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China's 'Well-Off Society' on Rocky Road
AP
Wed Mar 3, 1:48 AM ET
 

By ELAINE KURTENBACH, AP Business Writer

HENGHU, China - A toddler's kiddie car, billboards for cell-phone services and motorcycles puttering over smooth concrete in this one-street country town in China's southeast — all signs of a society inching toward affluence.

Photo
AP Photo


 

 

China's new communist leaders, in office a year, have made building what they call a "well-off society" the centerpiece of their platform for economic progress. Success hinges on whether efforts to spread prosperity to places like Henghu can be sustained.

When China's lawmakers gather Friday in Beijing for their annual session, talks are expected to focus on the ultimate bottleneck for the economy — the countryside.

Exports and foreign investment have soared, as factories churn out ever more advanced products. City blocks are being transformed, seemingly overnight, from ramshackle one-story neighborhoods into modern high-rises and landscaped parks.

But in Henghu, as in much of China's vast rural hinterland, change comes slowly.

"Everything seems to stay about the same," says Ling Su, manager of the town's main restaurant as she looks out the door after sweeping and hosing the bare cement floor. "Oh yes, but they did fix the cement. Things do improve, but it takes time."

China's leaders are struggling to restore health to a financial system glutted with bad debt and to curb excessive investment in real estate projects, auto, steel and aluminum factories. Soaring industrial production has sparked energy shortages, and rising prices for food and fuel raise worries over inflation.

Though an estimated 30 million city dwellers live in poverty — many of them retirees or workers laid off from state factories — in the fast-growing cities incomes average $970.

In rural China, home to about two of every three of the country's 1.3 billion people, income per person averages only $317 a year, barely enough to keep up with rising prices for seeds, fertilizer and fuel, let alone taxes, schooling and medical care.

Estimates of poverty in rural China vary. According to the China Poverty-Relief Fund, 30 million rural Chinese lack enough food and clothing. Another 60 million have incomes below about $100 a year.

"The agricultural sector simply cannot feed 800 million to 900 million people anymore," says Chen Xingdong, an economist with the French bank BNP Paribas in Beijing. "For decades, China has relied on the rural areas to support urban growth, and they have suffered greatly. It has come to the point that it cannot continue."

Just down the road from Henghu, cement yields to bumpy mud tracks. Instead of water taps there are hand pumps. The trickle-down of the country's rising affluence seems to trickle out.

Four years ago, in villages not far from Henghu, farmers incensed by taxes that devoured almost two-thirds of their incomes ransacked offices of the Yuandu township government. The disorder spread to neighboring townships, with about 20,000 farmers involved in attacks on local government offices and leaders' homes.

Since then, taxes have been reduced, local officials said. And the authorities keep a tight lid on unrest.

"Everyone has the responsibility to keep order" is the slogan whitewashed onto dusty brick walls in villages in Jiangxi, a mountainous province that the communists used as a base to foment peasant uprisings before they seized power in 1949.

In their recent best-seller, "Investigative Report on Chinese Peasants," authors Chen Guidi and Wu Chuntao recount the sufferings of dozens of farmers at the hands of tyrannical officials. Some are beaten to death for not paying taxes. Others are losing their land to corrupt local officials — seemingly a reversal of the revolution that brought the communists to power.

"No matter if the cities change with each passing day, if we forget the vast countryside, if our 900 million rural brothers do not achieve prosperity, then economic statistics, no matter how positive, will be meaningless," they wrote.

Since taking office a year ago in a long-planned generational transfer of power, top leaders have renewed pledges to help the rural underclass, underlining those commitments with well publicized visits to the countryside.

They're promising to protect property rights, subsidize grain production and ease demands for taxes and fees that often eat up whatever little extra farmers might manage to accumulate.

They're also easing restrictions on migration to cities, and many are eyeing the potential for new lives elsewhere.

Xu Jian, a country boy running a snack shop in Nanchang, Jiangxi's provincial capital, is among the many millions of rural Chinese who have given up on their hometowns, opting to seek their fortunes in the cities.

"What's the point of staying in the village? If you make any money, the corrupt officials just pocket it," Xu says. "Better to seek a better life elsewhere."

    

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