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### Viewing cable 06GUANGZHOU11468, Disagreement on Building a New Socialist

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06GUANGZHOU11468 | 2006-04-12 05:51 | 2011-08-23 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Consulate Guangzhou

`

    VZCZCXRO0211
    RR RUEHAG RUEHCN RUEHDF RUEHGH RUEHIK RUEHLZ
    DE RUEHGZ #1468/01 1020551
    ZNR UUUUU ZZH
    R 120551Z APR 06
    FM AMCONSUL GUANGZHOU
    TO RUEHC/SECSTATE WASHDC 4832
    INFO RUEHOO/CHINA POSTS COLLECTIVE
    RUCNMEM/EU MEMBER STATES COLLECTIVE
    RUCPDOC/USDOC WASHDC
    RUEAIIA/CIA WASHDC
    RUEKJCS/DIA WASHDC
    RHEHNSC/NSC WASHDC
    RHHMUNA/HQ USPACOM HONOLULU HI

` `

    UNCLAS SECTION 01 OF 03 GUANGZHOU 011468

    SIPDIS

    SENSITIVE
    SIPDIS

    STATE FOR EB, R, EAP/CM, EAP/PD, DRL
    STATE PASS USTR
    USDOC FOR 4420/ITA/MAC/MCQUEEN, CELICO, DAS LEVINE
    USPACOM FOR FPA

    E.O. 12958: N/A
    TAGS: EAGR PHUM SENV EIND SOCI PGOV CH
    SUBJECT:  Disagreement on Building a New Socialist
    Countryside

    (U)  THIS DOCUMENT IS SENSITIVE BUT UNCLASSIFIED.  PLEASE
    PROTECT ACCORDINGLY.  NOT FOR RELEASE OUTSIDE U.S.
    GOVERNMENT CHANNELS.  NOT FOR INTERNET PUBLICATION.

    ¶1. (U) Summary:  A substantial number of Chinese rural
    development experts at a major think tank conference
    believed that the rural-urban gap is a startling eight to
    one (when taking into consideration "public services")
    instead of three to one.  There was a virtual consensus
    among conference delegates the rural sector is dangerously
    underdeveloped and that public service improvement in areas
    like agricultural production, education and medical services
    is the key to building a "New Socialist Countryside."  The
    bigger challenge, however, remains with the questions of
    governance reform:  should the township government structure
    be eliminated and should farmers be granted more rights?
    Here there was no consensus but rather heated debate.  End
    Summary.

    ¶2. (U) Recently Beijing Emboff and Guangzhou Congenoffs
    attended a two-day conference on rural governance issues in
    Haikou, in China's southernmost province of Hainan,
    sponsored by the China Institute for Reform and Development
    (CIRD) and the International Republican Institute (IRI) and
    enjoying German support.  The title of the conference was
    "Building up a New Countryside in China:  Rural Governance
    and Township Government Reform."  The conference featured
    speakers from the Chinese government (national, provincial,
    municipal and county levels), state-sponsored research
    councils, academics from Asia and America and foreign
    diplomats.

    Background on Rural Development Policies
    ----------------------------------------
    ¶3.  (U) Since 1953, the agricultural sector has been
    exploited in favor of industry.  Today the Chinese Central
    Government is concerned with the social and economic gap
    between rural and urban areas stemming from this policy and
    the unequal economic growth since the 1978 reforms.  Since
    2000, the Central Government has dealt with the problem
    through such measures as making rural issues the "number
    one" Party document, eliminating agricultural taxes and
    mandating universal nine-year education in rural areas.
    More recently, in his March 5 report on the work of the
    government, Premier Wen Jiabao highlighted rural development
    as the central goal of the 11th Five-Year Plan.  The plan
    calls for an increase of 14 percent on rural area spending
    (equal to RMB 42 billion, or USD 5.25 billion), compared
    with last year.

    This Is a Public Service Announcement: "We Need Money!"
    --------------------------------------------- ----------
    ¶4.  (U) Essentially the presentations at the conferences
    dealt with three topics:  1) public service problems; 2)
    township government reform; and 3) farmers' representation
    and rights.  A fundamental question throughout all the
    lectures was "what is the source of the rural-urban gap?"
    Lecturers acknowledged that the rural-urban income gap is
    roughly three to one.  Thus overall agricultural production
    must increase.  However, beginning with the opening speech,
    many speakers considered deficiencies in "public service"
    areas (hospitals, schools, police, etc.) as the real
    contributor to rural poverty.  One speaker estimated that if
    these public services in cities were included in the urban-
    rural comparison, the rural-urban gap is more likely to be
    eight times to one.  For example, Guo Jianjun of the Rural
    Research Development Center reported that 86 percent of
    villages have no road access, 300 million have bad drinking
    water and 190 million live near environmental hazards.  In
    terms of education, urban residents study on average 8 years
    while rural areas only 6.7 years.  According to the
    speakers, the public services such as education, health,
    infrastructure and (according to some) population control
    are all important areas in need of further development.

    ¶5.  (U) Some of the later speakers described China as a
    country with a "dual system" of citizens.  The rural areas
    are many generations behind urban areas and urbanites tend
    to regard people from rural areas as second class citizens.

    GUANGZHOU 00011468  002 OF 003

    One speaker described how in most traffic accident cases,
    urban victims get three times the compensation.

    ¶6.  (U) The famous rural development scholar, Wen Tiejun, of
    Renmin University, was concerned about the "Latin
    Americanization" of China, i.e. the rise of urban slums.
    Wen defended China's development plan as a monumental task
    unparalleled in history.  He argued that any country with a
    rural labor force over 100 million will inevitably end up
    with urban slums.  His two main examples were India and
    Brazil.  China has a rural labor force of 500 million,
    larger than the 430 million found in all the developed
    countries combined.  Thus Wen concluded that urbanization
    will continue to challenge local governments' capacity to
    provide public services.

    Too Many Hands in "The Emperor's Rice"?
    ---------------------------------------
    ¶7.  (U) One area of debate at the conference was whether the
    township governance system should be eliminated.  Some
    speakers complained that China's government structure
    suffers greatly from redundancy.  For example, no other
    country in the world has six levels of government (Note:  In
    China, these are: central government, province, prefecture,
    county, township, and village.  End note).  One Chinese
    researcher has estimated that government and party
    bureaucrats eat way more than their share of "the Emperor's
    rice."  Of the 800 million countryside denizens, bureaucrats
    constitute only 5.5 percent of the population, but consume
    42.7 percent of total village agricultural production.

    ¶8.  (U) However, a minority of speakers, such as Mr. Xiao
    Jinchen of the National Development and Reform Commission,
    argued for maintaining township governance.  Xiao estimated
    that China has 2,800 townships and 720,000 villages.  Thus
    each township governs about 256 villages.  Mathematically
    the township is the most efficient level of government and
    without which, prefectures would be overburdened.

    The Village Voice:  Good or Bad?
    --------------------------------
    ¶9.  (U) The final issue of serious discussion was about
    farmer participation.  One village leader from Hubei
    province described the difficulties of working at the
    grassroots level.  He said that since the abolition of
    agricultural taxes, village leaders are not paid on time, if
    at all.  Many leaders are depressed, lose hope, and are
    forced to find "another living" (either another job or
    possibly corruption).  Describing the paucity of rural
    government funds, he said that "even the wisest wife can't
    cook without ingredients."  Moreover, village leaders have
    no real autonomy, as the township must approve all
    decisions.  This top-down approach means that village
    leaders cannot always provide what farmers really need.

    ¶10.  (U) Wen Tiejun raised the point that rural denizens
    cannot be called "farmers" in China.  The term "farmer"
    denotes possession of property.  In China no rural citizens
    possess land property and thus it is more appropriate to
    call them "peasants".   A Zhejiang University legal expert
    later described the legal differences for rural and urban
    residents.  Urban residents are free to sell their property
    (i.e. the house or apartment, but not the land) to anyone,
    including foreigners.  Rural citizens can only "sell" land
    within the village, where "sell" truly means to swap the
    land.  Rural residents can rent the land to peasants from
    another village, only with a 2/3 majority agreement from the
    village collective.

    ¶11.  (U) Some of the more ideologically-minded Communist
    Party cadres were unwilling to consider increasing farmers'
    autonomy or land rights.  For example, Xin Ming of the
    Central Party School's Research Office, was adamantly
    against the rise of farmer "interest groups".  He believed
    that the Party should decide the direction of rural
    development and that China "can't be persuaded by farmer's
    interests."

    In a Land Far, Far Away...

    GUANGZHOU 00011468  003 OF 003

    --------------------------
    ¶12.  (U) Although some of the lectures were useful, the
    context and audience reaction during the conference were
    perhaps more interesting.  The CIRD conferences are held in
    the isolation of Hainan, far from Beijing, and among a more
    international crowd, some Chinese officials were encouraged
    to be more critical of government policies than usual.
    Audience members were laughing about government corruption
    among local government Party leaders and the abysmal rural
    educational system.  Even the accompanying Guangzhou
    Consulate FSN found some of the comments unusually bold.
    During one of the question and answer sessions, a delegate
    asked about the inability to implement nine-year compulsory
    education.  He asked, "If the government itself doesn't
    follow the law, what should we do?"  The Ministry of
    Agriculture official flatly replied, "Reform!"

    COMMENT:  Keep the "New" Out of "New Socialist Countryside"
    --------------------------------------------- --------------
    ¶13.  (SBU) In general, a conference like this is more useful
    as a thermometer of China's domestic politics than as a
    source of new information.  For example, an April 7 New York
    Times article, "Chinese Analysts Clash over Reforms",
    demonstrates that in Beijing, Chinese intellectuals are
    facing an internal dilemma about the nature of Communist
    Party goals.  More progressive thinkers are tired of the
    redundant, top-down, corrupt model of Communist leadership
    in the countryside.  Instead they would like to grant rural
    citizens more rights and decision-making power.  Similarly,
    even in Hainan, thousands of miles from Beijing's watchful
    eye, old guard Communists remain unwilling to grant rights
    to local farmers, hoping that the "New Socialist
    Countryside" will be less "new" and more "socialist."

    ¶14.  (U) This message has been cleared with Embassy
    Beijing.

    DONG

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