Since the start of the economic downturn, the Chinese government has made it clear that maintaining social stability is at the center of its economic planning. Many saw the recent events in Xinjiang as a reminder that minority relations remain a key potential source of unrest. They are wrong. Minority issues are just an irritant. The real potential threat to social stability in China lies in the increasing disparity between the rural and urban economies.
For this reason, Beijing continues to focus on improving living standards in rural areas. And the complaints of many farmers can ultimately be traced back to land rights.
A major point of contention is that, while farmers now have relatively secure rights to their land, there has traditionally been no market for the transfer of those rights. This led to the creation of local markets for the leasing and transfer of rural land rights. In many locations, this new policy has resulted in significant amount of transfers.
For example, a pilot program held in Xikang village in Tengzhou city, Shandong province saw around 13,000 mu (865 hectares) of land exchanged by over 4,000 farmers between 2004 and 2007. This included over one fifth of the total land in the village. Surveys indicated that the income received from these transfers was 20 times greater than what the farmers had traditionally earned from working their fields.
While Beijing has effectively addressed a social need, the unfortunate byproduct of the system is a further risk of social instability arising from disputes over land transfers. The high initial returns reported in Tengzhou suggest that a boom mentality has inflated land prices. With every boom there is a bust, leading to disputes.
The recently promulgated Rural Land Contract Dispute Mediation and Arbitration Law, which will go into effect on January 1, 2010, is intended to deal with these issues.
Under the law, every local government will be required to create a rural land contract arbitration commission. The commission is charged with supervision of informal mediation and formal arbitration of rural land disputes. There are detailed rules on how these should be carried out so that the legal validity of decisions can be confirmed.
Arbitrators – who are to be selected by the concerned parties under supervision of the commission – will be locals familiar with the particular regulations and conditions. They must not be government officials, despite the fact that the commission is under the authority of the local government. Arbitrations are intended to be concluded quickly, with most proceedings subject to a 60-day time limit.
Preferable to the courts
While either party may appeal an arbitrators’ decision to the local people’s court, the arbitration procedure has a number of advantages.
The most important of these is speed. Chinese courts may proceed quicker than they once did, but it can still take more than a year to complete a legal proceeding. For most rural disputes, this is simply too long, since the concerned parties are dependent on the land for their income. The 60-day time limit for arbitrations is better suited to the realities of rural life.
Other advantages include low cost and informality – a must if the system is to be used by relatively unsophisticated farmers – and the fact that the arbitrators are locals. The procedures and rules governing both creation and transfer of rural land contracts vary considerably from region to region. An arbitration panel staffed by people with local knowledge is more likely to reach a decision that is acceptable to the parties than a decision by a court that is obligated to follow uniform national law.
During this year of economic challenges, the People’s Congress has promulgated very few new laws. That the Rural Land Arbitration Law made the cut is a reflection of the significance of the issue, and Beijing’s intent to maintain stability in rural regions.
It also shows that the government recognizes that disputes over land rights are certain to occur and that such disputes have the potential to create problems. Rather than avoid the issue, policymakers have decided to confront it directly by promoting a resolution method designed to address disputes early and in a manner that involves, not alienates, the local community.