What are the substantive disagreements over land system reform?
The first half of the 21st century is a critical period for China's transformation from a traditional agricultural society to a modern urban society. Urbanization is the migration process in which farmers, who make up the vast majority of the population in an agricultural society, change occupations and places of residence, so it can be said that land plays a pivotal role in it. This is the reason I have concentrated on studying land issues in recent years. Professor Zhou Qiren is an academic colleague I respect, and his several unsolicited and generous teachings, including his latest article “Why Can't Urbanization Do Without Farmland and Farmhouses Entering the Market” (see Economic Observer, September 8, 2014), have prompted my thinking on this issue. I also know that Professor Zhou's views on land are by no means those of a minority, but represent the mainstream opinion of a large group of economists who advise the government. Nevertheless, in the academic spirit of “I love my teacher, but I love truth more,” I write this article again to seek instruction from Brother Qiren and from experts and the public.
Is the urbanization of people awkward, or does it hit the vital point?
Professor Zhou said last time that he had known me for many years, did not know I studied land issues, and that I published grand views all at once without having studied them, which carried a tone of reproach. So I carefully explained that in fact, more than ten years ago, I began studying the issue of the urbanization of people starting from farmers going to cities to work, and that I had also put in many years of effort, so it was not a rash act based on the idea that “without studying, one may still not necessarily fail to offer correct opinions.” Unexpectedly, after my explanation, Professor Zhou this time implied that I had studied it too early. He said, “As for how it was proposed back then, and whether others proposed it even earlier, I have not verified. From the current situation, regardless of who the originator is, ‘the urbanization of people’——this ‘term’——I just find it a bit awkward.”
Sustained large-scale urbanization takes farmers' land, yet cannot absorb farmers.
In fact, raising the problem is only for the sake of studying and solving it; it makes little difference who raised it first or later. But the true urbanization of people is a major matter for all developing countries. In particular, China's special household registration system has created a serious problem in which farmers who enter cities cannot obtain household registration and become urban citizens. Therefore, in my analysis at the time I said, “The monopoly of urban household registration is a huge obstacle to China's development, yet it has far from attracted sufficient attention. The greatest challenge facing China's development in the new century is the pressure of population relative to resources, and the greatest problem facing China's effort to achieve high-speed modernization growth in the new century is insufficient domestic demand. The crux of both major problems lies in the excessively low level of population urbanization.” “By the end of the 20th century, according to statistics, the urban non-agricultural population was still hovering around 20%, and the other 10% listed as urban population referred only to the rural population that had currently entered cities and small towns.” “It is no exaggeration to say that the ratio of the population with lawful urban household registration to the rural population, compared with developed countries, is exactly completely inverted. This is the greatest irrationality in China's economic structure, the most fundamental reason for the country's insufficient domestic demand, the most conspicuous sign of the backwardness of China's stage of social development, and the largest factor in the widening gap between rich and poor” (see “Breaking the Ice of Monopoly,” Times Wealth magazine, Issue 1, 2001). This contradiction was alleviated because China subsequently joined the WTO, and therefore did not attract attention. Thus, on February 4, 2006, I obstinately and rashly wrote a solemn letter to the then President and Premier, frankly criticizing the policy focus of the time, pointing out that “At present, China's urban-rural income gap is among the largest in the world. This contradiction is the principal contradiction for China in the next 20 years. But the principal aspect of this contradiction is not in agriculture, rural areas, and farmers, but in urbanization.” “What Chinese society urgently needs to propose and implement at present is a new-type urbanization strategy. The starting point of this strategy is, first, to resolve, within the framework of urban-rural coordination, the problem of the smooth transformation of the identity and status of farmers who have already entered cities, and second, to plan and lay out the settlement and household registration of about 15 million newly added farmers entering cities each year.” But only after the outbreak of the global financial crisis in 2008 did this problem of the urbanization of people, temporarily obscured by globalization, resurface more sharply and become a hot topic in policy and society in recent years.
⟦NL> Nevertheless, I have never said nor do I believe that I have any original ideas on this issue. I believe that perhaps others paid attention to this issue earlier and more extensively from different angles, but Professor Zhou's statement in his article that “to my knowledge, the earliest person to raise this issue was Professor Wen Guan Zhong” is certainly not rigorous. In his preface to Professor Wen Guanzhong's new book this year, My People Have No Land, Professor Zhou specifically pointed out “that was July 2009.” In fact, by then there was already a great deal of discussion in China about the urbanization of people, so Professor Wen himself also said in the book that because the urban population included 200 million migrant workers, “the academic community accordingly believed that China's real urbanization rate should deduct the share of migrant workers, and therefore was only about 36%, and jokingly called the official figure the ‘pseudo-urbanization rate.’” As far as I have seen, Professor Wen already had some doubts about the official urbanization rate in 2007, but as a scholar who had long taught at an American university, even until 2008, when he returned to Shanghai to teach part-time, the articles he published still all used official data. As for Professor Zhou saying that Professor Wen proposed that land urbanization was faster than population urbanization, this involves the question of what proportional relationship between land and urban population growth is better in the process of urbanization, which is another issue at the technical-economic level and requires specialized comparison and research. In the book, Professor Wen also did not say that he proposed it; rather, he cited others' view that China's urbanization “urbanizes land but not people,” and expressed strong agreement with this “incisive summary.” Incidentally, Professor Wen is a scholar who firmly believes that only land privatization can save China. In the first few years after he returned to China, he had many exchanges with me. In recent years, our views on land and urbanization have drifted further and further apart. Still, despite our different views, he remains a scholar I respect.
Ownership of collective land: who made a joke of it?
Professor Zhou cited a sentence I wrote elsewhere: “What our country's laws now call collective land mainly refers to land owned by collectives with administrative villages as the unit,” and then launched into a long discussion: “I cannot believe that the author is so completely lacking in common knowledge about the history and evolution of the rural collective ‘three-level ownership, with the team as the foundation,’ and does not know at all that the vast majority of China's collective land belongs to the former production teams——that is, today's natural villages, villagers' groups, or ‘cooperatives’——and not to the ‘administrative villages’ (that is, the former ‘brigades’).” Professor Zhou lectured that “without much effort, one only needs to check ‘collective land ownership’ on Baidu Baike” to know that the collective land ownership now held by villagers' groups (production teams) accounts for more than 90% of the total area, and thus one would not make a joke. “To enter the field carrying a self-inflicted hard wound at the level of a joke, is that not exposing one's own weakness and handing others a handle? Hua Sheng also introduced himself as someone who ‘went to the countryside at 15 to join the production team and was a farmer for many years, and later also conducted rural surveys from time to time.’ If so, how can he not even be sure what ‘collective land’ mainly is? Let me write out the worry in my heart: regarding the various complex affairs of urban construction, planning, and land development in Britain, the United States, Japan, Germany, Hong Kong, China, and other places, which are far more complex than China's collective land and about which his experience is far more insufficient, those ‘statements of fact’ delivered in an unquestionable tone while running his tongue all over the world, how can they make readers feel secure?” Clearly, Professor Zhou's claim that he was “embarrassed to add a note” was not superfluous; rather, he was using a small thing to reveal a bigger one, seizing on one “hard wound” of his opponent and then questioning and denying the credibility of all his statements and views.
Professor Zhou laughed, scolded, and, seizing on one point, beat his opponent to death with a single blow. Naturally, this was satisfying. But it also contained a small risk: if this “hard wound” and “joke,” which he regarded as beyond doubt, were proved to be his own error or oversight, then all the objects of his ridicule and denial would fall entirely back on himself. For the collective economy's “three-level ownership, with the team as the foundation” that Professor Zhou spoke of was only a provision in the 1962 “Sixty Articles on the People's Commune,” Article 21 of which explicitly stated that “land within the scope of a production team belongs to the production team.” The 1975 constitutional revision wrote “three-level ownership, with the team as the foundation” into Article 7 of the “1975 Constitution.” But Professor Zhou, who seems to have a special fondness for the world outside the law, seems unaware that this formulation had already been deleted in the 1982 Constitution revised after the end of the “Cultural Revolution.” Article 10 of the “1982 Constitution” only says in general terms that “land in rural and suburban areas is owned by collectives, except where the law provides that it is owned by the state,” and no longer addresses which level it belongs to. What Professor Zhou seems even less aware of is that the General Principles of Civil Law of the People's Republic of China, adopted on April 12, 1986, explicitly abolished the statement that collective land belongs to production teams, that is, the current villagers' groups. Article 73 for the first time stipulated that “land owned by collectives belongs, in accordance with the law, to the village farmers' collective, and is operated and managed by the village agricultural production cooperative and other agricultural collective economic organizations or the villagers' committee.” Subsequent laws such as the Land Administration Law and the Property Law all copied this provision verbatim. Taking historical circumstances into account, some laws added that where land already belongs to townships or towns or to two or more collective organizations within a village, it may continue to belong to them. It can thus be seen that the concept stated in my earlier article is quite accurate and contains no error at all. In fact, it is precisely on the basis of this legal ownership relationship that land conflicts and self-dealing in various places from Guangdong to Beijing, north and south alike, have concentrated at the level of village committees and village cadres, rather than at villagers' groups and villagers' group heads. Professor Zhou, relying solely on information processed by others found through an online search, without looking at the law or at reality, dared to smugly mock the formal legal provisions cited by others as a “hard wound” and a “joke.” One truly does not know what to say.
Although Professor Zhou made such a huge blunder, I do not want to copy his logic and assert that all his various views and his “brief analysis” of overseas situations are therefore entirely doubtful and invalid. I believe Professor Zhou will also be more guarded in the future about information quickly found online, will verify it, and will show a bit more respect for others' research. I also want to say that it is not such a terrible thing for Professor Zhou to make a momentary mistake from oversight, but that so many media outlets and scholars used Professor Zhou's words to make a great fuss about a “hard wound” and a “joke,” while no one did even a little work to check the original sources, truly shows the extent to which today's academic and media environment has become frivolous.
What we have clarified above by following Professor Zhou's line of thought is in fact only two small issues. Of course, it reminds us that no matter how far one has advanced in learning, one's scholarly attitude still needs to be rigorous; that even when one feels truth is in hand, one should still leave some room in what one says; and that whether another's views are right or wrong has even less to do with personal character. But given that even small issues are so convoluted, the larger issues below, if we continue along the line set by Professor Zhou, will certainly leave us even more dizzy and disoriented. Therefore, below I will focus on several substantive issues in the debate, so that even if everyone cannot reach consensus, at least they can understand where the disagreements lie.
Disagreement one:
Farmland and farmhouses entering the market, or the attribution of building rights
Professor Zhou, holding high the banner of farmland and farmhouses entering the market, charged down from the moral high ground, but this blow of his should not originally have been aimed at me. For in my article replying again to Professor Zhou Qiren, I already clearly stated that “farmland and farmhouses entering the market is indeed completely different in nature from the illegal construction of small property-rights housing; it is an inherent part of what conforms to the goals of reform and market economic development. In terms of direction, I have no objection.” I also devoted a third reply specifically to discussing the problems that may arise under current circumstances when farmland and farmhouses enter the market, and the methods and paths for solving them. Then why did Professor Zhou insist on vigorously attacking me, a fellow traveler, under the banner of farmland and farmhouses entering the market?
It turns out that what Professor Zhou cared about was not the circulation and market entry of farmland itself. As I said before, the circulation and market entry of farmland limited to agricultural use is now surging across the country, and the amount circulated has long exceeded one quarter. Yet Professor Zhou has no interest in this. As for the circulation, transfer, or recovery of farmers' self-occupied housing and homestead land under the current regulation of one household, one homestead, although it is more complex and there has been some loosening in documents and policy, with pilot projects being prepared, Professor Zhou's interest in this is also limited. What Professor Zhou is truly interested in is how to remove the clause in the Land Administration Law that farmland may not be transferred for non-agricultural construction, or, as he says, change “may not” to “may,” thereby opening the door wide for the transfer of farmland for non-agricultural construction. But the separation of land ownership and development rights, land-use and planning control, and the absence of freedom in building, which I introduced and advocated, precisely blocked his path, so Professor Zhou naturally became angry. Thus Professor Zhou said bitterly, “I think the worst of them is that ‘theory of no freedom in building.’”
Judging from the path taken by countries that have already completed urbanization, a large amount of farmland will indeed be converted to urban construction use during urbanization. However, this mainly occurs in and around towns, especially large and medium-sized cities. Farmland not in the suburbs will still be used for agriculture, and an even larger number of rural villages will be reclaimed as farmland. Some farmland in distant suburban rural areas will also be used for non-agricultural construction during urbanization, but this is mainly land for roads and various other public infrastructure and services that must increase with rural modernization. Therefore, for the vast non-suburban rural areas, whether due to planning control or market laws, the appreciation and changes from farmland and farmhouses entering the market will be very limited. Looking at the path others have taken and their current situation, one knows that to insist that farmland and farmhouses entering the market will bring great benefits to distant suburban farmers is certainly false. What is truly significant is the farmland and villages around towns, especially large and medium-sized cities. So what Professor Zhou calls out is farmland and farmhouses, but what his eyes are fixed on is suburban land development. The research he has organized continuously in recent years has never left the suburbs of large cities such as Chongqing, Chengdu, and Shenzhen; the reason is probably here.
It can thus be seen that some people cheering that farmland and farmhouses entering the market is good news for 900 million farmers is clearly confusing the public. The manner in which farmland enters the market is of enormous consequence only to the tens of millions of original residents of urban villages and suburban villages, as well as to land investors and speculators. For rapid urbanization transformation causes major structural changes in a country's land value. While the value changes of true farmland and farmhouses are limited, farmland converted to urban construction may gain a hundredfold or a thousandfold increase in value. The continuous urbanization and concentration of population and the accumulation of social public facilities, public services, and public goods on a very small amount of urban construction land make commercialized land in cities a wealth-generating machine and the most common form of wealth distribution.
Therefore, the real disagreement is that Professor Zhou, under the banner of farmland and farmhouses entering the market, wants to freely promote the transfer, development, and market entry of land in urban villages and suburban villages, while I believe this involves a major distribution of wealth for all citizens and must absolutely not be left to a few to divide up the spoils and act as they please. Therefore, although I support, in terms of the direction of reform, that farmland and farmhouses can and should enter the market, this must be done step by step and prudently, strictly distinguishing suburban from non-suburban areas, and distinguishing cultivated land from construction land under the great banner of farmland. Even for land that can be developed for commercial and residential use, modern society cannot do without planning and floor area ratio control, and therefore one does not have spatial building rights even on one's own land. Moreover, this is not only true for farmers but also for urban residents; it is true not only on China's public land but also on private land in the West. This then provoked several critical articles by Professor Zhou, “Debating ‘No Freedom in Building,’” in which he expressed deep doubt about my statement that there is no freedom in building in the West. After I introduced in detail the situation of use and building control in developed countries and East Asia, Professor Zhou this time again lectured: “Specifically on the subject of urbanization, would it not be more pertinent to look more at the measures taken by other countries before their urbanization rates reached 70%? Your own urbanization rate has only just passed 50%, and you insist on bringing over methods adopted very late by highly urbanized countries——where the urbanization rate has reached 80%-90%——while others remain unscathed and you choke yourself half to death. Is that very satisfying?”
It appears that Professor Zhou has now verified to some extent the current situation in developed countries that I introduced, and no longer denounces it as “absurd” and “bizarre.” But he scolds me for citing situations from the wrong time and historical stage. In fact, I originally introduced both the historical judicial reality of land and building in Europe and America and focused on Japan, South Korea, and Taiwan, China in East Asia precisely because we are at the stage of development they were at decades ago. But at the time Professor Zhou did not like to hear it. He must have forgotten what he himself said half a year ago in the article “Debating ‘No Freedom in Building.’” For there he said that, to his knowledge, American zoning and planning control since the last century had become more and more relaxed, and that “under such circumstances, to cite only American legal precedents from before the 1920s with great reverence for authority may risk misleading readers.” It can thus be seen that as long as it does not conform to the fixed market creed of freedom in building in Professor Zhou's mind, then with regard to others' cases and reality, citing a later time will not do, and citing an earlier time still will not do.