China envisions 'socialist countryside'

BEIJING -- China won't extend its market-oriented reforms into the agricultural sector and will instead focus on creating ''a new socialist countryside," Premier Wen Jiabao said as China's parliament ended its current legislative session here yesterday.

The decision reveals how wary the Chinese leadership has become of continuing with economic changes that have turned China into the world's fastest growing economy, but also saddled the country with growing inequalities.

Speaking at a stage-managed press conference traditionally held at the close of the National People's Congress, Wen indicated the government has realized it needs to stop cutting social expenditures and focus on increasing rural investments and agricultural subsidies for China's 750 million rural residents, whose per capita income is just 3,255 yuan ($400) a year, less than one-third that in the cities.

''The new socialist countryside will be a key and significant step in building a society of moderate prosperity and putting the Chinese economy on more solid ground," Wen told journalists from the ornate Great Hall of the People at Tiananmen Square. ''Now uplifting farmers' material and cultural life should be the most important yardstick of our development."

Ding Ningning, director of social studies at the Development Research Center of the State Council, said the new initiative was a much-needed response to growing criticisms from many quarters that the benefits of China's frenetic economic growth were being cornered by urban elites and connected 'clans' and not trickling down to farmers.

A recent confidential study coauthored by the Chinese Academy of Social Sciences and embracing China's 20,000 richest people found that 90 percent of them were related to senior government or Communist Party officials, according to a report in the China Rights Forum by Liu Xiaobao.

In contrast, Chinese farmers in arid interior provinces, such as Ningxia and Guizhou, have seen their incomes fall and had their social services, such as healthcare and education, cut, said Wang Hui, a professor of literature at Tsinghua University in Beijing and a prominent member of a group of Chinese intellectuals who are being called the new left for their criticism of China's market reforms.

Anger over such rising inequalities has been swelling so much in China that last year more than 87,000 public protests erupted across the country, about 10 percent more than 2004, the Ministry of Public Security has said.

That's worried many in China's government and Communist Party, for whom political stability has always been the prime concern.

While taking mostly prearranged questions from domestic and foreign media, Wen put up a confident and upbeat front.

''To be resolute is to unwaveringly push forward reform and . . . take a Socialist path with Chinese characteristics," Wen said. ''There will be difficulties as we move ahead, but we cannot stop. Backpedaling offers no way out."

To emphasize the government's shift in focus, officials also ensured that the first question Wen took was from the Farmer's Daily. Usually the People's Daily, the official paper of the Communist Party, or Xinhua, the government's news wire, gets to lead off the questioning at press conferences.

Although China's Communist party likes to give the impression its leadership is united and strong, the growing divides in Chinese society have created deep rifts within China's ruling elite. While some leaders say they favor widening free-market reforms, others want to rein in the excesses of China's crony capitalism with hefty doses of Marxism.

In fact, the current Congress saw lively debates on the merits and demerits of communism and capitalism of the sort that used to take place in the late 1970s, when then Paramount leader Deng Xiaoping was steering China toward opening up to the world.

Among the chief complaints of the ''new leftists" is that the central government has cut social spending in rural areas too much, leaving local governments floundering for revenue-generating means. This, they say, is leading many village and county officials to burden farmers with excessive taxes and forcibly convert their farmland into revenue-generating industrial parks. Often, corrupt officials also evict people at the behest of developers.

To remedy this, the government has decided not to privatize agricultural land. After the Communist Revolution of 1949, all land in China was taken over by the state. Later, it was redistributed to farmers who were granted approximately 35-year leases on individual plots.

Although the privatization mood of recent years led the government to consider giving people full property rights and privatizing land as well, ''we have realized we just cannot do this," said Ding.

''Privatizing land will only allow rich people to slowly buy up huge amounts of land, and create landless peasants," Ding said. ''That is where we came from, and we don't want to go back there."

Instead, Wen said, the government will make farmers' leases more water-tight to prevent coercive evictions.

Du Ying, the vice minister of the National Development and Reform Commission, also said that if farmers' land needed to be acquired for commercial development, they should be paid a ''market price" by local authorities.

In another landmark decision, the government announced farmers would be exempt from paying taxes.

''In one stroke, our farmers have been freed of feudal or government taxes for the first time in 2,500 years," said He Bing Jun, vice chief of Dong Chun village in China's central Hunan Province, who was in Beijing to try and win World Bank funding for a developmental project.

Beijing has also said it will earmark about $42 billion for rural development this year, about 10 percent more than last year.

He, the village leader in Hunan Province, said that while this sounded good, his main concern was whether the government would be able to implement its plans. ''This is the key," he said. ''Words in Beijing don't automatically become actions in the villages."