The Chinese people are used to suppression by the government. A front page report in The Hindu [15 Dec] says that the Chinese government record more than 180,000 “mass incidents” every year. The present uprising in the Wukan village is against land acquisition by the government at the behest of private developers.
Since the mid-1980s, the neoliberal urban policy stipulated that resources should be channelled to dynamic entrepreneurial growth. Benefits of such growth will trickle down to the rank and file. What actually happened, as a result of such a policy, was that the developers and speculators took over the cities wherever neoliberalism had taken root.
The 2009 World Bank Report says that “since the deregulation of financial systems in the second half of the 1980s, market-based housing financing has expanded rapidly.” The Report was of the view that “People who own their house or who have secure tenure have a larger stake in their community and thus are more likely to lobby for less crime, stronger governance, and better local environmental conditions.”
The Bank’s optimism is not supported by history, however. Property booms witnessed eventual crash of the economy in 1929, 1979, 1987, and 2000 in the USA. The end of the Japanese boom in 1990 corresponded to a collapse of land prices. The Swedish banking system had to nationalised in 1992 because of excesses in property markets.
China privatised housing in 1998. As a result, housing prices rose 140% nationwide since 2007 and as much as 800% in cities such as Beijing and Shanghai. The average price of an apartment in Shanghai today is $500,000. Even in second tier cities in China a typical home costs about 25 times the average income of the residents. In other words, the ordinary people cannot afford to buy these homes. So, who benefits by such development? The answer is obvious.
Land acquisitions and displacements of people have reached legendary proportions in the major cities of China. Three million people were displaced in Beijing alone in the last decade. Such displacements have triggered many popular and sometimes violent protests, which the government has ruthlessly suppressed. The government is happy to fill its coffers by selling the land to the private developers.
There are whole new cities in China now with hardly any residents or real activities. China has advertised in the US business press to attract investors and companies to these vacant cities. Yet China is the most populous country in the world! The irony is also obvious.
Author’s Note: I am indebted to David Harvey’s essay in The Crisis and the Left: Socialist Register 2012 for much of the information contained in this blog. The Book is a collection of essays by experts and scholars and was published in India last month by LeftWord Books, New Delhi.