Why is the land system an advantage for China's future development?

Two days ago, when I was at a meeting in Wuhan with Teacher Wen, we also discussed this issue. Teacher Wen is indeed a good person, very tolerant; it does not matter if our views differ during discussion. For many issues, when looked at from different angles, the conclusions are completely different. My conclusion and Teacher Wen's conclusion are basically the opposite.

Teacher Wen just said that the main reason for the problems currently appearing in China is that our reforms do not conform to the definitions of a market economy and urbanization. How is urbanization defined? How is a market economy defined? Although there are international standards, China's development follows the path of socialism with Chinese characteristics, and our development goal is to achieve a century of national prosperity and strength. Teacher Wen also said that many of our current development efforts have not been tried, which is indeed a little strange. Over the past 30 years, China has created world-renowned economic development achievements and realized the dream of a century of national prosperity and strength. I believe no one will doubt this point. Over the past 30 years, with double-digit growth, under such growth conditions, we have achieved this by relying on systems that do not exist in the world, lack common sense, and must be changed, including the land system. This is very tangled, but this tangling was not raised by Teacher Wen; it is something that today's academic circles, intellectual circles, and even policy circles, including ordinary media and the public, are all very tangled about. On the one hand, our economy develops very quickly and has created a miracle. On the other hand, our miracle was created under a background that is very wrong, lacks common sense, and does not conform to definitions, so this matter is very strange.

So this involves the angle from which we look at problems. There are two angles from which we have achieved these results. First, the reason these results were achieved is that over 30 years of reform and opening up, we continuously improved wrong and unsuitable systems and institutions; we changed old systems and realized good systems, thereby achieving good development. But there is also another angle: the reason China has been able to create a world miracle and maintain unprecedented double-digit growth for 30 years is that we can create miracles, and creating miracles cannot be solved simply by universal values, general rules, or methods divorced from time and space. This shows that there are some things in our system that are different from others, and this is precisely what constitutes China's unique development model and the system that enables China to create a world miracle.

In my view, it is precisely China's system that differs from that of other countries in the world, perhaps the common-sense-lacking system Teacher Wen mentioned, including the construction land system and the land system, that has enabled China's construction to create miracles. In China's land area, one is the New Democratic regime, and the other is socialist transformation. These two formed today's unique Chinese system of eliminating private land ownership and private landlords. This is very different from mainstream capitalist countries and other ordinary countries; it is a legacy of socialism. Has such a legacy played a positive or negative role today? This must be analyzed concretely.

Since the land system has created miracles and no obvious drawbacks have appeared so far, then we should still not act rashly and insist on changing the land system merely because it does not conform to textbook common sense.

China now has a mode of thinking that everything about China is backward, wrong, and in need of reform, yet it has created miracles. There are two ways to say it is wrong, one from the left and one from the right, both saying that we have an ideal-type, error-free method. I think time is very complex; there is right, there is wrong, there is complexity. Whether looking at problems from the left or the right, existing concepts must be changed. But a conservative person often returns to time and finds that the longer the time, the less self-confidence there is. So how do we understand time? On that basis, looking again at which part of this system is good and which part is bad is more meaningful. I personally believe that the existing land system is an advantage for China's future development and also evidence of whether China can enter the ranks of advanced countries in the future. When I look at reality, whether from the left or the right, I also have emotions and criticisms. But the longer the time, the more I find that when we look at problems, we simplify complex problems. Starting in 2009, I wrote four books in succession, all related to the logic of land. A fifth related book, Who Is the Farmer, will also be published soon. Which farmer are you talking about? Which rural area? The situation is very complex. If you do not go into practice to look, you will certainly find conceptual misalignment. I work at a research center at Huazhong University of Science and Technology, investigating farmers every day, and I have an understanding of the complexity of rural areas. So let me talk about the rationality of our current land system, including the farmland system and the construction land system.

China's current farmland system is based on household contracting, emphasizing that the collective has ownership of the land and farmers have contracted management rights to the land. Such a farmland system is mainly manifested in three aspects:

First, the current farmland system has formed a very widespread model of part-time farming and part-time work in China's labor production. For example, looking at rural China today, 70% of farmer households have a division of labor: older parents farm at home, while younger children work in cities. A farmer household has farming income and wage income. Rural elderly people farming have income, employment, interpersonal relationships, meaning in life, their own independent economy, and a place for their own entertainment; the cost of living in rural areas is very low. For a farmer household, with two incomes and relatively few expenditures, their quality of life is relatively high, and labor reproduction proceeds relatively smoothly. At the same time, the key reason China can today become the world's factory and create China's development miracle is the large number of high-quality laborers produced on the basis of replacing division of labor; this cheap labor does not mean it must be cheap. But China has no reason for success without cause. This is the result of our farmland system of part-time farming and part-time work; such a system is very important.

Second, the current land system provides the possibility for farmers who fail in the city to return home. In China's current economic development zones, farmers hope to live a decent life in the city, and whether in body or soul they need a sense of security. When young people enter the city, they have employment advantages and income, and there is no problem with them entering the city, but can they bring their parents and brothers into the city? Can they bring their children into the city? Parents cannot be brought in, brothers do not need to be brought, and some children are brought into the city to enjoy better educational resources. When you are older, you have no employment advantage, and your children have grown up; your children's income can only support their children's children. When you are older, your economic income in the city is very tight, relationships are very tense, and all the tension is transformed onto the elderly. If the elderly cannot create wealth for their children, then they should die early; if they do not die, how can they face their children? So we let farmers be able to go back. As long as they return to the countryside, one mu and three fen of land is not important, but for farmers who need to find a straw to grasp at, going back is very important. Because they can combine their bodies with the land, there is no problem solving food and clothing, and in the land production within the village they can form social relationships and obtain income and economic value.

Third, farmers who fail in the city can return home, which enables China to respond to economic crises. When the 2008 world economic crisis occurred, the whole world was very tense, and China was also very tense. With 21 million unemployed people worldwide and no income at all, if the government could not provide relief, this group would create social harm. But at the end of 2008, some farmers returned to the countryside and said we can just take a rest; after drifting in the city for so many years, returning to the countryside to rest and recover is fine.    Will there be an economic crisis in the future? There certainly will be. We hope China will change from a middle-income country into a developed country. In more than 100 years worldwide, only South Korea, with a population of more than 40 million, has changed from a low-income country into a developed country. On what basis can China become a developed country? Whether China can ultimately become a developed country is unclear. At this time, it must be possible for people who entered the city to go back. If they cannot go back, there will not only be slums, but political and social instability will also fluctuate one after another.

When I was in rural Guangxi, farmers said that now the government gives us money and also must give rights, and they said they want to strive for greater collective rights so that their small-scale farmers can solve the problem of public services and the problem of common production. The rights they want are not individual rights, but the convenience of production. They want land to grow grain, small-scale grain growing; how can one mu and three fen of land make them rich? They hope to shed tears, sweat, and blood in agricultural production, and they need the ability for collective intervention.

Next, let me talk about the issue of construction land. Construction land is also very important. China's land system is the consequence of two revolutions, the first being the new stage of the capitalist class, and the other being socialist transformation. The legal order of the land system formed by the two revolutions is Article 43 of the Land Administration Law: any unit or individual must use state-owned land for construction. The meaning of the Land Administration Law's provision is that in economic development and urban expansion, the state monopolizes the urban construction land market, because the land economic gains attached to specific locations in economic development and urban expansion are returned to the public when prices rise, and this has nothing to do with farmers' land. Our land has already gone through two revolutions; it itself is not private, it is public.

Therefore, under our current land system, the value-added income from sold construction land is transferred to land finance, and we use this part of the money for urban infrastructure construction, so infrastructure construction improves. China's labor today is more expensive than labor in Southeast Asia or many developing countries. I think it should still increase, but on what basis does China have competitiveness? What does it rely on? It relies on our infrastructure being better than others'. Where does this infrastructure come from? It comes from this part of land price increases. If Beijing wants to build an airport and builds it in Daxing, farmers' interests are harmed, so why are farmers so happy when their land is expropriated? In this sense, I think when we criticize China's land system today, we must consider whether we stand from the angle of farmers or from the angle of land users. Under the current land system, not only the land system, China's miracle was created by many factors; from a relatively conservative angle, it is quite good. We have pursued utopia for so many years, do we still want to pursue it? Today everyone should study the forms of complex China. I think it can be discussed; scholars can hold any viewpoint, but we must keep our viewpoints within the scope of discussion.