper from the common people emerged. “Don't force Start New Urbanization and make the peasants lose their hometown to freedom”. Apparently, the word “freedom” in the title drew reference from Karl Marx's words in Das Kapital: British peasants who lost their land during the Enclosure movement had broken free from the fetters of the land and thus became “free men” without anything, or tramps.

A China of the displaced in expansion

Let's look back at the large scale “village demolition campaign” that took place in China over the last five years. Holding high the flag of “building new Socialist villages”, chanting slogans like “transformation of old villages” and “petite urbanization”, local governments made peasants migrate to cities by using baits like “exchange land for social security”. Such measures gave rise to human tragedies such as the many counts of self-immolation and those who sought to take the lives of their own and of the people who bulldozed their home. Numerous peasants had their homes and land taken from them. 

And in the past few years the news reports about these could not be said to be just a few, but since “new urbanization” became what the new Premier Li Keqiang approved as the new growth point, most dared not to point out as Li is assuming his new position that “new urbanization” is essentially rehashing the original “urbanization” of the past.

If the “new urbanization” in future is still a cooperation between the government, the real property developers and bankers to seek profit through land enclosure, the profits from land still get [unevenly] divided between the government, the developers, and the peasants who still don't get new job opportunities, then this “new urbanization” with zero growth in employment would only cause even more problems, for instance, it would give rise to a China of the displaced persons.

What impacts would the displaced have on China? The answer to this could be found in many changes of dynasties throughout the history of China. Those well-known peasant uprisings might as well be called uprisings of the displaced. For example, the revolt of Li Zicheng in late Ming Dynasty, and the Taiping Rebellion in the mid-Qing Dynasty contained predominantly peasants who lost their land.

Autocratic regimes have always had the tendency to drive people to revolt. Although the current Chinese government is far more capable in maintaining stability than dynasties of the past and the weapons the people can get hold of are far limited than their predecessors, they even have to give their real names when they buy a kitchen knife. 

However, while the displaced do not have the ability to revolt, they are perfectly capable of causing chaos. They may be unable to fight the government and the armed police force that are armed to their teeth, but they are more than able to overcome unarmed civilians. The various criminal cases that frequently take place could be attributed to, among other reasons, the massive land grab by the government.