Will the Boat Sink the Water?: The Life of China's Peasants (41 page)

thought. Could it be that our system itself is a toxic pool and whoever enters it is poisoned?

The letter reminded us of our visit to the famous village of Xiaogang in 2001. At the time, the change from taxation to fees and charges was just under way, and we went to Xiaogang Village to find out the current situation. Yan Hongchang, the head of the villagers’ committee, popularly known as the village chief, met with us.

Yan told us that Xiaogang Village had made its name during the reform movement twenty years ago, when the slogan for the newly introduced contract system was “Pay in full to the state, reserve what is necessary for the collective, and the rest is yours to keep.” He shook his head as he described how the latest surge in excessive taxation was taking advantage of the slogan—every excessive tax would be handed down in the name of the state or the collective. There is no way to establish a standard for what is considered “full” and what is considered “necessary.” Take, for instance, the issue of raising pigs. He said: “Taxes and fees and charges are endless, and villagers gave up raising pigs. Then,” he went on, “if you buy a tractor, it is not enough just to pay the management fee. The question is, are you going on the highway? Of course you are. In that case, there is the road-maintenance fee, payments for speed detection, and so on and so forth. And then, whether you farm special products or not, you must pay the tax on special products.”

Yan conceded that when taxation was changed to fees and charges, some of the worst tax abuses were eliminated. “But,” he warned, “a new problem arose—village income dropped dramatically.” The village administration barely had any money to run village affairs on a daily basis. The township, also impoverished, hands out 3,080 yuan per annum for village

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finances. Village Chief Yan Hongchang counted on his fingers the various demands made on village finances. First, there were seven village cadres: the Party secretary, the chairman of the village committee, and a clerk, each pulling an annual salary of 1,800 yuan, and the remaining four were each paid 1,000 yuan. The combined figure for the modest salaries of the village cadres alone was 9,400 yuan per annum. With no money-making enterprises in the village, there was no guarantee for the cadres’ salaries. Furthermore, there was no money for subsidies to fam-ily members of revolutionary martyrs and men in active service, and even less for the relief of families living in poverty. Last but not least, there were three cases of old people without families who depend on the village to survive. Each was entitled to 1,800 yuan annually, which adds up to 5,400 yuan, and there was absolutely nowhere to find the money for them. Yan concluded by telling us that there was a saying: “State finances are growing by the day, county finances are shaky, township finances are going down, and village finances are nothing to speak of.”

Yan continued, “The central government and the provincial government earmarked funds to pay for the expenses of running the experiment of transferring taxation to fees and charges. Our county got two million and each individual village, big or small, got five thousand yuan. That was a great boon,” Yan conceded, “but we were so short of funds that in the end, it could not cover all our needs.”

Yan ended by saying that whatever the difficulties, as a village cadre he would never, ever squeeze the villagers. As for expenses incurred in the course of official business, they were entitled to a 15-yuan allowance for each official activity, but it was far from sufficient. “During the year when taxation was transferred into fees and charges,” he said, “many cadres stopped carrying out their duties. In Liyuan Village, a Party secretary and a deputy village head resigned; the deputy village

the search for a way out

head and a cadre for Yangang Village left to look for work in the city. Within the last two years, I myself was reimbursed sixteen yuan to attend the celebration of a neighborhood committee in Qihe County. It’s just hopeless. All I can do is take money out of my own pocket. So far I have spent more than 200 yuan for office supplies.”

We were surprised and said, “Even with your annual salary of 1800 yuan, that’s just 150 yuan per month—not enough to keep a family, not to mention office supplies at your own expense. How do you manage?”

Yan laughed. “By relying on my wife and my children,” he said proudly. “My son and my daughter have both made good in Shenzhen, the special economic zone. My son has even become a manager at a private enterprise. My fifth child is a reporter at the provincial TV station. As for my wife, she raises chickens and hogs and makes a good return. They collectively support me in my job as village chief.”

After saying good-bye, we could not help thinking that it is all very well for Yan Hongchang to run the village administration out of his own pocket, but we cannot expect all village cadres to do so, nor should the villagers be squeezed, either. Under pressure, when a campaign is on, local officials may hold back a little. But without fundamental changes in the agricultural system, without fixing all the loopholes and drawbacks in our agricultural policies, excessive taxation is bound to bounce back. If dealing with the one problem of excessive taxation is so difficult, how are we to solve the problems of raising the peasants’ standard of living, modernizing agriculture, and reversing the widening gap between country and city? In the light of evidence of recurrent excessive taxation, it is clear that neither transforming taxation into fees and charges, nor technology, nor restructuring agriculture, nor any other such measures— though useful and necessary—will ever solve the problem of the peasants in a fundamental way.

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The Search for a Way Out

Where, then, is the solution for China’s agriculture?

What, then, is the ultimate obstacle to rural development? How are we to restore the enthusiasm and spirit of the

1980s? How can we call forth the vast potential of the peasants in order to create China’s new twenty-first-century civilization? We talked to many specialists and looked up many studies and reports. Perhaps they all have something to contribute, and

all we need to do is act on what they say.

Du Rensheng, an economist who has occupied important posts in the government and the Party, said that looking at the larger picture, it is important to create a beneficial system and a beneficial environment in order to motivate the peasants. He emphasized the importance of the system of land ownership. In the mid-nineties, the central government consolidated the land-contract system by extending it to thirty years, which gave the peasants long-term rights to use the land. But this should be protected by law. The right to use the land that has been taken out of collective ownership and is now an economic entity should be confirmed by law as private property and should be protected as private property. Du pointed out that in the past we were always saying that socialist public property is sacred and must not be violated, but now, he said, “We must point out that use of the land as a form of private property is also sacred and should not be violated.” The right to land use should include all economic rights: the rights to contract, manage, use as collateral, use for investment, as well as transfer rights and so forth. According to him, all these rights should be spelled out in legal terms and clearly defined.

Another specialist, Wen Tiejun, who had been transferred from the Ministry of Agriculture to the Research Association for China’s Economic Reform, where he held the position of deputy secretary-general, insisted that China must change the

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patchwork way of dealing with problems in favor of a comprehensive approach to the reform of agriculture. Wen said he had raised the question of the peasants’ excessive burden as early as 1993:

Since the days of the First Emperor of the Qin Dynasty two thousand years ago, the imperial rule did not reach down to the county. The lowest denominator of the economy, based on the small rural household, was self-ruling. With us, however, it was the opposite; the government insisted on taxing the two hundred million–plus peasant households, each with its own tiny economy. For this, the township had to set up various departments way down to the village. This kind of financial management costs a lot of money and leads to the proliferation of bureaucracy.

Wen added that the rationale for taxing the peasants is very shaky, because the Chinese peasant had on average slightly over

1.5 acre of land per head, and there are 660 counties where this figure is less than 1 acre—too little to sustain life, according to the United Nations. In these sub-subsistence areas, the land is not a means of production, and thus should not be taxed. Looking at productivity over the previous three years, the value of what the peasants produced was less than what they invested. Without gain, what are we taxing them on? According to government figures the Chinese peasants have an average monthly income of 300 yuan, while urban residents only start paying taxes when their monthly income reaches 800 yuan. Obviously, by this national standard there is no justification for taxing the peasants, who are way below the 800-yuan minimum. Furthermore, the current agricultural tax system has been in effect for several decades, and it has not adapted to new conditions.

Wen Tiejun ended by saying that there is no panacea for the

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