China’s 700 million farmers have mostly missed out on the country’s economic boom. In 2006 Vice Premier Wen Jiabao correctly noted that rural poverty and land grabs that strip farmers of their land were a ‘key source of instability’ in China. Two years later, the situation is just as dire.
A raft of reforms recently announced may help. But if history is any guide, the reforms will provide only a superficial fix.
The main, still unaddressed, problem is farmers’ lack of full property rights. Unlike in cities, where owning property is now permitted, almost all farmland in China is owned by village collectives.
Under a reform passed a decade ago, farmers ostensibly have 30-year land-use rights that allow them to till the soil. But corrupt local officials have little trouble stripping these rights through arbitrary ‘reallocations.’ These land grabs result in tens of thousands of protests in rural China every year.
The new set of reforms is being hailed by state media as a ‘landmark,’ but they still don’t give farmers the ownership rights. They do, however, make it easier for farmers to sell or transfer their land rights, which could unlock around $500 billion in land assets. They are also intended to make it harder for local officials to seize farmers’ land without compensation.