A Study of China's Urban-Rural Integration Development (The Great Transformation of China) [1st ed. 2022] 9811927553, 9789811927553

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THE GREAT TRANSFORMATION OF CHINA

A Study of China’s Urban-Rural Integration Development Dangguo Ying · Wenyuan Wu

The Great Transformation of China China’s Economic Transformation, Innovation and Development

Series Editor

Fulin Chi China Institute for Reform and Development Haikou, Hainan, China

China is facing unprecedented challenges in its continued modernization process. This series brings together government insiders, academics, and policymakers in articulating specific social and political issues that China is trying to resolve, offering scholars around the world insights into what China’s leadership see as the biggest challenges facing the nation and how best to resolve them. The series publishes monographs and edited volumes with contributions on a global basis dedicated to ground-breaking research on the Chinese modernization process.

Dangguo Ying • Wenyuan Wu

A Study of China’s Urban-Rural Integration Development Translated by XUhua Shen, Dandan Zhou, Xinru Liu

Dangguo Ying Rural Development Institute Chinese Academy of Social Sciences Beijing, China

Wenyuan Wu Shenzhen Apecland Design Co., Ltd Shenzhen, China

Translated by Xuhua Shen Hangzhou, China

Ning Meng Hangzhou, China

Xinru Liu Hangzhou, China

Xie Qianfan Hangzhou, China

Dandan Zhou Hangzhou, China

ISSN 2509-6001     ISSN 2509-601X (electronic) The Great Transformation of China ISBN 978-981-19-2755-3    ISBN 978-981-19-2756-0 (eBook) https://doi.org/10.1007/978-981-19-2756-0 © Zhejiang University Press 2022 Translation from the Chinese language edition: “《城乡一体化发展要义》” by Dangguo Ying and Wenyuan Wu, © Zhejiang University Press 2016. Published by Zhejiang University Press. All Rights Reserved. This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publishers, the authors, and the editors are safe to assume that the advice and ­information in this book are believed to be true and accurate at the date of publication. Neither the ­publishers nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publishers remain neutral with regard to jurisdictional claims in published maps and ­institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-­01/04 Gateway East, Singapore 189721, Singapore

Foreword: How to Make the City Stronger and the Village Better

The division of human activity area into the city and village used to a sensible move. Later on, the relation between the city and the village kept changing, but the path in major countries varied from one another. For a long period of time, Chinese people’s engagement in urban-rural division generated the poverty of village and peasants. Retrospecting the reform and opening-up history of China for decades, one lesson may be concluded that the city will have stronger momentum of expansion if the village has higher productivity and in turn, the village will be built better if the city has more prosperous economy. The foundation in favor of urbanrural benign interaction is the market condition formed under reform and opening-up policy, and the condition is still developing for the time being now. We sincerely expect to further push forward this progress. The term “urban-rural integration” is not favored by everyone, but it has some reason as long as it is popular now. Probably the consensus can be more easily reached if the definition about urban-rural integration has been proposed. Urban-rural integration mainly refers to the unity of urban and rural factor market. In addition to affairs involved crucial social public interests that force the government to take minimum intervention, it is imperative to smash the barriers imposed on land, capital and labor factors between the city and the village, and realize the decisive role of market on factor mobility to the uttermost. As for economic indicator, if urban-rural integration has come true, peasants’ income and urban residents’ income should be basically remain the same, and Engel coefficient and urbanization rate should respectively reach 0.25 and 75%. v

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FOREWORD: HOW TO MAKE THE CITY STRONGER AND THE VILLAGE BETTER

Urban-rural integration must be oriented towards urbanization. This is the core argument of the book. The urbanization process of China used to be a hot issue in contemporary world concerned by western scholars. This claim is not exaggerated at all. Some doubt whether the urbanization rate of China has been overestimated. However, such query is not tenable at all. In effect, the urbanization rate of China is probably underestimated. Some countries in Europe and America have given different definition for city and village. There are also popular international standards, like “congested area” which views the place as the city if it reaches the threshold and vice versa. However, any standard is more loose than that of China. Many villages in China measure up to the city standards in Europe and America. Generally, a village where a primary school has over 30 students in each grade can be classified as a city in Europe and America. At present, after large-scale merger of schools, all primary schools basically reach this standard. According to former official statistics, there are less than 130,000 primary schools in China rural area, and approximately 50% population of these villages are not engaged in agriculture. This estimate caters to the demographic data in China. In accordance with such estimate, the urbanization rate in China must be higher in reality. Therefore, the urbanization rate of China has been underestimated. The thought which insists that the urbanization rate of China has been overestimated because of the low quality of urbanization is wrong in logic. Though the urbanization quality of China is not very high, it is not inferior to that in any other developing country. It is totally another matter. Unquestionably, the continuous rise of urbanization rate in China is a great even throughout human history. Urbanization is essentially accompanied by the professionalism of economic activities and sharp rise of economic efficiency. Therefore, China becomes the leading supplier of industrial products in the world. The drastic increase of both economic aggregate and per capita income, and the reinforcement of national power also change world’s geopolitics. As per history evolution law, the cheap industrial products made in China have and will continue to produce far-­ reaching impacts on developing countries. Cheap industrial products will change people’s lifestyle, expand trading scale and promote financial deepening. Tracing back to then Britain, one of the fundamental factors leading to its then social structure changes was the impact of cross-national trading.

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The rise of urbanization rate naturally changes the fate of Chinese people. But till now, some still consider urbanization process as a disaster to Chinese peasants due to some periodical problems. This is really troublesome. The urbanization rate of China is predicted to further increase in the future. Though it is highly uncertain to precisely forecast future demographics, we still have the inspiration to estimate future population and urban structure of China as per several constraints. The demographic layout in China will continually change in some period in the future. Whereas, some crucial factors may act on its changing rate. Focusing on too many factors probably goes against judgment. The following factors deserve further discussion considering their impacts on demographic layout. The first factor is existing city distribution and scale. According to the grouping standard of population in cities at or above the prefecture level, the city scale and number condition in China in 2014 was shown in the following Table 1. However, the data about cities in above table are biased. Nevertheless, this issue will not be carefully explained here. This structure is not a relatively stable structure, but it can generate significant impacts on the future development of cities. If future urbanization policy authentically highlights “people-­oriented” principle, the evolution of cities is about to be subject to more factors. Secondly, the foremost factor is that professional peasants in the village have the same income with urban residents. Pursuant to our estimate, 30  million is a node for professional peasants nationwide, as China can basically ensure the equal income level of urban-rural residents upon reaching the node. Thirdly, from the perspective of public service, transportation structure and information exchange, a city should be built every 1200  sq.km on average. Japanese scholars have already made a research on the relation between city and rural development level. As proved by their findings, rural area within a 30-min driving distance from small and medium-sized cities has high indicators indicative of agriculture vigor (Negishi, 1993).1 China has approximately 4 million sq.km acreage habitable for people (or 1  Negishi, Correlation between Regional Rural Revitalization and Urbanization, New Development of Urban-Rural Relation in Kinki Circle-2, 1993 (3). Japanese scholars tend to define city as district of inhabitant density (DID), namely impacted area. To be specific, it

Population at the end of the year in urban districts

17

35

91

98

47

4

361

–

1542

–

20,401

Town

292

County

Not classified, include Cheng Guan Zhen –

Countylevel city

4 2 1 500,000–1 200,000–500,000 200,000 Not Not million million–4 million–2 million below classified classified above million million

Prefecture city

Table 1  2014 condition of cities in China

12,282

–

Not classified

Village

viii  FOREWORD: HOW TO MAKE THE CITY STRONGER AND THE VILLAGE BETTER

  FOREWORD: HOW TO MAKE THE CITY STRONGER AND THE VILLAGE BETTER 

ix

3 million sq.km as said by geographers) or more people (east of Hu’s line) and has the ability to develop competitive agriculture. In view of rural roads and public bus service time, it is better to build a city every 1200 sq. km on average at least to promote agriculture. In this way, China should at least build 3333 cities. The fourth factor is counter-urbanization population. As a great many peasants liberated from agricultural production still live in villages, counter-­urbanization population decided by historical factors has reached a giant cardinal number. Subject to national policy, counter-urbanization population scale will not be very large. In developed countries, the counter-­ urbanization population scale in Europe is small, but that in America is large approximately nine times more than farm population.2 It is close to American Engel coefficient. If non-agriculture population near to rural area is classified into counter-urbanization population and non-­ agriculture population in rural area doubles that of professional peasant population, it is predicted that China will enter a stable state and reach the 60  million threshold. Considering the number of professional peasants, population aging, income level, child education, another form of “leftbehind children” possibly comes into being once the threshold has been breached. On the whole, urban-rural population mobility will be significantly lowered when urbanization rate in China totals around 75%. We hereby raise a hypothesis to explain why Engel coefficient approaches rural population. A proportion of population in crowd shows significant preference to field life and labor. Whether to settle down in rural area is also decided by the intensity of other factors. Because of the free mobility of labor force and population, the formation of rural population proportion possesses the property of natural evolution. Even if people who prefer field life go to the city, they also tend to work in agriculture-related positions. Consequently, in a rather long period of time people who work in the city on agriculture industry chain habitually return to the village after retirement. In this way, population on agriculture industry chain will specifically aims at regions with over 4000 population density per sq.km and over 5000 gross population. Considering the reality in China, the data should be higher. 2  According to the statistics disclosed by USDA and FAO, counter-urbanization population is basically the same with non-farm population in agriculture industry chain in America, and part population in agriculture industry chain lives in the city. Data source: USDA: Economic Research Service Using Data from the President’s Budget FY2006–FY2016, Department of Agriculture Appendix and USDA Department Budget Summary and Annual Performance Plans and FAO database: http://faostat.fao.org/.

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Foreword: How to Make the City Stronger and the Village Better

approach population in rural area when population urban-rural transfer turns stable. While this hypothesis requests further verification. The fifth factor refers to education and school arrangement. The arrangement where a primary school sets up two classes in one grade and each class contains 30 students makes for the allocation of teaching resources and enables students to learn in a more competitive environment. Such arrangement for school in rural area will bring benefit to rural residents. In the future, population in village will reach 120  million. According to the 15‰ birth rate, around 1.8 million children need to go to school on an annual basis. In addition, considering the fact that counter-­ urbanization population does not take children of school age, 30,000 primary schools need to be built in rural area. This indicates that rural area needs at least 30,000 large residence districts and more small peasants’ residence districts. The last factor is other factors affecting city and population layout. At present, the GDP per unit yield in city of China is about 1/8 of that in developed countries, but average city scale in China is larger than that of developed countries. Thus it can be seen that city scale is not a constraint on the growth of industrial economy. The general condition of city in China does not remove the possibility for any city to grow to be world’s financial center. Whether a city can become a financial center is decided by gross economic aggregate and national financial policy. Irrespective of the gravity of environmental problems in China, it is wrong to ascribe it to the development of city. On the contrary, it is a series of improper urban development policies that lead to environment problems. Based on above hypothesis and inference, the paper outlines future stable population and city layout (Table 2). Gross population totaling 1.5 billion is predicted to be the stable population scale within a certain period in China. If the government follows such population and city layout, it will greatly push forward the development of agriculture and rural education, making for agriculture modernization and social stability. On account of above analysis, we can roughly estimate the investment amount of rural construction. According to the survey in rural area of China, the construction of a well-equipped and beautiful residence district with 10,000 residents takes 200  million  RMB investment amount. Small residence districts in rural area take less infrastructure investment amount. Inspired by countries with developed agriculture industry, in most cases, less populated rural area (less population in catchment area, and less than 10% rigidification area)

10

40

10 4 2 million million~10 million~4 above million million

Number of 8 other residence districts Population 11 (hundred million)

Population

City

100

120

300

1 500,000~1 200,000~500,000 million~2 million million

Table 2  Future residence district distribution estimate in China

1000

100,000~200,000

2000

10,000~100,000

0.8

2.8

30,000

Small residence districts for peasants 3,000,000

Large residence districts

Village

0.4

Others

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FOREWORD: HOW TO MAKE THE CITY STRONGER AND THE VILLAGE BETTER

does not need to install sewage processing facilities nor pave roads and build sound public facilities. Peasants in such area are allowed to chop down some trees and shrub, mix solar energy and wood burning furnace aiming to help perennial plants renew, and improve their absorption for CO2. In this case, rural construction takes around 8  trillion  RMB.  The government should formulate an investment plan for future 20  years. According to the urbanization rate, the government needs to invest around 400 trillion RMB per year. This is not a huge amount. Admittedly, rural construction will be a headache if the government does not follow urbanization revolution and compulsorily retains 0.6  billion–0.7  billion people in the village. Urbanization process is also a process where new problems are continually raised and solved. Problems in the following three aspects are often misunderstood because of superficial theories and careless observation. Question 1: Who will go to the city? Do peasants go to the city mainly out of their personal choice or external constraint? Some consider peasants’ entry to the city as the suffering to peasants, but we disapprove of such statement. The most popular view holds that land is the security of peasants, and peasants can’t live without land. Do peasants depend on land or labor to ensure their livelihood? This issue is very serious. We can’t come to conclusion at once. Under sufficient market competition conditions, if retired peasants just depend on land to ensure their livelihood, their income will be 6 trillion RMB  agriculture GDP   10%  rent 



15%  rural elderly quota   90 billion RMB



Actually, the amount is far below the rural elderly care expenditures allotted by governments at all levels. Moreover, the figure is about to be increasingly insignificant in the future. If such misgiving confines half labor force of China, we can not imagine how heavy the loss will be. We can roughly calculate the bill too. Existing rural labor force produces around 20 trillion RMB GDP in urban system. If 70% attribution comes down to rural labor force, about 10% will be allotted to the elderly with over 14 trillion RMB. This is just the minimum estimate. Obviously, the meaning of elderly care by labor far surmounts that of elderly care by land.

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Everyone wants to improve personal life. In spite of so many constraints, peasants still swarm into cities in China. This is the fact. Peasants’ entry to the city is not forced, but refined. Urban management drawbacks, high housing price and irrational land system are also constraints. Devoid of such factors or the force of such factors has been impaired, peasants will have much stronger momentum to enter to the city until they earn the same income with urban residents. Profession preference exerts a leading role in urban-rural profession choice. A popular view about peasants’ entry to the city is that women, children and the elderly left behind in the village make up a “386199” team. Based on our survey stable, rural labor force’s age is in inverse proportion to their acreage of land, which means that younger owners tend to manage more land. Even practitioners in the non-land production link in agriculture industry chain are obviously younger than those in the land production link. We can’t simply judge the age of practitioners from the land production link. If the city is rationally distributed and has convenient transportation conditions, like a peasant can reach any city with over 100,000 population within half an hour, the average age of owners will be lowered. In this sense, it is improper to question the necessity of urbanization just because of the seniority of left-­ behind peasants. Question 2: Who will not go to the city? How about the village in the future if peasants continually flow into the city? Will the village worsen under the background of urbanization? It is definitely nonsense. Not all peasants would like to go to the city. For those professional peasants who have 200 effective working days and sell products at average market price, they are reluctant to move to the city. At present, some places excessively go after demolition and place all peasants inside the resettlement area built by the government despite their profession. This practice does more harm than good. As mentioned above, in a period when urban-rural relation turns mature, if there are around 30,000 large residence districts in rural area, and overwhelming peasants can reach a good primary school, a public hospital that provides emergency rescue service, a public security bureau or local police station within 10 minutes (with car), then there is no significant difference between rural residents and urban residents. In residence districts with 7000–8000 population, there should be other facilities attracting to young people. For residence districts with millions of professional peasants, there can be no well-equipped public facilities. Such

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FOREWORD: HOW TO MAKE THE CITY STRONGER AND THE VILLAGE BETTER

sacrifice serves convenience. This is the universal practice in the international society. Such residence districts definitely request the sponsorship of public finance. The social governance mode in residence districts does not require the “government and community unity” mode at village level now. Supposing the expenditures granted to “agriculture, rural area and rural residents” grow at the rate of 3%, rural residents will have the same income with urban residents in around 20 years. At that time, there will be 30,000 large rural residence districts nationwide, and every single residence district’s expenditure for “agriculture, rural area and rural residents” will total 54 trillion RMB. With matching fund oriented towards counter-­urbanization population, every residence district and peripheral small professional peasant residence district will have around 300 million RMB financial expenditures. Under such background, it is unnecessary to rely on rural collective economy to support the public expenditures of “government and community unity” mode. In this case, rural organizations will be in a totally different state. Meanwhile, it is also unnecessary to set up different social management systems for the city and the village. For instance, Organic Law on Village Committee and Neighborhood Committee Organization Law can be merged as one law. Apart from agricultural cooperative, other rural organizations should be the same with urban organizations. By way of the separation of politics and economy in village, the government can cut off the public fund granted by collective economy to community so that peasants do not need to assume public expenditure responsibilities besides tax. Such move obviously helps improve the market vigor of peasants and rural organizations. In this stage, rural organizations should spontaneously expand cooperative economy or farm economy. The number of rural cooperatives will be greatly reduced. One main product is just provided by few or even sole cooperative nationwide. Some large cooperatives can also take in members across the country, and small cooperatives will eventually lose the meaning of existence. On this development platform, drastic changes will take place in rural residents’ income structure. As demonstrated by experience in Europe and America, farm owners’ income gradually decreases, and income from agriculture industry chain continually goes up. The prime organization form of agriculture industry chain is rural cooperative. As long as this objective comes true, there are nearly no poor people in the village. Poor people are more suitable for urban life. People in the

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village fall into two types, among which professional peasants are not poor and counter-urbanization people are not poor as well. Urban poor people are primarily hardcore unemployed people, patients or the disabled, and the minority with special values. It is the responsibility of the government that defends the bottom living standards of the poor. Resulting financial cost in the city is much lower than that in the village. For instance, basic food supply cost is nearly zero in the city, but very high in the village. Question 3: Why do people go to the city? As proved by information in multiple channels, peasants’ will to go to the city is not as strong as before. Household registration is a basic work under the scope of social management. Some peasants have deviated from agriculture to be the long-term residents in the city. Whereas, in small and medium cities, peasants are not interested in household registration. In super-large cities, the government is reluctant to afford such service for peasants. How to tackle it? The problem is ascribed to the city. It is unnecessary for large or superlarge cities to implement the “point-based household registration” policy. Peasants who go to the city can’t leave the city for the time being no matter whether the government approves their household registration as they are the rigid residents of the city. Any large city has low-income group. It is nonsense that the government does not approve peasants’ household registration even if it knows that peasants can’t leave the city and they do not aggravate burdens to the city at all. The sole standard in household registration is whether peasants have permanent residence. This standard is decided by the government according to the reality. In many cities of China, ordinary peasants can’t afford the minimum standard residence, and have to live in irregular houses. This should be attributable to the mistakes of a series of policies, including urban land use planning criterion. Though average population density is not very high, residence districts merely make up a small proportion in the city. This implies that the population density in residence district is at a high level. As industrial plot is cheap, and public plot is free, financial equilibrium pressures in urban construction must be compensated by expensive residential land. This is the prime reason of high housing price. Why can’t the city undertake “nostalgia”? The city is supposed to carry forward nostalgia, but this is not the case in the city of China. Conclusions in environment psychology science already demonstrate that people living in highly dense districts easily suffer from psychological diseases. Since the government compresses ordinary residents’ residential land into 25% urban

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FOREWORD: HOW TO MAKE THE CITY STRONGER AND THE VILLAGE BETTER

land, people have to live in high-rise buildings. But high-rise buildings also go against psychological health. Residential land use index in Europe and America is around 45%, and that in Tokyo is above 58%. Only such residential form can carry forward nostalgia! Furthermore, changing residential form is beneficial to social stability. The national and urban population density in Netherlands is higher than that in China, but over half residents there live in single house. This is also true for Tokyo. Consequently, the key to build a habitable form of living is to the sufficiency of land, but use of land instead. If urban land is planned in the principle of humanism, the absolute amount of land does not require further expansion. What needs to do is to change land use proportion. For instance, under rigorous planning and management, it is very meaningful to moderately develop some shallow mountainous areas. In Beijing, Tianjin, Guangzhou, Shenzhen, Chongqing, Chengdu, Xi’an and other large cities and numerous middle cities of China, there is vast non-arable land suitable for living instead. Moderate habitation of people in these areas also makes for the growth of plantation. Urban planning standards enacted by China in 2011 determine residential land use proportion as 25%–40%. However, in practice, the proportion rarely makes up above 30%. The left part in Table 3 shows the land use planning of a new district in western China, and the right part is humanistic urban land planning. As regulated by existing planning management standards, in specific industrial, residential and official business land use design, at least 15% land should be used for greening. Therefore, we consider that no Table 3  Gross land use equilibrium under two thoughts The planning indicators in a city

Measure up to the planning indicators of humanistic urbanization

Transportation Industry Residence district

Transportation Industry Coverage of single residence district Coverage of building Public management and service

18.56% 14.22% 25.10%

Public management and 8.85% service Business land 11.43% Green land 16.62% Logistics storage 3.17% Public facility 2.05% Total 100.00%

Business land Concentrated public green land Logistics storage Public facility Total

16.00% 15.00% 36.00% 8.00% 5.00% 8.00% 8.00% 2.00% 2.00% 100.00%

  Foreword: How to Make the City Stronger and the Village Better 

xvii

environmental pollution problem will be caused due to concentrated use of greening land. To the opposite, penetrable greening land distribution will be more even if habitable land mode can be realized on a large scale. This is also beneficial to mitigate the rain and flood peak value triggered by high-­intensity construction. Following above land planning thought, the new land use condition across China may be changed as below. Please consult the following estimate. . Urban single house land coverage : 70 million mu 1 2. Collective (low-rise building) land coverage : 20 million mu The land above includes 30% public facility and small business land. 3. 1.2 billion mu land for other urban construction (including industry, warehouse, municipal facility) 4. 45 million mu land for large residence districts in the village 5. 30 million mu land for small residence districts in the village 6. 50 million mu land for other construction land (land infrastructure construction) The total of above construction land is 33.5 billion mu, at least 100 million mu less than the existing urban-rural construction land. Such land use planning will not affect farmland protection, but also increase farmland in general. Such land use pattern is ideal, but divorced from the reality. Certainly, we can’t totally overthrow existing land use pattern and rebuild the city. What counts is to change the mind in new urban construction. Will the city finance run into crisis in China if the change of living form induces sharp decline of housing price? Individually, it is possible to see the decline of housing price and land price because it is the real problem in structural reform. The distribution effect of excessive-priced housing far surmounts economic growth effect. Moreover, the social stability effect of excessive-priced housing is negative too. Housing price definitely drops down if the situation remains as usual. Probably the situation till then is more intractable. If the structural reform begins with the change of living form, it may yield twice the result with half the effort. Let’s do the accounts now. By reference to related data in America, it can be fitly judged throughout the comparison between flat and house that the country may increase

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Foreword: How to Make the City Stronger and the Village Better

15  trillion  RMB consumption if urban residents grow by 70% (slightly higher than the same index in Tokyo). Then 80 trillion RMB capital goods will be produced. If the depreciation rate of the capital goods is 10%, around 8  trillion  RMB capital goods will be produced every year. This process also generates additional impacts and continually produces positive effects on economic growth. The improvement of citizen living form has significant importance to the building industry of China too. Though the building is owned by household, people can hardly repair or maintain building. As such type of house has strong property of publicity, people are often unwilling to make continuous investment in such property. However, it is not the case for house which has significant individual ownership property. People are also willing to make investment in it. Enlightened by experience in Japan, the cost of house construction and installation per sqm is 20,000 RMB. This means that the investment amount of a 200-sqm house equals to that of 15 100sqm flats. According to conservative estimate, if China will build 200 million houses in future 20 years to satisfy the demands of the middle class, it will confront 800 trillion RMB building material and labor force demands, and consume 40 trillion RMB per year. Such demand potential is very huge and has great meaning to the growth of national economy. Once this construction proposal has been initiated, decline of urban buildings will bring lots of benefits. Hundreds of millions of peasants can afford urban buildings and find proper handling means for their houses in the village. The key to future economic growth in China is to increase reform at demand side while reinforcing marketization reform, and solve consumption constraints. The consumption short slab of Chinese people is low living quality, and corresponding low consumption expenditures. House purchasing is investment rather than consumption. High housing price can only give rise of distribution deterioration effects, but can’t push forward economic growth. It is really ridiculous for some entrepreneurs in real estate industry to compare flat in China with house in developed countries in Europe and America. In the future, China should manage to improve citizens’ living quality. It is high time to deepen land system reform now. Dangguo Ying Rural Development Institute Chinese Academy of Social Sciences, Beijing, China Shenzhen Apecland Design Co., Ltd., Shenzhen, China Wenyuan Wu

General Preface: The Year 2020—A Historic Choice of Economic Transformation and Upgrading

A great nation with 13 billion people is confronting a changing situation it has not ever faced for a thousand years. Change, transformation, and innovation feature the main melody of the era. In this era of high integration of growth, transformation, and reform, “great transformation” is exactly what decides the destiny of China. In other words, not only will “toxic assets” left in the traditional system have to be eliminated completely but also the new way for further growth needs to be paved quickly while letting loose the new motive force of development. The major transformation in China’s “13th Five-Year Plan” (FYP) is historically decisive. With the economic transformation as the focal point, both social transformation and government transformation are in the crucial period of transition in which innumerable thorny problems have to be tackled. Our general judgment is that the year 2020 is like a “gorge” we have to jump over. Specifically, by the end of 2020 we will have eliminated the pressure on short-term growth and changed the way for economic development while achieving a comparatively prosperous society in an all-­ round way and becoming one of the high-income countries in the world. If we plan well enough to make the best use of 2020, a mid-term period in the 13th FYP, we can lay a solid foundation for the medium-to-longterm peaceful and sustainable growth. If we fail to grasp the historical opportunity of 2020, we will lose the initiative of “great transformation”, resulting in multiple systemic economic risks. The significant breakthrough for achieving the economic transformation and upgrading in the 13th FYP period is how to cope with “four threes”. Firstly, three major trends: one for industrial transformation and xix

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GENERAL PREFACE: THE YEAR 2020—A HISTORIC CHOICE OF ECONOMIC…

upgrading from “made in China” to “intellectually made in China”; one for urbanized transformation and upgrading from scale to population; and one for consumption pattern upgrading from material to service. Secondly, three major challenges: one for achieving a major breakthrough in structural reform by enhancing the structural adjustment despite the economic downturn; one for “corner overtaking” by responding to the global new round of scientific and technological revolution and increasing the ability to innovate; and one for a real and down-to-earth reform. Currently, the transformation depends more on the all-round breakthrough in reform. It could not move forward at all without the change in systematic structure. The growth would suffer from big pressures. Thirdly, three major goals: one for industry, namely forming the service-dominated industrial structure by accelerating the process of service in manufacture; one for a major motive force, namely forming a consumption-oriented new pattern of economic growth, in which consumption guides investment and domestic consumption becomes a main force that spurs economic growth; and one for opening-up, namely forming a new open pattern dominated by service trade so as to redouble service trade in scale. Finally, three major relationships to be handled properly: one between the short term and the medium-­ to-­long term in which the best job should be done for 2020 (the mid-term period) while resolving contradictions in the short term, basing ourselves on the mid-term and keeping our eyes on the long term; one between speed and structure which requires accelerating the structural adjustment while maintaining an increase by 7% or so; and one between policy and system in which the key is to gain a policy advantage in achieving institutional innovation under the economic pressure. The past 40  years of reform and opening-up have left us numerable valuable assets. The most valuable one is that the more complex the situation may be and the more fundamental the change in environment, the more determined we will be in carrying out the reform and pushing through the transformation. All these require that the “great transformation” need overall arrangement and ambitious planning, need a significant breakthrough in the reform of industrial structure, urban-rural structure, regional structure, ownership pattern, open structure and administrative power structure, and need prospective planning in green sustainable development and “internet plus” development trends. By judging the transformational reform in the 13th FYP period, China (Hainan) Institute for Reform and Development (CIRD) and Zhejiang University Press have jointly designed and published this set of series

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entitled The Great Nation in Great Transformation—Economic Transformation and Innovative Development in China. The book series has paid attention to readability based on being strategic, prospective and academic. It is our expectation that the series will offer enlightenment to readers who are closely watching the transformational reform in China while playing an active role in promoting the transformational reform in the 13th FYP period. The authors of the series are mostly well-known scholars in their own subject areas, who wrote their respective books in their spare-time. As the director of the editorial board of the series, I wish, first and foremost, to extend my sincere thanks to the consultants, editorial board members, authors, and the leadership and editors of the press. Last but not least, this set of series covers a wide range of subject areas, each volume representing its author’s own research conclusions and academic opinions. The set does not require consistency in terms of viewpoints. Any criticism and correction from readers are truly welcome. Haikou, China September 2015

Chi Fulin

Contents

1 Urbanization  Is the Irresistible Trend of Development in China (Introduction)  1 1.1 How to View the Basic Pattern of Rural Development?  1 1.2 Urbanization Level Determines the Success of China’s Future Development  6 1.3 Follow the Path of Humanistic Urbanization 11 1.4 What Is Urban-Rural Socio-economic Integration? 16 1.5 Possibility of High Urbanization in China 17 1.6 Urban-Rural Integration Development Requests Concept Upgrade and Policy Adjustment 19 2 Definition  for City and Village and Policy Implication 29 2.1 Practical Meaning to Determine the Boundary of City and Village 29 2.2 Discussion on the Minimum Size of City 32 2.3 International Experience about the Boundary of City and Village 38 2.4 Few Realistic Problems about the Boundary of City and Village and Policy Adjustment Discussion 40 3 Injustice  and Correction Solution of Urban-­Rural Dualism 45 3.1 Implication of Few Concepts 45 3.2 Possibility of Efficiency and Equality Impairment Under Dualism 47 xxiii

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3.3 Injustice of Dualism 49 3.4 Rural Poverty Relief Objective and Path 60 3.5 Urban-Rural Integration Path 66 4 Labor  Force Transfer and Reinforce Agriculture Competitiveness 71 4.1 Rural Labor Redundancy: Survey About Peasants’ Working Time 71 4.2 Path to Improve Agriculture Competitiveness in China 75 4.3 How Should Small Peasants Improve Scale Operation Level: Survey About the Transitional Mode 87 4.4 Urbanization-Centered Urban-Rural Integration 97 5 Land System Reform109 5.1 Agriculture Cost and Land System109 5.2 Few Problems to Be Solved116 5.3 Land Property System Reform123 5.4 How Should the Government Reform Land Management System?127 6 Adjustment  of Rural Development Concept in China141 6.1 Entrepreneurs’ Agriculture Romanticism141 6.2 Cultural Saviors’ Agriculture Romanticism143 6.3 Rural Elites’ Agriculture Romanticism146 6.4 Philanthropists’ Agriculture Romanticism148 6.5 “Government and Community” Unity Agriculture Romanticism150 6.6 “Anarchy” Market School’s Agriculture Romanticism151 6.7 Physiocratic School’s Agriculture Romanticism152 6.8 Fundamentalist School’s Agriculture Romanticism153 6.9 Zero Growth School’s Agriculture Romanticism155 6.10 Heroic Utopian Romanticism159 7 Urban-Rural  Social Governance Integration163 7.1 Analysis of Rural Society Governance Objective and Task163 7.2 Political Participation Behavioral Logic166

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7.3 Solve Rural Elderly Care Problem in China177 7.4 Social Governance under Rural Population Decline Trend179 7.5 Meaning of Municipality Reform Exploration186 8 Urban-Rural  Land Planning Management Reform199 8.1 Proposal of Questions199 8.2 Basis of Land Planning Management Reform202 8.3 Discussion of Few Major Problems218 8.4 Land Planning Management Reform: Few Conclusive Suggestions229 9 Urban-Rural  Development and Planning Innovation231 9.1 Recognition about the City231 9.2 Formation and Planning of City Charm234 9.3 How to Realize Compact Development245 9.4 Discussion about Small City250 9.5 Rural Planning Problems and Methods252 9.6 Public Participation Planning Diversity262 10 The  Netherlands’s Coordinated Urban and Rural Development and Enlightenment Thereof267 10.1 Highly Developed Netherlands Dairy: Taking Development of the Dairy as an Example [*2]268 10.2 Secret of Achievement of the Dutch Dairy273 10.3 Urban and Rural Land Use Planning of the Netherlands284 10.4 Enlightenment of Dutch Development Experiences on China289 Postscript297 Bibliography299

List of Figures

Fig. 3.1 Fig. 5.1 Fig. 8.1 Fig. 9.1 Fig. 9.2 Fig. 9.3

Fig. 9.4 Fig. 9.5 Fig. 9.6 Fig. 10.1

Edgeworth Box A simplified decision-making model Side effects of b district purpose on a district purpose Urban road design and population density Building height and urban population density. (Date source: Meta Berghauser Pont, Per Haupt, Spacematrix) Comparison of different building forms with the same building density. (Hokaido, Compact City Planning and Design, translated by Su Liying, China Building Industry Press, 2011, p70) Rational layout for villages and watercourses Relation between waterproof surface and water quality in impoundment area Natural purification in rural area Housing condition across provinces of Holland (See website: http://www.cbs.nl/nlNLmenuthemas/bouwen wonen/ publicaties/artikelen/archief 2013 twee derde van alle woningen eengezinswoning pub.htm for the dwelling conditions of various provinces of the Netherlands. Data unmarked with sources are taken from the official website of the Statistics Netherlands)

48 122 228 243 248

250 255 260 261

287

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List of Tables

Table 3.1 Table 3.2 Table 3.3 Table 3.4 Table 4.1 Table 4.2 Table 4.3 Table 4.4 Table 4.5 Table 4.6 Table 4.7 Table 6.1 Table 7.1 Table 8.1 Table 9.1

National vacant rural residence and value estimate of vacant rural land Employment elastic coefficient comparison in china and main developed countries Comparison between central government expenditures for “agriculture, rural areas and rural residents” and urban-rural resident transfer income Non-agricultural construction land occupation condition in China in 1952–2010 Calculation of labor costs and surplus labor of major agricultural products in 2007 (per acre, day, yuan) Japan land statistics in 1954 Comparison between China and Japan in economic growth and land appropriation Comparison of economic benefits between Sheyang Mode and “Petty Peasants + Socialized Services” Calculation of future changes in urban and rural population and employment Change of non-agricultural employment and national income in America National income growth rate and population growth rate in related stages of America American household average expenditure in 2014 Market development condition in rural areas (unit: %) Lancaster government’s TDR transaction norms Changed society and space

52 53 56 56 73 83 84 90 97 99 101 158 175 227 247

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List of Tables

Table 10.1 Table 10.2

Average income and expenditure status of Dutch Professional Dairy Farms (unit: Euro) Multiple of net income of the Dutch Dairy Farms relative to the income of the Dutch agriculture

270 271

CHAPTER 1

Urbanization Is the Irresistible Trend of Development in China (Introduction)

Throughout reform and development for over thirty years in China, two pieces of fundamental experience deserve high attention. Firstly, economic reform adheres to the marketization orientation and infuses vigor to Chinese economy. Secondly, economic growth communicates the mobility of factors between the city and the village, and improves resource allocation efficiency. Lessons about the reform and development in China may be also drawn from above two aspects. Firstly, resistance against marketization reform has not be effectively eliminated, and macroscopic management mechanism and means catering to marketization economy remain unsound. Secondly, urban-rural income gap during urbanization process has been significantly enlarged, and urban-rural socio-economic system is disunited. The rudimentary task of reform and development in China in the future should be the solution of problems in the two aspects.

1.1   How to View the Basic Pattern of Rural Development? With the rise of self-media in last one year or two, rural development conditions in China have attracted extensive attention from the public. In a manner of speaking, numerous popular rural realistic literary works reflect the true conditions in the village. However, it is less sensible and prudent © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 D. Ying, W. Wu, A Study of China’s Urban-Rural Integration Development, The Great Transformation of China, https://doi.org/10.1007/978-981-19-2756-0_1

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to interfere the general trend of rural development on the basis of such exceptional cases. At this point, two points need to be further clarified. The first one is the general pattern of rural development is either better or worse than that before reform and opening up, and the second one is why there are so many unsatisfactory phenomena in present rural development and how to tackle these problems in the future. At present, the Chinese government has indeed obtained substantial progress in rural development than days before reform and opening up. According to existing poverty standards, back to the 1960s–1970s, Chinese rural residents were generally in the poverty state. Then agriculture industry in China basically depended on traditional tillage method. As a result of the drawbacks in People’s Commune mechanism, rural productivity could not accommodate then gross population, and food shortage was a rather commonplace phenomenon. It was no exaggeration to describe then social situation with terms like “pathos”. After the execution of reform and opening up policy, peasants acquired sufficient land management right and enjoyed greater freedom in the choice of employment, and the focus of national politics transformed from class struggle to economic construction. Benefited by the great improvement of peasants’ production and living conditions, peasants’ spontaneously improved their living standards. The progress attained by China has received the recognition from the world. The essence of this course is changes in the order and rule of Chinese society. In particular, marketization and urbanization turn to be the leading trend of national economy. Guided by the trend of marketization, rural resource allocation efficiency is sharply raised, and peasants invest their land and labor resources in other economic fields with higher yield. Guided by the trend of urbanization, peasants transfer to higher economic sectors and add their income. No compulsory constraint has been imposed on peasants. On the contrary, peasants now can make a choice by themselves, force the deregulation of constraints and achieve prosperity on their own part. Accompanied by the improvement of living conditions, peasants’ social life also takes place drastic changes. Under People’s Commune system, peasants were on the one hand restricted by commands of cadres, and dragged out a miserable existence. Additionally, forced by the pressures in life, peasants had to submit to patriarchy for help. Young people living in the city now can hardly imagine such lifestyle. Likewise, those young people who walk out of the village and go to the city can’t understand the hardships in the life of their grandparents. If someone doubts the

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judgment, they can ask their seniors whether they are willing to go back to the life forty years ago. Some claim that rural culture possibly dies out together with the hollow village phenomenon on a large scale, and some worry if their nostalgia will have nothing to rely on due to the disappearance of some villages. We ought to correctly view the trend. Among all matters in the world, food is the paramount necessity of the people. The government should not intervene the free choice of peasants for sake of their nostalgia complex. Peasants leave the homeland to go after high living quality. Why can’t peasants leave farmland aside if farming work is not profitable? To the opposite, if farming work is profitable and allows peasants to lead a decent life, even young people are willing to till land. This is the basic conclusion that we have drawn from field survey in the village. As a matter of fact, the living form carrying forward nostalgia can also survive in the city, because limitations in the land planning management system in China compress such possibility. If peasants left behind in the village turn to be “household farmers”, the form of rural residents’ residence districts also varies, rural field becomes more picturesque and people more incisively perceive the beauty of the village. A beautiful village requests the support of prosperous peasants. If the government expects peasants to settle down in the village forever, and lead a miserable life with 30 mu land and one cow so that urban residents can travel to the village upon impulse and experience nostalgia, it may be rather too cruel. It is apparently important to retain nostalgia. However, the right path is to unify the development of the city and the village and realize urban-rural integration. As to cultural inheritance, the government should also hold a tolerance mindset. In a broad sense, culture refers to human behavioral norms and artistic expression. Different groups have different cultural properties. Not all kinds of cultures belong to civilization, as only those that proactively facilitate human progress can be deemed as civilization. In the long course of history, some types of culture have been eliminated, and some other types of culture come into being. It is not necessary to make a fish of one and flesh of another at all. In the progress of modernization, rural population in civilized countries greatly decreases. It is not because of the disappearance of culture or civilization. Modern cities can also bear culture and breed civilization. If some prefer a specific type of rural culture, and local peasants there would like to forsake it for sake of their prosperity, they may donate their money to peasants and ask these peasants to help

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retain the culture. The author thinks that a culture will not disappear as long as it caters to the taste of the public. It is never difficult to discover problems in the village of China. Among all the other problems, four of them deserve further observation. Firstly, as the agriculture in China has inferior competitiveness, plenty of Chinese agricultural products are not a match for counterparts in countries with developed agriculture. If products are sold at a low price, peasants can’t earn money. However, if products are sold at a high price, the country has to confront heavy pressures and can’t effectively prohibit the rampancy of smuggling. The second problem is the difficulty in the stable growth of peasants’ income. Peasants here indicate professional rural peasants. We consider that even if peasants have transformed to vocational farmers, they are still unable to earn money if they fail to seek supplementary income from agriculture industry chain. This is the experience in the international society. Now that China has few real rural cooperatives, agriculture leading companies barely share the dividend with peasants. This is really a big headache. Since we ignore this issue in the past, the situation gets worse now. The third problem is irrational urban-rural population layout. Though peasants have contributed to around 9% GDP, rural population makes up over half gross population and most residents are so-called “left-­ behind children” and “empty nest elderly”. The last problem is environment. In spite of the rise of national forest coverage rate, the air quality worsens and soil pollution deteriorates than before. The above-mentioned problems are primarily solved by reform deepening and expedition of development. For reinforcing agriculture competitiveness, the government must lower cost by expanding the scale operation of agriculture. As shown by related surveys, the prospect of this path is very promising. In order to achieve this goal, urbanization rate must be raised up to approximately 85%. Once the goal has been realized, rural population will be dominated by professional peasants and partial counterurbanization population. It is worth noticing here that the two groups are not poor people. The village backed by prosperous population will be definitely more charming. For the past few years, the State Council has successively enacted a series of policies in furtherance of urban-rural social guarantee construction and population registration integration. Recently, it steps up the citizenization process of migrant workers. All of these are praiseworthy major policy adjustments. In the future, the government

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should speed up to promote rural land system reform, achieve the unity of urban and rural factor market and lay a firm institutional foundation for marketization and urbanization. For over thirty years as of reform and opening up, the urbanization rate in China has been progressively increased from 17.92% in 1978 to 44.9% in 2007. After 2000, the speed of urbanization has been further accelerated, and urbanization rate has been raised by around 1 percentage point on an annual basis. The rise of urbanization rate makes great contributions to the growth of national economy. For rough calculation, whenever a rural laborer transfers to the city, annual labor days will increase by 6–10 times per year. According to magnitude of value, average net income of rural residents in 2007 was 4140 RMB, but that of urban residents of the same period was 14909 RMB, around 39 times higher than rural residents. We may equate such gap to the gap of labor productivity. This implies that the rise of urbanization rate significantly improves the productivity of society. The motivation of urbanization progress comes from economic system restructuring and tenacious spirits of Chinese peasants. The creativity of Chinese peasants responds to the buzzword that “give me a fulcrum and I can prize up the earth”. Though China has enacted a household registration system to differentiate the city and the village, Chinese peasants still take risks to go to the city and change their fate. Though planning economy system has limited peasants’ autonomous entrepreneurship, peasants still boldly break up institutional constraints, create the miracle of township companies, and give birth to a batch of new cities. As it is, Chinese peasants can create miracles if they are given with enough freedom. However, the urbanization level in China for the time being can’t cater to the requirement of economic growth. Chinese rural population accounts for 55% of gross population, but agriculture GDP merely accounts for 9% of GDP. As per the general law of world economic growth, the urbanization rate in China should be above 60%. because of the existence of urban-rural dualism, there exists a giant mobile group in Chinese economic system, which can be best evidenced by the resulting Spring Festival travel rush per year. Rural laborers known as “migrant workers” work in the city, but do not have any permanent residence in the city. Such situation not only impairs the economic growth in the village, but also goes against the general operation of national economy.

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1.2  Urbanization Level Determines the Success of China’s Future Development For achieve economic growth objective on the premise of stable currency stabilization, the government must focus on gross supply and gross demand. If gross supply conditions are not improved, the inflation level possibly goes up, while if gross demand conditions are not improved, the inflation level possibly shrinks and companies can’t find any way out. The two may also mutually act on each other. The key to improve the gross supply conditions is to raise productivity, cut down production cost and boost industry core competitiveness. The gross supply curve is decided by the marginal cost of all companies. Equilibrium growth level probably raises whenever the marginal cost drops down. Here present some measures to improve gross supply conditions. Firstly, as companies need to compete against each other against hard budget constraint conditions, the government should support the development of private companies. Secondly, as all production factors ought to be involved into market division system as much as possible, the government should enhance the impacts of market to traditional agriculture sectors, and introduce rural labor force into urban economic sectors with higher efficiency. Thirdly, the government should maintain maximum restriction on the independent operation of the market. Modern economy is specialized economy in which decisions can be only made by merchants devoid of the intervention of officials. What the government needs to do is to manage the currency, and invest money in public sectors. Regarding structure and employment problem, this is the obligation of the market. It is of vital importance to enhance the gross demand conditions. To be sure, it is very necessary for the government to stimulate gross demands by way of currency policy, but in China in contemporary times, the foremost task is to remove consumption suppression and promote the building of prosperity consumption mode. The giant durable consumer goods-centered manufacturing industry system must be supplemented by new consumption views and consumption mode. The first solution is to expand housing consumption (instead of high-priced house purchasing) and traveling consumption, and release residents’ demands for privacy protection and freedom promotion. Demands for house, propensity to choose decentralized residence districts and demands for limousine all belong to consumption will requesting encouragement. Out of this

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reason, it is high time to develop house-oriented residential district, and encourage residents to buy family limousine. Secondly, attention should be paid to developing urban acquaintance society, and properly prompting comparison consumption mode. Comparison consumption makes up increasingly larger proportion in consumption expenditures in modern society. The major social conditions in favor of comparison consumption mode is the acquaintance society in the city. Whereas, the high-rise building mode affects the formation of urban acquaintance society. In consequence, more house-centered residence districts should be developed to change such pattern. Thirdly, the government should invoke the middle class’ demands for the quality of independent and small environment, and add private space supply. The house purchasing fever exactly reflects people’s demands for such environment. Existing common high-rise building-­ based living form has great drawbacks. Inside the building, people are encircled by houses. Outside the building, people face the square space. In this case, people cannot pay for personalized space,and the government adds more square maintenance cost. To break up consumption limit, China now requests a “revolution of living form”. For this, China should properly draw lessons from the living form spontaneously formed in developed countries and regions in Europe, America and Japan, greatly add the proportion of residence districts in the city, urge the rational decline of house price, and explore to enact residential land permanent property rights system. As long as the government can well plan urban-rural construction land, land resource supply used to achieve this goal will never encounter any bottleneck, and it is also nonproblematic to protect farmland anymore. Breaking up consumption prohibition is related to economic growth in future decades. Therefore, the government should not save a little but lose a lot and miss development opportunities. The proverb “tighten your belt to get along” is often used to depict the plight where people are forced to accept the low living standards. As proved by historical materials, though such life is not the essential pursuit of people, it portrays the normal living state of most people in a rather long time. During pre-modernization period, “30 mu land and one cow” means that a household just owns less than 1000 kg cereal. If the household has five members, their life will be extremely awkward; and if the household is a tenant, probably all family members strive hard to keep body and soul together. This implies that it is a rather commonplace thing for people to suffer from starvation and tighten their belt at that time. As

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recorded by ancient literature, “a five-member household with one hundred mu land” is the foundation of social prosperity. This is rather fair. Whereas, such family structure is only seen in the heyday of a dynasty. Once a country steps into the industrial age, rare people suffer from starvation and tighten their belt. But after a second thought, such situation may be presented in another form as a result of state policy. Under such circumstances, “tighten your belt to get along” takes on another new look. As far as we are concerned, to limit the form of people’s wealth is to force people to tighten their belt in nature. To some extent, present land policy in China greatly restricts the consumption of people, and prevents people from converting to the middle class. Urban land supply policy constrains the possibility for most ordinary people to own houses, and ordinary people can only live in congested buildings. Though they have a certificate of land, the land is commonly shared by all residents here. The value of land only shows when they sell the building. In China, the proportion of residential land accounts for around 25% urban construction area. While this proportion is respectively 45% in Europe and America and 59.2% in Tokyo. Out of this reason, the housing price in China takes a lead ahead of most developed countries. The land price developed by real estate companies in first-tier cities even increases by few times, but the land price of single house in Shinjuku, Tokyo is simply 1/4 of that. Under such a background, the policy in China which prohibits the construction of single house can be basically carried out, because the house price in Chinese first-tier cities far exceeds the house price of the rich district in first-tier cities in Europe and America. Owing to the high price of house, house is taken as the object of speculation and hedging investment. Devoid of building tax, speculators hoard lots of houses, which adds difficulty to the decline of housing price. In this way, housing price allocation functions surmount economy stimulus functions, and ordinary people mostly donate their savings to real estate developers and government urban construction platform companies. The high housing price caused by land policy not only forces people to tighten their belt, flat construction indeed fails to stimulate consumption objectively. There exists a huge gap in subsequent expenditures between house and flat after disposable purchase. In addition to property service charge, residents do not have need to pay for extra expenditures for flat. By contrast, house consumes heavy subsequent expenditures. As the house is independent, the chance of affecting neighbors’ externality is greatly

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reduced when people decorate the house by themselves. In consequence, personalized house maintenance, energy system reformation, small garden construction and maintenance, reception facility, demand for baby sitter for sake of privacy, procurement of house maintenance tools, community facility refinement management all embody the rise of living quality, and naturally demand more expenditures and drive national consumption. Nevertheless, people who tighten their belt can’t live up to such living quality. Restricted by such improper policy, ordinary people faced by the high initial investment threshold can only bemoan their insignificance. Days continue on in congested buildings. Due to the low labor price, people do not have to earn too much money. In each month, they may spend 500 RMB in meal, 300 RMB in joint rent, 200 RMB in online shopping of clothes, 100 RMB in sidewalk snack vendor, 300 RMB in transportation, 100 RMB in communication, 200 RMB in elderly care, 300 RMB in other hobbies, 500 RMB in emergency, 600 RMB in premium. If a person earns 5000 RMB per month, he or she can save the remaining 1900 RMB so as to save face and make a contribution when parents help buy him or her a house. Such condition keeps a balance between efficiency and equality, but it doesn’t make for social stability. It is rather too difficult. If above occasion occurs under closed conditions, the reality may be worse than expected. China has become a rather open economic entity after its entry to WTO. The book here discusses the outcome of people who tighten their belt under open conditions. On the whole, efficiency loss triggered by the thought and policy of “tighten the belt” is inevitable. Subject to consumption restriction, low labor cost, large trade surplus, RMB appreciation is an irresistible trend. If foreign currency depreciates against RMB, and RMB appreciates to some degree, foreign land property right has investment capital, and capital elites and intellectual elites tend to engage in international arbitrage immigration and buy real estate property in developed countries. As government foreign exchange is one of the basics of currency issue, and foreign exchange reserve lacks corresponding domestic currency supply, inflation will take place in this case. Once government interest rate policy and reserve rate policy are implemented to prevent inflation, domestic capital price will go up. High price of domestic capital attracts foreign capital to enter Chinese currency market and launch arbitrage behavior. Both of the two sorts of arbitrage behaviors threaten the stable growth of entity economy in China. The free mobility of capital between countries indeed

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promotes resource allocation efficiency, but the problem is that there is no free flow of labor force, and domestic land market has low degree of openness. Consequently, China now is faced with asymmetric resource flow. It is imperative to match domestic free flow with international free flow. High price of capital in itself makes the rich richer and the poor poorer. After all, those who take the opportunity of RMB appreciation and go overseas to buy real estate property for arbitrage are definitely not ordinary people. According to land ownership, the government can’t control private luxury consumption ownership of land in reality. Moreover, the loose land ownership conditions for all sorts of legal persons creates a large space for the land ownership of some natural persons among legal persons. Social organization legal persons often occupy more coverage of land. Some of them have training centers, disguised rental facilities, reception centers enclosed by large gardens, etc. Likewise, it is also true for enterprise legal persons, such as resort centers, conference centers, and golf courses. There is no sign that Beijing is a city in short of land. By contrast, few large residence districts outside the fourth ring are probably the most compacted residence districts in the world. Tiantongyuan here has a coverage of 480000 sq.km and a planning area of 600 million sq.km, but its plot ratio totals over 10 times. It means that population per sq.km is above 80000! High domestic capital price also prevents private investment expansion, affects growth of investment, adds difficulty to rise of income, and therefore further affects the income rise of general laborers. Limitations on ordinary people’s wealth growth naturally obstructs social stability. For the past few years, the author repeatedly advocates people to notice the relation between social psychology and property state, but no response has been given yet. China has more than 15 billion mu national land, and the Chinese government can grant the use right over tens of millions of mu land to people so that most urban households have house. Such transition will exchange the happy mood of citizens and the affection of middle class. Till then, overwhelming people will possess a real estate property, and turn friendly, while few poor people also can take a ride in this stable society. The society is more like a whole. Obviously, we all know that public property state can’t wholly decide social stability, but we should be aware of the meaning of bucket cask effect. If any mistake has been committed in improving people’s property state, the bucket cask will lose its value for all. The way out is naturally to reform land property right system, land planning management system and urban residents’ land construction

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practice. The sally port of reform is to encourage the construction of house. To be sure, the government may enact economic policies to convert land with low use efficient into house construction land. Moreover, land retail sales mode should be approved in the market so that households with land use right can directly sign the construction contract with contractors. On the other hand, efforts should be made to convert land improper for agriculture in outskirts and shallow mountainous districts into house construction land. By virtue of rigorous environment standards and land proportion differential tax rate, the government can significantly increase the cost for the minority to build luxury mansions. High-rise building construction in the city needs to be restricted within a period so as to encourage migrant workers to rent or buy buildings when the price drops down to certain level. Above measures had better be carried out with marketization approaches and reduce direct intervention of administrative directives to the uttermost.

1.3  Follow the Path of Humanistic Urbanization The experience of reform and opening-up for over thirty years proves that urbanization lies in the basic momentum of economic growth. For maintaining the healthy development trend in the long run, Chinese economy takes a clear and reliable thought. While this problem has never been carefully treated in the past. Fortunately, China has a highly opening market and local government enjoys development autonomy, so that domestic resource allocation generally reflects the scarcity of resources, and preserves the vigor of economic growth in the long run. From the perspective of labor force price discrepancy, the fundamental characteristic of resource allocation adjustment in China is that the city lacks more cheap labor force than the village. Therefore, under the general free labor market environment, cheap labor force in the village continually flows into the city. This is the prime and radical source to improve resource allocation rate in China, and also the core secret of economic growth in China. Without past urbanization, contemporary economic achievements can’t be achieved. As to the history of economic growth in great powers, China breaks the record in urbanization speed. As of 2000, the urbanization rate in China has been raised by one percentage point annually. This rate exceeds the fastest speed of American urbanization rate at 0.5 percentage point annually.

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High urbanization is the general law of economic growth. Human technical progress and wealth growth depend on the continuous expansion of social labor division. The prerequisite of social labor division is developed market system. Building a city is the basic solution for people to solve market trade cost problem, and moreover, it also has many other benefits. Exactly because of this reason, nearly all developed cities in contemporary world have high urbanization rate. Irrespective of the dissent over alleged optimal city scale, economists do not hold different opinions about the role of market in promoting labor division and expanding the market. High urbanization is the necessary condition of agriculture modernization and peasants’ growth of income. The rise of agriculture scale operation level can cut down agriculture production cost and boost domestic agriculture competitiveness to a large extent. Comparing with developed agriculture economy in Europe and America, peasants in China have rather limited farmland operation coverage. In particular, in the field of crop production, the average operation scale of Chinese peasants is just about 1/10 of that of EU, and 1/100 of that of America. Latest documents prove that the soybean yield per hectare in large farms of America even totals 22 tons, about 7 times more than that in China. At present, most cereal production peasants in China manage less than 15 mu, and have to resort to non0agricultural industries for livelihood. With the rise of Chinese labor cost, such comparison disadvantage becomes increasingly prominent. According to the estimate of the author, if the constraint requests that peasant household average income reaches urban household average income, China simply requires around 30 million professional peasants in the future. In accordance with the condition, the proportion of agriculture population in gross population in China should be maintained at around 6%. Considering the diversity of agriculture population, the urbanization rate should be elevated over 75%. This means that the Chinese government must further propel the progress of urbanization nationwide. High urbanization is also the essential foundation of social stability and political democracy. The growth of democratic politics has to rely on the growth of the middle class, or otherwise, overwhelming ordinary people can’t enjoy due rights under “oligarch democracy”. The society dominated by the poor probably flings into the mud of populism. Social stability degree is in direct proportion to social organization degree, while urbanized society makes for the decline of organization cost and the rise of organization efficiency.

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Comparing with the village, the city has more important cultural values. Traditional rural society which does not have any accumulation and follows simple mode of production is a society which has absolute dominant power over public affairs. Such society naturally prioritizes agriculture economy, and residents mostly gather together to form the village as per kinship. The leading power that dominates public relations is patriarchy and religious representatives. It seems that residents tacitly approve the public criteria composed by folk customs and doctrines, and generate optimal public goods supply. But this is not true. Folk customs and doctrines actually suppress rural residents’ freedom, as they do not have any other choice. Such state comes down to non-civilization. Without high urbanization, such rural political ecology is impossible to evolve into modern civilization politics. Taking high-efficient resource use as the foundation, free population transfer as the path, equitable access to basic public services in the city and the village as the emphasis and sustainable development as the bottom line in structural reform, humanistic urbanization intends to fully improve residents’ living quality, promote public basic rights guarantee level, and realize the transition of traditional rural society to modern urbanization city. The foremost mark of humanistic urbanization is the rise of the middle class. The middle class generally possesses the following few characteristics. Firstly, members in the middle class consider themselves as part of this class, and approve mainstream values of the society. This involves the unity between self-identity and social identity. Secondly, members in the middle class enjoy private space by virtue of their wealth, and maintain benign social psychology to be in good terms with others. As a general rule, house is the basic property state owned or used by the middle class. This is a mature conclusion in social psychology research. Thirdly, members in the middle class have stable income, maintain around 20% Engel coefficient, and lead a vigorous life without nothing to worry about. Fourthly, members in the middle class pay high attention to public affairs and public charity and cultivate conscious awareness to defend social justice and law. Fifthly, though the main constitute of middle class is employees, including laborers in modern departments, they have discourse right in labor-capital relation and capital does not have absolute power on them anymore. The society mainly composed of the middle class is obviously the society controlled by the city. However, after the prevalence of “nostalgia” concept, some seem to deny the positive relation between urbanization

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and retention of nostalgia, and consequently query the possible humanistic property of urbanization. The author disapproves of such query. In reality, in the city, both new residents and old residents have the will to get close to the village. Such nostalgia and affection towards village essentially belong to two sorts of psychological dependence: one is the reliance on natural environment in favor of health and the other is reliance on interpersonal relation. The latter is obviously more important. However, few people acutely recognize its essential meaning. The concept of nostalgia can be further discussed. Nostalgia in social meaning is after all the sense of reliance on the acquaintance society. Under social capital theory, the acquaintance society more easily forms the social network based on trust relation. In particular, moral discovery and ability discovery have rather low cost. This is the major foundation to improve social capital level. Specifically speaking, four resources in the acquaintance society can be positively utilized under certain conditions. The first one is patriarchal relation. Patriarchal relation is not always bad, because it may lower social operation public cost if it can be well utilized. The second one is moral mutual trust. The acquaintance society depends on the punishment role of “sense of shame” to regulate people’s behaviors. The maintenance cost of such behavior is nearly zero. The third one is information communication. Information in the acquaintance society is communicated from mouth to mouth at a rather low cost which has high reliability. The fourth one is talent recognition. In the acquaintance society, individual talent and insight are easily recognized, and his leadership status is relatively stable. This lowers the dialogue and cooperation cost between leaders and other social groups. During certain course of history, these resources have practical functions and easily gain the preference of people. However, the acquaintance society also has some limitations. For instance, the high cost of privacy protection invisibly restricts people’s freedom. If the acquaintance society is not connected with the whole society, and particularly not involved into the whole social labor division system economically, it possibly becomes an enslaved society featured by internal tension and external extension. The acquaintance society falls into different categories. It is practical to roughly divide the acquaintance society into the traditional type and modern type. The keynote of humanistic urbanization is to convert traditional acquaintance society to modern acquaintance society. Traditional acquaintance society has rather sophisticated bonds, including patriarchal kinship, religious bond as well as economic reliance. On the

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whole, such acquaintance society is depressive. People who have breathed the free air in the city or market may feel afraid of such society and want to escape from it. Such sort of acquaintance society still prevails in China for the time being. Especially in some mountainous areas and villages where leaders have all powers in the hand, the atmosphere is rather depressive. It is nearly impossible to convert such acquaintance society to modern society. The sole way to liberate such type of society is to continually transfer local population by way of urbanization until final disappearance. Some intellectuals do not carefully observe such type of society, but blindly stress the diversity of cultural protection. Their preference for such society actually deviates from the bottom line of humanism. Peasants show their like and dislike with two legs. Especially, some girls who go to the city to find a job would never go back to their homeland. Scholars’ diversified culture has no status in their mind. If there is no change in basic structure, even if such type of acquaintance society is amplified to a small city, it is essentially a large village beset by the drawbacks of traditional acquaintance society. The most prominent drawback of such small society is heavy humanity burden. People can’t successfully do anything without the support of such humanity relation. Patriarchal relation, administrative network and interests are often interlaced. People tend to spend much time to foster their interpersonal network, and share interests flow backed by public finance. Modern city acquaintance society integrated by market relation apparently has some specialized form. People begin to solve their basic life necessities with professional technologies. The appearance of such labor division shows the great emancipation of people. People’s interpersonal demands are not bound up with the satisfaction of material interests, and people have free choices for contact. This marks the separation between private right and public right. Private right is used to meet material demands only associated with individual skills, and public right is used to process public affairs. Only people who have preference for public affairs can enter the field of interpersonal contact. Freedom in public right execution can only present the choice for public right representatives (officials). Once public decisions have been made, even the minority have to carry them out. Whereas, the minority’s right sacrifice is limited to some public spheres, and their material demands are still confined within the scope of private rights with no relation with basic freedom. This is the political property after the actualization of humanistic urbanization.

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When the society enters modernization, the acquaintance society itself demonstrates diversity, and there exists obvious demarcation between different types of acquaintance society so that leaders in one or few communities lose the control right over every aspect of the society. The transition of society in China includes the transition of acquaintance social circle. This transition does not trigger enough attention in theory. The author believes that the success of such transition has an intimate relation with social stability and rise of people’s living quality. For instance, there generally prevails some “duplicates” of patriarchal relation or other rural community out of some sophisticated causes in the low-end employment market in the city of China. Probably laborers in certain industry of a city are mostly foreigners from the same province. Such conditions lead to the stereotype of urban residents about foreign population, including their ability and morality. In serious cases, such condition causes trouble to the employment of some residents from borderland. When they go out to find a job in group, they are easily collectively rejected because of their similar and recognizable appearance and character. This is the function of stereotype. It is just one condition in the labor market. Such phenomenon can be also seen in the capital market and real estate market too. It poses huge threats to humanistic urbanization.

1.4  What Is Urban-Rural Socio-economic Integration? The premise to talk about urban-rural integration should be the difference between the city and the village. But such difference is usually overlooked. In China, such difference is both vague and irrational. Besides, it lacks a universally acknowledged standard in the intellectual field and all countries in the world. States in America haven’t given a uniform definition for the city, and statistical department in federal government also tells the city from the village by reference to population concentration. It views the population settlement district in which population reaches 2500 in core district per square mile (around 2.6 sq.km). It is simply a statistical concept. According to the logic of language embryology, it is sensible for America to define the concept of city as per population density. If this standard is used to differentiate the city and the village in China, most villages in China measure up to the standard of city. Under the context of China, a place can be defined as the village once permanent

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residents and related industries live on agriculture, and the opposite place can be defined as the city. In general, the population in former type of residence district is rather small and disperse in distribution. Population in places dominated by agriculture and other related industries usually becomes more disperse with the progress of agriculture devoid of improper intervention. The agriculture population in American rural area is about 1/7 of rural population, and other residents are either related to agriculture industry chain, or are non-agriculture population caused by counter-urbanization. The permanent population in Chinese rural area is agriculture population. People who are related to agriculture but do not directly engage in farmland production activities begin to polarize and counter-urbanization transfer targeted at urban population has begun. We estimate that even if Chinese agriculture has realized high modernization, the agriculture population in rural area will not reduce to 1/7 of gross rural population. The possible proportion might be 1/3. The proposal of urban-rural integration goal aims to remove urban-­ rural dualism, and promote the harmonious development of China. Guided by the implication, the goal of urban-rural integration must contain the following points. Firstly, an urban-rural united market, especially factor market, must be built to radically remove the institutional root of binary structure. Secondly, urban and rural residents have basically same income, and rural residents’ income even exceeds average national level. Thirdly, urban and rural residents enjoy basically same services, and especially, urban-rural separation system of social security has been totally eradicated. Fourthly, agriculture is highly developed, with agriculture GDP proportion decreasing to 5% and below, national average Engel coefficient decreasing to 20% and below and professional peasants being the main residents in the village. Fifthly, urbanization rate reaches above 70%.

1.5   Possibility of High Urbanization in China Many people doubt the potential for cities to absorb population, and judge that Chinese cities lack sufficient employment opportunities. Energy shortage, land inadequacy, short supply of housing resources all delay the speed of urbanization. We consider that such misgiving has no reason. People are most concerned about employment. Some doubt that Chinese cities have limited employment ability and rural labor force is in

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the risk of short supply. Pursuant to the basic law of economic growth, urban employment necessarily expands as long as economic growth continues and urban economic sectors expand. During the past two decades, the employment elasticity of Chinese national economy was around 1/4 or 1/2 of that in main developed countries in fast economic growth period. Such gap is worth of noticing. We can hardly explain the huge gap by faster technical progress in America than China. We may also explain the great contributions of Chinese technical progress with the statistical evidence. It is also sort of vicious demonstration. We tend to explain the discrepancy in the way that Chinese laborers have long working hours. As suggested by the rural household survey performed by the research team led by Dang Guoying (around 1000 rural households as the research subject), 80% migrant workers work for over 50 hours in the city per week, 20% above standard working time. According to our rough calculation, if urban employees all work overtime like this, it means that over 60 million employment opportunities nationwide have been reduced. In line with the pull function of America national economy on employment, the urbanization rate in China can be much faster and at least promoted to above 2.5% per year. The potential for rural labor force to transfer to the city is also very large, and moreover, the prime factor that decides transfer scale and rate is urban-rural income gap. The gap now is still remarkable, showing that the power driving labor force transfer remains formidable. As to this problem, we will conduct an elaborate analysis on it in Chap. 4 of the book. With regard to land, it is not valid to judge that China can’t realize fast urbanization because Chinese cities lack enough land. It is a well-known fact that the population density standard of a garden city should be 10,000 people/sq.km. Based on the data of National Bureau of Statistics, the population density in Chinese cities is around 2000 people/sq.km, and that in urban built-up areas is merely 1000/sq.km. Related estimate shows that population density in Chinese cities is in indirect proportion to economic growth level, with the correlation coefficient as −0.26. The figure in Japan of the same period in 1954 was 6.8%. Chinese villages make up 25.5 billion mu (including rural companies). Throughout well-­organized village planning, approximately 100 million mu land can be saved. After all, urban expansion does not request so much land. Our problem is not in land. It is institutional and planning problem that leads to excessive waste of land. Back to the 1980s, 1% growth of GDP in China would consume

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land 10 times more than that in Japan. This fully indicates the low intensive land use level of China. As to gross amount of land, China owns around 15 billion mu land, including 5 billion mu land is suitable for human habitation, and remaining 10 trillion mu land preserves 6 billion mu land for forest. In human habitation land for 5 billion mu, existing urban-rural construction land occupies 500 million mu land (including road and other infrastructure). In principle, the land can accommodate 2.5 billion people as per the garden standard. In addition, 2.5 billion mu land can be planned as agriculture preservation area. Remaining 2 billion mu land can be still applied in ecological environmental protection construction. In terms of urban water and energy supply, the government should have a right idea about it too. At present, the absolute level of domestic water and life energy in the village is inferior to that in the city. Peasants are requested to maintain their living standards at a low level, or otherwise, if they catch up with urban residents, rural energy and water consumption will definitely surmount the city. The city also has higher energy supply efficiency, water processing and recycle use efficiency than the village. The urban sewage processing rate in the city has reached 45%, but there is no sewage processing system in the village yet. Industrial water waste in the village is more serious than the city too. Now that rural residents need to enjoy the results of modernization like urban residents, urbanization is obviously beneficial to the raise of water resource and energy use rate.

1.6  Urban-Rural Integration Development Requests Concept Upgrade and Policy Adjustment Civilization Built by Merchants To ensure future economic sustainability, Chinese people should upgrade the concept about the rich and the poor, and deepen the knowledge about business civilization value. Nowadays, there are lots of buzzwords that satirize the rich in China. In the eyes of most people, any person who has lots of money must be an upstart. For instance, the color of a phone model of Apple is called “luxury gold color”. Actually, the color looks pleasing and plain. For a time, “rich and wilful” has been a popular buzzword on the network.

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It is rational that people expect the rich to donate money to the poor. However, it is no reason for people to prohibit the arbitrary consumption view of the rich, put the interests of the poor in the first place all the time, and lead a highly restrained life. Even if such hope comes true, it may not go against social development. Therefore, the desire for people to get rich or strive for the goal is always amazing. If people do not have pursuit for a rich life, and just want to lead a simple life with enough food and shelter, the society might show another appearance. The society can never be harmonious even if everyone leads a plain life with no difference. The reason is very comprehensible. If every household leads such a conventional life where the man tills the farm and the woman weaves, then it is no need for the society to expand economic scale. In this case, modern agriculture technologies, like fertilizer, pesticide and agricultural machinery, do not exist at all, because they can be only produced at a low cost under massive production conditions. Such conventional life just takes “30 mu land and one cow”. According to the measurement standard in the ruling of Empress Wu Zetian, it is equal to “20 mu land and one cow”. As recorded by historical materials, China can at most accommodate 400 million people. In addition to those high officials and noble personages, ordinary people including landlords just want to have enough to eat and wear. We once held an interview with one household in North China Plain whose father used to be a landlord. He said that even his father could only eat wheat-made steamed bun in the Spring Festival. Not everyone under farming civilization is contented in poverty. Some always want to live better than others, and envy others’ resources. They would not exchange wealth via the market, but plunder via violence. For reinforcing the power of plunder, a group of people might form an alliance against another group. In consequence, some organizations are established with the aim to maintain social order, like government and church. However, because of the regionalism of organizations, conflicts inevitably take place between different regions. Let’s talk about another scene—a “rich and wilful” scene. If there is a non-violent way which enables those who long for wealth and have enough energy to toss about to realize their dreams via market channel, it is a fairly good thing. These people are not contented in poverty, and some of them are fond of showing off. Even if they want to make a contribution to charity, they will behave in a rather high-profile way to make all the other know. While some may not act in this way, but will create another identity and sense of belonging to another circle. It is not ridiculous to say that

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they all pursue wealth unremittingly. We may also say that they are shoulder the mission and cherish lofty ambition. Anyway, the progress of the society is indispensable from their efforts. The reason is rather simple. If people want to make a fortune, they need to be aggressive, expand the business of companies and seek professionalism. In consequence, some technologies will be developed and applied, instruments will be invented and products will be more cheap. This also does favor to the poor. The “cellular phone” used to be the symbol of bosses in old days. But nowadays, any model of phone has more powerful functions than it. If the government blocks the way for the poor of becoming rich, the days of the poor may be more tough. There are lots of benefits for the poor to become rich via the market channel. Due to universal labor division and trade, contractual spirits gradually take shape, and property rights protection and patent protection system have been successively proposed, which lays a foundation for the building of a law-based society. When social labor division gets mature, patriarchal relation fades out, and the boundary between public rights and private rights becomes distinct. People have the freedom in the private domain and need to submit to the public domain. People even conceive the voting mechanism over public affairs to prevent the abuse of public rights. The appearance of the full set of systems not only benefits the rich, but also the poor. The breadth and profundity of marketization is also related to peace. EU is probably the region which has most powerful bond effects on cross-­ national markets in the world now. No one would believe that there will take place the Third World War between countries inside EU. After all, countless wars used to occur in this region in history. At present, the place most frequently hit by war in varying sizes in the world is the place that has most severe market segmentation and highest social tribe segmentation degree. On the whole, human beings would be still in the dark without merchants, the group of people who diligently strive after wealth. There will be hope and light whenever there are merchants. The rich with business background who grow up in market competition deserve our reverence. Under present knowledge discourse right, above analysis is probably questioned. Wealth gap also exists in the commercialized society. Furthermore, as the investor has final say on business management or say so-called “capital-ruled labor”, the rich and the poor are not equal in rights. Some may cite lots of cases in business society to prove the validity

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of “be rich and cruel”. Aren’t the poor more happy than those in agriculture civilization? Many people say yes. But in the opinion of the author, non-economic constraint is more horrible than market constraint. It does not take too many efforts to prove. People flow to places with higher marketiztion level, which can be evidenced by the direction of population flow across districts and countries in contemporary times. Some cultural friends out of nostalgia affection are worried about such trend, and expect people to stay in their hometown and keep away from the boisterous society. Actually, even they themselves are still passengers of traditional villages, instead of a node in traditional rural relations, which means that they do not want to lead a life where the man plows and the woman weaves. They can’t tolerate such lifestyle at all. Admittedly, it is a public issue that the poor are not humanistic. This is also a problem faced by the poor. Therefore, open-minded rich merchants not only act as a responsible tax paper and help the government to assist the poor, but also do some charitable activities. The best way is to give some employment opportunities to the poor and make their children enjoy equal education in the society. For those poor who have lost employment ability, they usually give them subsidy so that the poor can lead an ensured and healthy life. All of these depend on the prosperity of the society. The Fate of the Middle Class Is Related to the Success of Urban-­Rural Integration Development Though it is feasible to realize urban-rural socio-economoic integration on the basis of highly urbanization, it does not mean that there is no difficulty in achieving this goal. Urban-rural integration will be the main melody for sustainable development in China in future decades. The difficulty faced by this goal is also the difficulty confronted by state security development in the future. Throughout the modern development history of developed countries in the world, the process of urbanization also witnesses the growth of the middle class. According to national urbanization policy orientation in recent years, it is still uncertain whether the middle class can grow in China. Firstly, the new rich class is not confident in the social stability of China. We hold the opinion that the increasingly intense immigration propensity of the new rich class should be ascribed to the worry about future social risks. Low-income agriculture population goes to the city, and urban rich

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class either transfers assets or immigrates to overseas countries, therefore reducing domestic capital supply, cutting down employment opportunities and preventing agriculture population from taking a foothold in the city. Such urban-rural integration can’t sustain at all. Secondly, existing urban management system in China is rather irrational, and urbanization quality is worrisome. The drawback in the national governance framework in China is to the disadvantage of the healthy development of urbanization. It can be demonstrated by the following problems: due to the large coverage of province, counties lack vigor and small cities (towns) can’t measure up to the standard of city; public responsibilities between governments at all levels are not clearly differentiated; local autonomy is nearly impossible in reality. These local problems should be gradually solved under overall planning. Some can be quickly solved, and some can be slowly solved. Thirdly, the imbalance in capital-labor relation restricts the expansion of employment market and the rise of income. According to our estimate, comparing with the employment elasticity coefficient in fast economic growth period in main developed countries (employment growth rate and economic growth rate), the figure in China is obviously lower than the counterpart in other countries. The main cause of such condition is imbalanced labor-capital relation in China and long working time of laborers (no citation here). It directly reduces the employment absorption ability of the city, and makes laborers in the disadvantageous status in labor market competition. Fourthly, due to the improper intervention of local government, the realistic trend of rural population layout far deviates from natural trend. Led by the natural trend, when rural population in China continually transits to another period and remains stable at around 90 million households, the spatial layout is probably that around 30 million professional peasants live separately and remaining residents live in featured villages. The disperse distribution of professional peasants corresponds to the demands of agriculture production mode. At present, most regions across the country are inclined to gather peasants in the tide of “new village” construction, and merge rural residence districts to large communities. Our survey also proves that professional peasants often temporarily build a building in the land when their houses are demolished. Some households liberated from agriculture are not willing to live in new rural communities and prefer to settle down in other cities.

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Fifthly, domestic market equilibrium for main grain varieties under opening conditions confronts great challenges. Under marketization conditions, grain output in China is increasingly non-related to technical possibility and even absolute amount of land. The decisive factor is grain production cost and grain price. During the past decade, we caught the good opportunity of high grain price in the international market. Afterwards, the sharp decline of international grain price aggravates more pressures on grain import in China. As more land with poor fertility has been abandoned by peasants, the supply and demand balance in Chinese grain market faces huge impacts. Probably such condition may not generate so drastic influences under another international context, and the result may be reverse. But in present international context, such condition intensifies the uncertainties of economic growth in China, expands implicit unemployment in the village and worsens imbalance between the city and the village. Reform Is a Systematic Engineering Project The 18th Communist Party of China National Congress formulated the tenet of urban-rural integration development, and listed agriculture, rural area and rural resident problems as the top priority of government work. Urban-rural integration proves to be the radical solution of agriculture, rural area and rural resident problems. Implementation of the spirits at the 18th Communist Party of China National Congress requests pertinent action deployment. We believe that the emphasis on urban-rural integration policy adjustment in the future should comprises the following eight aspects. (1) Property right structure optimization policy Moreover, the government should make more efforts in the growth of private economy and do not intervene affairs that can be handled by private economic sectors. The authority to be deregulated to private economic sectors can draw lessons from developed countries. It is no need to set up any experimental unit in China. If this restricted zone is not broken through, private economy can not find any way out at all. Specifically, the government can propel the transition of most state-owned companies, recollect expressways with gained capital, and therefore gradually promote the toll free service of expressways. By way of the reform, private entrepreneurs’ confidence may be boosted, and on the other hand, the government expands employment and facilitate urban economic growth.

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(2) Territorial planning policy The central government should conceive a feasible territorial resource planning and management policy framework, reinforce power division management, clarify the power division management scope of governments at all levels, and totally solve the negative sum game problems caused by ambiguous rights and obligations in land planning management between governments at all levels. Besides that, the government should further protect arable land, consider replacing agriculture protection zone system with basic farmland protection system, and finally issue agriculture zone protection law. On this basis, the central government is able to greatly deregulate land planning and management use right to government at all levels. (3) Population layout policy Population layout policy should be oriented towards the philosophy of “people orientation”. Urban population layout policy should make breakthroughs and innovation. On the premise of maintaining urban average population density as usual, it is imperative to enlarge the proportion of residence districts in urban built-up area, greatly develop economical house, and create better living conditions for ordinary residents. Rural population layout ought to cater to agriculture development, and prohibit the “sweeping approach” in village merger. The central government should notify local governments to encourage the disperse distribution of professional peasants. Anyway, the government is supposed to respect rural and urban residents’ free immigration right. (4) Population registration policy Population registration should eventually carry out the sole criterion. As long as residents own or use legitimate building, and settle down in a place permanently, they can be regarded as legitimate permanent residents in this place. China can consult the experience in foreign countries to establish statutory “legal housing” concept. While implementing this policy, the government can firstly register the census for those residents who have housing property rights, and gradually open the service to renters. The emphasis in population registration policy reform should be large cities. It is no need to worry that loose household registration policy may

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aggregate population in large cities. After all, even if the reform has not been executed, residents are still living there as their buildings are there. Likewise, it is no need to worry about the financial burdens imposed on social security, because this issue can be totally solved by classified insurance policy. Moreover, the government can try to gradually unify and simplify social security standards. (5) Administrative division policy More municipalities should be established. To be specific, the number of provincial-level administrative districts may be increased up to around 50. Only when there are more provincial administrative districts the central government can greatly deregulate powers to local governments and effectively prevent the abuse of power in some districts. The decrease of provincial-level administrative districts expands the governance scope of counties and creates conditions for the establishment of county-­ controlled cities. (6) Government department setting policy Government department setting system should be significantly simplified. Provincial-level and county-level administrative districts can merely set up the dispatch agency of superior government, but do not necessarily set up a government. Apart from municipalities directly under the central government, the central government just sets up provincial municipality and county-controlled city government. Besides, it is totally practical to develop tens of thousands of county-controlled cities with over 10,000 residents. In principle, existing organic towns and few large villages not dominated by agriculture can be transformed to county-controlled cities. The “feature villages” and small professional peasants’ residence districts in rural areas can be directly governed by county-controlled cities. (7) Urban-rural community construction and management policy An urban-rural integrated social governance system should be set up to remove differentiated governance for the village and the city. Under the leadership of new legislative concept, county-controlled cities (People’s Congress) can also enjoy local legislative authority. The “community rules” established by urban communities enjoy equal legal binding force

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with the civil law. In this regard, the government should prompt the “political and economic separation” reform in rural communities, guide cooperatives to develop collective economy, and fully cover public finance over rural communities. Besides tax obligations, rural collective companies do not assume extra public expenditures in the community. Furthermore, the government should greatly reform urban property management system, endow owner committee with more powers, promote the professionalism of property service and overcome the abuse of power in property companies. Finally, efforts should be made to explore the possibility of enacting “residence law” or “housing law”. (8) Political guarantee policy The government should reinforce information disclosure, improve government supervision and counterbalance mechanism, embark on political system reform, gradually expand the scope of reform, as well as ensure the stability of political reform. Democratic reform inside the party begins from the grassroots, while social democratic reform begins from the high officials so as to ensure the control of ruling party over the reform. Besides that, the government should disclose the assets of civil servants above section chief, and boost public confidence in anti-corruption. On the other hand, the government should fully enlarge the power of People’s Congress and facilitate the legal management of social public affairs.

CHAPTER 2

Definition for City and Village and Policy Implication

What is the city? What is the village? How can people talk about the relation between the city and the village if the concept of the two has not been clarified? How can people ensure the pertinence of policies related to the relation between the city and the village if the concept of the two has been just vaguely clarified? It seems that we can ignore these problems if these questions have not been proposed yet. But now, it is rather difficult to answer these questions. The paper primarily aims to discuss these problems.

2.1   Practical Meaning to Determine the Boundary of City and Village The vague boundary between the city and the village in China adds more difficulties to the formation and operation of related policies. Concerning administrative management and hierarchy setting, China has been implementing the “city administrating county” system, and the populous district in the east of “Hu’s line” is almost under the jurisdiction of a city. In terms of population registration system, after the demarcation of rural and urban census register in the 1960s in China, the population born in rural families is collectively referred to as “peasants” in addition to few channels (state recruitment, formal employment in state-owned companies, admission to college or academy), and the place where they live in is habitually viewed as the village. In terms of statistical system, China classifies large © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 D. Ying, W. Wu, A Study of China’s Urban-Rural Integration Development, The Great Transformation of China, https://doi.org/10.1007/978-981-19-2756-0_2

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residence districts above town into the city, and residence districts in rural towns are nearly all organic towns. However, in effect, the population size in some organic towns across specific districts is smaller than that of those administrative villages. Such chaotic demarcation of the boundary between the village and the town directly generates the ambiguity of policy orientation. Currently, a series of agricultural policies in China are associated with the boundary between the city and the village. Unscientific boundary between the city and the village causes trouble to the implementation of agricultural policies. We generally incorporate infrastructure below the town level into the scope of the work oriented towards agriculture, rural area and rural residents. But in effect, residents in a large group of organic towns do not engage in agriculture. China carries out different “family planning” policies in the city and the village, but some residents under rural “family planning” policy have no relation with agriculture at all. With regard to the final relation, as there is no clear and normative tax distribution system relation between township government and superior government, governments at different levels often bargain with each other in sharing financial income. This means that a multitude of small unincorporated cities do not have stable finance as expected nor have exclusive tax categories. The case will be greatly different if plenty of conditional organic towns are transformed into compliant cities. Evidenced by the using tradition for terms “the city” and “the village”, it is also feasible to define the city or the village in accordance with industry type or population density. Based on the execution of social management policy, the two standards are actually mixed in essence. There is no significant difference between the two standards in case of economic downturn. Population in the rural area is rather disperse, while population in places with high density of business and commerce is obviously high. The two standards contradict with each other in economic transition period. At present, the population density in Chinese rural area is at a high level, and some large residence districts are also inhabited by peasants. Agriculture still occupies a remarkable status in some urban outskirts, while such places are classified as one district of the city. In the long run, it is more rational to define the city according to population density within a certain area. It indicates the more modern agriculture, the larger the operation scale of farmers. Under such circumstances, scattered living pattern is more suitable. According to the estimate of the author, the rural population in China will be reduced to around 30 million, approximately

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one seventh of gross rural population, if rural residents’ per capita income approaches urban standards. This means that the agriculture population in rural area will be rather scattered till then. Determining the boundary between the city and the village and presenting scientific classification standards for the city and the village has important practical significance to straighten out urban-rural relation and formulate pertinent urban-rural development policies. Initially, it makes for the formation of rational environmental protection policy. Related studies in environment sciences illustrate that the emission self-­purification social cost also varies under different population density and economic aggregate conditions. The emission discharged by population below certain density may not take engineering processing. Secondly, it makes for the right equality in regional development. Some large residence districts can not enjoy the welfare granted by public finance, because they are defined as the village. In this case, numerous districts have to resort to the “one case one meeting” practice to solve public investment problem. Reversely, some real villages possibly gain extra financial investment due to the special relation with the government, such as demonstration area, which results in the oversupply of public goods. Such situation is quite common in the survey of the author. Some rural areas are improper for wide paved roads. In another word, the country can’t allocate pubic infrastructure construction in line with permanent agricultural population. If the government prematurely promotes the overt counter-urbanization phenomenon against such undeveloped conditions, those agricultural residence districts may turn to the secondary residence of urban population. On the whole, such condition decreases land use efficiency. Thirdly, it makes for the formation of policies in favor of the balanced development of urban system. Some large residence districts have become small cities in reality, but as they are defined as the village in policy, they are not incorporated into urban system. This severely prohibits their development space. Furthermore, such small cities are not preferred by large industry projects. Instead, those large industry projects usually concentrate in provincial or municipal development zones so that small cities degenerate to the parasitic economic entity subordinate to superior government financial transfer and are exposed to a series of social diseases. Fourthly, it makes for the formation of normative hierarchy management mechanism across the country, and rationalize the vertical relation between local governments. At present, if a local government is about to add one “city”, it can usually achieve the goal by “converting a county to a city” upon the approval

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from related department in the State Council. As a result of the discretion, the execution of approval power may not be normative in most cases. In some towns, the economy scale has surmounted that of local superior government, and town leaders rank above superior leaders. Such condition prevents the superior government from effectively executing power, and aggravates pressures in government governance.

2.2   Discussion on the Minimum Size of City How can a residence district be set as a “city” in size and population density? This problem will be further discussed in subsequent sections. Rational size of the city and minimum population of the city are two related but different problems. In order to make a meaningful analysis on the latter, it is imperative to briefly investigate the former now. Difficulty in Ascertaining the “Rational Size” of the City It is not feasible for the government to decide the optimal size of a city. City can be rendered as a residence pattern of population living on the land. Therefore, it can be fitly judged that people or companies make their choice of living or investment after deliberate consideration. On the part of consumers, the paper assumes that under full competition conditions, the marginal amount of per capita urban welfare will drop down with the continuous expansion of size of city. When the value is zero, urban population size will reach equilibrium and urban size will not change for all. On the part of manufacturers, with other conditions remaining unchanged, every company possibly gains no marginal output and even realize zero-profit equilibrium from land investment in the city. Theoretically, consumer and manufacturer equilibrium come true synchronously. Nevertheless, such description only has certain analytical significance, as the government hardly resorts such analytical mode to calculate the “rational size” of a city. For instance, consumers’ housing rent cost and corporate tenancy cost both depend on the supply-demand competition in the land market. A few technical factors affecting consumers’ demand preference and manufacturers’ demands are all ever-changing. In a rather long time span, income level, transportation improvement, overseas migration pressures are key motivators propelling urban downturn depreciation and urban outskirts development. Moreover, these factors generate remarkable influences on the variation of city size. The

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“rational size” of the city is more difficult to be determined once noncompetitive urban public departments have been introduced. Though it has been proved that the “rational size” of the city is not so simple as an engineering or technical problem, considerable studies still reach a consensus. External scale economy (concentration effects) in a city caused by the clustering of a large number of companies, primarily localized scale economy, is associated with the high concentration of similar related industries, instead of gross city size.1 Moreover, this research implies that small cities can also be effective and vigorous. The pros and cons of varying city size can not be determined by experiments, but the correlation between city size variation and government control can be acquired throughout the historical evolution of the city. Comparing with European countries, American Federal Government does not control city size nor prohibit the expansion of city by household registration system and urban organization system. The real case is that in post-World War II days in America, the predominant status of its few major cities had been reduced, and a group of small and medium cities sought quick expansion. For a time, urban residents’ income in all cities across the country was nearly the same. It was unparalleled in history. Inspired by the conclusion, the government does not necessarily set up the “rational size” of a city, but should create chances for the free flow of factors in the space and push forward the spontaneous evolution of the city. Such mode of development runs ahead of man-made mode of development in both equality and efficiency. Lower Limit of Social Governance Cost and Minimum City Population Size Derecognition of a city in legal terms actually intervenes the development of the city. Then, what is a city in real sense? Can a residence district be taken as a city if its population size meets the requirement? Though scholars rarely raise or answer this question in available city studies, it does not mean that it is meaningless to observe this question. In legal terms, the city may be viewed as a juridical association. As a general rule, the association should be led by an authoritative agency. When the association has public financial budget, election and deliberative 1  Mills, E S and Tan, J D.  A Comparison of Urban Population Density Functions in Developed and Developing Countries. Urban Studies, 1980, 17(3): 313–321.

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agency, administrative agency and coercive order maintenance agency, it can be defined as a government. By the same token the jurisdiction subordinate to the association can be taken as the administrative district. As long as the population density within the administrative district measures up to the standard, it becomes a city. The upper limit of city population size can not be easily determined. Taking some world-class mega-cities in China for example, some of them are cities in administrative sense, like Chongqing, some are cities in economic sense, like Shenzhen, and some are cities in both administrative and economic sense, like Beijing and Shanghai. As a matter of fact, they can be viewed as the city district or dense city cluster. However, the emphasis in urban-rural demarcation studies rests in the determination of minimum city size. The place below the lower limit is the village and the place above is the city. Referring to the latest research results in Anthropology, a community, company or social network staffed by no more than 150 do not necessarily establish a formal authority as long as people know each other. Likewise, it is not necessary to enact formal code of conduct, as overall public affairs may be handled as conventional rules.2 This means that in groups with no more than 150 members, it is not essential to form a government nor provide forceful public budget. This finding may help us recognize that a group with no more than 150 members can be viewed as an association legally. That is, there is no necessity to set the population lower limit of a legitimate small city as 150. Then can a community with over 150 members and certain population density be taken as a city? The answer is definitely no. The most straightforward feature of a city should be large gross population and high population density in a certain district. The minimum of gross and rational value of density will be discussed below. Rational Population Size in Minimum City—Taking Public Finance Sustainability as the Constraint The leading industry of a city is not usually agriculture. As mentioned above, if the government sets up cities as per the scale economy of 2  Yuval Horali, Brief History of Human, translated by Lin Junhong, CITIC Group, 2014, p28. Hill, R.A. and Dunbar, R.I.M. Social Network Size in Humans, Human Nature, 2013, 14 (1): 65.

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industrial companies, the size of city will be greatly different. Probably a settlement inhabited by thousands of people has advantageous local scale economy benefits, but it is more likely happening in those large settlements inhabited by tens of thousands of people. In comparison with economic department, public department of the city sets higher requirements on structure and operation stability. For this reason, one feasible solution is to examine the population lower limit of a small city with the core factor—public budget. In line with international universal government system functional positioning, a small city often takes charge of municipal facility maintenance, general citizen basic education, society security, environment sanitation, basic urban cultural activities, conventional social relief, etc. Other more functions are undertaken by superior government. The financial budget income of such small cities is often supported by property tax. Following this realistic conception, few factors below need to be taken into consideration in determining the minimum population size of a small city. The first factor refers to the number of civil servants (C) required by general government service system in a small city (all staff paid by government finance). General government service system here includes government administrative agency, election and deliberate agency, judiciary agency, social activity service agency and other municipal activity supporting agency. The second factor is the per capita public finance income of civil servants (F). To ensure the public service supply ability of small cities, the government can directly take peer indicator as measurement indicator for small cities. The third factor is property tax rate (R). Property tax rate should be controlled within 1%–3%. The last factor is property value of per capita property tax (V). It comprises resident residence and land value, business durable facility and land occupation coverage, etc. Agricultural land and durable agricultural facilities within the jurisdiction of small cities often enjoy tax exemption welfare, but non-agricultural operation facilities, like rural tourism service, shall be levied for property tax. The minimum population size of small cities can be roughly estimated based on above factors (S).

S   C·F  / R  / V



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These factors all involve the routine data related to national economic activities. Especially, though no reference can be drawn in China in taxable property value, we may still estimate it. For instance, generally speaking, in marketization countries, the proportion of gross land rent in national income is rather stable at around 8%. Then, the value of business land may be inferred on this basis. Similarly, considering the stable proportion of capital and national income, as well as fixed assets and flow capital in gross capital, the gross value of endurable capital may be inferred too. No data accuracy measurement will be made here. On accounts of the rough estimate of the author, in current stage of China, if property tax is taken as the main tax of small cities, and corresponding tax rate is preset at 1%, the lower limit of population size should be 50,000. If the tax rate is up to 3%, the lower limit of population should be 17,000. This is a simplified average analysis which excludes “maximum” equilibrium problem. Considering that the estimate takes public budget sustainability as the constraint, such small cities probably would not incur debts in tax reform. Additionally, the government should not launch land finance, and manage to equate urban residents’ income level and prosperity to social average level. If regional economic layout policies can be initiated to rationally restrain the improper development of all development zones in small cities, like introducing a batch of large companies and agencies, the government can guarantee the vigor of urban economy. Rational Population Density in Minimum City—Taking Resident Psychological Health as the Constraint Concerning urban population density, both economic and urban planning scholars have performed abundant studies and derived diverse conclusions. Nevertheless, researchers generally acknowledge that in large districts, overcrowding and under-population possibly generate negative influences on people’s living quality.3 Under the same population density conditions, population layout also varies and influences people’s living quality.4 As revealed by studies concerning the relation between high-density living environment and human psychology and physiology, children living in 3  Edward Glaeser. Victory of the City, translated by Liu Runquan, Shanghai Academy of Social Sciences Press, 2012, p87. 4  Serge Sarate. City and Form—A Study on Sustainable Urbanization, translated by Lu Yang & Zhang Yan, China Architecture & Building Press, 2012.

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multi-layer or high-­rise buildings are more susceptible to harms physically and psychologically. The reason comes down to “crowding syndrome” caused by the strong sense of crowding living in high-density residence.5 In addition, as surveyed by the author in urban population distribution studies, the same average population density fits with greatly different living quality. Strikingly enough, in countries with large population and limited land like Japan, especially densely inhabited urban district like Tokyo, most residents still own single houses. The reason will be not investigated here. However, it is of note here that in cities with high average population density, residents can only live in a pleasing and comfortable way in residence districts with moderate density as long as the city has formulated rational urban management philosophy and advanced planning thoughts. Specifically speaking, average population density of 10,000 population per sq.km enables over 2/3 urban households to live in single houses. It is a major wealth holding form important to the middle class. To be sure, such house can’t be a villa nor high-proportion mansion exclusive to medium and small cities in America.  egal Norms of the Boundary between City and Village L Based on above discussion, we now can roughly propose the legal norms to determine the boundary between the city and the village. In the abstract, if gross population across certain scattered districts reaches a level together with the population density in core district, residents here can form a juridical association under the organization system and majority principle. According to state laws, the city is governed by the government at certain level. As discussed above, as the chapter does not expound the specific situations in China, the establishment condition of minimum cities can be expressed as below. Once the gross population size in a district reaches 50,000, population density per sq.km in this densely inhabited districts scales up to 8000, gross area is no more than 4 sq.km, and cities or densely inhabited districts are in scattered state, the district can set a city here. Upon the implementation of city establishment system for a while, the government may further loosen the threshold, like decreasing gross population size by 15,000 and decreasing core district area in densely inhabited district by 1  sq.km. Furthermore, Provincial People’s Government or People’s Congress can autonomously determine the lower limit of city 5

 Taylor et al. Social Psychology, translated by Xie Xiaofei et al, Peking University Press, 2004.

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establishment. If a city can be rationally viewed as a large dotted residence district instead of an administrative district, then all districts covering small cities may be defined as the rural area.

2.3  International Experience about the Boundary of City and Village There still lacks a mature and well-recognized criterion of urban-rural boundary demarcation in the international society, but it does not mean that there is no difference between the village and the city in regional economic management field. If conceptual ambiguity does not hinder the execution of policies, people may not ask for trouble to determine political terms. In developed countries in Europe and America, the classification policy for professional peasants and non-peasants in rural population directly adheres to population occupation property. It is no need to divide basic policy into urban policy and rural policy nor raise fuzzy concepts like “agriculture, rural areas and rural residents”. It is not important to differentiate the city and the village in vast legal documents related to social economy management. In official statistics, only few studies talk about rural conditions. Even so, we should still pay attention to theories and policies about city establishment and urban-rural boundary demarcation in Europe and America. Autonomy System Foundation for City Establishment The autonomy system in modern countries governed by law has been generally put into practice. The autonomy principle comprises few key factors. Firstly, those affairs able to be handled by individuals and private agencies, including some public affairs, should be maximally disposed by individuals and private agencies at discretion. Secondly, in state and local government governance system, the power of handling public affairs should be deregulated to subordinate public departments or local governments maximally, and those other affairs are still governed by superior public departments or local governments. Thirdly, any legislative agency enjoys legislative power. Fourthly, governments at all levels are equal in law. The laws enacted by subordinate legislative agency have the legal binding force as long as they do not contradict with the host law. Finally, small communities had better do not establish any public agency.

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Modern countries governed by law often do not give a legal definition for the minimum population size of the city, but it does not mean that any small residence district can become a city. During the field visit to Iowa, America, the author finds an interesting phenomenon. The state law stipulates that a community can establish a juridical association if all residents in a residence district agree to establish a community of juridical association property, and build enough infrastructure upon the approval of State Council. Moreover, such association is in the same legal status with a city. A household with more family members once filed the application to establish such an association, but State Council disapproved. As it is, in most cases, resident communities will not randomly raise the request to establish a city, especially those communities where residents live in scattered areas. It is probably related to aggravated tax burdens. Concept of DID In the international society, there prevails the concept of DID (densely inhabitant district) in the discussion about population distribution. DID refers to the district in which gross population scales up to 5000 and population per sq.km totals 4000. In population distribution studies, the concept has operability no matter whether the residence district has the legal status as an association or a city. Residence district up to the standard can be viewed as a small city once it deviates from adjacent similar residence districts. Whereas, such sort of small city is not in large quantity even in Europe and America according to the population distribution condition. Concept of Small Residence Districts in the Village TDR (transfer development rights) policies in some countries promote the scattered distribution propensity of farmers. Origin of this concept may be traced back to America at the time when it was coined to denote an innovative land development and control means. After being put into practice in large cities represented by New York, it had been later applied in other districts.6 As local government land district planning policy restricts the farmers’ free right of converting agricultural land into construction land, farmers’ development rights have been invisibly deprived. 6  American Planning Association: Land News, PICCUD, Planners Advisory Service Memo, 2015-03-20.

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It possibly exposes farmers to more interest losses.7 The way of compensation is to capitalize farmers’ development rights by allowing them to sell land to investors in need of construction land. The acreage of such capitalized land should be verified by the government pursuant to specific standards. In general, the acreage is related to the gross area of farm. Such policy is similar to the pilot policy linked to the increase or decrease enacted by the Chinese government. Under this policy, farmers in rural area decrease the non-agricultural development on their land so that agricultural population turns more sparse and there arise many new small residence districts composed of one or two households. Inspired by the discovery, we find it tough to differentiate the boundary between the city and the village.

2.4  Few Realistic Problems about the Boundary of City and Village and Policy Adjustment Discussion Despite the importance for the government to execute the rational legal standards to differentiate the city and village, it does not indicate that other urban-rural problems can be easily tackled. The chapter here presents some major problems related to urban-rural boundary demarcation worth of discussion. Brief Analysis on Urban-Rural Population Equilibrium Distribution Urban-rural population distribution is essentially the urban-rural boundary in a macro sense. Under specific conditions, is it possible to form a stable urban-rural population distribution state? It is possible in theory. If we ignore the population flow concern in counter-urbanization to view the village as the residence of professional farmers, and ignore the flow capital and other part-time jobs of farmers commuting between the city and the village, it will be much easier to examine urban-rural population equilibrium distribution. We may take farm as a manufacturer and agriculture an industry, then manufacturer equilibrium and industry equilibrium is a rather common optimal analysis question in economics. 7  Gao Xinjun. Origin and Change of District Planning Land Management System in America, China Economic Times, January 12th 2011.

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Farmers are self-employed manufacturers who can view urban average income as their own labor opportunity cost. Under free competition conditions, farmers can gain labor opportunity cost in exchange of compensatory and zero-profit margin long-run equilibrium. If the profit margin is not zero, farmers will continually withdraw or enter until the equilibrium has been achieved. Whether farmers’ labor opportunity cost can be compensated is a problem about profit margin, which means that once farmers are not compensated, their profit margin will be minus. Therefore, whether farmers’ labor cost can be compensated, i.e, whether farmers’ average labor income can approach urban laborers’ average level (supposing there is no quality difference in urban-rural laborers) determines whether farmers transfer the occupation and flow between the city and the village. On this basis, the author chooses a group of data, including per capita income growth, farmer household scale operation potential, agricultural product price change, population variation, and assumes that other factors remain unchanged, concluding that for ensuring that peasants’ per capita annual income approaches that of urban residents, China takes around 25 years to achieve this goal as they are 30 million professional peasants. Counter-urbanization problem should be also taken into full consideration. Under the statistical standards of America, rural population is seven times more than agricultural population. In view of domestic policy environment and hypotheses in above chapters, it is much better to maintain future rural population three times more than agricultural population. We accordingly estimate that urban-rural population distribution will turn stable once rural population reaches 900 million, urban population reaches 3.3  billion, average household population reaches 3.5, population peak reaches 4.2 billion households, and urbanization rate reaches 79%. By reference to the natural village distribution pattern in China, there will be around 5 million small professional peasant residence districts in the future, with each residence district being inhabited by five professional peasants on average. Other peasants and counter-urbanization population distribute in large villages or residence districts below the threshold of city. As such residence district is not the acquaintance society reflected by Dunbar indicator, and it can accommodate 150 residents and request a public authority, we can assume that the population size of such residence district totals 340 households, the average number of household in villages of China. Then, China requests around 190 thousand residence districts or new villages in the future. This implies that around 67% administrative villages will disappear or convert to small professional peasant residence districts.

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Invalid accurate data analysis is not simple than data, but logically correct simplified analysis is more reliable. The author can’t promise that data in above analysis is very reliable, it should be credible as the description for a tendency. Following such thinking, the Chinese government should carefully ponder over how to build the new village, and how to control the depth of rural investment. Establish Rational Urban-Rural Governance Social and Political Platform The above chapters have fully analyzed the meaning of policy adjustment about urban-rural social government. In the opinion of the author, the government may launch the reform in following aspects. Firstly, the government may cancel the “city administrating county” system, and promote the “county administrating small city” system. A county has the dual power to govern multiple small cities. Simultaneously, it may also moderately merge few agricultural counties to expand the gross economy scale of the county. Mega-cities can be directly governed by the central government, while general large and medium cities and subordinate small cities at the same administrative level are governed by the province. Firstly, in county, the government may create diversified modes of governance for rural areas subordinate to small cities, such as peasant commune, agricultural management district, village association, etc. Moreover, these modes of governance ought to be under the direct leadership of county government, instead of small cities. Thirdly, small cities, peasant communes or village associations can be established according to the “application approval system”. Once the government has enacted precise laws and regulations about the establishment of small cities, residents in a district may apply to Provincial People’s Congress to establish a city, and form the organization upon approval. Residents in rural area may file the application of setting up peasant communes or village associations to County People’s Congress and form the organization upon approval. Urban-Rural Boundary Demarcation Development Rights The revolution of urban-rural relation, especially the execution of land district planning, essentially involves the protection of “development

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rights” and damage compensation. Such situation mostly takes place in rural district division planning and management practice. Peasants or agricultural land owners usually feel that their land has been confined to agricultural purposes and lose their rights. It is in nature the violation against land development rights. Admittedly, such claim is rational. Some scholars advocate to compensate peasants’ loss as per opportunity cost. Such claim deserves attention as it reveals the intention of marketization reform.8 Above chapters have introduced the TDR policy implemented by America to solve compensation problems, and the author approves of its feasibility. However, the author generally considers that the problem is not as serious as people think. As an institutional arrangement in saving transaction cost, legal planning right inevitably goes against market pricing. The technical difficulty is the measurement of “externality”. It is worth mentioning here that even under marketization conditions, even if the government does not make any land district planning, probably every land owner’s equivalent land does not undertake the same development right value quantity. The reason is that non-agricultural industry’s demand for construction land is limited, and such demand often chases after clustering effects. Most rural land owners do not have any chance to achieve the value of “development rights”. In the sense of social equality, the change of few peasants’ development rights manifests the efficiency overflow brought by business progress. Such efficiency is fair in the moderate and average distribution among all peasants. Development rights can be “traded” too, which increases efficiency to some degree. Nevertheless, the trading “base price” relies on quantity and planning. Inspired by such finding, the author advocates to fully implement existing urban-rural construction land pilot policies linked to the increase or decrease in the village after the introduction of market mechanism. The vision of the village will be drastically modified upon its execution, and people will be more motivated by the vision to “make the city more like a city and the village more like a village”.

8  Wen Guanzhong, Does Purpose Regulation Filter Market Dysfunction or Non-national Land Market Access Right? Academic Monthly, 2014 (7).

CHAPTER 3

Injustice and Correction Solution of Urban-­ Rural Dualism

Economic efficiency, social equality and political stability are always the political goals pursued by politicians. Under specific conditions, these goals may be generalized as social justice goals. In China, the main obstacle hindering the realization of social justice goal is urban-rural dualism. In order to overcome the obstacle, the Chinese government determines to fully carry out urban-rural economic and social integration policy. Urban-­ rural separation mechanism not only damages efficiency, but also affects equality and endangers social stability. Therefore, it is imperative for the government to initiate urban-rural integration reform and development and establish a more rational urban-rural relation to promote efficiency, equality and stability.

3.1   Implication of Few Concepts As few terms in the chapter are not standards terms in economics, and some of them having plural connotations do not completely fit with the context, a brief introduction will be firstly made as below. Efficiency In economics, Pareto Optimality is usually used to indicate optimal efficiency, including profit maximization of both producers and consumers, © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 D. Ying, W. Wu, A Study of China’s Urban-Rural Integration Development, The Great Transformation of China, https://doi.org/10.1007/978-981-19-2756-0_3

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equality between social marginal cost (investment) and social marginal efficiency (reward), and internalization requirement of external cost (benefit). The concept of efficiency mentioned in the discussion about urban-­ rural integration in this chapter mainly indicates the rational use degree of full social producers’ factors (especially land and labor). In another word, efficiency optimization means the equality between marginal cost and marginal reward. An international comparative study will be made in this chapter. Equality In most circumstances, official documents and even the academic circle do not differentiate the difference between equality and justice (fairness). One logical statement is that justice means equal attention to efficiency and equality, while equality means the equalization of income caused by citizens’ political right appeals. However, the statement does not become the consensus agreed by the academic circle yet. The reason lies in the fact that political right appeals are subject to an array of sophisticated factors and can hardly offer stable and logical explanations. The concept of equality used in this chapter suggests the rational allocation of economic interests between rural and urban residents, while the grasp for “rationality” is bound up with the author’s recognition about social ideology. Social Stability Social stability is the institutional environment in which a society endogenously takes legal means to prevent and solve contradictory conflicts, including stable legal orders, stable regime and orderly iteration of regime. In Theory of Justice, American scholar John Rawls views social stability as a factor of social justice, and incorporates it into his theoretical analysis framework. He explains that social turbulence actually deprives the vulnerable class. Social turbulence, in nature, is the reallocation of wealth which makes the vulnerable class pay a huge cost on the whole. However, the concept of social stability easily causes misunderstanding. For instance, isn’t Iraq led by Saddam and Libya led by Gaddafi a stable society? According to the definition raised in this chapter, the answer is definitely no, as such society is as fragile as a straw to the camel.

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Justice or Fairness Abiding by the views of Rawls and other major scholars, the chapter defines justice as the combination of efficiency and equality under specific legal environment. The system up to justice requirements is characterized by the few points : it establishes a competitive mechanism which allocates factors as per market price in private sectors to ensure economic vigor; it establishes rational competitive orders in public sectors to ensure the equality of citizens’ interests by income redistribution; it formulate regulation policies for interest conflicts in the principle of democracy and openness in the two fields. Dualism Dualism has three characteristics as below. The first one is disunity in the market, especially factor market. The second one is non-equilibrium of basic public services, limited coverage of public finance across the society, and severe short supply of public goods in rural area. The third one is disunity in social governance mode. Urban-Rural Integration There basically does not exist any overt urban-rural gap in moderately developed countries across the world, let alone rural-rural gap in social system. The author believes that urban-rural development gap and system discrepancy are exclusive to China. Thus, urban-rural integration should be a special concept in discussing the development problems of China. In this chapter, the term means gradually unifying urban-rural factor markets, realizing the full coverage of state public services across urban-rural society and equality of urban-rural residents’ rights.

3.2  Possibility of Efficiency and Equality Impairment Under Dualism In general, there exists a negative correlation between equality and efficiency in economics. But under dualism, it is also possible that both efficiency and equality are impaired. Edgeworth Box is usually illustrated to explain efficiency maximization. This chapter intends to interpret efficiency loss and equality loss (Fig. 3.1).

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YA C

XB

L

OB

D

K

S

E

M

T OA

F

G

YB

XA

Fig. 3.1  Edgeworth Box

In Edgeworth Box, the vertical axis Y is agricultural product, and horizontal axis X is non-agricultural product. Agricultural economic department is expressed by A, production of agricultural products is expressed by YA, urban economic department is expressed by A, production of industrial products is expressed by XB. YB suggests gross social products. Before exchange, urban-rural product mix is point C, wherein agricultural products in the village is OAC and non-agricultural products in the city is OBC. Under free competitive conditions, both agricultural and urban departments face the same price curve CT. The outcome of mutual competition is that trading equilibrium point, K, falls on the contract curve OAOB. If the free competitive condition is invalid, and price is distorted, urban departments will enjoy an edge in trading, and trading point possibly falls on point D. At the point of D, the indifferent curve focus of urban department and rural department varies in slope (ratio).

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As D and K are of equal efficiency to urban department, and D and M are of equal efficiency to rural department, rural department efficiency loss=FG (lost industrial product efficiency)+ SE (lost agricultural product efficiency). As the real trading point is D, the whole society actually produces OAC agricultural products and OBC industrial products. The output and equilibrium level are the same at point K.  However, the efficiency brought about by these products is less than the gross efficiency under equilibrium level K. Generally speaking, market disunity and price distortion may also worsen welfare distribution state in case of reduced production efficiency.

3.3   Injustice of Dualism Dualism Generates Huge Efficiency Loss  abor Factor-Incurred Efficiency Loss L Under dualism, the rudimentary feature of labor resource allocation adjustment is that the city lacks more cheap labor force than the village, which can be evidenced by higher annual average income in the city than annual average labor remuneration in the village. The academic circle holds different estimates for the gap between the two, but there is no great dissent here. Even if urban-rural labor force is converted to “standard labor force”, the remuneration also varies from the city and the village. According to the report issued by researchers from Chinese Academy of Social Sciences Rural Development Research Institute, the gap is around 2.2 times (larger in State Statistics Bureau). If such gap accidentally incurs, it is non-related to economic system. By contrast, if such gap sustains for years, it is definitely related to system. In theory, we may roughly judge that the product of urban-rural income gap in“standard labor force” and gross labor force is the gross efficiency loss in labor resource allocation under dualism. In this process, the decline of urban income level caused by competition should be deducted. The author estimates that the figure will be around 10%. Recessive unemployment means the short labor time of peasants. For making peasants rich, the government must lengthen their labor time and give them enough employment opportunities. Urbanization is exactly the fundamental way to achieve the goal. Existing household registration

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system obviously affects such changes. China runs ahead of some western countries in economic growth rate. One of the reasons is the fast pace of urbanization.  and Use Factor-Incurred Efficiency Loss L Dualism in China has prominent expression in the land factor market. First of all, the city and the village implement different land systems, which makes rural land national land after being converted to construction land. Secondly, the city and the village have different land trading modes. Following land acquisition, rural land will be directly invested by the government to the secondary market. Even if peasants’ land conforms to the requirement of construction planning, peasants are prevented from directly trading with final land users. Thirdly, the city and the village implement different land planning systems. Though China has executed uniform Urban-Rural Planning Act, it is still faced by sophisticated problems caused by the discrepancy in ownership, such as exterior and interior land planning and purpose management problems. In theory, if plots are close to each other in location and purpose, price discrepancy totally caused by market incompletion definitely gives rise to efficiency loss. In land management and land trading practices, the efficiency loss of Chinese land factor may be expressed by the following few aspects. Firstly, urban construction land has been severely wasted. The decrease of arable land triggered by urbanization in China far exceeds that in most developed countries. In developed countries beset by land resource shortage, Britain (1771–1850) did not decrease its arable land, Japan (1920–1960) slightly increased its arable land in faster urbanization expansion period. France (1851–1954) decreased its arable land at the rate of 0.324%, but significantly increased its green land and forest coverage.1 After the”requisition-compensation balance” policy for arable land in China, the official statistics showed that arable land does not decrease, but requisition-compensation problem intensified. The expansion of urban built-up district means the decrease of quality arable land. The growth rate of urban built-up districts in China was very fast in the 9th and 15th Five-­Year Planning as 5.34%. The rate began to drop in former two years 1  Data source: World Economy Laboratory, Chinese Academy of Sciences Economic Research Institute: Economic Statistics Set for Main Capitalist Countries (1848–1960), World Affairs Press, 1962.

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in the 11th Five-Year Planning, but it was still maintained at 3.84%. Such condition makes the expansion rate in Chinese urban built-up district exceed urban population growth rate so that urban population density continually decreases. Population density in eastern cities is much higher than that in western cities, while governments in eastern cities always boast about shortage of construction land.2 Secondly, as a result of the negative influence of ownership on land planning system, the housing construction land in China is confined to the city. Since most of the land is quality arable land in plain, and real estate development potential is very bleak in shallow mountainous area, housing construction land is very intense in China for the time being. Thirdly, the defects in land ownership and huge gap of urban-rural land market price also guide peasants to occupy more house site. This greatly wastes rural land in the village. Comparing with Japan, the country of which rural residence coverage made up 68% of arable land in 1954, arable land in China made up 13.3% of gross rural area.3 It has been conservatively estimated that throughout village renovation, approximately 100 million mu land in gross 25.5 billion mu rural areas (including township companies) can be saved. While this coverage is large enough to support economic construction in future decades. According to the rural survey research project made by the author, the number of vacant residence in the village makes up 10.8% of gross sampling residences. The State Statistics Bureau has not exposed any statistics about vacant residence in the village up to now. Therefore, we comprehensively analyze the survey data and the secondary agricultural census data disclosed by State Statistics Bureau to derive the outcomes as shown in Table 3.1.4 Thirdly, dualism undermines the reinforcement of agricultural competition in China. Accompanied by the progress of urbanization, the comparative advantage of food production will experience structural decline, and some mountainous arable land may even go out of use. Food output reduction has great potential to occur. To our knowledge, present agricultural productivity in mountainous area is about half of that in plain, and the figure is predicted to drop down continually. We rely more on the food production 2  Data source: China Statistical Yearbook 2009, China Statistical Press, 2009; China City Statistical Yearbook 2008, China Statistical Press, 2008. 3  Data source: Data source: World Economy Laboratory, Chinese Academy of Sciences Economic Research Institute: Economic Statistics Set for Main Capitalist Countries (1848–1960), World Affairs Press, 1962. 4  Data comes from Data Bulletin for the Secondary National Agricultural Census.

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Table 3.1  National vacant rural residence and value estimate of vacant rural land

Based on large-scale village survey data (condition 1)a The outcome is also based on typical survey data in Hebei Province (condition 2)

Vacant residence gross value (hundred million RMB)

of vacant land gross area (hundred million mu)

of vacant land gross value (hundred million RMB)

Total (hundred million RMB)

11,627

2.2

19,555

31,182

26,914

1.1

9777

27,891

Notes: 1. in above table, vacant residence falls into three categories, i.e., reinforced concrete residence, brick-concrete-structured residence, and others. The value is determined as per the survey data and general market price in the year of 2008. 2. Land value is calculated according to annual land rent 200 RMB/ mu and one-year bank fixed deposit rate  We performed the survey in 11 provinces and obtained 1650 valid peasant household samples. The survey was made in 2008–2009 a

capacity in plain area. Whereas, due to the instability of labor transfer and so-called “semi-urbanization” defects in dualism, excessive high price of urban construction land, agricultural arable land transfer remains difficult and agricultural scale economy can be hardly promoted. As found in our survey, rural arable land transfer rate in China is around 10%, and most cases in practice take place inside a family clan. Such condition obstructs the growth of scale economy in agriculture. Under such circumstances, it is rather hard to apply labor-intensive technologies in agriculture, and peasants are forced to massively use fertilizers and pesticides to increase food output. The opportunity cost of such small-scale agriculture is predicted to continually go up with the rise of urban income, which goes against the maintenance of Chinese agriculture’s comparative advantage in the international society.  acro-Economy-Incurred Efficiency Loss M The macro-economy-incurred efficiency loss generated by dualism can be proved by at least three aspects as below. The first one is labor market distortion, intense labor-capital relation and weak employment potentials. Owing to the poor protection of the labor market for migrant workers’ rights and interests, migrant workers’ income has been obviously squeezed. Cheap labor force clusters in large cities as large number of migrant workers live in illegal buildings or group

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tenant buildings. The lower labor price in large cities worsens the investment environment in small cities and manipulates their economic growth. Incomplete enforcement of labor protection laws, high labor intensity and long working hours of laborers seriously affect the capacity for urban economic entities to incorporate excess labor force from the village. Comparative analysis also shows the pulling effects of national economic growth per percentage point on employment in China. This figure is much lower than that of developed countries (Table  3.2). Such situation has strong negative impacts on the transfer of rural population to the city. Secondly, structural problem impairs the leverage of macro-control. The premise for macro-control to play a role is market unity and sufficient competition. However, the two conditions do not exist under dualism so that employment and commodity price are less sensitive towards leverage regulation effects. Thirdly, price distortion in the housing market leads to the irrational allocation of national income. The fancy high price in urban housing market should be ascribed to lots of reasons. Dualism is exactly one of the decisive factors. The new urban population in China is expected to demand 5 million housing units in the future. If every single house counts 400 thousand RMB, altogether 2 trillion RMB will be needed. In view of the investment in improving housing conditions, the upper limit is controlled within 4 trillion RMB.  However, in the year of 2009, the gross size of Table 3.2  Employment elastic coefficient comparison in china and main developed countries America

Federal Germany

Britain (1) Britain (2)

Japan

China

Time frame 1919–1957 1950–1960 1911–1931 1948–1955 1929–1955 1990–2007 E- GDP 0.48 0.42 0.27 0.33 0.23 0.098 elasticity coefficient Notes: 1. Data source: World Economic Data Editing Committee, Statistical Summary of Britain, France, America and Germany for A Century, Statistical Press, 1958; World Economy Laboratory, Chinese Academy of Sciences Economic Research Institute: Economic Statistics Set for Main Capitalist Countries (1848–1960), World Affairs Press, 1962. 2. Besides China, data analysis in other countries is counted with national income indicator. The analysis of growth rate does not affect the final conclusion. 3. The data for China has not been adjusted with secondary economic census results, for its influence on the final conclusion can be omitted. 4. Related data has been all adjusted with price indicator, but the category of price indicator varies. Its influence on the final conclusion can be also omitted as well. 5. The setting of time frame is out of the consideration for data comparability

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housing market in China was 6 trillion RMB, including infrastructure construction cost in residence district. If one house counts 400 thousand RMB on average, 6 trillion RMB should afford 15 million housing units. As revealed by national secondary economic census data, the housing completion floor space of general contracting and specialized contracting construction companies in China in 2008 totaled 13.4 trillion sq.km, which means that 13.4 million housing units had been built in every 100 sq.km. Excess and high-priced supply of houses are finally paid by urban residents. Then the income of urban residents flows to real estate developers and municipal government by housing market and tax revenues. At the same time, the housing market also converts national savings and pension to real-time gross demands, expands the imbalance of national economic structure and leads to potential inflation crisis.  ualism Sacrifices Social Equality D In view of the incompleteness of available data, it is a rather hard task to precisely describe social inequality arising from dualism. Roughly, the interests of professional peasants have been severely damaged under dualism, including those real peasants, and other rural residents with agricultural census register. Before 2008, more than 10 provinces had announced to cancel dual census register system, but the real rights of the population did not take place drastic changes. Inequality in Primary Distribution of National Income In the field of political research, related studies are rather vague and ambiguous. In reality, due to the high competitive degree of agricultural products in the market, the daily income of agricultural producers has already exceeded the average level of urban service industry. This point has been well explained in above sections. The key to the problem is in urban labor market. There exist severe structural defects in urban labor market now. The inequality between migrant workers and urban residents is caused by the transfer of social dualism to the city. Considerable surveys about migrant workers indicate that migrant workers mostly concentrate in non-formal fields and temporary positions. Pursuant to the research made by Han Jun research group, Chinese migrant workers’ income is about half of urban workers, and besides, migrant workers need to work for longer hours. They work for 6–3 days per week, and 8–9 hours per day.5 The research given by Dang Guoying et al demonstrates that 80% 5  Han Jun et  al., Research Report for Strategic Problems on Chinese Migrant Workers, Shanghai Far East Publishers, 2009.

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migrant workers work for above 50 hours per week in the city, around 20% more than normal working hours. Therefore, the income of migrant workers in equivalent time is much lower. Such income gap can’t be totally explained by the structural defects in labor market, but it is indeed a main motivator. Inequality in Redistribution of National Income Inequality caused by national income redistribution is related to irrational public finance. Before promoting socialist new rural construction work, the government pays less attention to public investment, and especially, the investment in peasant social security approaches zero. Even the fund in rural “household enjoying the five guarantees” also primarily comes from rural collectives. Rural capital outflows via finance and banking. The case is different after the promotion of socialist new rural construction work, as the government rapidly increased investment in “agriculture, rural areas and rural residents”. The investment rate sharply grew to 20.45% from 2008 to 2011. However, from the perspective of urban-rural resident transfer income, the key factor affecting national income redistribution, rural residents’ per capita annual transfer income was still significantly lower than the counterpart of rural residents in 2008–2010. The annual transfer income of the former was nearly 1/9 of that of the latter. Irrespective of the faster growth of indicator in rural residents, the village still takes 71 years to catch up with the city in current growth rate (Table 3.3). Inequality of Land Factor Trading The main property of peasants is land. For years, land “trading’ problem has always been the core concern in the relation between the country and peasants. It is necessary for the section to briefly quantify this relation. By now, there still lack accurate data about non-agricultural construction land occupation since the founding of New China, and researchers draw reference from different data sources. Table  3.4 presents the data summarized by the author from reliable sources. It is an intractable task to count how much fund has been donated by national peasants to the society because of the appropriation of their 1 trillion mu land. In market economy principle, even if the government appropriates land, it should still pay for the land at market price. Probably it is a basis used to estimate peasants’ interest loss in land acquisition. But market price data can’t be easily accessed, since a rational market price can’t be

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Table 3.3  Comparison between central government expenditures for “agriculture, rural areas and rural residents” and urban-rural resident transfer income 2008 Gross expenditures for 5955.5 “agriculture, rural areas and rural residents” of central government Rural resident transfer income 397 (RMB/per capita) Urban resident transfer income 3928 (RMB/per capita)

2009

2010

2011

Average growth rate

7161.4

8581 10408.6 20.45%

483

549

4515

5092 –

–

(Excluding 2011) 17.6% (excluding 2011) 13.9%

Data source: (1) State Statistics Bureau: China Statistical Yearbook (2011, 2009); (2) Ministry of Finance: national expenditures for “agriculture, rural areas and rural residents” totaled approximately 3 trillion RMB in 2011. Cited from website: http://finance.sina.com.cn/nongye/nyhgjj/20120308/ 114111542991.shtml

Table 3.4  Non-agricultural construction land occupation condition in China in 1952–2010 1952–1978

1979–1990

1991–1996

1997–2005

2006–2010

23.15 12.2 million 26.46 million 27.45 million 11.5 million million mu * mu * mu ** mu ** mu **

Total 100.76 million mu

Notes: *Based on Zheng Zhenyuan’s “Land Use Collection” (China Land Press, 2007); **Indicates calculations based on the “National Land Use Planning” (issued by the Ministry of Land and Resources in 2011) and other relevant data

made under market distortion condition. Moreover, we should not count the loss according to the final land use price. One of the reason is that the price is not able to be accessed. On the other hand, the price is affected by speculation. Whereas, we are able to roughly estimate peasants’ land interest loss subject to the general law of national income distribution. It follows two bases. Firstly, under general economic theories, under full competition conditions (like American economy), national income generally comprises three factors, namely profit, land rent and income.6 Land rent income usually accounts for 10% of national income. Secondly, after 1949, Chinese peasants became the owners of land use rights, but they 6  Under economic theory, attention should be paid to residual value, the remuneration of technical progress. Under real national income distribution, gross income falls into income, profit and land rent.

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never gained land rent income when land was massively converted for non-agricultural purposes and just gained mean “compensation” from such acquisition after reform and opening-up.7 Thus it can be easily seen that Chinese peasants lose considerable income in this regard. Dualism Threatens Political Stability There are three most critical factors in a stable society. Firstly, the middle class occupies the largest proportion in all national citizens. Secondly, national citizens have uniform ethnic cultural identity. Thirdly, democratic politics grows mature. World historical experience shows that the third factor only shapes up when the former two factors come into being. Regardless of the third factor, the former two factors can’t be easily developed under dualism.  rban-Rural Separate Land System Threatens the Formation of Middle U Class and Social Harmony There is no normative expression in economics about the features of the middle class. According to the author, the middle class has three features. Firstly, members of the middle class possess or have the ability to own a house, especially single house. Secondly, members of the middle class earn high income and live a comfortable life. Their Engel coefficient is maintained below 10%. Thirdly, members of the middle class have high approval and constructive attitudes towards social system. In China in current stage, if economic system restructuring can be further deepened, some may measure up to the former two features; and if political system restructuring can be gradually promoted, lots of citizens shall develop the third feature. The main form of property to the middle class is house. The high housing price paid by middle and high-income class in the city is for the land. Applicable to the law in China, residents do not have land ownership. The use right of land lasts for 70 years. Such condition frustrates Chinese middle and high-income earners and prohibits the formation of middle class mindset.

7  As recorded by China Statistical Yearbook in 1997, land acquisition fee paid in 1996 was merely 6.3 billion RMB.  Especially, large-scale land acquisition had been waged in the same year.

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In the world, in addition to few urban countries and cities like New York, the middle class in general developed countries all own or rent single houses. Moreover, apart from few cities like New York, residents in large cities in developed countries all own or rent single houses, and unit buildings are generally inhabited by low-income earners. To most Chinese families, it is of great social meaning for them to own a single house. The saying of “down to the earth” also shows Chinese people’s recognition about the relation between residence and psychology. In psychology, people easily generate negative emotions under overcrowding conditions. People easily feel their identity as the master of property when they have the ownership of house. At the same time, they may also generate sense of peace and satisfaction. It is conceivable that if 70% Chinese households have a single house with a courtyard, their social mindset will be greatly different. Land system reform will also decide future state food security. As stated above, food supply is not greatly related to the absolute quantity of land in China, but the quantity of quality arable land instead. The waste of massive mountainous land and conversion of quality arable land in plain to construction land severely affect the food security of China in the future. Such potential crisis has an intimate association with national land planning and land system. Determining Chinese peasants’ land property right also has important significance to social stability. The legal foundation of “forced demolition” of peasants’ house rests in the collective ownership of rural house site. Therefore, by the pretext of “collective benefits”, rural households have to submit to the “planning” generated by so-called “public interests”. Houses inhabited by peasants for few generations abruptly contradict with “public interests”. Government decision which applies the “majority principle” in forced demolition and migration severely damages rural residents’ interests. The right of habitation of rural residents for generations should surmount public planning right, and the legal foundation is resident house and house site private ownership. Now that such right is uncertain, barbarous practice of forced demolition and disguised forced demolition can’t be totally eradicated, and the society can’t be stable for all. Social stability is the rudimentary concern in contemporary China. Devoid of social stability, the reform and development outcomes in China will be ruined. We consider current land ownership as the cornerstone of socialism. In reality, such system not only loses efficiency, but also worsens social justice, erodes the base of social stability and even totally deviate from socialism principles.

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 rban-Rural Separation Mechanism Impairs the Growth U of Democratic Politics On accounts of the academic experience for years, the author insists that the growth of democratic politics is not up to popular culture, but the demand of social governance for democratic politics instead. Traditional rural social governance does not take democratic politics. Democratic politics is the demand of marketization society and modern and contemporary urban society. In traditional rural society, no change occurs in basic production mode. Correspondingly, public life is also rather simple. Now that the routine is to handle public affairs by conventions and customs, there is basically no need to discuss about new public affairs. Everyone is the receiver of customs. So, “unanimous consent” becomes the universal principle of public decisions. After all, such “unanimous consent” is not so harmonious and exquisite, because residents have to sacrifice their freedom to obey customs in most cases. As a result, from a microscopic perspective, the governance of traditional rural society does not request democratic politics. From a macroscopic perspective, traditional society implements “one person or one group consent” principle, i.e., dictatorship principle or military management principle, in tribe alliance security affairs. Military rank evolves into social class and subordination in social relation, like obedience in the army. Traditional Chinese rulers invented the civil service system worshiped by westerners in which civil servants were elected via exam. However, it was still a variant of the equilibrium system where supreme military leaders controlled subordinate officials. Such system only came into effect in wars. At the outbreak of war, a farmer possibly becomes the screw spike of war machines. Consequently, the great kingdom “large commune” composed by traditional rural society “small commune” does not request democratic politics. Under marketization social conditions, people’s action rules in public sectors experience adaptive changes. Such changes are primarily shown in two aspects. Firstly, on the prerequisite of the founding of an ethnic country, the election of leading cadres and legislative representatives of governments at all levels should conform to the “majority” voting system. Secondly, public criteria of the society, including rational habits, should be converted to laws so as to reinforce the “unanimous obedience” criterion in law. Anyone can act at their own will as long as they do not violate the law. This is the so-called democratic politics.

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To be sure, democratic politics is a stable system. China still works at improving the construction of socialist democratic politics. For seeking smooth development, democratic politics request the disintegration of traditional rural society and progressive transition to modern economic system characterized by uniform market. Though drastic changes have taken place in Chinese rural social relations for the past few decades after reform and opening-up, traditional property of villages still exists in different places across the country. Urban-rural separate dualism goes against the complete disintegration of traditional rural society. The growth of democratic politics must coincide with the disintegration of traditional rural society.

3.4  Rural Poverty Relief Objective and Path Poverty Relief Standards If it is essential to define poverty at a macroscopic social level, we must lay emphasis on the following few features. Firstly, most labor of people can only satisfy their demand for clothing and food, and people lead a simple and plain life. Secondly, people do not have accumulated any wealth, and prosperity in clothing and food in the short run will be quickly counteracted by population growth. Thirdly, in minimum social units composed by people, both economic sectors and social sectors have high-intensity non-market and non-currency reciprocal interactions and supra-economic constraints. Traditional customs and ethnic morality impose heavy pressures on a person. Few persons dare to break up the inherent rules in such an acquaintance society. Fourthly, the acquaintance circle of people basically has no change throughout the lifetime, and it is nearly impossible for people to exit from such a circle. Such pressures substantially frustrate people, and most people need to submit to power. Finally, gender discrimination is a commonplace phenomenon under poverty conditions, as women always have to rely on men. In China, the latest poverty relief threshold for peasants is 2300 RMB per capita annual income in 2011 (consistent with 2010). Comparing with former threshold, the amount has been raised to 1196, growing by 100%. The limit of poverty line means the intensification of poverty relief work, which directly increases then rural poverty population from 26.88 million to 12.8 billion. Till late 2014, there were still 70.17 million people beneath

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the poverty threshold. Among 1.6 billion elderly citizens in China, 0.7 billion citizens are from the village, including 7 million homeless ones. As indicated by 2015 National Economy and Social Development Statistical Bulletin issued by State Statistics Bureau, rural poor population in 2015 decreased from 70.17 million to 55.75 million than last year, reducing by 14.42 million (2.1 million more than last year), and concurrent poverty rate decreased from 7.2% to 5.7%. Comparing with the data in October 2015, the World Bank announced to raise international poverty line from 1.25 USD per day to 1.9 USD per day. As dressed by Liu Yongfu, Director of the State Council Poverty Alleviation Office, countries in the world have different poverty standards and policies. At present, the poverty standard in China is 2300 RMB per capita annual income in 2011 (consistent with 2010). Specific figure is dynamically regulated with price index and life index once a year. For instance, the poverty line was raised to 2800 RMB in 2014. According to purchasing power parity, it is around 2.2 USD per day, slightly higher than 1.9 USD poverty standard of the World Bank. Determination of poverty relief standards should highlight three factors. Firstly, average income of the household should be counted, including the elderly and children. For households with more than one child, the government should choose one child to count household income per capita at the will of the elderly. For those elderly citizens with no child, the government should count their own income. Secondly, essential life expenditures should be counted according to national climate. For instance, the government must consider rural residents’ warming service fees in North China in winter. Simultaneously, other consumption should be also taken into account, like basic clothing consumption, housing consumption, interpersonal relation consumption, cultural consumption, traveling consumption, etc. Rural residents can only lead a decent life and moderately rich life with such consumption. Thirdly, the expenditure should be counted as per market price. In current stage, professionalism development trend is rather remarkable in Chinese rural area. Even peasants in poor areas rarely produce their staple food in a self-sufficiency means. The self-sufficiency rate is often below 30%. Consequently, it is of necessity to count poverty relief standard with market price as the baseline. It is worth noticing here that the standard formulated by World Bank is not applicable to China, the country of which most territory is in the north temperate zone. After all, warming is a necessity of living in winter. We can’t acclaim that people’s living has reached the well-off standard if warming

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problem is not solved. If a family sits around a furnace for warming in the day and curls up in layers of quilt with cotton wadding at night, we should not judge that it has reached the well-off standard. The poverty standard formulated by international agencies mainly targets at population in tropical countries, as no warming consumption has been involved. Expect few provinces and districts in South China, most rural residents have to deal with warming problem in winter. Under current standard in China, urban warming expenditure is 22 RMB per sq.km. If the housing coverage of a household reaches 150 sq.km, it needs to pay 3330 RMB warming expenditures in winter. Rural areas can hardly solve warming problem by concentrated heating like the city, and separate heating consumes more cost. Even though an economical way is taken (by heating with natural gas in bedroom), every rural household in North China should pay at least 2000 RMB in winter. Based on above analysis, we think it rational to judge poverty standard as per Engel coefficient. The United Nations has classified the living standard of countries according to Engel coefficient. Generally, a country should be deemed as a poor country if its average household Engel coefficient is above 60%, a moderate country having enough to eat and wear if the figure is 50%–60%, a well-off country if the figure is 40%–50%, a relatively rich country if the figure is 30%–40%, a rich country if the figure is 20%–30% and an extremely rich country if the figure is below 20%. Subject to the standard, we may determine existing standard in China as absolute poverty (as the Engel coefficient in most regions of China exceeds 70%) and Engel coefficient 50% as well-off standard. Taking the village in Gansu for example, existing standard actually just meets the extreme poverty standard in China in which the disposable capital per capita is 8 RMB, and people can meet basic life necessities for food and clothing and ensure the intake of nutrition. But if the figure is doubled, people will lead a decent life and support other consumption. In line with the standard that Engel coefficient is no more than 50% (16 RMB per capita in Gansu Dingxi and other districts), every person has around 500 RMB per month, and 6000 RMB per year. If so, in Gansu village, the annual income of a household with four members should total 240,000 RMB. Most districts across the country far surmounts the standard. Few Pieces of Comprehension and Judgment Firstly, in a country, especially a large country, some people can only get out of poverty and lead a decent life with the aid of the government or

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society. In China, the disabled population makes up around 6% of gross population. In addition, it is reported that there are 14 million drug addicts in China (inferred by reference to the number of investigated drug addicts in international experience). The two determine the giant poverty population base of our country. Even in America, the Ministry of Agriculture has established special fund to help around 1/7 American people solve food shortage problem, and corresponding expenditure totaling 107.3 billion USD accounts for 7% of gross expenditures. It is easy to judge that China will continually implement the poverty relief plan in the long run. Probably poor population or poverty phenomenon can be wiped out, poverty relief work should not be slackened in the short run. Secondly, it is promising to achieve current poverty relief goal of 2800 annual income per capita. If the economic growth rate in future five years can be kept above 6.5%, current goal will be realized soon. However, it does not mean that the country can then build a moderately prosperous society. It takes further discussion yet. The reason is that China has strong national strength. Even if the full amount has been completely paid, it even does not measure up to 2% of financial income. The necessity of increasing the bottom line exists as usual. The survey made by Wuzhong City Poverty Relief Office in Ningxia Hui Autonomous Region, rural mentally handicapped population takes 4000 RMB per capita each year to solve their basic life necessities. Moreover, the survey indicates that in over 70 million absolutely poor population, 42% population is stricken by diseases. This group of people relies on government subsidy to a large extent. Thirdly, for building a moderately prosperous society, if the standard is raised up to 6000 RMB per capita annually, the income statistics provided by State Statistics Bureau will cover300 million. Among them, 2.7 million population suffers from poverty because of backward local economy. It takes ten years for China to reach 65% urbanization rate. If China is about to reach the level of a developed country, its urbanization rate should reach above 80%. Then it will be a more lengthy process. In this process, population structure will gradually change, and the poor will gradually enter the city. Till then, the village will be primarily composed of professional peasants and rich counter-urbanization population. Fourthly, former practice of rural development proves that the fundamental way of poverty relief in rural areas should be reform and development. Targeted poverty relief ought to be listed as the working strategy for reform poverty relief and development poverty relief. The direct cause of rural poverty is inadequate employment of peasants, and at the same time,

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it is also related to institution, infrastructure, technology and education. For solving problems in these aspects, the government is expected to accelerate the development course of urban-rural integration, and set rational man-land proportion in the village so that rural residents can participate in modern social labor division system and become efficient and fully employed vocational peasants. The goal must be achieved by giving full consideration to regional development and all residents in a village instead of low-income families. Without such cognition, the government can never fundamentally tackle the poverty problem of low-income families no matter how accurate the target is. Adjustment of Poverty Relief Measures  eepen the Cognition About Targeted Poverty Relief Concept D and Improve Poverty Relief Capital Use Efficiency The Poverty Relief Office of Central Government raises that targeted poverty relief includes many different aspects, such as “targeted object of poverty relief”, “targeted project arrangement”, “targeted use of capital”, “targeted measures for household”, “targeted dispatch of personnel”, and “targeted poverty relief efficiency”. Attention should be specifically paid to the use efficiency of poverty relief capital. For preventing production support capital from being converted to living assistance capital, the government should separate the use of production support capital and living assistance capital. Production support capital should be combined with regional economic development policies, and granted to every household. Living assistance capital should be combined with rural pension, rural minimum subsistence guarantee and rural cooperative medical service guarantee capital to ensure rural residents have enough money to see a doctor. Capital use in the two aspects requests a medium and short-­ run plan.  oster Poor Peasants’ Healthy Lifestyle and Improve Low-Income F Families’ Poverty Relief Ability Available studies suggest that one of the obstacles hindering the poverty relief of rural peasants is their unhealthy lifestyle. Improper cooking methods in contemporary times (rice flour and preserved meat) cause loss of food nutrition and severely affect the physical health of peasants. Gamble is the inducement of poverty of some peasants, and also one of the reasons

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of polarization in the village which should be continually cracked down upon. Superstition has great detrimental impacts on the vulnerable group in the village, especially rural women. Therefore, the government must suit the remedy to the case, and abolish the soil breeding superstition. The author finds from the survey that fashion cultural activities, competitive sports activities, film projection and foundation of other healthy social customs have overt positive significance.  enovate Land System and Activate Poor Peasants’ House Site Resources R Existing land system prevents the trading of peasants’ house site in the market, which not only suppresses the market values of house site, but also prohibits the development rights of peasants. However, the government does not grant proper compensation to such suppression. If this problem can be solved effectively, then a large proportion of peasants’ poverty relief trouble will be solved. In many cities of China surrounded by mountains and hills, local slope and water resources make the land unsuitable for the competitive agriculture. For instance, the shallow mountainous area from Fangshan to Pinggu in Beijing has poor conditions for the development of agriculture, but it is very suitable for the development of high-end residence district. Cities in middle and east China have abundant similar land resources. If the land has been used as per marketization means, it will do a lot to the prosperity of local peasants, and meanwhile optimize the living form of cities.  ural Basic Education Equalization R Developing rural education and promoting urban-rural education resource equalization has great importance to the inter-generation inheritance of poverty relief. To be specific, the government may moderately concentrate rural middle schools, promote students’ accommodation facility quality, and subsidize students’ meals, especially students from poor families. Such work has great significance to the poverty relief work in the village.  djustment of Migration Policies A Residents from districts with poor living conditions move to the city. Given the poor man-land proportion in the village of China, it is a long-­ run trend for rural population to move to the city. If the government does not transfer peasants from inhabitable districts to other rural districts, the tension of man-land proportion in the receiving districts will be inevitably intensified. If the government can migrate 10 million conditional rural

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population to the city in five years, then annual average number of migrants is no less than 2 million, less than 1/7 of actual rural migration population in China. Some residents have to stay behind in districts in harsh natural conditions as environmental protection professional staff or part-time staff. Until then, poor population will eventually find a way out.

3.5  Urban-Rural Integration Path Urban-Rural Integration Goal The urban-rural socio-economic integration development strategy raised at the Third Plenary Session of the 17th CPC Central Committee is the foremost decision-making achievement made during the execution of the 11th Five-Year Plan. The decision enacted at the meeting outlines the six specific goals to be realized before the year of 2020. Though the conference document does not specifically outline the vision of urban-rural integration, we can generally describe this vision according to the development course in main developed countries and reality in China. The vision for urban-rural integration has implications in five aspects. The first one is the basic foundation of urban-rural uniform market, especially uniform factor market. The second one is the equality of income between urban and rural residents. Peasants’ income may even exceed national average level. The third one one is the equality of public service between urban and rural residents. Especially, the urban-rural gap of social guarantee system should be totally eradicated. Fourthly, agriculture is highly developed. The proportion of agriculture in GDP decreases to 5%, nationwide Engel coefficient decreases to around 20%, and professional peasants become the main residents in the village. Fifthly, urbanization rate reaches over 70%. Due to the vast territory in China, different districts have different economic structures. Under such circumstances, it is irrational to formulate the same urban-rural integration indicator for all districts. Some districts can have higher rate of urbanization, and some can have lower rate of urbanization. Additionally, we can optimistically estimate that China has full potential to realize urban-rural integration in around 30 years if some major reformation measures can be effectively put into operation.

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Implement Positive Urbanization Strategy On the whole, remarkable achievements have been made in urbanization in China. Firstly, the government has formulated positive and robust urbanization strategy. In 2008, the government clearly stated the”two-­ wheel motivation” for urbanization and new village construction to promote the sound and rapid development of national economy. New village construction is nothing but one component of urbanization. Secondly, the government puts the development of a group of cities on its agenda so that the central government and local government have consensus and consistent actions in urbanization. Thirdly, some institutional obstacles prohibiting urbanization development are now being smashed. Fourthly, the rate of urbanization is very fast. As of 1992, the urbanization rate has been raised by 1.2 percentage point on an annual basis, twice more than fastest American urbanization rate. Fifthly, urbanization has made tremendous contributions to the growth of national economy, and the momentum of widening urban-rural gap has been effectively ceased. At present, the income gap between urban and rural residents has been significantly narrowed than that before the reform and opening-up, and moreover, the relative gap between the city and the village is rather stable in recent years as calculated by a more scientific method. With the aim of executing the tenet of “positively and steadily promoting urbanization” advocated by the Central Economic Working Conference in 2008, the government must have correct guiding thinking and a package of policies and measures. Generally, attention should be paid to the following aspects: 1. accelerate rural population transfer, and increase urbanization rate by at least 1 percentage point per year or more in specific districts. 2. improve planning and management, and gradually realize the legalization and democratization of planning. Both the central and local government should formulate plans. Additionally, middle and small cities can gain larger space of development if the government can rationally plan the development of each city. Thirdly, the government should greatly push forward agricultural modernization, help peasants get rich and cultivate professional peasants so that professional peasants gradually become the main residents in the village. Fourthly, the fundamental role of the market in resource allocation should be exerted fully in the process of urbanization. Finally, the government should maintain social justice, never damage the interests of residents in the process of urbanization, and bring about the benefits of urbanization to both citizens and peasants.

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Promote Land Reform-Centered Factor Market Reform Land reform should cast off the constraints of all outdated concepts and stick to the people-oriented governance concept. People’s welfare is the priority of institutional arrangement. In this sense, the baseline of institutional design should be the improvement of people’s welfare. In practice, the keynote to practise the standard is to well dispose the relation between equality and efficiency by observing efficiency standard and rationally allocating land ownership in private sectors, and on the other hand, observing equality standard and pursuing legislative land planning and democratic public goals in public sectors. Moreover, it is imperative to revise existing land laws and regulations and implement the land management and reform principle of “clarifying property, regulating land use, conservation and intensity, and strict management” proposed at the Third Plenary Session of the 17th Central Committee of the Communist Party of China. At present, few tough problems to be solved in reform are shown as below. The first one is to gradually form a diversified land property structure by clarifying property; explore how to realize peasants’ permanent land contracting rights and affirm peasants’ land property ownership; explore how to abolish the 70-year urban operational land rights and realize permanent land ownership. Even if the two properties are deemed as “quasi-­ private ownership”,involved land coverage merely accounts for around 1% of national land. Secondly, urban expansion in plain should be strictly prohibited to protect quality arable land in China. The first step is to reassess urban land use and planning indicator in plain, in which residence district plot ratio must be maintained above 5. The economic density in new industrial parks (i.e., GDP of land per mu) should reach 10 million RMB. In addition to the gap left by the policy linked to the increase or decrease, the government should cease the supply of urban construction land in plain three years later in principle. For cities which have increased urban construction land by way of policies linked to the increase or decrease, they can only add less than half mu whenever they decrease one mu. The threshold may be slightly different from city to city. Land supervision agency is supposed to reinforce law enforcement, expand the authority of branch agency as well as set the rank of superintendent as sub-provincial. Thirdly, shallow mountainous district can be further developed for construction land use market so that 70% Chinese families can have single

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house. The proposal stated above which advocates to make 70% Chinese families have or use single house seems to be impractical at first, as we generally acknowledge that China is short of land resources. While pushing forward land system reform, it is of equal importance to positively regulate labor-capital relation, deepen labor and population management system reform, carefully execute laws and regulations related to labor protection, solve high labor intensity and long labor hours problems. Urban social management system has to be fully innovated with household register system reform as the center. The central government may request local government to expedite household register system reform in the principle of “ensuring justice, balancing efficiency and defending stability”, encourage the municipal governments in other districts to learn the advanced experience of Chongqing and Chengdu in household register system reform. Convert Rural Governance to Urban Governance and Realize Unification of Social Governance As we all know, villages in Yangtze River Delta and Pearl River Delta have been highly non-agriculturalized. Though they are villages in the administrative system, and described with political terms like “rural governance”, these villages do not have any relation with agriculture in practice. Admittedly, the negative influence of such “stagnant expression” on practical work still prevails now. Exactly for this reason, we should be aware of the necessity to deepen our recognition about theories, timely convert political terms, and eradicate the negative influence of such fuzzy political terms. Regardless of the long-run political conversion, we have to achieve the following goals in future one or two decades. Firstly, the government should wipe out the dualism of social governance nationwide, convert so-called rural governance to urban governance and realize the unification of social governance. Secondly, the government should motivate some rural population to enter existing cities and some to emerging cities, and convert the rest to professional peasants scattered in around 3 million small residence districts. In this way, the village will be the prime living and work zone of peasants and peasants have professional identity equal to urban residents. Small rural residence districts will not have to establish independent public organizations, and just need to submit the power of local affairs to small cities or suburbs governments in other cities.

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Thirdly, in the foreseeable future, China simply needs around 50 million peasants who have certain scale of operation and earn income equal to average national level. Overwhelming peasants will enter the middle class. The rise of above social vision means the disappearance of traditional rural society.

CHAPTER 4

Labor Force Transfer and Reinforce Agriculture Competitiveness

Whether Chinese agriculture can improve competitiveness in the international market and how should it improve competitiveness is a major issue related to the development of agriculture, and future economic growth of China. There are many ways to enhance agricultural competitiveness, among which the most critical one is to reduce agricultural labor force and create conditions for the development of agricultural scale operation.

4.1   Rural Labor Redundancy: Survey About Peasants’ Working Time We estimate the recessive unemployment rate in China according to secondary national agricultural census. In 2007, rural recessive unemployment rate still approached 50% at the time when more than 1.5 billion rural labor force transferred to non-agricultural sectors. Considering the potential of agricultural technical promotion in China, the figure may be much bigger. Recessive unemployment means the short labor time of peasants. We roughly estimate that the workdays of Chinese grain-­growing peasants equate to urban employees’ overtime. As found by the survey, the income of peasants is in direct proportion to their labor time. Despite the mediocre gross income, peasants’ income on single workday is almost the same with or slightly higher than urban labor force’s income. Peasants engaged in cultivation and production of vegetables, fruits and other © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 D. Ying, W. Wu, A Study of China’s Urban-Rural Integration Development, The Great Transformation of China, https://doi.org/10.1007/978-981-19-2756-0_4

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commercial crops tend to have longer labor time, and naturally, higher income than grain-growing peasants. The higher income of peasants who grow commercial crops and breeding farmers also comes down to their longer effective workdays than ordinary peasants annually. Following this thinking, the government must lengthen peasants’ labor time, and ensure their full employment to let peasants achieve prosperity. While urbanization proves to be the radical way to achieve this goal. It is a misunderstanding to claim that peasants need to increase income by “industrialization”. Theoretically speaking, as long as the labor market has enough freedom, and product market has competitiveness, positions requesting identical technical content will not have highly discrepant income on single workday. Now that the breeding industry and commercial crop production earn high gross income, why don’t peasants flock to this industry? Why peasants in some places even remove their greenhouses? The reason is that peasants can rationally count their daily income. Our survey illustrates that peasants request less labor time in production and operation as agricultural industrialization level gets higher. If peasants do not utilize the labor time that they have saved, they can never increase their income. In case of price downfall, their income possibly decreases. As long as the daily average income in agricultural industrialization is still below urban migrant workers’ daily income, peasants still have the propensity to work in the city. Under the role of competition, either in “industrialization” or “non-industrialization” operation in large-scale agriculture, there will be no significant difference in peasants’ daily income. High-­ income peasants are often very busy. Actually, for increasing the income of peasants, the government must keep peasants busy. But it should be noted here that peasants should not still engage themselves in natural economy system anymore, but should march into “money exchange economic system” or otherwise they still find it hard to increase income. Table 4.1 lists the data in National Agricultural Product Cost and Income Assembly 2008 and our estimate. Pursuant to our survey, the data concerning peasants’ labor time invested in unit agricultural product production issued by State Statistics Bureau is much higher than the counterpart in our own farmer householder survey data. Taking three prime grain production for example, we roughly estimate that the labor amount of wheat, maize and rice per mu is respectively 4, 6 and 7 workdays (8-hour per workday) and the mean is 5–7 workdays. Therefore, it implies that the data given by State Statistics Bureau is 40% higher than our survey. In reality, with the progress of technology, it is very likely to reduce the living

6.4

1907.81 2402.42 18651.00

118840.50

430.50

8.2

27325.50

42.5

864.0

2146.50

26.0

640.0

tea garden

2865.00

51.0

994.9

Tangerine

0.23%

0.45%

0.92%

1.77%

7.03%

13.58%

1.90%

3.68%

2.24%

4.33%

0.76%

1.47%

0.48%

0.93%

0.04%

0.08%

12.90%

24.91%

0.62%

1.20%

(continued)

1.62%

0.14%

2242.50

19.4

188.5

Average vegetables

10.81%

1822.50

37.6

467.2

sugar cane beet

3.14%

8113.50

24.9

730.2

Flue-­cured tobacco

0.26%

17188.50

10.0

490.7

cotton

20.88%

14893.50

42.5

198.0

Two kinds of oil

4,870,500

4.4

864.0

Yam

32,403,843 407,634 697,503 2,754,131 21,074,303 5,706,582 6,720,683 2,286,023 1,447,160 117,670 38,665,583 1,860,300

8.7

87.7

8.2

163.3

124.6

Soybean

159.6

Millet

labor cost (yuan) (1) The amount of labor per acre (2) (3) National production scale (4) National employment (5) Necessary labor force full employment ratio (6) Necessary labor as a proportion of existing agricultural labor

Chinese sorghum

Three kinds of crops

Type

Table 4.1  Calculation of labor costs and surplus labor of major agricultural products in 2007 (per acre, day, yuan)

4.3

89.4 19.6

427.9

Scale Scale broiler(100) laying hens(100)

47.9

1107.0

Cow

22.3

616.0

Freshwater fish intensive

2.16%

2.72%

5.26%

8,166,447

0.35%

0.67%

1,036,800

0.20%

0.38%

588,000

0.59%

1.13%

1,754,867

0.25%

0.48%

743,333

Total items

0.20%

0.39%

51.78%

100.00%

600,000 155,198,458

Other breeding

6. Indicates the proportion of this type of working days in the total working days of the labor force in a state of full employment

5. Indicates the proportion of the total number of working days in this category to the total working days in actual agriculture

Note: (4) = (2) × (3) × 300 [Calculated based on 300 working days of full employment in a year. This calculation is based on the “China Labor Statistics Yearbook (2008)” (China Statistics Press, 2008). According to this conservative official data, Chinese workers under the age of 60 work an average of 300 working days per year.];

Source of this table: “Compilation of National Agricultural Product Cost and Benefit Data 2008” China Statistics Press, 2009. Individual data are extrapolated based on the data in the “China Statistical Yearbook 2008”

1.07%

3.05%

1.15%

0.33%

4.18%

5.89%

2.08%

6.6

128.5

Free-­range sheep

680,500,000 139,440,000 368,966,000 72,000,000 9,000,000 11,000,000 0,000,000

19.7

2.22%

5000

2.9

442.3

0.65%

2848.00

600.00

19.3

68.4

Free range beef cattle

9,142,616

36.3

50.1

394.3

Other crops Scale pig

1,001,200 3,444,181 3,221,667 6,487,433

816.9

962.1

labor cost (yuan) (1) The amount of labor per acre (2) (3) National production scale (4) National employment (5) Necessary labor force full employment ratio (6) Necessary labor as a proportion of existing agricultural labor

Apple

Silkworm cocoon

Type

Table 4.1 (continued)

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75

labor investment in unit agricultural product. Our data is possibly overestimated. Even if based on the data of State Statistics Bureau, we can still observe that peasants actually have rather limited effective workdays, which means that even if considerable rural labor force has been transferred, peasants’ effective workdays are still merely half of full employment workdays. Counted as per full employment workdays, the GDP of single rural laborer can reach up to 18,445 RMB and the daily income of a rural laborer totals 61 RMB. Given national tax exemption preference and subsidy in agriculture, GDP here equates to peasants’ real income.1 In consequence, it means that the average income of urban employees in 2007 was just 34% higher than peasants under full employment conditions, but urban employees’ average income in collective undertakings was even 19% lower than peasants. In 2014, the number of agricultural practitioners had been reduced by 35% than 2007. Counted as per agricultural labor productivity in 2007, potential surplus labor force in agriculture still totals 33%. As a matter of fact, agricultural productivity in China in this period had been significantly raised, while the growth rate of social demands for agricultural products estimated by population growth did not exceed 5%. In general, potential surplus labor force in the village is above 33%.

4.2   Path to Improve Agriculture Competitiveness in China Improving the general competitiveness of Chinese agricultural products in the international market and maintaining supply-demand balance in domestic agricultural product market against the context of “certain gross amount and adjustment structure” will forcefully support the sustained and stable growth of Chinese economy. This task is arduous and heavy. Success can be only achieved if the government pays high attention and persists in the direction of reform.

1  We can’t get the data about peasants’ real income in agriculture. Statistics about “income from household business operation” does not mean peasants’ agricultural income. Though agriculture GDP contains the data of state-owned farms, it most approaches peasants’ agricultural income.

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Competitive Agriculture Is the Strategic Backbone Propelling Sustained and Stable Economic Growth of China To gradually construct fully competitive modern agriculture in international market has major strategic significance to the sustained and stable growth of Chinese economy. First of all, agricultural modernization will relatively cut down agricultural product price, remarkably raise actual national income, and meantime, positively affect citizens’ employment choice, and boost national creativity. As shown by related studies, the lower food price relative coefficient (Engel coefficient), the more citizens are likely to be manipulated by interests and preferences in employment. This aggravates the probability of position innovation. Position is no more treated as a means of living by citizens, but a platform by which they realize lifetime pursuits. At the same time, since food is no more than an intractable difficult besetting citizens, people are more courageous in choosing their profession and dare to make long-term investment to practise their vocational skills. Till then, it is promising to raise human capital level across the society. A society can only become an innovative society driven by such internal factors. Secondly, lowering the price of staple agricultural products in China on the premise of rising efficiency not only cuts down citizens’ food and clothing cost, but also helps change their “consumption-savings” mode, pushes forward consumption innovation, expands domestic demands and reinforces the internal impetus of economic growth. Citizens’ average consumption propensity in China is obviously lower than that in developed countries, and thus the mode that primarily depends on investment to drive national economic growth can not be changed in the long run. One of the factors leading to such mode is citizens’ “collective hunger memory” and influence of high Engel coefficient on household financial budget. People tend to seek help from high savings to counteract uncertainties when they feel worried about future food guarantee. Official statistics indicates that as of 2006, despite the low economic growth rate in China, urban residents’ Engel coefficient does not decline but reversely goes up. This is a bad stimulus to national household budget in China. The cheap price of basic food ingredients can alleviate government’s financial burdens in sponsoring the poor by food relief, and simultaneously optimize household financial budget’s positive regulation factors. Due to the cheap food price in America, American government has the capacity to donate food bonds to around 1/7 families so that American society is

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basically a self-sufficient society. Such situation inevitably generates huge influences on household financial budget, and balances citizens’ real welfare and national economic growth. This is one secret guaranteeing American maintenance of its technical advantages. China should draw lessons from such mechanism. Secondly, improving agricultural competitiveness and converting Chinese peasants from petty by-business peasants to professional peasants in the middle class can fundamentally solve urban-rural separation problems and push forward urban-rural integration. Though by-business peasants can increase their income, general social economic efficiency is very low, which prohibits China from being built as an economic power. If peasants remain as petty peasants, they can never catch up with urban residents in income no matter how economic structure has been adjusted by competitive law. It is definitely not a long-term policy for the government to increase peasants’ income by government’s price hike for agricultural products and government financial transfer payment. Peasants’ can only become rich and the village can only become prosperous after the government fully motivates peasants and agricultural economy to get involved in world labor division system. Finally, improving agricultural competitiveness has significant meaning to maintain the supply and demand balance in domestic staple agricultural product market and facilitate social economic stability. For large powers like China, if staple agricultural products, especially cereal, heavily rely on the international market, the transmission effect of international agricultural products’ price volatility will be amplified, and the instability of domestic agricultural products’ price will be intensified. Sharp decline of products not only affects peasants’ income, but also results in the excessive bounce of agricultural products’ price for consecutive years. Severe inflation is possibly incurred by agricultural products’ price rise and investment expansion. In condition of drastic volatility of agricultural products’ price, state reserves may also aggravate financial burdens and go against the general coordinated and stable growth of national economy. China now is still in the transitional period of social economic system vulnerable to specific uncertainties. If staple agricultural products still depend on the international market, even if the supplier countries do not significantly use “sanction weapons”, some “incoordination” strategies can enough cause trouble to the economic stability of China. Improving domestic agricultural product supply ability and holding the control right over food in our hands unquestionably help the government take the whole situation into

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account and make an overall plan and steadily push forward the progress of all reform careers across the country. In China, the shortage of freedom over land ownership and transaction confines people to limited resources. If public service facilities are invested in such regions according to urban standards, it is hard to form a sustainable social structure. Challenges and Opportunities It is not an easy work to improve Chinese agricultural competitiveness and propel Chinese agriculture to be deeply involved in international labor division system. For the past few years, the stable appreciation of RMB reverses the imbalance of international transaction, but agricultural product price behaves its disadvantages in international competition. This fully indicates the inadequate comparative advantages of agriculture in China. The cereal in China has relied on net import for years, among which the import of some varieties has surmounted low tariff-rate quota. If the price of staple cereal varieties has been continually raised for around 60%, cereal cost insurance and freight will be still lower than domestic price and import pressures will grow larger and larger. If such a trend can not be prohibited, cereal yield increase will run into the ceiling where price rise hardly stimulates the growth of domestic yield and financial subsidy probably gives preference to importers. Irrespective of numerous adverse factors threatening the reinforcement of domestic agriculture’s international competitiveness, and strong rigidity of some factors, we should still focus on the promising prospects. Taking labor cost for example, as mentioned above, it is extremely potential to cut down labor cost in China. If the number of national peasant households is decreased to 30 million, and that of cereal production peasant households is decreased to 10 million, and other peasants mainly develop labor-intensive agriculture, the labor productivity of China counted as per actual labor time will get close to the level of developed countries. Dynamically speaking, at this level, agricultural residents will earn the same average income with urban residents. Supposing that rural population is fourfold of agricultural population, it means that China must reach around 70% urbanization rate. If urbanization rate in China progressively increases by 12 percentage point annually, the goal can be achieved by around 2030. International experience shows that

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urbanization rate will accelerate before it reaches 75%. In a word, there are some international examples that can be followed. From the perspective of land resources, we do not need to hold pessimistic attitudes towards the goal of improving agricultural competitiveness. Latest statistics reveals that China has currently 135.385 million hectares of arable land, 14.812 million hectares of garden land, 253.95 million hectares of forest and 287.314 million hectares of grass land. Taking breeding industry’s absorption to peasants into account, if average acreage per household for arable land is 13 hectares, 2 hectares for garden land, and 300 hectares for grass land, the government can accommodate 30 million professional peasants’ demands for lands resources in scale operation. Grass land in China has poor capacity of carrying herdsmen. For countries with developed animal product industry such as Netherlands, household grass land does not exceed 40 hectares, but corresponding productivity reaches up to a high level. On the whole, the land policy of central government is out of realistic consideration. As food security is a matter of primary importance in China, the government should preserve the acreage of arable land. As economic construction inevitably occupies much arable land, it is essential to control the area of site and implement most rigorous land policies. Land policy has even become an auxiliary means of macro control in China. Food production in China is mainly up to technical level and agricultural product price, but the land source required by economic construction may not absolutely come from arable land. If the government moderately executes the policy, it can not only get enough land for economic construction, but also protect arable land. For achieving this goal, it is imperative to adjust land policies and accordingly reassess land resources in China. There will be no problem with food security in China considering available resources. In addition, food production growth potential can be also inferred from past trends. In 1978–2006, food annual growth rate was 1.76%, but population annual growth rate was 1.1%. Subject to the assumption, population peak of China will total 14.8 billion by the year of 2043, with annual growth rate of 0.5%. Catering to population growth, food production must reach 600 million tons. While this goal has been already achieved yet. Food production reduction after 1998 is not ascribed to the scale of arable land. Before that, due to the continuous growth of domestic food yield, national grain reserves total 2.5 billion tons and peasant grain

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reserves total 200 million tons. The sharp decline of food price aggravates land abandonment conditions. At the same time, the area of forestry conceded from the land in 1999–2013 totalling106.31 million mu also generates severe impacts on food yield. Food price recovery after 2003 proves the effects of forestry recovery conceded from the land (according to our survey, mountainous dam field significantly increases the production by around 30%) on food yield increase. From the perspective of food demands, existing land scale can enough satisfy the demands of food production. In 1949, the population of China was billion, and food production per capita was 209  kg. In 1984 and 1986, the population of China was 10.4 billion, food production per capita was 371 kg, and food consumption heat was 2650 kcal/person per day, 250 kcal higher above the threshold. In 2014, food production per capita was 440 kg. In line with the law back to the 1990s, peasants run into difficulties in selling food when domestic food production per capita exceeds 385 kg, and difficulties in buying food when domestic food production per capita falls short of 375  kg. Food surplus and storage overcapacity emerged in food market in 2015 once again. From the perspective of technology, continually reforming medium and low-production farmland, raising irrigation water use rate and fertilizer use rate, and cultivating varieties with high efficient use of resources may all add food production. During our field visit in Shandong, we learn that for realizing plain afforestation, Qihe County reaches 30% forest coverage rate, decreases arable land acreage and increases food production. Under the same conditions, the county maintains 3–5% growth simply by way of the upgrade of new varieties. At present, the average production per mu of three staple food in America is around 420 kg (not very high in the world), and that in China is around 350 kg. Comparing with America, China has greater potentials in cereal production increase.2 If our policy in seed technology is not too conservative, cereal production per mu may be much higher. Though food production situation in China remains optimistic from the perspective of technology, national arable land protection policy should not be abandoned. 2  Mr Li Zhensheng, domestic agricultural technology expert, holds the opinion that it is very likely for Chinese food market to progressively increase by 1% per year. (see People’s Daily, January 9th 2019). Our survey in Fuyang, Anhui, also verifies that Mr Li Zhensheng’s estimate is rational (see Column 4-1).

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On the one hand, with the progress of urbanization, food production comparative advantage will experience structural decline. As some mountainous arable land will be gradually left aside, food production reduction risks further aggravate. Our survey also illustrates that agricultural productivity in mountainous district is half of that in plain now, and possibly much lower in the future. We will rely more on the food production capacity of plain. This implies the necessity to protect quality arable land in plain. 【Column 4-1】 The case of Fuyang, Anhui expresses the great potentials for peasants to increase income and food production. In October 2009, the author visited the village in Fuyang, Anhui for field survey, and exchanged opinions with Mr Guo Shimin, local model peasant, over the possibility to increase food production and rural income without extra agricultural investment. The main practice is to promote scale operation and field management level. If a peasant cultivates 30–50 mu crops, and engages in purchase and marketing cooperation in circulation, there will be three benefits. In the transaction flow, the cost of plowing, harvest, pesticide and fertilizer on farmland per mu will be respectively cut down from 40, 70, 11 and 150 to 25, 35, 6 and 95. In land use, the land use rate can be raised by 4%. Under the condition of small-scale operation, peasants’ land border acreage is around 2%. Peasants are unwilling to apply fertilizer on land border. In addition to other losses on land border, the influence on production is very substantial. It is not exaggerated at all. Adhering to the estimate, if 5% arable land across the country is under scale operation annually, food production will increase by 1 billion kg, which means that when arable land increases by 5.4 million mu, national food production investment will be saved by 6 billion RMB. In work technology, scale operation creates 15% potentials for food production growth. Guo Shimin mentions that under the condition of scale operation, peasants may more scientifically apply fertilizer and row spacing, and resulting production efficiency can reach 10% in wheat, 20% in corn and 15% in all crops on average. Based on the above statistics, if scale operation is popularized nationwide, national peasants’ average operations scale will be maintained at 50 mu, and even 100 mu in some provinces. Existing agricultural

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technologies make 60% arable land feasible for scale operation. Then food production is expected to add up to 60 billion kg in the future. On the other hand, from the perspective of social economic sustainability, it indicates the more arable land, the better. Though fertilizer, pesticide, and irrigation by surface water and underground water can significantly increase production per mu, it is at a high environmental cost. Professionals observe that in recent years, sea water intrusion of freshwater aquifers frequently hits costal areas in China, covering multiple provinces and cities from north to south like Liaoning, Hebei, Shandong, Guangxi and Hainan. Among them, sea water intrusion promptly deteriorates in circum-­Bohai sea region. In 2003, the acreage of sea water intrusion totals 2457 sq.km, increasing by 937 sq.km than late 1980s with average annual growth rate of 62 sq.km. China has become world’s first country which applies most fertilizer and pesticide. The annual use rate of fertilizer is 46.37 million tons, around 40 tons per sq.km according to the area under crops. It has measured up to the security limit set by developed countries for preventing the damages of fertilizer to soil and water body (22.5 ton/ sq.km). Furthermore, irrational fertilizer application structure results in the low use rate and high loss rate. If China has enough arable land, the use amount of fertilizer, pesticide and irrigation can be naturally reduced, and meanwhile, peasants can popularize extensive cultivate mode to reinforce agriculture economy comparative advantage and lower people’s livelihood cost. As stressed by our research, economic construction in China does not lack land. On the contrary, when compared with some developed countries, China has serious land waste problems. In 1960s–1980s, whenever GDP increased by 1 percentage point in China, land use would amount to a high level about eight times higher than the counterpart in Japan. Non-agricultural land in the village of China is also quite large too. Compared with Japan, rural residence in Japan in 1954 merely made up 6.8% arable land, but contemporary counterpart in China was 13.3%, about twice of that of Japan (see Table 4.2). Therefore, we conservatively estimate that throughout rural integration, around 25.5 billion mu (including township companies) rural land can be saved for economic construction for future decades. Please refer to Table 4.3 for the comparative study on economic growth and land appropriation condition between China and Japan. Due to data incompleteness, it is rather hard to compare urban population density between countries, but our data shows that China has much lower population density than other prime cities in the world. Given

2989 720 2269

14,772 2607 12,165

6.8% Proportion of rural residence in arable land in Japan

Total City Village

Key statistics comparison

2653 499 2154

Dry land 1457 186 1271

88,293

Population (thousand)

0.96 Arable land acreage per capita in Japan

4 2 2

Grassland Salt field

38.2%; 12.6% Proportion of arable land in national land in Japan and in China

6984 168 974 10 6010 158

Forest Pasture

5223 Gross arable land acreage of Japan in 1903

518 216 302

Residence

Note: Unit: thousand ha

Data source: World Economic Data Editing Committee, Statistical Summary of Britain, France, America and Germany for A Century, Statistical Press, 1958

13.3% Proportion of rural residence in arable land in China

Paddy field

Land acreage

Table 4.2  Japan land statistics in 1954

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Table 4.3  Comparison between China and Japan in economic growth and land appropriation Economic growth and land appropriation: Japan Year 1965 GDP annual growth (%) 14.38 Construction land converted from 31.2 arable land (thousand ha.) GDP growth by one percentage 2170 point Arable land acreage (ha.) Economic growth and land appropriation: China Year 1980–1990 GDP annual growth (%) 7.9 Construction land converted from 176.5 arable land (thousand ha.) Arable land acreage (ha.) 22,342

1970 16.99 51.1

1975 10.14 29.2

1980 1984 8.15 6.62 22.0 17.2

3008

2880

2699 2598

1991–1995 1996–2000 2001–2005 12.2 8.6 9.5 218.4 184.3 189.3 17,902

21,430

19,926

similar definition for the city, Beijing’s population density is lower than that of London, and Shanghai’s population density is lower than Seoul and Tokyo. Consistent with the basic law of modern economic growth, resource is the function of system and technology. As long as we work at deepening of reform, and improve the technical level of agriculture, we may form the international comparison advantage of agriculture. Path to Improve Agriculture Competitiveness in China Improving agricultural competitiveness requests more efforts to be paid in agriculture. At the same time, the government should formulate an overall plan, begin to regulate urban-rural relation, break through urban-rural factor market, optimize government control and increase policy efficiency. In future days, the government must do a good job in the following few aspects. The first one is to deepen rural ownership reform, and consolidate the marketization degree of land factor. Clear land ownership consists in the premise of land transfer, and also the institutional guarantee to propel agriculture scale operation. Across the country, some prime agricultural production areas have high agricultural efficiency, but fail to generally raise the efficiency yet. Why? We summarize few reasons. First of all, the opportunity cost in leisure time is rather low. Peasants can barely find a job in the

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city or even dwell in the city after reaching the age limit. For this reason, rural leisure cost is very low. Simultaneously, farming labor intensity has been significantly decreased by socialized services and real farm workers are professional servers. Under such a background, small plot is guarded by the elderly and left-behind women, but not used for rent or transfer. Those real peasants engaged in socialized services actually earn salary. Secondly, land rent rate is very high. Under “petty peasant + socialized service” mode, land rent merely makes up of 80% of pure income. Such land rent rate is rather rare in the world. If peasants want to realize agricultural scale operation simply by rent, the land rent cost alone is non-­ tolerable enough. Thirdly, rent term is short. During the interview with a professional peasant who specializes in scale operation, the author learns that if the rent term of cultivated land has been extended for 30 years, the government does not need to invest in land consolidation and he himself can afford the expenditure. Short rent term undermines the initiative of agricultural investors. Fourthly, land rent agreement is unstable, namely the high default rate of land rent agreement. Such situation also affects agricultural investors’ initiative. Speculation awareness motivated by property right instability is the main cause of high default rate. Problems mentioned above are all related to rural property rights system, which implies the fact that rural property rights system obstructs the rise of agricultural efficiency. If land contract right has been maintained stable all the time, and is not subject to term of validity, above problems will never occur. Nevertheless, such rural property rights system has not been established in Chinese rural area yet. The second step is to accelerate urbanization progress and improve urbanization quality. We should not doubt the potential for urbanization to take in excess rural population nor doubt the ability for traditional village to release population. In the gross aggregate of Netherlands GDP, agricultural added value approaches that of China, but its urbanization rate amounts to 90%. Comparing with the fast growth period in Europe and America, the pull ability of GDP growth for employment is rather low in China. The author accordingly analyzes it should be attributable to two reasons. Firstly, employees have too many actual workdays. Secondly, tertiary industry is too backward. In the future, the government should regulate labor-capital relations and practically protect laborers’ rights in order to boost GDP growth’s pull ability for employment. For reinforcing urban consumption ability and expanding the scale of tertiary industry, the government should greatly regulate urban population layout, ameliorate

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urban residents’ living conditions and especially satisfy urban middle class’ demands for economical single houses. The third step is to strengthen arable land protection efficiency and improve arable land quality. “Protecting the red line of 1.8 billion mu arable land” will not radically affect urbanization nor urban residents’ living quality. The key to the issue is rational land use planning. In the future, the government may upgrade basic farmland policy to agricultural protection zone policy, protect agricultural land on a large scale and strictly govern land purpose. For land management outside agricultural protection zone, it is necessary to expand local autonomy and gradually cancel index management practice. The fourth step is to alter agricultural technologies and vigorously popularize rain-run agriculture and dry farming. By improving and reforming agricultural technical research and promotion management system, the government can add more modern agricultural technical equipment, and take dry farming technical development as the prime direction of agricultural technical progress. Moreover, the government should reform agricultural college school-running and management mechanism, and introduce agricultural colleges to the full promotion of agricultural technologies as the main force. Existing agricultural technology promotion department may be classified into agricultural college system as well. Water conservancy investment may concentrate on places rich in water resources. Other regions are suitable for dry farming. The government should more proactively encourage private capital development of deserts for increasing prairie economic values. Centered around property protection policy, market factors should be greatly introduced to incorporate private capital into desert reform and expand all sorts of dry farming supplemented by national support fund. Fifthly, efforts should be made to develop home farms and peasants’ cooperative and raise agricultural industry. In response to the reality, the government should prevent urban capital enclosure of farms, and foster family farmers among existing peasants as much as possible. At present, the development condition of cooperatives in China is barely satisfactory. Firstly, the small operation scale makes peasants less benefit from cooperatives, and deprives peasants’ initiative in cooperative activities. Secondly, the guiding ideology of the country for rural cooperatives is defective. Some officials mistakenly believe that more and more cooperatives should be established, and tend to preset the quota of local cooperatives. Thirdly, cooperatives have low management level and lack enough talents. The

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government should pertinently solve problems existing in the development of rural cooperatives and encourage rural cooperatives to grow stronger. In order to make cooperatives larger and stronger, traditional quota orientation needs to be replaced by cross-regional development of cooperatives. It is impractical to establish cooperative support projects in grassroots below the county level. Instead, governments above the city level should set up cooperative development fund. The central government may support the development of cooperatives by carrying out village cadre temporary post policy, and fostering a group of operation talents. The last step is to regulate the means of financial support for agriculture and raise support efficiency. By now, over 20 branches subordinate to the State Council have a control over the support fund in “agricultural, rural areas and rural residents” projects. Such situation must be altered as soon as possible. In brief, support projects for agricultural must be streamlined, like abolishing leisurely agriculture projects, ceasing support for agricultural leading companies, etc. Support fund should be concentrated in the production and development of staple agricultural products, by lowering their production cost and making ordinary residents enjoy the benefits of agricultural progress. The government should not just meet the high-end food consumption demands of the minority. Moreover, governments at all levels should disclose the progress of financial support projects for agriculture, raise the transparency of support fund, absolutely crack down upon companies parasitic on national agricultural support system and exert the dual role of support fund.

4.3  How Should Small Peasants Improve Scale Operation Level: Survey About the Transitional Mode After 2013, Sheyang County, Yancheng City of Jiangsu Province promoted agriculture scale production mode characterized by “stable land ownership and coordinated operation” and achieved remarkable achievements. According to primary survey and analysis of the author, in 2014, in cultivated zones that had tried such production mode in Sheyang County, the yield/cost ratio of wheat had been increased by around 192%, while the yield/cost ratio of rice had been increased by around 30%. Its agricultural competitiveness had been significantly promoted. There is still a room of further exploration in the economic potentials of such production

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mode. With present agricultural technical equipment conditions and agricultural material investment technologies unchanged, it is promising to cut down the cost by at least 15% by “stable land ownership and coordinated operation”. Main Content of “Stable Land Ownership and Coordinated Operation” Mode The core feature of “stable land ownership and coordinated operation” mode is that land is not transferred between peasants. The cereal productivity is raised by production operation collaboration and scale operation. Cadres and the masses in Sheyang County refer to this scale production mode as “cooperative tillage”. In reality, this mode is exactly breaking up the tillage link and moving towards integrated and coordinated operation. Specifically, it has the following features. Peasants can autonomously set marks of plots belonging to different fields, cancel ridge and land borders in tillage for convenience of tractor plough. Peasants can ascertain time of tillage, lower operation efficiency loss caused by petty peasants’ disunity of tillage time, raise crop growth period photothermal resource use efficiency. Peasants can make unified planning for tillage route, maximally eliminate tractor plough dead corners and therefore minimize tillage road floor space. Based on the full coordination with cadres or cooperative principals, peasants alone determine the brand and variety of seed, fertilizer and other means of production for uniform application on a large plot. If there exists some difference between peasants’ land in soil fertility, the harvester can separately operate and each peasant takes over the product by himself. If the land of peasant households has approximate soil fertility, peasants can uniformly harvest and sell crops and the income will be directly credited to the account of each household. Such situation is rather rare. However, with the progress of uniform tillage, the land of every household will gradually approach and such means will become the mainstream one. The whole production process should be informed or participated by peasants. Production coordinators here (often village cadres or cooperative principals) do not act on their own, nor make uniform operation according to the requirements of an agricultural company.

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Considering the features of “stable land ownership and coordinated operation” mode, peasants consider that the land is still theirs psychologically, and land operation right has not been transferred. At present, such mode receives high population among peasants by virtue of its strong demonstration effects and fast promotion speed. Exploratory Meaning of “Stable Land Ownership and Coordinated Operation” Mode Since the implementation of land contract system, main grain producing areas in China develop different scale operation means with varying forms and degrees, and make great contributions to the rise of agricultural economic benefits. Comparatively speaking, “stable land ownership and coordinated operation” mode in Sheyang County, Jiangsu Province has its own distinctive features than existing prime agriculture scale operation mode. 1. Comparison with “Petty Peasants + Socialized Services” “Petty peasants + socialized services” mode is the basic means for China to realize scale operation. It is mainly benefited by the professionalism of agricultural production, among which scale operation nature mainly occurs in production service link. Under such circumstances, agricultural service providers serve multiple petty peasants concurrently. Such mode unquestionably enjoys an edge than full-process petty peasant operation. However, its drawback is that socialized service will lead to inconvenience in scale operation before petty peasants, and give rise to efficiency loss. For instance, the discrepancy among petty peasants in plowing time, row spacing, plot shape, fertilizer and pesticide brand all add difficulties to uniform operation. Nevertheless, under “stable land ownership and coordinated operation” mode, these problems can be basically solved by weakening land border constraints and reinforcing tillage uniformity (see Table 4.4). 2. Comparison with “Corporate Agriculture” The general efficiency of “corporate agriculture” in China is rather low. Firstly, owing to the low standardization degree of production, operation measurement work is rather sophisticated and it in turn adds more difficulties to employment supervision work. Secondly, “corporate

Wheat/acre Rice/acre Remarks:

Changes in farm labor input −50% −30% 3 and 5. Reward 80 yuan for a single working day. The original working days of 1 acre of wheat and rice are 3 and 5, respectively.

Changes in capital investment

−19% −19% Wheat and rice were originally invested 1038 yuan throughout the year. Take the average here. 8% 8% Increased land fertility, land utilization rate and effective agricultural time utilization rate.

Change in land yield 20% 10% Wheat price 1.1 yuan/jin; rice price 1.5 yuan/jin

Change in output

The left column calculation 192% assumption: 30% 1. It is assumed that the Wheat investment in agricultural production equipment of small farmers changed from does not change, and related loss to profit, services are obtained through and the change procurement. was obvious. 2. Relevant calculation unit conversion standards are shown in “Remarks”.

Changes in revenue/cost ratio

Table 4.4  Comparison of economic benefits between Sheyang Mode and “Petty Peasants + Socialized Services”

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agriculture” usually depends on government intervention to transfer land. As peasants’ psychological cost has been determined by land rent rate, land rent rate often accounts for more than half of pure agricultural income. This greatly adds agricultural companies’ operation cost. Under “stable land ownership and coordinated operation” mode, peasants do not separate from operation, and there is no land rent cost to be considered. In this way, peasants do not have to change their budget plan, and drawbacks in existing “corporate agriculture” can be roughly eliminated. 3. Comparison with “Land Association” In a manner of speaking, such “land association” mode does not experience land operation right transfer because peasant households actually purchase the full-process services of the commissioned party. As a general rule, since peasant households must preserve their land border, such mode is similar to above-mentioned “petty peasants + socialized services” mode. In addition, such mode is more applicable for regions featured by high labor force transfer and high non-agricultural employment income. Comparatively speaking, in those villages with more left-behind elderly people and women, the “stable land ownership and coordinated operation” mode can better satisfy the psychological demands of petty peasant households. 4. Comparison with “Petty Peasants + Cooperative Services” International experience demonstrates that petty peasant households can hardly organize cooperatives in real sense. Only cooperatives composed of large peasant households or family farms can exert advantages in professionalism and scale service. In countries with developed agriculture, real cooperatives do not directly intervene land production that is totally the business of farmers. Petty peasant households and real cooperatives are not a good pair of partners. Strictly speaking, most cooperatives in Sheyang County in Jiangsu are not real cooperatives, and they are nothing but production coordinators under “stable land ownership and coordinated operation” mode. Such coordination plays a positive role in scale production. In general, “stable land ownership and coordinated operation” mode in Sheyang County of Jiangsu is very applicable for the development requirements of agricultural scale production under the context of

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unstable agricultural population transfer and peasants’ strong land complex, and such mode has higher scale operation degree and economic efficiency. Meanwhile, we also notice that though “stable land ownership and coordinated operation” mode in Sheyang County of Jiangsu is basically consistent with land intensive cereal scale production requirements, this mode does not have an edge in the production of technology and laborintensive small agricultural products. Throughout the international advantage comparison of agriculture, the disadvantage of China is cereal production. Therefore, Sheyang mode has prominent significance to the growth of agriculture in China. Promotion Value and Transition of “Stable Land Ownership and Coordinated Operation” Mode The “stable land ownership and coordinated operation” mode in Sheyang County makes for the improvement of agricultural competitiveness in populous grain producing areas. According to our estimate, in gross cereal production of China, around 80% cereal is produced from areas with identical agricultural conditions similar to Sheyang County. These areas all have dense population, unstable labor transfer and wide vacant land guarded by the elderly and women. In addition to few “corporate agriculture” and rent family farms, approximately 50% cereal in these areas is produced by “petty peasants  +  cooperative services”. Thus, it can be observed that it is meaningful to popularize the “stable land ownership and coordinated operation” mode in Sheyang County of Jiangsu to promote the scale operation level in Chinese agriculture. The meaning of such “stable land ownership and coordinated operation” mode also rests in the fact that it can smoothly transit to scale production means at a higher level. After cultivating enough conditions, petty peasants possibly are not willing to intervene in production and operation nor make further investment in production. Then existing production and collaboration organizers will be subjects of uniform operation who sign contract relations with petty peasants. Therefore, petty peasants merely earn fixed income or establish “pawning” contract relation to gain income for once. Such income manifests the land property ownership of peasants. In this way, peasants actually transfer their land property rights, including operation rights. Sheyang mode provides a reference for the transition of Chinese agriculture economic and management system reform.

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To be sure, we should be keenly aware of the fact it still takes a long time for Sheyang agricultural scale operation mode to transit to family farm mode under few conditions as below. Firstly, agricultural surplus labor force should realize stable transfer and bid farewell to “migratory flow”. The author estimates that when there are around 300 million peasant households across the country, “urban-­ rural income balance” can be generally formed. It takes at least over 20 years to propel this progress. For achieving this goal, the government needs to design a more proactive urbanization policy and encourage proper rural population to settle down in cities become permanent residents. Secondly, social security system should be further improved to gradually weaken the economic root of peasants’ land complex and lower agricultural land rent rate by 10% of pure agricultural income. If peasants who have settled down in the city have higher pension than the pure income earned by petty peasants in populous areas, and afford the necessary expenditures in urban life, their land complex will lose economic incentive. Based on such condition, land complex-triggered high land rent rate will be also decreased, and land rent farm will seek larger room. Obviously, it is a lengthy process to make this goal come true. Thirdly, the government should further regulate national farmland policy. A distinctive drawback in existing rural land transfer market is that petty peasants’ transfer of land is often manipulated by local government, which makes peasants feel afraid of losing their territory. If the market has not been distorted, peasants will trust more in the market. If peasants can conveniently repurchase the land that they have transferred in the market, they will be assured to transfer land operation rights and even contract rights. Central land system reform is expected to steadily move forward in the marketization orientation and local government should reduce direct intervention of the land market. The author believes that when above conditions gradually take shape, family farm system-centered modern agriculture operation system will eventually come into being nationwide. Prior to the completion of the goal, “stable land ownership and coordinated operation” mode in Sheyang County of Jiangsu is a steady and effective way to develop agriculture.

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4.4  Urbanization-Centered Urban-Rural Integration Historical transition of Chinese economy needs to accomplish two mutually associated processes. The first concern is to lower the proportion of agriculture in GDP, so to speak, by 5%, so as to offer productivity foundation for the decline of Chinese residents’ Engel coefficient and lift people’s actual living standards. The second concern is to lower the proportion of Chinese rural population in gross population, so to speak, by 20%, so as to integrate urban-rural economy and society on the basis of high urbanization. Chinese people are striving at this goal now. In this process, there generates a unique phenomenon across Chinese society - migrant workers rather than non-rural families flow into the city. But sooner or later, considerable rural families will entirely enter the city. How to realize the smooth connection between migrant workers’ employment in the city and rural families’ migration to the city and facilitate this process is a century problem to be faced by us. Implications of Urban-Rural Socio-economic Integration Development Strategy As over half population is in the village, can China realize urban-rural integration? In another word, can China realize urban-rural integration without vigorously propelling urbanization? This is indeed a crucial matter in comprehending the significance of urban-rural integration. Our answer is negative. Over the past 3 decades, Chinese economy develops at a faster speed than that in some other western countries. One reason is the faster urbanization pace in China. Some mistakenly interpret national policy for “the construction of socialist new countryside”, implicitly conveying the claim that if the country wants to build a good countryside, peasants should remain in the village and peasant do not have to go to the city if they become rich by agriculture or rural industry. How ridiculous it is! Though urbanization is problematic yet, it is more troublesome to confine peasants in the village. Now that the government invests substantially to build the new countryside and rural infrastructure conditions gradually turn up, do peasants need to go to the city? Sure, the country has invested a lot of money in rural construction. In respect of rural transportation, the Ministry of

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Communications has formulated a “five year one hundred billion project” and grants fund to other supporting facilities. In a broad sense, more than 100 “engineering” projects have been executed by over 20 ministerial undertakings to support rural development. Great efforts of the government indeed drastically change the look of the village. Farmhouses near to roadside are painted by coating, some peasants live in new houses and use running water and villages have built paved roads. However, peasants still want to swarm into the city. Peasants run faster when rural roads have been built better. Why? The reason is extremely simple. There are 560,000 villages in the countryside of China. If the government plans to build each village as a city, it needs to invest in around 30 trillion RMB. The country and peasants can’t afford it. Even so, it is not economical. As said by one local cadre, they have to demolish the old toilets of peasants to get them to use the new toilets sponsored by the government or otherwise peasants are accustomed to their old habits. Such seemingly “absurd” thing has full reason. Peasants need to count whether it is convenient for them to use government-built toilets. Urban toilets are connected by a large system. But it is rather non-economical to build such a large system in villages inhabited by 1000–2000 households. In recent five years, urban fixed asset investment growth rate still surmounts that in the village, including public investment. This means that the village still falls short of the city in socio-economic growth. As a consequence, it is nonsense for most peasants to live in the village to enjoy modernization results. Rural residents can only enjoy modernization results like urban residents when the government motivates massive rural population migration, builds well few villages and professional peasants and promotes residents’ prosperity above average level of the city. This is the basic law of world economic growth, no exception in China. The law of value that we used to talk about also decides that most peasants in China must go to the city. In above analysis concerning peasant income, we have mentioned that peasants’ low income is closely associated with their effective labor time. We will not enlarge on this matter here. As some regions have raised peasants’ income by agriculture industrialization, then can the government improve rural absorption of surplus labor force by such means? Agriculture industrialization is marketization and professionalism indicative of agriculture progress. It requests promotion in practice. Nevertheless, pursuant to our survey, agriculture industrialization does not take in more labor force, but more quickly releases rural labor force. Since agriculture industrialization enables peasants to save

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more labor time, agricultural products’ cost and relative price have been reduced and more surplus labor force generates from the expansion of operation scale. If such surplus labor force does not migrant to the city, peasants’ income may be further lowered. What Is the Difficulty in High Urbanization? For thoroughly discussing the potential for Chinese cities to take in population, this chapter predicts urban-rural population transition in future decades (Table 4.5). In this process, we assume future statistics based on former population natural growth rate and employment conditions. Compliant with international experience, we assume that urbanization rate will increase faster before reaching 70% (we take the conservative assumption that urbanization rate is raised by 1 percentage point per year) and then gradually slow down. Urbanization rate in China will reach 70% by 2032. Urban population increases by around 16 million per year in most years, and rural population decreases by around 12 million per year with the peak value of 13.57 million. If urbanization rate is increased by 12 percentage points per year, urban population will increase by around 20 million per year, and rural population will decrease by 13 million per year till reaching the threshold of 16 million. People are most concerned about employment. We conservatively assume that by 2032, urban employment growth rate will drop down from 27% to 16%. During this period, regardless of price of commodities, if GDP growth rate in China is counted as 9%, then average elasticity of national economy growth in employment growth is 0.19 (mostly 0.1 in past decade). This suggests that whenever national economy increases by one percentage point, employment will increase by 0.19 percentage point. Let’s check the situation in America. During 1919–1957, annual employment growth rate of America is 1.89%. Regardless of price of commodities, actual GDP growth rate is 3.94% and elasticity value is 0.48, illustrating that American national economy’s pull ability in fast growth period for employment is 2.53 times higher than that of China in the future. Statistics in Japan, Germany and Britain is also higher than that of China (see Table 3.2 and Table 4.6). If China follows the practice of Europe and America to regulate capital-­ labor relation, lower labor time to a rational level, will national economy efficiency be lowered? Definitely no. Rationalization of labor time will generate favorable influences on employees in the labor market by forcing

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

13.2 13.26864 13.33565 13.40099 13.46465 13.52658 13.58678 13.6452 13.70183 13.75663 13.8096 13.86069 13.9099 13.95719 14.00255 14.04596 14.0874 14.12684 14.16428 14.19969 14.23306 14.26437 14.29361

0.52% 0.51% 0.49% 0.48% 0.46% 0.45% 0.43% 0.42% 0.40% 0.39% 0.37% 0.36% 0.34% 0.33% 0.31% 0.30% 0.28% 0.27% 0.25% 0.24% 0.22% 0.21% 0.19%

General Population population growth trends rate 6.072 6.236261 6.40111 6.566486 6.732323 6.898558 7.065124 7.231956 7.398987 7.566149 7.733375 7.900595 8.067741 8.234744 8.401532 8.568036 8.734186 8.89991 9.065138 9.229797 9.393818 9.557128 9.719656

Urban population trends 46.0% 47.0% 48.0% 49.0% 50.0% 51.0% 52.0% 53.0% 54.0% 55.0% 56.0% 57.0% 58.0% 59.0% 60.0% 61.0% 62.0% 63.0% 64.0% 65.0% 66.0% 67.0% 68.0%

After 70% urbanization rate, the speed drops 0.164261 0.16485 0.165375 0.165837 0.166235 0.166566 0.166832 0.167031 0.167162 0.167226 0.16722 0.167146 0.167002 0.166788 0.166504 0.16615 0.165724 0.165228 0.16466 0.164021 0.16331 0.162528

Annual increase of urban population 7.12800 7.03238 6.93454 6.83451 6.73232 6.62803 6.52165 6.41324 6.30284 6.19049 6.07622 5.96010 5.84216 5.72245 5.60102 5.47792 5.35321 5.22693 5.09914 4.96989 4.83924 4.70724 4.57396 −0.0956 −0.0978 −0.1000 −0.1022 −0.1043 −0.1064 −0.1084 −0.1104 −0.1124 −0.1143 −0.1161 −0.1179 −0.1197 −0.1214 −0.1231 −0.1247 −0.1263 −0.1278 −0.1292 −0.1307 −0.1320 −0.1333

30,210 31027.25 31847.42 32670.21 33495.3 34322.37 35151.09 35981.12 36812.15 37643.83 38475.83 39307.8 40139.4 40970.29 41800.11 42628.52 43455.16 44279.69 45101.75 45920.98 46737.03 47549.55 48358.17

817.2462 820.1755 822.7914 825.0896 827.066 828.717 830.0388 831.0282 831.682 831.9972 831.9712 831.6014 830.8857 829.822 828.4086 826.6439 824.5267 822.056 819.231 816.0511 812.5162 808.6261

(continued)

2.7% 2.6% 2.6% 2.5% 2.5% 2.4% 2.4% 2.3% 2.3% 2.2% 2.2% 2.1% 2.1% 2.0% 2.0% 1.9% 1.9% 1.9% 1.8% 1.8% 1.7% 1.7%

Rural Annual Urban Urban Urban population increase of employment employment employment trends rural changes population population increase

Table 4.5  Calculation of future changes in urban and rural population and employment

2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051

14.32077 14.34583 14.36878 14.38962 14.40833 14.4249 14.43932 14.45159 14.46171 14.46966 14.47545 14.47907 14.48052 14.47979 14.4769 14.47183 14.4646 14.45519 14.44363 14.42991 14.41404

0.18% 0.16% 0.15% 0.13% 0.12% 0.10% 0.09% 0.07% 0.06% 0.04% 0.03% 0.01% 0.00% −0.02% −0.03% −0.05% −0.06% −0.08% −0.09% −0.11% −0.13%

General Population population growth trends rate

Table 4.5 (continued)

9.881331 10.04208 10.19609 10.34326 10.4835 10.61672 10.74285 10.86182 10.97355 11.07797 11.17505 11.26472 11.34693 11.42166 11.48887 11.54852 11.60061 11.6451 11.68201 11.71131 11.73302

Urban population trends 69.0% 70.0% 71.0% 71.9% 72.8% 73.6% 74.4% 75.2% 75.9% 76.6% 77.2% 77.8% 78.4% 78.9% 79.4% 79.8% 80.2% 80.6% 80.9% 81.2% 81.4%

After 70% urbanization rate, the speed drops 0.161675 0.160751 0.154008 0.147169 0.14024 0.133225 0.126131 0.118964 0.111728 0.104429 0.097074 0.089668 0.082217 0.074728 0.067205 0.059655 0.052084 0.044498 0.036904 0.029306 0.021711

Annual increase of urban population 4.43944 4.30375 4.17270 4.04636 3.92483 3.80817 3.69647 3.58978 3.48816 3.39169 3.30040 3.21435 3.13358 3.05813 2.98803 2.92331 2.86399 2.81009 2.76162 2.71859 2.68101

−0.1345 −0.1357 −0.1311 −0.1263 −0.1215 −0.1167 −0.1117 −0.1067 −0.1016 −0.0965 −0.0913 −0.0860 −0.0808 −0.0755 −0.0701 −0.0647 −0.0593 −0.0539 −0.0485 −0.0430 −0.0376 49162.55 49962.33 50728.57 51460.78 52158.51 52821.34 53448.89 54040.76 54596.64 55116.21 55599.18 56045.31 56454.36 56826.15 57160.52 57457.32 57716.45 57937.85 58121.45 58267.26 58375.28

804.3813 799.7821 766.2338 732.2086 697.7331 662.8346 627.5405 591.8789 555.8779 519.5661 482.9723 446.1258 409.0558 371.7919 334.3637 296.8011 259.1339 221.3923 183.606 145.8052 108.0199

1.7% 1.6% 1.5% 1.4% 1.4% 1.3% 1.2% 1.1% 1.0% 1.0% 0.9% 0.8% 0.7% 0.7% 0.6% 0.5% 0.5% 0.4% 0.3% 0.3% 0.2%

Rural Annual Urban Urban Urban population increase of employment employment employment trends rural changes population population increase

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Table 4.6  Change of non-agricultural employment and national income in America Year

Total (thousand people)

Service industry and others

Government agency

Corresponding national income (1 billion)

1919 1920 1925 1930 1935 1940 1944 1945 1946 1950 1955 1957

25,829 27,068 28,505 29,143 26,792 32,058 41,534 40,037 41,287 44,738 49,950 52,543 The average annual growth is 1.89%

2054 2142 2591 3084 2883 3477 3934 4011 4474 5077 5854 6457

2671 2603 2802 3149 3477 4202 6043 5944 5595 6026 6915 7380

64 74.2 76 75.7 57.1 81.6 182.6 181.2 179.6 240 324 358 After deducting the price factor, the actual average annual growth rate is 3.94%

Notes: The statistics excludes individual practitioners in related industries. Automobile repairing industry is classified into business before 1940 and service industry after 1940. Please refer to World Economic Data Editing Committee, Statistical Summary of Britain, France, America and Germany for A Century, Statistical Press, 1958

the employers to raise income and motivating positive changes in national income distribution ratio. In the meantime, it forces employers to replace laborers by machines, thus improving social technical proficiency on the whole. In order to prove this argument, we investigate economic growth conditions in different stages of America. Upon the implementation of the eight-hour working system as of the mid-19th century, America significantly increased its per capita national income growth rate, proving the proactive significance of regulating labor-capital relation to national economy (Table 4.7). As to land resources in urbanization, we have analyzed this problem before. To put it simply, the path of urbanization is more conducive to saving land. Will the acceleration of urbanization pace intensify urban housing condition? Will there appear considerable “slums”? These questions are not difficult to be answered. On account of above estimate, the government

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Table 4.7  National income growth rate and population growth rate in related stages of America

1799–1859 1859–1919

Average annual growth rate (%)

Per capita growth rate (%)

Population growth rate (%)

3.62 3.23

0.59 1.14

3.02 2.06

Data source: Chinese Academy of Sciences Institute of Economics: Economic Statistics of Main Capitalist Countries (1948–1960), World Affairs Press, 1962 Notes: Above price is counted as the benchmark in 1826

can satisfy the housing demands of both urban residents and additional population. In effect, in medium and small cities, a housing unit is priced at around 300,000 RMB. At present, the housing price has been inflated in an abnormal state. Since ordinary people can’t afford a house, but speculators hoard lots of houses in their hands, housing price is maintained at a high level. As long as the government takes proper measures, housing price will definitely recover the normal level. In present stage, the average housing price of China is around 4000 RMB.  Our survey in Shandong Province discovers that despite land price, peasants just take 130,000 RMB to build a single house in a small town under government planning, including infrastructure expenditures in residence district. As a result of the high housing price in the city, even urban residents want to flow to the village. Some also worry whether urbanization will give rise to severe “slum” problems. We think it totally unnecessary. In developed countries, there are not too many real “slums”. Harlem District in New York used to be a residence district for the rich. However, it later evolves to a slum by problematic public policies, rather than housing shortage. Real “slums” easily emerge in poorer countries. Are “shanty towns” in big cities not “slums”? In fast period of urbanization, even developed countries also have similar “shanty towns”. Nowadays, slums in developed countries are found to be closely related to illegal immigration population. In China, severe “slums” can be basically wiped out by proper national policies. In current stage, the “slum” problems aggravate in some countries. These countries do not have ill practice in planning and management, but do not formulate any planning and management practices at all. With such a government, “slums” will still coexist with urbanization. The sole difference is that such “slums” gather in the village.

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Above analytical results manifest that in future decades, it is not radical to maintain 1 percentage point annual growth rate of urbanization. Whereas, the analysis is made by possibility. If we do not have proper policies, every problem mentioned above will obstruct the development of urbanization. Path of Urbanization With the purpose of carrying forward the tenet of “pushing forward urbanization” proposed at 2009 Central Economic Working Conference, the government must conceive proper guiding ideology and package policies and measures. Roughly speaking, it is imperative to expedite rural population migration. The rate of migration is to raise urbanization rate by at least 1 percentage point per year, or maybe higher in some regions. Secondly, the government should emphasize the importance of planning at both central government and local government. Attention should be paid to the construction of urban system, especially the construction of small cities or towns. Thirdly, the government should develop the village and agriculture, and help peasants get rich, including fostering professional peasants and making professional peasants the main body of the village. Fourthly, the rudimentary role of market in resource allocation should be given full play in the process of urbanization. Fifthly, the government should maintain social justice, never damage people’s interests in urbanization process, and popularize the benefits of urbanization among citizens and peasants. The reform in fundamental land system and state land planning and management system will be discussed later. The main emphasis of the chapter will be discussed below. 1. Deepen Labor and Population Management System Reform around Labor-Capital Relation Adjustment The author has talked above that Chinese cities have huge potential employment chances. Nevertheless, it is not an easy thing to convert theoretical employment chances to realistic employment chances. Anyway, this will be a solution. The sole way is to carefully implement labor protection-­ related laws and regulations in China, rationally regulate labor-capital relations, and make up the mind in solving tough problems like high labor intensity and long labor time. Employees who work overtime must gain compensation as per law. Government departments should take the lead in

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this aspect by removing unpaid overtime routine among civil servants. If the work can’t be accomplished on schedule, the government must retain extra staff. Comparing with developed countries, the population proportion of civil servants in China is not very high. Colleges should not retain graduate students to teach classes with no pay or low pay. Instead, the number of college teachers needs to match with the number of students. Any employee who gets sick may lodge criminal or civil lawsuits against the employer as long as he or she has unpaid overtime experience. Labor-­ capital relation can’t be regulated if no one observes laws and regulations. “People-oriented” state governance philosophy has to be embodied in this critical parts. For sake of the regulation of labor-capital relation, efforts must be made to change the malicious cycle in existing labor market by adding employment chances and raising income. Will such outcome lower Chinese economy’s international competitiveness? It is no need to worry about it at all. As we have estimated, after practising the eight-hour working system, American labor productivity growth rate is raised from 0.59% to 1.14%. It is no exaggeration to say that in future decades, whether the government can regulate labor-capital relation is related to the realization of urbanization goal, and national security of China to some degree. While regulating urban labor-capital relation, household registration system should be the main focus and the government should comprehensively reform urban social management system. The meaning of household registration system reform to peasant migration far exceeds that to other social groups like college students, and moreover, such meaning is more significant in large and middle cities than small cities. The central government can request local governments to speed up household registration system in the principle of “ensuring justice, balancing efficiency, and maintaining stability”, while specific reform plans should be designed and executed by municipal governments. The basic thinking of reform is to control population by housing construction planning. In principle, citizens can get population registration as long as they have or rent eligible houses in the city. What local officials need to do is to measure the type of houses, the term of possession or rent of houses, welfare for new residents and old residents, and many other problems. Even if some cities do not have done a good job, problems will be revised in later urban competition. Some cities can even build low-rent houses for migrant workers. Available survey materials indicate that if the government follows the thinking to reform household registration system, around 100 million rural

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population will settle down in big and middle cities, and do not cause trouble for the city because rural population lives in the city already. If household registration is linked to house, rapid inflation of urban population may be prohibited, and high housing price phenomenon can be effectively reversed. 2. Comprehensively Adjust National Administrative Management System around Local Autonomy Now, we will go on another topic—villager self-governance. Should “large communities” merged by few villages enjoy self-governance authority? Should local governments at higher levels introduce self-governance? The author believes that proper authority should be deregulated for the trial experiment of local governments. This problem is not fixed by numerous western developed countries. We do not have to worry about it too much. The self-governance boundary between governments at all levels in public sectors is not fixed at all. At present, the central government often refers “expanding local autonomy” to related policies, and we think that we may follow this term further. Problems across provinces have to be solved as soon as possible. To be specific, some large provinces may be divided into few small direct-­ controller municipalities. For supporting the developed of west China, more municipalities can be established. If there are more and smaller provincial-­level administrative districts, the central government can totally deregulate more powers, and give urban economic entities more autonomy. In part, the lack of vigor in county economy should be ascribed to the “large and comprehensive” industry policies in large and middle cities. Large cities are able to optimize economic structure by establishing comprehensive threshold, and transfer some industries to small and middle cities. The setting of threshold should obey fewer administrative decrees, and more economic means. The threshold which associates housing with household registration is an effective threshold. Now that cheap labor force abounds in large cities, no one in small cities would like to make investment, and housing threshold becomes the means to prohibit the inflow of cheap labor force into large cities. Once small and middle cities raise the income, Beijing, Shanghai and other large cities’ appeal will be undermined. It is high time to explore the possibility to enact “Residence Law” or “Housing Law”.

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Problems in small cities or towns have not attracted great attention yet. In official statistics of America, residence districts accommodating more than 2500 people should be deemed as cities. Some states give a more loose definition for the city. While the standard of the city in China is much higher. According to the context of China, population residence accommodating 10,000 residents is a city, and a city can establish city-­ controlled system across a batch of counties. 3. Reform of Household Registration System Household registration system aims to found an operable household registration system which removes identity discrimination and provides accurate population information for social and economic management. Opinions on Further Promoting Household Registration System Reform issued by the State Council in 2014 takes a big step in this direction. The most appealing highlight of the document is that it abolishes discrimination against peasants in past household registration system, and offers a clear thought for wiping up those unreasonable clauses in current laws. In practice, three matters ought to be addressed to implement provisions stipulated by the document. Firstly, can the evidence of household registration be simplified? In the long run, the core of new system should be household registration system in the place of residence, namely which city and district a person should be registered as. The main standard is the permanent residence of the person. More specifically, if a person has house (rented or possessed) in the city, and the house conforms to government planning in housing structure, acreage and other quality measurements, he should be registered as a resident of the city and enjoy same rights with others. Housing standards should be classified, in particular on minimum standard housing. It is a sound idea to register one household or one resident on standard housing registration certificate. This standard can be used to simplify household registration system. By now, no independent laws concerning residence have been enacted, which causes trouble to the affirmation of “permanent residents” and simplification of household registration. New household registration reform opinions are less operable and convenient in practice. It seems unnecessary for the opinions to divide the city into few categories. For instance, even if the government plans to loosen the household registration system for middle and small cities, the meaning

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of this measure is not significant at all. Some downtown areas in small cities, like ancient towns, can’t build more houses on a large scale. As increasing permanent residents go against the protection of historical relics, there exist difficulties in household registration. In regions outside the downtown areas, residents do not essentially have to migrate to downtown areas due to developed transportation conditions. If a small city is far from national-level or provincial-level development zones and peripheral districts, it will absolutely have poor employment absorption capacity, and attract few migrants. The problem is how citizens, including former peasants, migrate from the village or small cities to large cities. The new household registration reform opinions exactly set sophisticated threshold on such migrants, like “point household registration system”. Actually, the household registration threshold in large cities can be also simplified, in which the government may determine whether a household, no matter whether its members are farmers or not, can move from one place to another regardless of the size of city that it is about to registered as. The reference is whether the household has possessed or stably used eligible standard house. Such threshold can’t be removed according to this practice. One popular term is “three elements” in the threshold, namely housing, employment and income. This is rather sophisticated. “Point household registration system” is more sophisticated and non-­ scientific. It requests the government to elaborately formulate a housing development proposal. Houses are built for people. If people live in a house, how can the government refuse to make people registered permanent residents? If a retired billionaire buys a house in Shanghai, it is nonsense to give a registered account for him. If a peasant has lived in the city for years, and his descendants have been accustomed to life here, and the family has rented a house or bought a house after transferring the land in the village at a reasonable price, how can the government refuse to make them registered permanent residents? Some worry such single practice may generate household registration speculation, but we hold opposite opinions. How should the government control population? What is the meaning of household registration threshold? A popular view is that if a large city absorbs one person, it will add much costs amounting to few ten thousand yuan, and this is the reason why the government prohibits migration. We think it as an ambiguous thought. The reality is that around 20% migrant workers in China have stable places of residence in large and middle cities. Moreover, such rural

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residents have stable job and income as taxpayers, and most of them are young adults who will not aggravate local financial burdens in pension and medical care at all. Even if the government prohibits their household registration, they still enjoy urban public services. The government can’t save money in this regard. This means that it is more beneficial to register these migrant workers and their family members as urban residents. To say the least, even if a municipal government has to add financial expenditures for meeting social security demands of rural residents, there is also a good solution that prevents us from solving trouble of household registration system reform by simple methods stated above. Is resident permit system a permanent system or a stopgap? Certainly, household registration system reform should not only aim at solving the urban migration problem of over 100 million rural residents. Actually, around 300 million rural residents have entered the city but not gained household registration qualification. Most of them are not living in eligible and standard houses. In the long run, the urbanization rate of China should measure up to approximately 80%, and around 100 million persons should retain in the village for professional agricultural production, which means that urban-rural discrepancy can’t be eradicated if agricultural modernization level hasn’t been promoted. As a consequence, it is a lengthy process for rural residents to successively migrate to the city. Then how should migrant workers who have been working in the large cities far from their hometown but can’t afford a house make census register? As long as the “dual economic structure” in China hasn’t been changed, migrant workers’ “migratory” by-business phenomenon will not be abolished for all. This problem should be fixed sooner or later. While it can’t be solved by the government alone. If China deepens reform in land system and further regulates labor-capital relation, peasants may transact their property rights in the land market. In case of decline of housing price in the city, such migrant workers will afford a house and turn from migratory birds to resident birds, and no problem will exist in household registration system. However, such transition takes a lengthy process and it is up to the will of peasants. At present, large cities may temporarily view partial migrant workers as “persons living in workplace”, retain their register in former place of residence, and ascribe their social security account and tax liability to former place of residence. The municipal government can issue “residence permit” to these persons. Certainly, the municipal

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government needs to normalize residence conditions in workplace and solve the realistic difficulties of migrant workers to the uttermost. How to protect the interests of peasants after implementing household registration system reform? In accordance with the new reform opinions, even if rural peasants have gained a city register, their collective economic rights, housing and house site preservation rights and farmland contract rights will be preserved. This regulation is necessary and correct. Without it, most rural peasants may would like to continually implement the old household registration system. Therefore, the central government should firmly prevent local governments from depriving peasants’ land property rights by the opportunity of household registration system reform. Subsequent supporting reform should be stimultaed in the thinking that “market plays a decisive role”. In addition to humanistic intentions, household registration system reform should endeavor to unify urban-­ rural labor market. After all, it is merely one part of marketization reform which should be compensated by the foundation and improvement of labor factor market and capital market. Especially, market economy can only operate in a healthy manner by unifying land market with labor market.

CHAPTER 5

Land System Reform

Land system reform is a significant social realistic problem in China at present. If the work has been done well, it will be of great significance to release reform dividends and support the steady growth of national economy in future decades. The prime target of land system reform is to on the one hand realize land property reform at microscopic level, and lay a microscopic basis in furtherance of land market operation, and on the other hand reform government land management system, solve market dysfunction problem in land resource allocation and raise land resource management efficiency at macroscopic level. For achieving this reform goal, it is time to upgrade concept and liberate thinking.

5.1   Agriculture Cost and Land System Next, the section will roughly analyze grain production cost in accordance with factor cost theory. It is not to make accurate quantitative analysis nor finish the analysis with data resources. But pursuant to the survey and observation of the author, the analysis helps judge the basic condition of grain production.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 D. Ying, W. Wu, A Study of China’s Urban-Rural Integration Development, The Great Transformation of China, https://doi.org/10.1007/978-981-19-2756-0_5

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Chinese Grain Production at Full Factor Cost Is in Severe Loss State Full factor cost refers to the sum of price of land, labor, capital and other numerous factors. Different from the financial cost of peasant household operation, full factor cost is recessive in part. However, the concept more precisely reflects resource allocation conditions. It should be noted that this chapter does not take environment factors into account. The cost of Chinese agriculture is rather high according to full factor cost. Let’s roughly settle the account. If the rent of land per season is around 500 RMB, the contribution made by rent in 1.5 billion grain cultivation land totals 800 billion RMB. According to current labor productivity, gross grain production takes around 7 billion workdays. If a workday costs 60 RMB, the gross labor remuneration sums 420 billion RMB. According to the maximum limit, the capital stock of grain production in China (including government investment and peasant investment) is around 5 trillion RMB, and resulting capital return (instead of production material consumption) is around 300 billion RMB.  Therefore, the gross factor cost in national grain production should be 1.52 trillion RMB. As to the sales price of grain, the consumable cost of per mu land per season is around 300 RMB (including capital depreciation), and gross sum is 480 billion RMB. Supposing the annual grain output is 0.6 trillion kg in China, the factor cost and consumable cost sum up 2 trillion RMB. If the grain is sold at competitive price in the international market, and 0.5 kg grain is sold at 0.7 RMB, 0.6 trillion kg grain will gain 0.84 trillion sales volume and lose 1.16 trillion RMB deficit. Counted as 2 RMB per 1 kg under national policies, the loss will total 0.8 trillion RMB. The estimate is less accurate, but anyone can get totally accurate answer. In our opinion, if the calculation basically conforms to the basic condition and proves the property of question, it will be meaningful. Why Does Grain Increase in Loss State? Loss mentioned above is calculated in strict accordance with full factor cost. It does not necessarily result in the financial dilemma of most peasants in the short run. Or otherwise, it is not hard to know why Chinese agriculture still develops and increases grain output in condition of moderate land abandonment.

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First of all, government subsidy for grain compensates peasants’ operation cost in part, and alleviates peasants’ financial difficulties. It is estimated that central government subsidy for local grain cultivation reaches around 250 billion RMB. In some places, the subsidy even totals 500 RMB. Secondly, invisible capital depreciation cost and capital interest are assumed by government fund for agriculture, and no direct financial cost for peasants has formed. The growth rate of annual government fund for agriculture far exceeds that of grain production growth year by year. If the process ceases, the situation will grow very severe. According to the estimate based on multiple statistics, EU and American federal government’s financial fund for agriculture is less than Chinese government’s financial fund for agriculture (regardless of food subsidy planning expenditure for American Department of Agriculture). Thus it can be seen that agricultural development in China is subject to heavy pressures. Thirdly, Chinese peasants sacrifice their own wage. At present, the daily wage in agriculture labor-hiring operation is around 40–100 RMB, but peasants do not count their own wage cost as per market price in self-­ support agriculture. If it is less likely to transfer labor force between the village and the city, such counting is more impossible. Self-support peasants may lower their daily income to basic daily living cost, like 10 RMB. Fourthly, rent cost is recessive to self-support peasants and peasants do not have to spend expenditure. However, the expenditure is rigid to large peasant households who rent land for operation. At present, some large peasant households start to shrink operation scale in condition of food price decline because of the non-affordability for rent. Besides, capital cost is also recessive in part and does not constitute the financial constraint on peasant households. Agricultural machinery subsidy, soft loan, insurance subsidy all aggravate the load on capital cost. Chinese agriculture is not sustainable in financial budget without above factors. More cost generates when grain turns to food on the table. However, under the effort of “cantango sales”, a large amount of cost fall onto consumers. Therefore, Engel coefficient of Chinese people remains high above 30%, while the counterpart of Americans is 12.6%. American population is just one fourth of Chinese population, but its food expenditure is half of ours. If Americans have same dietary habits with Chinese people, probably its Engel coefficient will be below 6%. Such giant gap is exactly caused by different agricultural competitiveness.

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Will Chinese Grain Production “Turn Losses into Gains”? Grain production cost of China may be adjusted in few terms. The first concern to be talked is labor cost. Referring to the interview of the author with scale operation peasant households in Dezhou, Shandong, Sheyang, Jiangsu and other places, grain production labor cost significantly decreases with the expansion of peasant household operation scale. For peasant households who operate 10,000 mu land, it takes half workday to work on 1 mu land (with decline potential), around one eights of current level. Supposing the cost is lowered by 50%, then grain production labor cost can be cut down to 210 billion RMB. The second concern is recessive rent cost. Recessive rent in China can be decreased by 80% in accordance with the situation in marketiziation countries with developed agriculture. Therefore, the rent cost of grain production can be decreased to 160 billion RMB. Capital cost may be also decreased. The rise of land scale operation level increases the use rate of agriculture machinery. In spite of the shortage of research data, price and bank rate of the same equipment suggest the possibility of lowering capital cost by around 30%, which means that capital factor cost can be decreased to 200 billion RMB. Subject to the combined function of above factors, grain factor cost can be decreased to 570 billion RMB. The profit prospects remain promising even if peasant household financial cost is counted as per international market level. If the unit wage of agricultural workday is promoted to urban wage level as 120 RMB, and factor cost is 780 billion RMB, the profit margin remains substantial. Additionally, as found by the author, scale operation peasant householders more rationally apply fertilizer and pesticide than general small peasant households, and consequently make for the protection of agricultural environment and lower agricultural social cost. Unstable Ownership of Land Prohibits Agricultural Modernization Modern agriculture must possess international competitiveness. Lack of competitiveness means backwardness. Then how to realize agricultural modernization? The author finds in the survey that the passive attitudes of some grassroots cadres towards rural contracted land confirmation right certificate

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affect the smooth progress of this work. Though some places basically finish this task, related cadres refuse to award the certificate to peasant households. Likewise, some places readjust the land upon the issuance of certificate, which actually announces the invalidity of certificate. The causes should be analyzed from four aspects as below. The first cause is the fear for possible adverse influence of certificate on collective economy. Many economically backward villages rely on contracted land rent to solve collective expenditures. Village cadres worry if the certificate severs off the source of collective revenues. Few village cadres disapprove of confirmation certificate on the pretext of “insisting on socialist collective economy”. Actually, their real intention is to defend collective revenues. Secondly, the issuance of confirmation certificate affects land transfer and obstructs scale operation. Some cadres estimate that the certificate aggravates high rent phenomenon in land transfer and imposes heavy loads on scale operation peasant households. In some hilly and mountainous districts, the plots of land contracted by peasant households are rather scattered and disperse. It is very common for one peasant household to contract tens of land plots. Comparing with scale production peasant households who contract closely grouped land, such peasant households confront more difficulties in cultivation. Given such situation, leaders from a city of Guangdong decide to give priority to land arrangement prior to confirmation certificate. In the long run, this practice paves way for the development of agriculture. But the author notices that some villages directly subcontract arranged land to large peasant households so as to solve distribution problems by means of shares. Thirdly, some cadres worry if the certificate leads to uneven distribution of land per capita and damages social justice. Some cadres think that no gap of per capita distribution should be allowed as rural land is publicly shared. Based on such thought, village cadres in a place of Sichuan rearrange the land upon the issuance of certificate. Fourthly, as some developed districts have established land share system but land is not contracted to peasant households yet, cadres oppose the issuance of certificate. For rigorously implementing the decrees of central government, some provinces request every peasant household to have such a certificate. However, the technical inseparability of large real estate land indeed poses difficulties to implementation.

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The inadequate recognition and low passion of peasant households towards confirmation right certificate in some places slow down the progress of work. It comes down to three reasons. Firstly, the propaganda work fails to make peasants authentically aware of the significance of confirmation certificate reform. As found from a survey in a province in North China, when being asked about the attitudes towards the policy of “increasing labor force but not land and decreasing labor force but not land”, 80% peasant households hold negative opinions. But some peasants change their mind after the cadres carefully explain the intention of the policy design. However, how many village cadres would like to explain the policy to peasants? Some scholars mistakenly take peasants’ chat as their real intention but refuse to conduct in-­ depth survey nor have further communication with peasants. Therefore, their research reports submitted to the decision-making layer inevitably mislead orientation of policies. Moreover, the author also learns that peasants seemingly do not hold any dissent nor propose complaints via certain channel in some places when the government readjusts the land after issuing certificate. Village cadres usually tell peasants that the land is under collective ownership, and such concept has already deeply rooted in the mind of peasants. Therefore, peasants do not view land adjustment as a matter of vital importance. Such situation inevitably makes it hard for peasants to acutely know the meaning of certificate. On the other hand, we also learn from the survey that some grassroots cadres tell peasants that contracting right only lasts for 30 years and the government needs to readjust the land afterwards. Such distortion of policy frustrates peasants’ passion for land right confirmation. Secondly, realistic interest conflicts force peasants to focus on short-­ term interests, but ignore long-term interests brought about by confirmation certificate reform. International comparison results suggest that throughout adjustment for years, rural land acquisition compensation has reached a high level especially in developed districts of China. Upon the issuance of confirmation certificate, if the government acquires the land, and peasant households whose land has been acquired gain high compensation, peasants in other districts naturally feel unfair, and even demand to abolish new land ownership and realize uniform distribution of land acquisition compensation. It is exactly conventional land equality concept that works. Thirdly, as some districts have not strictly implemented the policy of “increasing labor force but not land and decreasing labor force but not

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land”, some peasants do not believe in the legal validity of this confirmation certificate reform. Land adjustment is very commonplace in first round land contract in Chinese rural areas. Though it is less commonplace in second round land contract, such condition still prevails in main agricultural zones. Affected by such phenomenon, land confirmation certificate reform plans in some places are easily accepted by peasants. Actually, as peasants cherish the hope that the government may still adjust land in the future, they recklessly accept the proposal of village cadres, therefore laying dangers for subsequent land disputes. There indeed exist some problems in the reform. The first one is confirmation right “depreciation”. In some places, the original contracted land area is different from actual land area, and village collectives control extra land and excludes the land from confirmation certificate system. The superficial cause of this practice is still to “boost collective economy”. The second one is sophisticated ownership relation. The land in some places is owned by “two levels”, then should the land in superior communities be included in confirmation certificate system? In Pearl River Delta, the land is originally owned by village group, but some village committees later own the land by buying the land from village group. Some villages under township restructuring are in even more sophisticated land ownership relations. Such condition indeed causes much trouble to the operation of confirmation certification issuance. The third one is “starting point justice problem”. In many places, there exists discrepancy in peasant households’ land contract quantity. Then is it rational to set permanent contract right by the certificate? Those peasants whose land contract quantity is below the average level consider it irrational. In their opinion, they used to recognize the uneven distribution of land contract right because second round of farmland contract would expire in around 2024, and they could increase acreage of land by adjusting contracting relation upon expiration. While the abolishment of “30-­ year expiration” policy benefited by confirmation certificate damages their interests and naturally triggers their disgust. From this perspective, the issuance of rigid confirmation certificate indeed lays dangers. The author also holds that this problem should not be ignored. Though we should be opposed to equalitarianism, in particular readjustment of land by population changes after the issuance of confirmation certificate, it is still essential to “adjust land for the last time” according to population changes before

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the issuance of certificate. This implies that it is not so easy to confirm land right. Given former failures caused by fewer efforts and greater resolution, the government now must spare no efforts to complete the work.

5.2   Few Problems to Be Solved Weaken Property Right Ideological Functions and Recognize the Significance of Land Property Right from Technical Nature For a long time over the past, our conscious association of property right institutional allocation with ideology confines our thought and hinders our pace to invigorate economic system. This pattern must be smashed for the time being. Ideology indicates a full set of legal cognition norms of the ruling party. Such norms only have effective force after winning the cognition of the public. As proved by perennial practices, legal cognition norms recognized by the public are mainly associated with outcomes, instead of means. Property right theoretical studies illustrate the close intimacy between property right relation category and economic development technical category. For instance, back to then agricultural civilization, land property right needed to satisfy the demands of personal goods production, and also the demands of public goods provision. Therefore, general arable land might be divided as public land in part either in the West or the East, except unoccupied land subject to the monarch. Entering industrial civilization, politicians conceived new means for public goods provision and established public finance system in which arable land was not divided in part as public land for social public goods demands. Modern society can still hold public land, but it will not be arable land. If a country satisfies public demands by arable land, it indicates that the country is still in the days of agricultural civilization, or the property right system in the country is extremely irrational. Historical logic illustrates that we just need to view property right establishment as a natural technical issue. Property right inevitably affects social equality, but radical denial of the deeply-rooted property right relation on a large scale can’t promote equality, but in turn lead to heavy efficiency losses. Property right concept reflects the exclusive property of belongings and actually reveals interpersonal right relations because property right concept has been already blurred when people use it at multiple levels.

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The first one is its use at ideological or political level. For instance, land ownership to monarch in Britain actually shows British people’s respect for kingship and also traditional conservatism political traditions. Scholars from Britain tell the author that they never associate monarch land ownership in real life. The second one is its use at legal level. The law may stipulate the belonging of certain property to a group, but in the evolution of economic relations, legal regulations do not just have written meaning rather than meaning of substantial interests. For instance, the law in China stipulates that rural land is possessed by rural collectives, but Land Contract Law authorizes land use right to peasant households, which endows collective ownership with certain nominal property. In the meantime, few villages that do not implement land contract system in practice are not punished, which upsets the execution of contract right once again. Consequently, it causes much trouble to rural reform practice. The third one is its use at economic level. In realistic economic activities, a country often implements specific principles on belongings possession, use, earnings and other rights. These principles can be either confirmed by concrete laws or government decrees, or contradict with legal clauses. For instance, though the law of China stipulates national ownership of urban construction land, it is not the case in reality. Statistics department often view organic towns as cities, but the land in built-up areas is mostly owned by the collective instead of the country. Policy researchers and even government documents in China often mix the use of above-mentioned three ownership concepts, causing much trouble to the discussion of policies. Certainly, the best outcome is to unify the three concepts of property right. But in reality, they are inconsistent in China. The focus of discussion in this chapter is to avoid such trouble. The nature of existing rural property right system is to extend public land ownership system applicable for public goods provision to competitive economy field. For instance, the land system in China contains such a relation - as long as a person possesses “collective economy organization membership right”, he shall enjoy some major rights in land, like share possession right, dividend right, or disposable right over a plot of land. But such membership right is decided by origin, instead of property inheritance or personal investment. If a person is born in a family with rural community census register, he probably gains such “collective economy organization membership right”. Thus it can be seen that the right decided

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by origin should not be membership right in economic organizations, but membership right or civic right in communities. The basic consensus in modern social political theories is that civic right should be primarily revealed in public goods sharing field, instead of competitive economy field. Our mistake about property right arrangement is that we extend common ownership applicable for public field to competitive economy field. In November 2015, the document Comprehensive Implementation Plan for Deepening Rural Reform enacted by the central government that focused on rural collective economic organizations’ membership right created conditions for rural property right reform. For villages in the past, any person born in the collective was a member of it and enjoyed collective dividend. The Notice of the State Council for Stabilizing and Improving Land Contract Relation in Ministry of Agriculture in 1995 stressed that “the government should implement the policy of “increasing labor force but not land and decreasing labor force but not land” in land contract period”. In 2008, the Third Plenary Session of the 17th CPC Central Committee clearly stated to maintain existing contract relation stable and unchanged permanently. This proposal turned collective economy economic organization membership right from “origin empowerment” to “inheritance empowerment”. Such inheritance means reinforced peasants’ property right. If peasants’ land contract right is changed all the time, how should land operation right be transferred? Therefore, we need to confirm that land contract right shall not be adjusted by birth of population. With the deepening of reform, “transaction empowerment” can help form collective economy membership right. Documents of central government emphasizes the exploration of house site paid use system and voluntary paid exit system, and also land contract right paid transfer system. All of these are ground-breaking reform opinions that give more freedom to peasants and propel marketization reform. Applicability of Four Land Ownership Relations in Marketization Countries Private ownership (formal public ownership or substantial private ownership), private cooperative ownership (share joint ownership), community public ownership (community joint ownership), national joint ownership (national ownership) are four common land ownership types in Europe and America.

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Private Ownership Direct agricultural production activities possess intense private property. As long as peasant households satisfy personal interests according to market production law, and at least do not directly endanger public interests, private ownership can be applied. In case of conflicts between private behaviors and others’ interests or social interests, then certain public management rules or private contract may be employed for restructuring. As private house site use does not encroach public interests, it is not necessary to execute any joint ownership on house site. For possible house site use means encroaching public interests, the government may restrain its planning and purpose, and does not necessarily establish joint ownership property right.  rivate Cooperative Ownership (Share Joint Ownership) P Internationally, share joint ownership property right form is less common in farmland. However, it has special meaning in China. Because of small land contract acreage of peasant households, and the inseparability of facility agriculture land use, peasant households have to cooperate with one another in land use. However, such condition will gradually decrease with the growth of land transfer phenomena. Field crop production does not have to execute share joint ownership property right structure. Many places carry out “share farmland system” in field crop production district coupled with share joint ownership. Such practice has more disadvantages. Empirical studies reveal that land contract system in field crop production does not hinder land arrangement and mechanical production means. Additionally, permanent contract right betters makes for the rise of land resource use efficiency. Peasant cooperative refers to an important share joint ownership property right form, but it just adapts to agricultural product circulation, processing and production service. In most cases, there is no need to introduce it into land use field.  ommunity (Collective) Joint Ownership C Chinese village collectives have common belongings, including land, since ancient times. Existing rural collective economic system in China is also in joint ownership, but it is not applicable for agricultural collective production. Permanency of land contract means the disintegration of joint ownership system in rural economy.

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 ational Joint Ownership (National Ownership) N Cross-regional roads, rivers, land bearing major ecological functions and other land hardly developed by others or companies all generate a huge gap between private cost and social cost in marketization use. It is more advantageous to be possessed by the country. In another word, most land of the country should be governed under national ownership. How to determine the category of land ownership based on the benchmark of interest correlation has always been a difficult point in decision-­ making recognition. The choice for above four categories of ownership in practice is decided by whether it pays equal attention to efficiency and equality or private interests and public interests (socialism). Joint ownership is not the sole optimal form. In general sense, the sequence of four ownership forms corresponding to the publicity of economic activities is incremental, while that of privacy is diminishing. Whereas, throughout careful analysis, even if some economic activities have full properties of publicity, joint ownership is not necessarily chosen. Rationally Determine the Public Right Boundary of Land System At present, the mainstream practice in Europe and America is to determine joint ownership according to whether the land is directly used by public sectors or whether the land has public purposes. If a plot of land is used by individuals or private groups, there is still no need to establish land joint ownership even if the purpose of use is associated with public interests. Only land for facilities like national defense, express, railway, main roads in the city, public schools, public hospitals, and public security requests joint ownership. Coercive acquisition is not always applied in the establishment of joint ownership. From the perspective of technical considerations, any plot of land for public use purpose may take marketization consultation method unless there is specific requirement on position. The practice which advocates to build public facilities in places where the government can buy land can also lower land acquisition price. The effective execution of land planning right as a public power must found its basis on planning management institution reform. The central government takes charge of building of land property right protection, river governance, agricultural protection zone maintenance and land judicial system; provincial government puts environmental protection on agenda as the priority; administrative municipal (district and county) government formulates land use planning principles for all jurisdictions on the

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premise of obeying host law. On this basis, actual land use planning right should be totally deregulated to urban-rural community communes. Without such communes, such right should be confirmed by reform. Avoid to Establish Joint Ownership Cross the Border Admittedly, it is essential to establish joint ownership in rural areas, as some belongings and services rarely establish personal exclusive right or legal person exclusive right that can be exited in an effective manner. In such circumstances, it is of necessity to joint ownership, i.e., so-called public ownership. Specifically speaking, attention should be paid to the following three points. Firstly, even in agricultural production, hazardous substance emission in production, “gully” and environmental protection problems in land use can also constrain private power by public power in relevant laws and regulations. Though public power here does not directly appropriate land, it still intervenes private power. Such power is usually manifested by the land district planning right in public sectors. Secondly, for land assets that can’t be used by individuals or that have extremely high use cost, public power (like community collective) can directly appropriate the land. For instance, rivers, roads, public activity sites, ecological forests, community public services all apply to joint ownership. At the national level, more belongings have full reason to be governed by joint national ownership. Thirdly, for some assets with low private value but high public value, individuals possibly would like to voluntarily provide such assets for public use wholly or partially. Such condition is increasingly popular in some developed countries. The alleged conservancy exactly means such real estate property. Whereas, the abandonment or transformation of such private power has been basically ignored by domestic theoretical cycle. Besides that, private ownership or share joint ownership also comes into play. Community joint ownership or national joint ownership lowers the efficiency in other aspects. We may resort famous decision-making model to prove the drawbacks in joint ownership cross-border execution (Fig. 5.1). As we all know, subject to joint ownership, related affairs are often decided by democratic voting system unless joint ownership loses its due meaning. As shown in Fig. 5.1, if a decision is not made by one person but 100% persons (from B to C), decision-making cost and external cost will

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Fig. 5.1  A simplified decision-making model

A

D

G F B

E

C

slightly change, in which decision-making marginal cost curve is BD and external marginal cost curve is AC. Gross marginal cost curve is the sum of the two, namely AGD. Figure 5.1 presents that according to minimum cost decision, a public affair decision-making procedures takes the gross cost of ABEG. It is a sort of “helpless expenditure”. If a private affair is incorporated under joint ownership framework, above cost still incurs. However, the expenditure could be saved in accordance with the definition for “private affair”. Now that private affair does not incur any external cost, and private decisions do not damage others’ interests, no public decision-making cost is supposed to generate. The replacement of private decisions by public decisions leads to two consequences. First of all, public decision cost will be formed. Secondly, because of its “one-size-fits-all” property, public decisions inevitably damage private affair efficiency and aggravate more external cost in public decisions. Fig. 51 illustrates that ABEG is the sum of the two. It is not any “helpless expenditure”. To the opposite, the expenditure can be completely evaded. Above analysis reveals the fact that agricultural production, as a competitive activity, had better be decided by individuals, while related ownership design is not applicable for joint ownership. It does not mean that related agricultural affairs do not need any intervention of joint ownership. As mentioned above, food security, environment protection, water use, taxation obligation all involve public affairs, but these public affairs can be also managed by national regulation policies. It is not necessary to implement joint ownership.

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Transform Property Right Reform Concept by Progressive Reform Spirits in China Following existing rural land property right institutional reform thinking disclosed by official documents, the Chinese government will “stick to collective ownership, stabilize peasant households’ contract right and deregulate multiple operation rights”. The author holds the opinion that without detailed and operable legal provisions, it is very likely for the government to excessively reinforce ownership. While it inevitably affects the stability of land contract right and use right. As a matter of fact, such condition once happened widely before. The author hereby advises that subsequent reforms shall enact more strict legal provisions, reinforce land contract right, improve guarantee provisions for land use right, thus prohibiting collective organization principals or government officials from intervening the execution of land contract right or use right.

5.3  Land Property System Reform As to the specific design of land property right reform, the first point is to give full play to the decisive role of market in land resource allocation, and raise land resource allocation efficiency. Secondly, it is imperative to revise existing improper laws and regulations as much as possible. Thirdly, the system consistency of reform plan should be guaranteed so as to eradicate the possibility of backtrack. Fourthly, the government needs to stick to the principle of openness and justice and make peasant households enjoy the benefits of reform. Present rural collective property right system primarily has two forms, including peasant household land contract system in most agricultural areas, and share system in developed rural areas. Some places integrate the two sorts of systems. Different reform plans should be formulated to cater to two kinds of institutional forms. Moreover, considering the overt drawbacks and considerable leftover problems in rural house site management system, the government ought to propel the reform with groundbreaking thoughts. Reform of Permanent Rural Land Contract Right In the opinion of the author, the basic plan for property right reform should be formulated as below:

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All related clauses concerning Rural Land Contract Law need to be revised promptly. The new provisions are expected to stipulate that rural arable land is contracted to household permanently, and meantime land allocation corresponding to the establishment of contract right should be as fair as possible. The Third Plenary Session of the 17th CPC Central Committee had approved of the reform of permanent land contract right, but the decision has not been implemented nationwide by now and related amendment work is still on the way. Moreover, it is worth noticing that the term “permanent” and “forever” have totally different implications to property owners, in which the latter better conveys the spirits of reform. To set a concrete time point for permanent land distribution state, so to speak, last-time land adjustment upon the expiration of second-round land contract or last-time land adjustment prior to the expiration of second-­round land contract. Otherwise, the status quo may be also viewed as the benchmark of permanent contract right. The choice for time point should be agreed by two thirds villagers at villager meeting. For fear that village cadres execute privilege to endanger general peasants’ interests or rural patriarchal or religious forces damage fair land distribution, permanent land contract plan must be formulated under the principle of justice and equality. Reform of Share Community Share Setting in Districts Not under Land Contract System Based on the opinion of the author, the basic plan for collective economy reform should be formulated as below: To separate politics from economy and improve the governance framework in share community; separate share community membership right from rural community membership right; share community is subject to the agency elected by shareholders, and village committee executes the management functions over public affairs. Assets in share community should be operational assets of village collectives or communities. To fairly set up share community equity, rationally quantify equity and solidify equity. Improve share community earnings distribution mechanism; explore taxation of non-agricultural industry in share community and feasible ways for share community not to grant public fund to village collectives; rationally dismantle rural public expenditures, implement government subsidy and realize full coverage of public finance.

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Reform of Rural Property Right Transfer Transaction In the opinion of the author, the basic plan for rural property right transfer transaction reform should be formulated as below: For villages which have not implemented peasant household land contract system, the government can designate experimental units, and explore to establish peasant household transaction market on the basis of improving share community governance structure and share quantification and solidification, thus making sure of the tradability of peasant household equity, openness of share community and peasant households’ property right to the uttermost. Equal attention should be paid to the building of “registered agricultural operator” system to encourage qualified professional peasants to be subjects of arable land transfer trading. To arrange experimental units in developed districts, and explore land contract right transfer trading practices. After transferring land contract right to others, peasant households will break away from rural collective economic organizations. Though they are not members of rural collective economic organizations, they are still members of community who enjoy equal rights to access public services. To determine the largest scale of family farm operation advocated by the government in municipal administrative districts. The State Council has issued opinions about proper scale of family farm, and stick to equate peasant household income to urban residents’ family income and set up proper family farm scale on this basis. In view of the category of agriculture, proper scale of grain production is around 100  mu, while that of other crops can be much smaller. With the continuous rise of per capita national income level in China, it is promising to further promote farm scale. When confirming land transfer practices in line with marketization principle, government departments should not directly intervene land transfer trading nor compulsorily stipulate land transfer, and intervene trading price as the intermediary. Reform of Rural House Site Management System In the opinion of the author, the basic plan for rural house site management reform should be formulated as below: To innovate national land planning management system, and push forward rural house site management reform. The government may as well

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establish “agricultural protection zone system” in replacement of existing basic farmland protection system to set a large plot of land proper for agriculture as agricultural protection zone, more effectively protect arable land, deregulate non-arable land management authority, and promote land factor marketization. Specifically speaking, Ministry of Land and Resources should formulate and implement agricultural protection zone system and consider related legislation work. For land outside of agricultural protection zones and other statutory protection zones, people’s government below provincial level should formulate local land planning proposals under the constraint of main functional area construction planning, and provincial people’s government should submit to the State Council for approval. For non-agricultural land below provincial level, the State Council should take charge of the formation and execution of planning management proposals. Rural construction land in these districts needs to be incorporated into local government land planning management system under “same land and same right” system. Similarly, rural construction land in these districts can be unified into general planning and development. If permitted, peasants’ house site and houses can be even traded in the market. Inside agricultural protection zones, overall land in villages shall not be developed for non-agricultural purposes. Peasants’ house sites can be either inherited or transferred to local residents. But for peasant households who have departed from agricultural production, when house sites are reclaimed as farmland, the government should compensate as per the trading price for nearby construction land. As to the management practices for village house site in agricultural protection zones, reference can be made to national agricultural protection zone system. To cease welfare free allocation for rural house site, take many means to solve leftover problems, and cease welfare approval allocation for peasant households’ house site. For peasant households who measure up to the use qualification of house site but do not gain house site before 2015, the government can take many means to solve their housing problems. Firstly, the government may encourage young peasants to reconstruct their parents’ house site and accommodate the collective or private habitation of few generations. Secondly, the government may persuade old villagers to transfer their houses to young villagers by building rural elderly care centers. Thirdly, the government may build houses across towns and attract the settlement of young peasants by appealing price. Fourthly, the

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government redeems the house site application right from eligible peasant households. For ensuring that all peasants have a house in rural areas, the government needs to measure the pros and cons of these means. In the process of implementing these measures, local finance may give necessary subsidy to peasants. Reform of City Land System City land system reform must take the following few concerns into account. The priority is to revise related laws, abolish national land ownership and allow for collective ownership in city built-up areas and peasants’ land contract right. The second step is taken to cancel the time limit lasting for 70 years for land use in the city, approve of permanent use right for specific types of land and accordingly revise land taxation clauses. Thirdly, it is essential to reform land provision form, allow multiple subjects to provide or trade fitness land in multiple means and activate city land market.

5.4   How Should the Government Reform Land Management System? The land management system in a country can be regarded as a set of right allocation relations formulated for rationalizing land resources and balancing the rights among land stakeholders and systems used to moderating such relations, including land property right system, land market system and government land management system. Government land management system primarily refers to the power space of the government to prescribe land resource use and the power allocation relations between governments at different levels. Currently, the land property right reform confirmed by the central government has clear guiding thinking and full operability. In the long run, it is of need to reinforce land use right/contract right, and supplement land property right comprising appropriation, disposition and earning interests. Land property right ought to be permanent with no validity period. Upon the confirmation and execution of this goal, the government must quickly propel land market system construction and government land management system reconstruction work, and turn property right reform reliable.

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Evidence of Right Resetting Correct understanding about the operation mechanism of land factor market in market economy conditions is the prerequisite to found a rational national land management system. Externality in land use, i.e., cost or earnings overflow in land use, is a very common and sophisticated phenomenon. Land resources can only get rational use when land users’ social cost or earnings comply with private cost or earnings. Theoretically speaking, if the trading cost is zero, then the problem can be well fixed by the market. But actually, the bargaining cost arising from externality is so expensive that not all externality problems can be solved by market regulation at times, while public decision-­making mode (the minority obeying the majority or administrative decrees) saves cost and raises resource allocation efficiency. Consequently, in terms of land resource allocation, it can’t absolutely depend on the market and exclude public decisions. Externality in land use differs in respect of scope of influence. Externality either just acts on neighborhood or on widespread districts. For the former, it is able to be regulated by laws akin to American Public Nuisance Law, and for the latter, the government is requested to take Regional Planning Law, River Management Law and nationwide administrative management practices. Government execution of land management power can be find evidence from other necessities. Protection for land property right and maintenance of market order demand the radical role of national organs of authority. Functional departments of the central government should exercise management functions over state-owned land on behalf of the country or empower local governments to execute such management functions. Concerning the development of specific resources, the central government can also execute its concession. In such a country with abundant agricultural traditions, the government is expected to execute its farmland protection functions. Presently, quite a few policy researchers criticize national farmland protection policies. While the author considers their arguments unreliable. First of all, farmland protection does not affect urbanization, which deprives the foothold of related censure. Urban-rural built-up area in China is very large now. According to the average GDP output level of unit construction land in developed countries, the total area of urban-rural construction land in China barely supports city economic growth even if it is not increased for

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20 years. Secondly, farmland is very susceptible to excessive cannibalization in condition of stronger market role. Devoid of agriculture district planning management, around 30% urban suburban farmland will gradually degenerate to low-density non-agriculture districts except deep agriculture zones. The mechanism is not discussed here. Thirdly, local governments under whatever mechanism have intense momentum to expand the city and appropriate arable land. Such situation is probably avoided or alleviated only when the central government assumes the responsibility of protecting the farmland. Referring to the reality of land resources in China, it is of great significance to protect the farmland. Based on the perspective of necessity, for large countries like China, self-sufficient food production decreases agriculture cost and resulting national consumption Engel coefficient. The association influence of such changes will change national consumptionsavings ratio, expand national consumption demands and better solve sustained macro-economy problems. Another association influence lies in the change of national employment mode, which in turn reinforces the orientation of personal interests towards career choice and boosts national innovation vigor. From the perspective of possibility, Chinese agricultural resources actually have formidable potential advantages so that people do not need to severely rely on the international market to solve their own food and clothing problems. In order to turn the possibility the reality, great efforts should be made to vigorously protect farmland, arrange land as per mechanical requirements and promote land transfer. Gradually Establish Government Land Management System up to Market Economy Requirements For building a government land management system up to market economy requirements, we must upgrade our concept now. As known by politicians, people have different cognition about ownership theory upon the enactment of Weimar Constitution. Actually, actual land use right also constitutes property right and such property right is subject to public right. Private land property right can totally comply with socialist equality principle. Marx has made a clear distinction between “ownership in legal terms” and “ownership in economic sense”. Future reform work should focus more on “ownership in economic sense”. In this sense, more thorough ownership reform more makes sure of the efficiency of national land management system.

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The tenet of government land management is also in need of adjustment. It is right for the government to preserve land intensively, but it is not enough without people-oriented principle. If the land does not serve people or the land is left idle or misused deviated from the demands of people, it is also a waste. This is not any empty talk of the author, but a general condition in reality. In contemporary world, many countries have higher population density than China, but they have obviously higher living quality. Consequently, it is high time to alter current irrational land management policies. Given that government land management system adjustment will be a systematic engineering, we are going to briefly talk about two points. Firstly, land management authority must be rationally allocated between governments at varying levels. The central government should deregulate due powers and strictly perform the obligation to manage all affairs. Despite the importance of land planning for main functional areas, existing management thinking is still defective in operability. More clear goals and effective policies have to be executed for guarantee. To reinforce farmland protection policies, construction land management authority needs to be deregulated to local governments. Nowadays, nearly one hundred national-level districts (like national-level development districts, and high-tech districts) have been established across the country. It appears to be less stern. As considerable like national-level development districts fail to reach the planning goal for years, we can’t help questioning its meaning. Together with the deepening of land system reform, legislation and amendment work related to land property right protection, land market supervision and regulation will be rather strenuous and the government functions must be strengthened. Besides that, it is the responsibility of the central government to execute property right functions and land resource use franchise management on state-owned land. Secondly, central government’s deregulation of land management authority to local governments does not mean dismantling a large right into few minor rights. Power execution mechanism requests reform now. Land resource is different from general goods. Now that each plot of land differs, no universal land district planning management practice applicable for all conditions exists. In another word, local governments’ district planning management inevitably gives rise to sophisticated entanglement of interests. International experience shows that land district management-­ related stakeholders ought to take part in district planning. But to avoid endless bargaining, the feasible way is for local governments to formulate

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district planning as per justified procedures, allow stakeholders to question right losses according to the law, and lodge lawsuits to the court. Judges’ verdict is nothing but a major aspect in actual land management. This reform needs to be steadily propelled. Reform Land Resource Management System and Establish Agriculture Protection Zone System The sally port to realize the decentralization reform between central and local government is to implement agriculture protection zone system and for the central government to formulate laws and regulations and forcefully protect agricultural land. By taking this move to confine local authority to a cage, there is no need to worry if arable land will be appropriated after construction land management authority has been deregulated. The reform involves some sophisticated links which will not be further discussed here. Rural property right reform has a close intimacy with national land resource management mechanism. Considering the low efficiency of national land resource management, some naturally worry if land marketization reform and property right reform will bring about new problems. Such consideration makes sense. Due to the lack of efficiency of national land functional district management, land marketization reform possibly forces massive agriculture land to enter construction land market in the short run. Can a set of policies be determined to effectively protect and expand agriculture land, and properly satisfy the land requirements of all towns? In the opinion of the author, it is possible and essential. It involves the reform of national land planning management system, but the reform has not held the attention from top-level design by now. 1. Properly Expand Arable Land Acreage in China The profound conflict in the face of Chinese agriculture economy is the conflict between agricultural products’ production reduction factor caused by high agriculture cost and agricultural products’ production increase goal stipulated by the government. Such conflict is in particular prominent in grain production field. For solving the conflict, the government should work at the reduction of agricultural products’ cost, improve agricultural products’ international competitiveness and alleviate import pressures.

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But it is rather hard to achieve this goal because of the relative scarcity of farmland resources in China. As a result of limited farmland, China has to develop intensive farming, and takes irrigation as the prime means to increase grain production, and therefore greatly increase grain production cost. Intensive cultivation directly triggers costly labor cost. Under the context of growing high labor force price, peasants gradually forsake such production mode and small peasant households decrease grain production. In a large part, agriculture irrigation cost in China is undertaken by the country, but the labor cost of irrigation work remains heavy. In respect of grain production in Hebei plains, irrigation operation time approximately accounts for one third of field operation time, let alone the consumption of goods and energy. Irrigation agriculture would also cause heavy pressures to the environment. As more and more comprehensive costs are incurred from irrigation, peasants in a county of Hebei just grow corns in one season for recent two years and forsake wheat planting. Such momentum is increasingly worrisome. One of the major means to cut down agriculture production cost is to vigorously develop dry farming (rain-fed agriculture). Resulting food production reduction must be supplemented by raising land use rate and increasing arable land acreage. Relative to a certain amount of population, a country more easily forsakes maximum per unit area yield in agriculture operation and determines proper per unit area yield target as per economic benefits when it has more arable land. This rests in a major condition of modern agriculture. In China, expansion of arable land acreage and rise of farmland use rate are conditional. According to the opinions of economic geographers, the gross area of farmland in favorable resource conditions is around 6 billion mu. Within this scope, towns and some mining districts appropriate 200 million mu land, roads and rivers appropriate 600 million mu land, natural and semi-natural forests appropriate 2 billion mu land. In this way, except existing 18.3 billion mu arable land, considerable land has full potential to develop to be agriculture land. Accompanied by the improvement of climate changes and technical conditions, massive land plots can become good dry farming agriculture land. For instance, benefited by the upgrade of agriculture technologies in Dingxi, Gansu, per unit area yield of corn is usually 800 kg. Similarly, usable land is conservatively estimated as around 300 million mu. In a word, it is conditional to expand preservable and developed arable land.

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But the real situation is not so optimistic and arable land protection task is seemingly tough. As proved by the survey, nearly all local governments agree that the tight land use indicators formulated by central government formulates prohibit local development. But in effect, economic density in Chinese city built-up areas is not very high. For instance, the economic density of Japanese cities is about eight times higher than that of China. For recent few years, land GDP marginal output in city built-up areas is about 2 million RMB per mu, while average GDP output in city land is about 500 thousand RMB per mu. This fully implies great potentials of city land stock. However, we now lack a sort of mechanism which forces local government to save land and do not encroach arable land for construction. 2. Establish Agriculture Protection Zone: Main Land Management Functions of the Central Government

(a) Main Design Thinking (i) Implication of Agriculture Protection Zone System

Agriculture protection zone refers to exclusive agriculture development zone stipulated by the country. The gross scale of agriculture protection zone is determined by the State Council according to the general requirements of agriculture modernization. Subject to county-level government, agriculture protection zone should set up management agency. By now, gross scale of agriculture protection zone across the country is more than 2.5 billion mu, far above farmland acreage. In the future, the government may develop new agriculture protection zone by desert governance. The gross scale of agriculture protection zone in the county should be no less than that of basic farmland. Agriculture protection zone should have continuity in space. The minimum acreage of each agriculture protection zone is above 1000 ha. The upper limit of agriculture protection zone acreage should not exceed the acreage of county. (ii) Basic Requirements to Build Agriculture Protection Zone System No non-agriculture industry should be developed in agriculture protection zone. Agriculture protection zone may entertain tourists and satisfy tourists’ sightseeing demands. But now accommodation facilities need to be built.

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Given certain amount of non-agriculture industry in existing agriculture protection zone, the government may allow the existence of non-­ agriculture industry at the beginning of planning agriculture protection zone, or allow the habitation of non-agriculture population and decrease non-agriculture industry. Except new children born in aborigine households, agriculture protection zone should not introduce more new non-­ agriculture population. Local governments need to formulate plannings and policies and gradually guide non-agriculture and non-agriculture population to deviate from agriculture protection zone. Continuous construction land in villages and towns with more than 1 sq.km and 1 plot ratio should not be classified into agriculture protection zone. In dense districts in villages and towns, the maximum distance of farmland boundary within the district is no more than 100 m. The land measures up to the standard of continuous construction land. The demarcation of agriculture protection zone boundary requests easily recognizable markers as the referent, such as rivers, main roads, high-­ tension lines and leading architecture. Continuous forest is allowable in agriculture protection zone, but its gross acreage in agriculture protection zone should not surmount 30%. For a county, continuous forest in agriculture protection zone should not exceed 10%. The government may protect forest according to related laws and regulations for reference. Professional peasant households can also take agriculture protection zone as permanent residence, but farmhouses in agriculture protection zone should not exceed 0.5%. In cereal agriculture protection zone, agriculture facilities in agriculture protection zone should not exceed 0.5%. For agriculture protection zones in which animal husbandry industry makes up a large proportion, the economic output density of husbandry facilities must account for10 times of cereal production land. Or otherwise, no husbandry facilities should be approved. In addition to continuous agriculture protection zones totaling 10 mu land, various residence districts in other agriculture protection zones are not allowed to build culture, education, and sanitation facilities. Such facilities outside agriculture protection zones need to be built with higher standards. In case of any inconvenience, the government should provide compensation for professional peasant households so as to encourage other peasant households emancipated from agriculture to gradually leave protection zones.

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As to companies engaged in agricultural product circulation and service, subordinate management agencies shall not enter agriculture protection zones. Proper measures need to be taken to guide these agencies to settle down in nearby small towns. Furthermore, quality farmland should be incorporated into agriculture protection zone to the hilt. For instance, for encouraging city economic sectors to make full use of shallow mountainous land and other land improper for scale agriculture, 90% existing basic farmland needs to be classified into agriculture protection zone. With regard to the supervision for agriculture protection zone, a dynamic land fertility index management mechanism should be established. “Agriculture Protection Zone Law” is advised to be enacted, therefore stipulating the principles, management authority and punishment clauses against agriculture protection zone system. (b) Deregulate Land Management Authority Outside Agriculture Protection Zone The establishment and improvement of agriculture protection zone system is also inseparable from supporting reform measures. The first step is to deregulate land management authority. For other land outside agriculture protection zone, it is feasible for the central government to greatly deregulate management authority to local government. Prior to the revision of related laws, the central government probably authorizes provincial government national land department to execute its power. The second step is to adjust financial support policies in agriculture centering around the development of agriculture protection zone. Rural land management fund centralizes in agriculture protection zone. Peasant households outside agriculture protection zone will not enjoy all sorts of agriculture subsidy, excluding those engaged in agriculture. Local governments are allowed to spend the fund saved from adjustment in agriculture protection zone construction work. Thirdly, “registered agriculture operator system” should be built. There are three types of registered agriculture operators, including “corporation legal person agriculture operator”, “cooperative corporation legal person agriculture operator”, and “natural person agriculture operator”, in which “natural person agriculture operator” is mainly family farm. Policies in

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furtherance of agriculture treat the three types of operators in different manner. Fourthly, the policy linked to increase or decrease executed by Ministry of Land and Resources may be converted to general policy, but concrete provisions request adjustment. No new centralized residence community is allowed in agriculture protection zone. Professional peasant households or family farm owners should be allowed to live separately. Professional peasant households have to build villages that combine production and life and can only occupy the land within agriculture protection zone. For peasant households who are voluntary to migrate from agriculture protection zone and reclaim house site, specific compensation standards for house site may draw city construction land price for reference. When city construction land is expanded by the policy linked to increase or decrease, premium income needs to be spent for agriculture protection zone construction in part. The fifth step is to try out agriculture operator scale management policy which differentiates different categories and production modes, and ascertains maximum scale of agriculture operators, like 300 mu upper limit for grain operation, 30 mu for vegetables and fruits production, etc. Specific standards are determined by local governments. The maximum scale of dry farming may be properly expanded, and adjusted every three years. The sixth step is to properly adjust local administrative planning. With the aim of reinforcing agriculture counties’ financial relief capacity, small counties in main agriculture production zones can be merged into large counties. Finally, in the process of empowering local land autonomy, the central government needs to monitor the economic density of local city built-up areas, including mining areas, formulate monitoring indexes and establish early-warning information release mechanism. Core monitoring indexes are the average of dynamic economic density indexes in city built-up areas for three years. (c) Main Problems in Operation First of all, based on experimental work, the central government should enact guiding opinions on the building of agriculture protection zone as soon as possible. The experimental work may be finished within one year. Following the full progress of the work, provinces that have firstly completed agriculture protection zone demarcation work can obtain the land management authority deregulated by the central government.

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Secondly, professional peasants’ interests must be thoroughly protected. Original peasant households in the protection zone should fostered as professional peasant households or farm owners. It is a good choice to stipulate the minimum scale of operation (say 80%). Specific standard is up to the municipal government. Those original peasant households who are opposed to leave protection zone should be allowed to continually live there. For original peasant households who haven’t gained professional agriculture operator qualification, local government may try to limit their house heritage affairs. For original peasant households still engaged in agriculture in agriculture protection zone, local government may prohibit their rent income (by levying stamp tax once rent rate exceeds the threshold) to lower professional peasant households’ operation cost. Thirdly, the government may take the opportunity of implementing agriculture protection zone system to promote land planning management democracy and scientificity. The demarcation of agriculture protection zone is to be made according to the opinions of all walks of life, and voted by county-level People’s Congress. (iii) Demonstration Firstly, agriculture protection zone system exists in most developed countries in varying forms. America has legalized natural protection zone and soil protection zone as of mid-1930s. After the 1960s, growing trend of population growth and suburbanization converts massive agriculture land to city and other construction land, and American states successively formulate different agriculture land protection plans. Agriculture protection zone is confined to agriculture production. Moreover, American government advocates to pay equal attention to the building of agriculture protection zone and other types of protection zone. Some other countries also take different means to protect whole plot of farmland. Netherlands strictly protects the scope of farmland and builds a full set of systems related to farmland fertility cultivation, purpose management and property right trading that not only prohibit non-agriculture industry from encroaching farmland but also prohibit peasant households from building permanent facilities on farmland at will. By virtue of farmland protection system, Netherlands’ dairy industry and flower industry take a lead in the world. Secondly, agriculture protection zone system is conducive to better developing land arrangement and raising farmland quality. Confinement

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of non-agriculture permanent building facilities in agriculture protection zone makes for land arrangement. Waste land, partial construction land, and barren land in protection zone can be allotted for overall planning to expand the acreage of arable land. Thirdly, agriculture protection zone system assists the central government to reinforce supervision on land purpose and expand arable land acreage. Owing to scattered distribution, it is rather hard to execute supervision for basic farmland. Once land near to basic farmland is used for non-agriculture construction, basic farmland becomes the target of encroachment. While agriculture protection zone system which advocates to protect continuous land helps fix this problem. Fourthly, agriculture protection zone system is conducive to industrial concentration and main functional zone construction work in governments at all levels. At present, some local industrial projects in basic farmland are scattered and less concentrated, which not only affects industry efficiency, but also goes against scale operation. Such condition is able to be relieved by agriculture protection zone system. Fifthly, agriculture protection zone system is helpful to rationally divide the land management authority between central government and local government, activate land management work, and promote land scientific planning and management level. Upon the execution of this system, the central government may not execute all land use index management policies in local districts (including the index of linked to increase or decrease), but combine local economic density, economic growth rate and construction land growth rate to monitor the aggregate growth of construction land. Other land outside agriculture protection zone that has not been listed as construction land may be taken as local land reserves. Competitive acquisition of public project land helps cut down land price. On the other hand, this move will add housing construction land supply, lower land use cost, and therefore promote civic living quality. If other land outside agriculture protection zone implements “government planning and property right diversity” management system, the government can solve disunity in construction land market for all. Next, agriculture protection zone system paves way for agriculture modernization. Per capita arable land and fresh water resources in China respectively account for 43% and 25% of average world level. In face of difficulties in excessive non-usable land, limited arable land and poor water and soil resource space matching ratio, agriculture protection zone system

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forcefully facilitates the transformation of agriculture technical development mode. In the end, will local governments deplete land outside agriculture protection zone and trigger so-called land urbanization problems in the short run after the execution of agriculture protection zone system? As far as the author has examined, such possibility indeed exists. But if matching reform measures proposed in this chapter can be executed, and the role of market can be given full play, such phenomenon can be prohibited to a large extent.

CHAPTER 6

Adjustment of Rural Development Concept in China

How to develop agriculture in China? A lot of countermeasures have been put forward, and many of them are of intense romantic properties. Romanticism claims to replace entire facts by minority facts, replace group preference by minority preference, infer the validity of entire effective policies by the success of a certain policy, and preach major principles by minor principles. Some romanticism propositions quickly catch the eyeballs of the public, affect public opinions and further manipulate decision-makers due to the rendering of agitators. This chapter will make a brief review over some common propositions.

6.1   Entrepreneurs’ Agriculture Romanticism In recent years, entrepreneurs divert their focus on facility agriculture. They pin hope on agricultural industrialization to remove the influence of soil, climate and labor force, and realize food production industrialization as soon as possible. If facility agriculture is defined as the agriculture in which water, temperature, light and fertilizer conditions are artificially controlled, then such agriculture is not the mainstream of agricultural modernization. Regardless of the possible influence of facility agriculture on life mechanism and close reliance of facility agriculture on nature, facility agriculture means a costly agricultural development concept. According to the survey © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 D. Ying, W. Wu, A Study of China’s Urban-Rural Integration Development, The Great Transformation of China, https://doi.org/10.1007/978-981-19-2756-0_6

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of the author, a well-built greenhouse on 1mu land requires around 10,000 RMB for capital return and depreciation cost, and 10,000 RMB for annual management cost. The gross cost sums up 30,000 RMB.  However, it is not easy to get 10,000 earnings from 1 mu land greenhouse vegetables in many places of North China. The indicator in Liaoning Province was just 5000 RMB in 2009.1 However, Liaoning Province vigorously developed facility agriculture from then on, and annual government investment totaled around 1 billion RMB.2 If vegetables are transported from Guangdong to Shenyang, 50,000 kg vegetables will consume less than 5000 freight. The comprehensive cost is much lower than the cost of greenhouse in Liaoning. In some places of North China, the yield of 1 mu vegetable land indeed totals tens of thousands of RMB and investment profit ratio reaches over 50%. But such situation can’t be sustained for a long time unless some natural monopoly factor works. Despite the high development level of American agriculture, it is still rare to see greenhouses in the village, and some greenhouses are possibly used to grow flowers. This actually comes down to cost. Then why does China vigorously develop facility agriculture? As found by the author in a survey, the word said by a scale agriculture operator with decades of experience solves the puzzle. He comments that the facility agriculture in China will all go bankrupt without government subsidy. According to the knowledge of the author, besides fungus, flower, vegetables inconvenient for transportation or other special agricultural activities with harsh cultivation conditions, it is not necessary to launch facility agriculture at all. High government subsidy for facility agriculture in reality mismatches agricultural resources, and lowers the competitiveness of Chinese agriculture. In effect, field agriculture is the most economical agriculture because we do not need to pay to sun and rain. Moreover, it can maximally utilize natural force without causing damages to human settlement. This is the foundation of high-efficient agriculture. The main way to lower agriculture cost is to promote natural force use efficiency throughout breeding technology, fertilizer technology, and manual technology in place of machinery. 1  See Liaoning Solar Greenhouse Vegetable Acreage and Yield Rank Top in China, Liaoning Daily, May 22, 2009. 2  See Liaoning Province Emphasizes Facility Vegetable Production and Ranks Top in Solar Greenhouse Acreage China in 2015, Farmers’ Daily, January 21, 2016.

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Then why are agricultural products in western developed countries simple in species and cheap in price? It is because that the public can’t afford high-cost agricultural products without specific government subsidy. As long as staple agricultural products are secured, the public will also like having such costly and delicious food. This is also true for agriculture in China, which means that the Chinese government must concentrate its efforts on the security of staple agricultural products like grain, vegetables, milk and poultry meat, and ensure the food security of ordinary public.

6.2  Cultural Saviors’ Agriculture Romanticism Recently, one argument which claims that Chinese villages turn destitute and hollowed, rural culture fades and nostalgia’s basis disappears because of urbanization makes a great clamor. This is totally nonsense. Probably traditional rural culture is not so wonderful as you have imagined! Rural culture includes religious culture, etiquette culture, morality culture, ancestor worship culture, celebration culture, classical culture, education culture, language symbol culture, recreation culture, sports culture, folk literature art, etc. Rural culture shows stronger non-governmental properties. In city culture, many cultural activities have turned highly professional due to the clear division of labor, and some cultural activities have turned public projects executed by the government. Whereas, rural cultural activity is usually a complex and cultural activity organizers are mostly folk people who depend on their prestige to organize the masses. Rural culture presents overt non-commercial characteristics. City cultural activities will be penetrated by commercial factors after being highly professionalized, and some cultural companies specializing in the organization of cultural activities arise. But the expenditures of rural cultural activities are often raised by peasants on themselves. Organizers in cultural activities are mostly volunteers. In recent years, in some developed districts, the government begins to sponsor rural cultural activities, and buy some devices, but cultural activities’ organizers are still volunteers. Rural cultural inheritance is customary and demonstrative. In modern society, some cultural customs are gradually set as laws and coercive norms constraining people’s behaviors. But in traditional rural communities, many cultural activities are still the customs of people, and inherited from generation to generation by demonstrative role. Especially, moral culture, ritual culture, celebration culture, sacrifice culture and religious culture

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often depend on rural elites for inheritance. Rural culture paradigm does not have any record to consult, and this is totally up to rural elites. Above characteristics are also changing. With the growth of economy, rural traffic and telecommunication conditions have been improved, rural society closure state has been progressively smashed, more business factors have permeated into the rural society, and specialized labor division degree turns increasingly higher. As rural residents are more and more influenced by urban fashion, rural culture turns open and rural culture characteristics have been weakened. There exists certain assimilation tendency in urban-rural culture. In the process of rural modernization, with the change of agricultural production mode and peasants’ living mode, national urban-rural integration policies in public field will eventually remove the cultural discrepancy between the city and the village. Due to the progressive progress of urbanization, and the continuous rise of agricultural professionalism, rural professional peasants’ farming land continually expands, and peasants’ settlements are increasingly scattered. Scattered residence of professional peasants makes convenience for cultivation, while rural residents who leave agriculture may also enjoy the benefits of the city after migrating to the city. However, such classified residence mode can’t be formed spontaneously in the short run. In countries which develop agricultural modernization at a fast rate, professional peasants may live near to other non-agricultural professional peasants. This is because that professional peasants’ production equipment has specific requirements on the use of land. For instance, professional peasants’ vehicles and agricultural machines have different requirements on road conditions different from the city. Professional peasants’ daily production activities may bring about negative externality to other peasants. If the government builds infrastructure according to city standards, investment benefits will be also lowered. Therefore, some countries, like Denmark, have enacted professional laws to stipulate farmers’ permanent residence as their own farms. Similar laws reinforce the scattered residence tendency in the village. Subject to above tendency, there will take place drastic changes in rural society which severely affect rural culture. First of all, there are nearly no poor people in rural society. Rural population consists of high-income counter-urbanization population and professional peasants. Both of them belong to the middle class in the society. Poor population’s caring cost is slightly lower in the city. If national

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policies are adjusted in compliance with the reality, rural population will successively live in the city. Secondly, there is no significant difference between rural peasants and urban peasants in lifestyle. According to above-mentioned tendency, modern rural peasants in China mainly live in small residence districts. Foreign experience shows that even though small residence districts lack concentrated modern infrastructure, like drainage facilities, garbage processing facilities, pave roads and so forth, peasants can still enjoy modern lifestyle through self-built small convenient facilities. Thirdly, rural community structure and community functions will be drastically changed. Public affairs in rural communities of China remain sophisticated in current stage as numerous functions request prompt adjustment. As urbanization progress accelerates, the population size in some villages will be shrunk. Therefore, those traditional cultural customs that rely on certain population size may gradually disappear. Apparently, when rural population layout is severely changed, the cultural contents contained by these public affairs also change accordingly. Above changes take a rather long historical course. On the one hand, in the transitional period, city factors incessantly permeate into rural life, and finally turn the village and the city consistent institutionally. On the other hand, as few settlements in village state still exist, these settlements that bear rural culture preserve historical traditions. It is worth noticing that preserved culture turns more and more symbolic and artistic, and basic cultural state in the village approaches that in the city. The value of ritual culture and religious culture significantly affecting rural society should be specifically analyzed but not simply promoted. Moral culture has general mediating significance to all social behaviors, but no peculiarity to rural development. Rite is a behavior by which people exchange information via programming speech to seek the regularization of living environment, remove the strangeness towards environment and lower the uncertainty in environment. Rite may be also viewed as the technical mode used to implement basic codes of conduct in social transaction or say the essential package of behavioral culture. The saying that “the establishment of righteousness and morality, the education of teachings and the discussion of disputes are all based on rite” also proves ritual functions. A person who gives rite also expects to gain returns. This responds to the saying that “courtesy demands reciprocity”. Or otherwise, it is meaningless to practise rites. In condition of unequal interpersonal status, “courtesy demands reciprocity”

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is still a universal law (except disguised bribery). Religious rite also adheres to a rigorous set of behavioral codes, and reflects the pious will of people to gain returns. In this sense, rite is self-centered cultural package. Such package is indeed essential which makes social relations warm and harmonious. In present historical period in which rural society quickly transforms to modern society, some favorable traditional rites have been damaged, while some improper rites start to rise. Power-for-money deals come true by gift giving. In some villages, people may collect cash gift by celebrating birthday or hundred day for beasts. Such wealth accumulation property of rite activities aggravates social contact cost and prohibits social progress. In limited conditions, even in closed rural society, patriarchal relation itself supports a stable social structure. The more closed the rural society is, the more likely that the clan leader, mediator and moral avatar is the same person. Patriarchal relation may provide a stable mechanism for economic activities. Family members often seek help from other kin members when they are in need. In land rent and money borrowing affairs, the mediator is often acted by kin members. Members of the same clan who have nothing may also seek help from kin members for survival. Research data about traditional rural society also show that without the intervention of external factors and especially government power, religious conflicts may also be solved throughout the negotiation between leaders. Under some occasions, religious relation and ancestor worship culture possibly divide the society. Such role persists even after economic prosperity. Though rural economy in South China is more developed, local ancestor worship culture is more flourishing there. Pursuant to latest sociology surveys, developed township companies and private companies in South China still show prominent religious properties. We may still observe the dominant influence of ancestor worship culture and religion in grassroots election of villages in China.

6.3  Rural Elites’ Agriculture Romanticism Rural elites are precious resources in rural society, but some of them prefer labor-hiring operation and view it as the essential way to propel the development of Chinese agriculture. Many administrative villages in China have founded companies, and some implement collective cultivation on land contracted to peasants. Consequently, village director becomes the general manager, and village secretary becomes the chairman.

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Most local governments are keen to “corporation agriculture”. No official statistics show how many companies are involved in field production link, but a great many agricultural companies are listed on cooperatives. At present, there are nearly 1 million cooperatives in China, including around 100,000 demonstrative communes. Most demonstrative communes have corporation background. In accordance with the survey of the author, corporation is not necessarily more efficient than family farming. In “corporation agriculture” district covering more than 1000 mu land, land subcontract is rather commonplace or otherwise management cost is extremely high. On the contrary, land subcontract in an agricultural production unit means the rise of “non-economical” issue caused by oversize scale. Some “corporation agriculture” investors directly and indirectly gain land from peasants at low rent, resort government financial support projects in agriculture to plow the land, and then rent the land to actual agricultural producers at a high price to earn the backspread. In some places, such price difference may total three times. Such company with the purpose of extracting national agriculture subsidy will not devote to agricultural operation. Meantime, subcontract peasants will not engage in long-term operation due to the short term of lease. Thanks to the rise of “corporation agriculture” and farm economy, hire laborers in Chinese agriculture see a growth momentum. Some local officials often comment that as peasants can obtain revenues from multiple sources, including salary, rent and subsidy, the focus of work should be labor-hiring operation of agriculture. Nevertheless, the author learns from the survey and interview at home and abroad that general agriculture field production which has applied labor-hiring mode is rather low-efficient. In condition of labor force shortage in family farms of Europe and America, people also invite laborers, usually partners, to operate the business rather than part-time workers. In China, some professional peasants inform the author about the huge discrepancy between agriculture hire-laboring operation and family farm operation by telling some vivid stories. In the opinion of the author, for reinforcing agriculture competitiveness, and promoting agriculture society transformation, the government must prohibit the tendency of agriculture corporation, farm manorialism and peasant labor-hiring. The government may not necessarily prohibit such actions by force, but it should never encourage such actions. Especially, the biggest taboo is to prevent investing financial fund for assisting agriculture to mobilize such tendency.

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Likewise, it is also irrational to oppose the foundation of companies in villages. Some villages are not agricultural residence districts actually. For instance, in some districts in Yantze River Delta, and Pearl River Delta, land has been converted to industrial land or large fishpond. Given the indivisibility in technology, it is of great necessity to solve distribution problems by founding companies. But in agricultural cultivation, it is not necessary to found companies as family operation alone can bear modern scale agriculture.

6.4  Philanthropists’ Agriculture Romanticism Low income of peasants and large income gap between the city and the village has been an old topic for years. To be sure, it is a fact. In our country, nearly half rural permanent resident population is in low-income state in the long run. This is unquestionably irrational. In particular, totally different from developed countries, absolutely poverty-stricken population in China mainly concentrates in the village. How to handle it? One popular view advocates “all-round city back-seeding village” initiative by guiding hundreds of millions of peasants to adjust rural economic structure and raise income. Such proposal is full of romanticism. Low income of peasants mainly comes from the limited average effective workdays. Under “small peasant+socialized service” mode, one peasant household takes around 60 workdays to grow 10 mu land of cereal, and involved labor is simple labor. The annual workload accounts for approximately 22% of Chinese laborers’ average annual workload.3 At present, the per capita agricultural income of national peasants simply makes up 23.3% of national per capita disposable income.4 It should be noted that national average labor complexity is much severe than peasants, which implies that the nature of urban-rural income gap is full employment. Peasants’ income of single workday is not lower than that of city residents. It proves that it is unfair to raise peasants’ income by national income redistribution and even charitable relief. The final way out to raise peasants’ income is to reduce rural labor force, and convert rural laborers to fully employed professional peasants.

 Tom Phillip: How Hard do Chinese People Work? Global Times, October 8 2015.  State Statistics Bureau: National Economy Ran Stable and Robust in 2015, cited from website: http://m.haiwainet.cn/middle/3541083/2016/0119/content_29564144_1.html. 3 4

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Another expression of charitarians’ agricultural romanticism is the concern for rural women. Gender inequality remains to be a serious problem in contemporary world. The guarantee of women right equality is not just the need of civilization progress, but also the need of economic growth. But we have to notice that in agriculture development field, development measures for rural women show intense propensity of romanticism. For years, the popular practice in rural poverty relief work is to issue micro credit to absolutely poverty-stricken population in the village, especially rural women. In 2015, the micro credit issued by financial institutions nationwide altogether totaled 120 billion RMB, with average growth rate of more than 20%.5 While rigorous quantitative research indicates that the insignificant influence of small credit on sustained poverty relief.6 Women’s status may be promoted and credit loss caused by the malpractice of men may be reduced more or less when women are allowed to sign the micro credit agreement. But on the whole, it does not seem to generate too remarkable influence. If the basic problem is not solved, gender right problem will not be easily solved. Even the intervention of credit workers hardly solves right inequality problem from the root. One main way out for liberating rural women is urbanization. Experience observation illustrates that women more easily gain benefits from urbanization than men. The gender discrepancy of income in the city is much smaller than that in the village. It has been demonstrated that women have higher average income than men in New York. Moreover, it has been also reported that women are more susceptible to traditional ethic relation. While migration to the city reinforces women’s sense of happiness.7 In general, in order to promote the development of agriculture and raise the status of women, the main practice is to help unemployed women in the village make a living in the city, rather than give copper coins to them or confine them in the village.

5  State Statistics Bureau: National Economy and Social Development Statistical Bulletin in 2015, cited from website: http://m.haiwainet.cn/middle/3541083/2016/0119/content_29564144_1.html. 6  Banerjee, A., Glennerster, R. and Kinnan, C.  The Miracle of Microfinance: Evidence from a Randomized Evaluation. American Economic Journal: Applied Economics, 2015, 7(1). 7  Li Qing. Realize the Radical Liberation of Chinese Women in Urbanization Process, Journal of China Women’s College, 2003: 1.

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6.5   “Government and Community” Unity Agriculture Romanticism Because of the adverse influence of the institution, the “integration of government administration with commune management” in people’s commune was abolished in early 1960s. However, such malpractice still exists in village-level governance concept. The core of such institution is collective engagement in agricultural production activities, and satisfaction of community public service demands by partial collective income. In rural survey, the author has asked grassroots cadres that “what is the meaning to stick to current rural management mechanism?”. They answer plainly that “devoid of current institution, village public expenditure problem can’t be fixed.” One of them straight adds that “without collective economy, our grassroots government may not have any tea to entertain the superior government, because collective can’t afford the tea”. Another cadre comments that “without collective economy, we can’t distribute income nor repair roads in the village”. Such “office expenditure” problem is in essence rural public service expenditure problem. Furthermore, what kind of money do we have to spend in the village? Irrespective of the high cost of land management and property protection, above-mentioned 12 public affairs are not regular public affairs. Other public affairs in the village, such as social security, are undertaken by the government instead of small communities alone. Do these community public affairs take lots of money? Not necessarily! It is basically free to handle these affairs in ancient China, and in contemporary European and American society too because small communities’ public services are often provided by volunteers. In European and American countries, public service organizations take turns to undertake the accountability in which the organizers do not charge reward. To say the least, if these community public services can’t be accessed free of charge, we may settle another account now. Supposing that each village gains 200,000 RMB subsidy, it will be a different story when a national urban-rural public finance mechanism covering rural community public affairs expenditures has formed. There are approximately over 500,000 involved national villages (not a few “villages in the city” and suburban villages have been covered by public finance). It takes them around 100 billion RMB to realize full public finance coverage. Backed by the expenditures totaling 100 billion RMB, the government may realize “politics and economy separation” reform and more deeper

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property right reform and therefore activate peasants’ operation right to the uttermost. 15% increase of agriculture GDP throughout deepening reform means extra output of 900 billion RMB. Don’t we have 100 billion RMB? Absolutely not! By now, expenditures for “agriculture, rural areas and rural residents” granted by central and local government reach up to approximately 3 trillion RMB.  The giant reform bonus of 900 billion RMB in exchange of 100 billion RMB is really substantial! The latest rural reform implementation plan issued by the central government affirms the reform exploration in “politics and economy separation” which is expected to create more conditions for deepening rural property right reform.

6.6   “Anarchy” Market School’s Agriculture Romanticism Some friends stand for the argument that agricultural production may be totally manipulated by the market, and the government does not necessarily intervene product market. Specifically speaking, they disapprove of land purpose district planning nor support peasant cooperative government policy because they insist that these government plans or policies hinder market competition. With no doubt, Chinese agriculture still has rather low degree of marketization and in particular, land property right goes against land market allocation. However, for expanding the manipulating role of market in agriculture, the meaning of government or peasant cooperatives sponsored by government to agricultural economy should not be denied. This is not complicated. Market dysfunction is inevitable given considerable publicity problems existing in agricultural production cultivation link. One of the connotations of land function district institution is to establish agricultural protection zone, i.e., dividing some plots of land for agricultural production. Though such practice seemingly prohibits the land market and violates market economy principles, it has been widely applied by countries with developed marketization economy. American Congress enacted State District Planning Implementation Law in the year of 1924. It directly deregulated the statutory decree of land use to the municipality but did not give any policy guide. Moreover, state government simply proposed principle requirements on municipality’s district planning, or affected municipality’s district planning in financial subsidy if necessary.8 This situation proactively protected arable land resources. In  Randall Arendt, Foreign Village Design, translated by Ye Qimao et al., China Building Industry Press, 2010. 8

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consideration of the populous conditions in Chinese rural areas, villages and peasants’ housing construction easily encroaches arable land or pollutes arable land. Under such circumstances, it is very necessary to divide agricultural protection zones. The “planning” property of agricultural product production is rather conspicuous in EU, but it is totally different from the “mandatory agricultural economy” in the past of China. EU agricultural plan is primarily supported by EU agricultural plan system and mega peasant cooperatives. Owing to such planning property, EU member states have not experienced agricultural product surplus crisis for years. It is rather rare to see people in EU countries to pour extra milk like some regions of China. Large peasant cooperatives in EU usually attract cross-national members, and rise in the form of cross-national companies in the international society. These cooperatives behave powerful planning and arrangement capacity for the production of agricultural products. Despite the scale of family farm, it is still a small operation unit for the giant market of agricultural products, and farmers do not have any influence on market price. The way to solve this puzzle is to establish peasant cooperatives by peasants themselves. International experience shows that a large enough peasant cooperative in a country can generate formidable influence on agricultural products’ price and make arrangement on supply. Such agricultural organization presents overt monopoly property. EU experience reveals that agricultural products’ market price fluctuation has been reduced and product quality has been promoted when massive cooperatives control production plans. This fundamentally removes the long-­ standing agricultural product surplus problem in EU countries. Thus it can be seen that cooperatives’ control on the market has more proactive influence.

6.7  Physiocratic School’s Agriculture Romanticism The wealth view claiming that “land is the mother of wealth and labor is the father of wealth” has gone out-of-dated to a large extent. Physiocrats in the seventeenth century held that only agriculture created wealth, and land and labor were basic conditions. Such pre-classicism view improper for contemporary society still prevails in China now. For instance, some always worry if the land will be appropriated in urbanization process once rural labor force leaves the village.

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In reality, in modern agricultural economy, technology and capital have made more contributions to agricultural output than land and labor. After World War II, world gross agricultural output increases by few times, but no growth in land has been witnessed, and rural labor force is greatly decreased. This proves that the main contributors of rural economic growth are technology and capital, which can be evidenced by the decline of land rent rate and land price. Even land price in countries with sound land market is much lower beyond expectation. During the visit in Poland, the author learns that local land price is around 4000 euros for poor farmland per ha (2700 RMB per mu), and 14,000 RMB per mu for good farmland. The price of planned construction land in the village is not very high, at around 13,000 RMB per mu. This is also the case in densely populated Japan. In our mind, Japan is a country with a large population but little arable land, and its land price must be very high. But this is not true. The price of farmland per mu in Tokyo suburb is worth of 400,000 RMB. Considering the expensive price of agricultural products in Japan, the figure is around 10 times of costly rent. It is consistent with the international price. In Hokkaido, the price of general farmland is around 3000 RMB per mu, and animal husbandry land can be used free of charge. Agriculture rotation and land retirement make for the sustainability of agricultural production. From this perspective, it is not a bad thing to acquire more farmland. But the final way out of rural economic growth is to replace labor by capital. Consequently, we do not have to bewail why there are more and more hollow villages, nor acclaim for the rise of rent rate and land price.

6.8   Fundamentalist School’s Agriculture Romanticism Organic agriculture is well-received in China. Many researchers, media opinion leaders and culture celebrities stand for organic agriculture. At times, organic agriculture may even become a supreme moral topic. If someone has any dissent, he may be thought as the enemy of mankind. We now leave aside the interest group background of such view for the time being. International experience shows the romanticism of such view. Organic agriculture has decades of history in developed EU countries, but gross cultivation area does not make up 10% of land. According to the

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general classification of industry, the sales volume of organic food in America totals 35 billion USD now.9 GPD of American agriculture and food industry in 2014 totaled 835 billion RMB, and the latter was about 4.2% of the former. The figure may be less if being measured by GDP indicator.10 Therefore, organic agriculture is not the mainstream of American agriculture. It does not mean that America ignores agricultural product quality and security. In nature, America has formulated a series of laws and regulations about the security of ordinary agricultural products. Many people in China have misunderstandings about transgenic technology. Those popular sayings lack evidence at all. The reason why America has widely applied transgenic technology in staple agricultural product production is just because the application of such technology conforms to rigorous regulations, and related agricultural products can’t be marked as organic agricultural products. In America, organic agricultural products should not be produced by transgenic organism or radiation ionizing, or pesticide, artificial fertilizer and antibiotics or growth hormone for livestock. Such regulation inevitably maintains the production cost of organic agricultural products high. Comparing with staple agricultural products, organic agricultural products have rather low market shares. The use of fertilizer, pesticide and transgenic seeds greatly cuts down agricultural products’ cost. The output of American transgenic beans per ha totals over 20 tons, about 5 times more than that in Northeast China. This is really amazing. The ratio of organic agricultural products in America is rather low. American people can hardly solve the problem of food and clothing if they just have organic agricultural products. As a matter of fact, American people’s Engel coefficient is just 12.6%, at the bottom line of the world. This is because of the cheap price of food. Such consumption structure encourages consumption of Americans, and forces them to reduce the saving ratio to below 4%. At the same time, due to the low housing price (and high quality than China. Single house is different from unit building in nature), American people dare to work for interests. This in turn stimulates social innovation ability.

9  Andrizej Zwaniecki. Fostering New Farmers, New Exchange, 2015, summer issue (US Embassy Publication). 10  USDA: Economic Research Service using data from U.S. Department of Commerce of Economic Analysis, cited from website: http://ers.usda.gov/data?products/chart?gallery/ detail.aspx?chartId=40037&ref=collection&embed=True.

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As to the use of fertilizer, pesticide and transgenic technology, the author affirms the rationality of available Chinese policies. The focus of future policy restructuring should be greatly applying advanced technologies, promoting rural population transfer to urban economic sectors, lowering agricultural products’ cost, guiding the decline of agricultural products’ relative price, and reinforcing Chinese agriculture’s international competitiveness on the premise of ensuring the basic security of staple agricultural products. This is the radical orientation of agriculture in China. Concerning food flavor, organic agricultural product production zone may solve the problem. After all, the bowl of ordinary Chinese people should not be abducted by organic agriculture. Subject to the reform, Chinese residents’ Engel coefficient possibly gradually decreases from 35% to 20%. This is the basic mark of people’s properties and national strength.

6.9   Zero Growth School’s Agriculture Romanticism It seems that we have entered the post-industrial age as there is more food than we can eat, more houses that we can sell, 20 million new cars can be sold per year and other consumer durable is in high demand. Under such a background, some question agriculture growth and rural development tendency. Why do we need high efficiency in agriculture? What is the meaning of improving agriculture competitiveness? Why not peasants plow few mu of land, live together and enjoy the fun of hearing the dog barking in the lane and crow cocking on the mulberry? Despite its low efficiency of such agriculture, it is not a problem if we maintain a low-level urbanization, and lead a plain life in the city. Some advise that we should not change peasants’ aggregation living pattern and even appraise old “squire governance” mode for fear of hollow villages. Believers of this thought mostly disapprove of urbanization and scale operation of agriculture. This is essentially the revised edition of “zero growth theory” subject to romanticism agriculture view. The consumption view in pre-industrial age is to “eat one catty of grain and sleep on one bed”. If we stick hold on to such old-fashioned view, it is no need to initiate industrial revolution nor seek after economic growth. Such view is basically established on the wrong understanding about history. It is not easy for humans to get enough food and clothing by their hands and feet. Throughout history, humans had been following beasts to

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gnaw the remaining bones of prey and even turned the prey at times. Once entering the agricultural society, humans had the ability to predict the future, but most of them still led a poor life. A household with five members might lead a moderately good life by plowing the land with traditional farming methods, but it is rather a tough thing to grow grain, cotton, vegetables and fruits not missing the farming season on the land. Most peasants can’t reach the standard. The romanticism of man plowing and woman weaving is the imagination of the literati. Because of resource intensity, no adequate surplus products can support the exchange system and people even do not form the equality awareness. The poor still rely on the rich, namely the so-called rural squires. There is no clear boundary between the private and public sector of society. The poor do not have any privacy nor free space. The poor can only change their attachment to squires by contemporary material civilization. The rise of large-scale social labor division featured by professionalism and roundabout production greatly emancipates people. People’s demands for interpersonal contact are not directly bound up with the satisfaction of material benefits, and they instead have free choices. It marks the separation of private right and public right. Private right, only associated with people’s skills and disposition, is used to satisfy the demands for material life. While public right probably can be only used to handle public affairs. Only people who have preference for public affairs would like to enter the public sector. Subject to the separation between private and public sector, the poor at most submit to the public rules led by the rich in public sector. The compression property of public rules is possibly avoided if a competitive mechanism can be established in public sector. Freedom of public right execution is possibly just reflected by the choice for public right representatives (government officials). As long as public decisions are formed, the minority can only carry them out. However, the right sacrifice of the minority is simply confined to some public sectors. As their material interests demands remain in the scope of private sector, their basic freedom is not affected at all. Such a society is generally harmonious. This is the freedom with rules open to everyone. Man liberation is nothing more than this. “Warmth and harmony” in the village mark the typical features of any acquaintance society. A humanistic city can also have an acquaintance society, and moreover, the diversity of different types of acquaintance society in the city draws a clear boundary between them. In this way, these types of acquaintance society are not interlaced, and no single or few leaders

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have control right on all aspects of the society. People now have freedom of choice. Once the acquaintance society is separated from the distribution of basic means of subsistence, it will depend on few basic elements for survival, like kinship, common interests, classmate relation, and neighborhood and then turn more simple. According to the author, this is the secret why massive peasants, especially young rural people and young rural women spare no efforts to migrate to the city. Because of wrong land planning, acquaintance society hardly takes shape and even forms irrational settlement pattern in many cities of China, especially emerging urban districts. This is not the blame for urbanization, but city planning management system. For changing their destiny, Chinese peasants must abolish the concept of “zero growth”, support fast economic growth and continue to expand urban-rural consumption. Upon the formation of the giant manufacturing industry system centered by consumer durable, new consumption view and mode must be proposed for supplement. There are two points to be noticed. The priority is to expand housing consumption (not buying a house at high price) and traffic consumption, and release residents’ demands for privacy protection and freedom furtherance. Demands for single house, propensity for decentralized residence districts and demands for cars all encourage consumers’ consumption will. Therefore, the government should vigorously develop single house residence districts and encourage households to buy cars. Secondly, attention should be paid to fostering acquaintance society in the society and mobilizing properly comparative consumption mode. The growing proportion of comparative consumption in modern social consumption expenditures to some extent boosts the economy. Finally, the proportion of multi-storey buildings should be reduced, while that of single houses should be elevated in the housing structure. European countries and America do not fall into the so-called “middle income gap” in their economic growth process. It should be ascribed to many reasons. One of the reasons is its compliance with the law of urbanization, opening of comparative consumption space and support by property right system. We may as well illustrate it by American household average expenditure (see Table 6.1). As shown in Table 6.1, in American household expenditure structure, housing expenditure (including rent or housing repairing and decoration, instead of purchasing) makes up over 30% of gross expenditure. Without the guarantee of property right, high-quality residential conditions,

33.3%

Percentage

17%

Traffic 12.6%

Food 10.7%

Individual insurance and pension 8%

Health 6%

Entertainment and drinking

3.3%

Savings

USDA: Economic Research Service Using Data from U.S. Bureau of Labor Statistics. Consumer Expenditure Survey, 2014

Housing

Item

Table 6.1  American household average expenditure in 2014

3.3%

Clothing

3.3%

Others

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maintainability of houses, it is hard to image why residents of the country repeatedly spend 30% income in housing year after year. Chinese people’s purchase of unit building is one-time investment, as they rarely spend money in maintenance and wait to see how such community public goods is demolished or collapses. By the same token, with no humanistic evolution way to urbanization, it is hard to image how 17% traffic expenditure generates. High-urbanization creates conditions for scale operation of agriculture, lowers agricultural products’ cost, and reduces Americans’ Engel coefficient to 12.6%. Such expenditure structure is the basis for America to maintain consumption power and economy vigor, and also its status as a world power. If America still worships “zero growth” economic theory that emerges decades of years ago, and constrains Americans’ consumption by state intervention, it will not develop to this level by now. In order to catch up with America, China must firmly push forward urbanization, greatly reduce rural population, give housing property to most families and stimulate consumers’ confidence by cheap food.

6.10  Heroic Utopian Romanticism Most Chinese people born in the 70s have led a miserable existence for a long time, but few of them really experience the taste of poverty. This is also true to the literati who think much about human destiny. Considerable written documents about the discussion of poverty may well prove this point. There is a popular cross-talk on WeChat. A thinker talks in a speech that “a successful person may be measured by a few of criteria, including business card, cash in purse, high frequency of outdoor activities, ownership of a courtyard, a driver, and two children, and leisure time for afternoon nap…”. Hardly as his sound fades away, the doorkeeper could not hold back any longer to say that “this is true to all residents in our village!” The cross-talk ridicules the poor and the rich, and conveys a sense of humor without discrimination. The rich work hard to return back to the starting point! The poor have found the meaning of life, but they can’t get rid of the meaning of life no matter how hard they try. As the saying goes, “draw water with a sieve”. Despite the cross-talk now, poverty and prosperity are absolutely two totally different things. We are not going to talk about personal income. No matter how rich the society is, 10%–15% people still drag a miserable life, and only lead a decent living with the assistance of society. But this is

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another case in a poor society. Most people manage to keep body and soul together, and do not expect the society to help them get rid of the dilemma. Minority poverty and majority poverty are obviously two concepts in a society. In former condition, the poverty of people may be ascribed to capricious personality; but in latter condition, the poverty is associated with specific systematic social causes. Thinkers have conceived some methods to liberate the poor from poverty. One of the solutions is to deprive the land from authoritarians and establish a public land ownership. Unfortunately, this solution alone can’t work. For getting most people rich in the society or building a moderately prosperous society, another solution should be proposed as soon as possible. A society in which most people get rich or say a society in which few people get poor can be generally described as such: firstly, it involves healthy labor force in a large-scale social labor division system where industrial laborers are closely connected with capital to form high labor productivity. Secondly, residents’ food expenditures across the whole society make up around 20% of gross expenditures, and most residents do not have to worry about food. Thirdly, most families live in single houses. Fourthly, residents rarely save money as they do not have to worry about food and the society has developed financial industry and sound social security system. Fifthly, interpersonal relation bound up by interests, beliefs and other non-ethic relations supports all kinds of formal and informal organizations. On the other hand, due to the stronger mobility of the society, people more easily and frequently enter or exit occupation communes. Now we add some explanations for the residential pattern of the rich. The security distance between people rests in a major condition of psychological health. If permitted, people would like to live in single houses. In most cases, a prosperous society can mostly realize such requirement, with few exceptions like Singapore. Even in Japan, a country with strained man-land relation, residents are mostly living in single houses. Especially in Tokyo, approximately 58% households also live in single houses. According to the real conditions of China, two thirds city families will possibly live in single houses in the far future. While the reality is that it is not easy for residents in first-tier cities to buy a unit in the building. To be sure, it is rather hard to turn a prosperous society with above five characteristics a reality. The poor still exist in such moderately prosperous

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society. Those illicit immigrants, unemployed groups, partial disabled persons and few pessimistic population may lead a simple and poor life in the eyes of others. This group of population makes up 15% of gross population. It is very normal. By now, general prosperity of people in a large district, like a city, a region or a large country, is a very commonplace phenomenon. During the past millions of years as of human use of language, few human communes have achieved general prosperity for no more than 300 years. It is like a person who just lives a decent life for two or three days in a lifetime. In addition, this is not the fate of human beings. Generally prosperous population, measured by group member quantity, only makes up of one fifth of gross population. Even so, this is a fairly good beginning. It is lucky for us to be born in contemporary age. The secret to achieve the general prosperity in a large human commune is labor division order. In the past, a saying said by westerners goes that “God’s to God and Caesar’s to Caesar”. It conforms to the concept of labor division order. The macroscopic labor division order in western society may be roughly outlined by this saying, coupled with “individuals’ to individuals and market’s to the market”. Such labor division commonly commented by people refers to industrial labor division. Driven by technical progress and market competition, such labor division brings about powerful productivity, and resulting life of people turns rich. Labor division order in human communes is absolutely a totally same mode. For instance, different large communes worship different “Gods” (religions) and different “Caesars” (politics), but the property of labor division is generality. The gap roughly comes down to the discrepancy of degree. With the purpose of forming a satisfactory labor division order, two most fundamental principles are indispensable. The first one is who invests who gains in the private sector. Only in this way can the society motivate public creativity and boost social vitality. People can’t survive if they lose the ability of investment. Therefore, the second principle comes into being, i.e., people in the public sector should enjoy public goods altogether. As long as a person is a resident of the commune, he can enjoy public goods no matter whether he has made contribution. There prevails a consensus in modern civilization  - when a person lacks creativity, his basic means of subsistence shall be considered as public goods. In another word, the society has due responsibility to ensure the self-dignity of a person. The society appears warm and harmonious with the second principle.

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Even though the two principles are easy to be written on paper, it is not easy to implement them in practice. The prohibitive role of each principle requests the security of clear property rights and fair competition system. Fair competition is of equal importance in both economic sector and public service sector. The wealth gap is very large in China for the time being. According to the official statistics, population in China was divided into five levels in 2015. The annual average income of 20% lowest-income population does not make up one tenth of the annual average income of 20% highest-­ income population. It is indeed imperative to change such situation now, but the way of reformation is still to propel marketization reform and avoid romantic practice by “robbing the rich to feed the poor” in primary distribution of national income.

CHAPTER 7

Urban-Rural Social Governance Integration

It is a special phenomenon for social governance to form different mechanisms in the village and the city of China. Upon the abandonment of people’s commune system in the 1980s, the social governance pattern featured by “integration of government administration and economic management” still exists in the village. National public finance does not cover the full area of the village and the city yet. Such situation makes agricultural operation organizations and public service organizations mutually hold each other back, which not only affects the rise of agricultural economic efficiency, but also hinders the building of social justice. The solution is urban-rural social governance integration. This chapter mainly illustrates the necessity and few major practices of the reform.

7.1   Analysis of Rural Society Governance Objective and Task Rural governance is a part of national governance. The modernization of national governance includes both modernization of rural governance and modernization of urban governance. Comparatively speaking, the two have personality and generality. In a broad sense, social governance refers to the arrangement mechanism of public affairs and public affairs within a group, including the formation mechanism of public authority, the operation mechanism of public © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 D. Ying, W. Wu, A Study of China’s Urban-Rural Integration Development, The Great Transformation of China, https://doi.org/10.1007/978-981-19-2756-0_7

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authority as well as the activity system of public affairs. The term “group” here can be either citizens of a country or residents of a community or a village. Governance modernization is a relative concept, which means that “modernity” has different standards in different times. On the whole, social governance has been making constant progress since the birth of human beings. According to the author, there are seven key clues indicative of governance progress in human society. First of all, the boundary between private property right and public property right gradually turns clear, and private property right protection has more and more legitimacy. Secondly, freedom has more and more universal reality, and public constraint becomes more and more normative. Thirdly, the generation of public authority gradually turns from violence to the voting system of democratic politics. Fourthly, public authority gradually turns decentralized and socialized, and pluralistic authority gradually replaces government unitary authority. Fifthly, in government governance system, continually augmented local autonomy results in widespread local autonomy. Next, the role of patriarchal force in public affairs gradually dissipates, while the situation varies from country to country in form and structure during this process. Finally, social governance tends to be highly professional. Either politicians or volunteers in public fields, mostly work at public affairs and accumulate speciality knowledge. To be sure, there are also other occasions as to the changes of social governance. But main clues are exactly embodied in these aspects. These aspects concerning social governance mentioned above can be seen as certain generality factor in either rural governance or rural governance modernization. Whereas, rural governance has its own peculiarity. Back to the reality, given the large scale of rural areas, contemporary rural governance in China is still an emergency. Analysis on the reality of rural governance in China shows that we still have a long way to go. First of all, there still lacks a rational and legitimate power separation system between central and local government for the operation of villager autonomy system. The inquiry task in this aspect is rather arduous. Prior to the rise of new institutional system, villager autonomy system can only proceed as usual. Secondly, the drawbacks of rural property right relation create conditions for the excessive intervention of public power, and prevent peasant households from freely executing their property right. Rural operational property, including land, is not suitable for community joint ownership,

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but we have chosen such a system (collective economy). Throughout years of adjustment, this system has become a reduced community joint ownership system, but peasant households’ property right problem has not been fundamentally solved yet. Thirdly, rural social governance is faced with institutional innovation problem. How to connect the grand goal of national governance modernization proposed at the Third Plenary Session of the 18th CPC Central Committee and rural governance will be a formidable task. The construction of administrative village will be of no meaning once considerable villages vanish or shrink to small residence districts for professional peasant households. In the future, the complete unity of rural and urban governance mechanism will come true. How to progressively push forward this process means the systematic adjustment of a series of policies. It poses unprecedented test to decision-makers. Fourthly, rural construction is faced with the dilemma of efficiency and equality. China is expected to realize the rough income equality between rural and urban residents when urbanization rate reaches around 75%. The finalization of this goal not only means massive migration of peasants to the city, but also the disappearance of lots of villages or reduction to small residence districts for professional peasant households. Meantime, a few villages either evolve to small cities or professional villages. Such condition implies a huge waste to be caused by “new rural construction” in millions of natural villages. But on the other hand, if the government totally ignores the public services for left-behind villagers, it also runs counter to the governance principles in socialist countries. If the government artificially accelerates population layout restructuring by “migration and village merger”, social friction will be inevitably magnified. Then how to conform to the requirements of urbanization, balance the relation between efficiency and equality and realize humanism urbanization still request more sensible policy innovation. Fifthly, the relation between the country and peasants needs further adjustment. Backward agricultural operation and organization system and defective agricultural technical mode are both major reasons leading to high agricultural cost and low peasant income. How to reform rural society management system and regulate financial support system in agriculture is a tough difficulty faced by the government. As institutional reform is confined by thinking emancipation level, and agriculture support restructuring is limited by interests protection, it is definitely difficult to promote reform and restructuring.

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Finally, one important mission of future villages in China is systematic immigration. However, such immigration should be free immigration instead of forced immigration manipulated by the government. Due to the poor competitiveness of agriculture in remote mountainous areas and barren areas, and inadequate effective working days of peasants, it is no wonder why peasants have low income. If they have free choice right, their priority must be working immigration. Those residents who basically do not have urban working ability (or who think that they do not have urban working ability) would like to stay in the village. Free immigration is a rather lengthy process. In this process, considerable peasant households need to tolerate the low income. It is also very challenging for the government to aid these residents for ensuring basic social equality. In recent two years, government reform measures provide effective assistance for these residents, in particular the enactment of meaningful National Development Programs for Children in Poor Areas. Solving above-mentioned problems ought to be the main task in realizing Chinese rural governance modernity in transitional period.

7.2   Political Participation Behavioral Logic1 In 1980, peasants in Yishan County and Luocheng County from Guangxi Zhuang Autonomous Region autonomously founded a mass autonomous organization of quasi-regime property—villager committee. From then on, administrative management system based on production brigade as of people’s commune began to collapse. At that time, the function of villager committee was just to assist the government to maintain public order. Similar mass organizations successively sprung up in rural areas in Hebei and Sichuan Province, and the functions of villager committee gradually transited to politics, economy, culture, etc. (Xu Yong, 2000). In 1982, Constitution further confirmed the legal status of villager committee, which offered legal evidence for villager autonomy. On June 1st 1988, Villager Committee Organization Law was officially put into force. After that, around 60% administrative villages primarily implemented villager autonomy. Upon the enactment of amended Villager Committee Organization Law in 1998, rural grassroots politics experienced drastic 1  In this section, Hu Bingchuan takes charge of  data analysis, and  Dang Guoying takes charge of the discussion of model outcomes. Please see Dang Guoying & Hu Bingchuan, Behavioral Logic of Peasants’ Political Participation, China Rural Survey, 2011 (3).

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historical transition in terms of democratic principles and civic behaviors. This was the most prominent change occurring in rural political life after the implementation of household contract responsibility system. From the trial implementation of Villager Committee Organization Law since 1988, overwhelming villages in China had experienced three-four times of villager committee election, and the normalization and democracy of election had been greatly promoted. How about independent rural residents’ voting behavioral mode and logic in this process? What is the effect of villager autonomy? Similar problems seemingly become serious academic research propositions. Literature Review and Research Thinking Human behavior economic analysis (Becker, 1976) emphasizes the trinity of maximum utility, market balance and preference stability, and therefore explains human behavior problems in economic society. Aiming at human behaviors in specific social activities, like human behavioral logic in political activities, Verba et al. (1978) put forward voters’ behavioral determination problem in American democratic politics, i.e., socioeconomic status (SES) model. The model mainly observes the influence of people’s socioeconomic status on political participation. Generally speaking, socioeconomic status roughly comprises income, education, occupation, family background and some other factors. Subsequent empirical studies will introduce more factors into the model. For instance, Rosenstone and Hansen (1993) considered political mobilization factor, insisting that all political parties’ political mobilization activities resulted in low voting rate and low political participation rate. Lien (1994) also adopted SES model to verify that Asian-Americans’ voting and political participation behaviors were non-related to education degree, income level, place of birth and other socioeconomic state, while Mexican-Americans’ political participation behaviors were significantly affected by these factors. On the basis of SES model, Leighley (1995) further explored the influence of political mobilization ability on political participation to raise improved standard SEM model, and listed the influence of age, gender, income and other factors on individual political participation from an empirical perspective. In terms of SES model assessment, Davis (1983) viewed that because of different social cultural characteristics, the influence of these factors hardly shared universality and consistency. In empirical research, SES model is explained in different ways about the reason of political

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participation behaviors. More importantly, from a more general perspective, SES model lacks explanatory power for some problems. Goldstein and Ridout (2002) used annual data to build a choice model, verifying that political mobilization activities had no substantial impacts on voting rate and the reason of the decline of political participation members was still unclear. Considering these limitations in SES model and improved standard SEM model of Leighley (1995), Whiteley (1995) adopted rational choice model (RCM) to analyze people’s prime motivation in political participation. One of the basic reasons why there are some activists in political parties is their political benefits exceed investment cost. But the research also admits that RCM can’t well explain the irrational behaviors of activists in condition of any conflict of political views. To some degree, the model explains the behavioral decision problem in political participation, and supplements SES model. It shows that political participation behaviors inside political parties are essentially different from group behaviors (such as political group behaviors) raised by Olson (1972). In addition, Leighley (1995) also assessed Whiteley’s analysis on political participation influence with RCM. He points out that though RCM effectively analyzes individual gains and losses in political participation process, it can’t explain the action in participation process. For this, SES model and RCM are empirical models at different levels. Villager autonomy in China has been studied for years. The research of Hsiao (1979) indicates that under the imperial system of Qing Dynasty, rural governance is not independently executed by community residents. On the contrary, most villages and sophisticated local organizations were set by the government (such as Bao-Jia system and Li-Jia system). In his opinion, Qing Dynasty strengthened the monitoring on its subjects by continuous power centralization. As national monitoring power hardly permeated into every corner of the empire, it was forced to rely on a set of quasi-administration system to supplement official ruling by rural residents. These grassroots quasi-administrative personnel acted as national agents. Therefore, every aspect of the rural society was at least theoretically under government regulation and instruction, and entire rural control system inevitably evolved into routines and even quasi-administration corruption. It caused damages to both the empire and rural residents.2 Befu (1965) derived similar conclusions from the research on Japan in 2  Please see Control and Reconciliation: Keywords in Xiao Gongquan’s Research on Rural China, cited from http://www.sociology.cass.cn, 2009.

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Edo Period, i.e., government governance played a vital role in rural governance. It is not unique to Japan. Countries in similar conditions also include China, Sri Lanka, Thailand and Greece. This research lays a foundation for “government efficiency theory” which claims that comparing with villager autonomy, the government is usually more efficient. Yao Yang et al. (2002) held similar opinions. As time passes by, traditional “government efficiency theory” gradually fades and receives more refutation. For instance, Wen Tiejun (2001) thought that either power centralization or democracy less acted on petty peasants. Beginning with Chinese peasants’ non-agricultural land rights and interests, Cai (2003) illustrated that peasants hardly protected their own rights and interests because of government power unconstraint and vulnerability of peasants. Therefore, there are prior (like tartar) and postmortem (like petition) handling means for such situation, in which the former is usually more effective but it possibly lacks rural elite organizations. Accordingly, he states that that villager election should be an effective way. Furthermore, Cai (2003) held that as rural elites were usually subordinate to government system, the meaning and effects of villager election were weakened to some degree. Consequently, grassroots elites in future Chinese rural politics should not only submit to peasants’ cognition, but also obtain government’s approval. Throughout related literature, foreign studies on villager autonomy and voting election focus more on subjects’ behavioral pattern and logic, and form a full set of systematic analysis models and research frameworks. While domestic studies on villager autonomy and rural grassroots democracy pay more attention to villager autonomy and government regulation efficiency. By contrast, the root leading to the discrepancy between two sorts of studies lies in the discrepancy of institutional design. With the continuous progress of rural grassroots democracy construction in China, discussion concerning villager autonomy and government regulation efficiency is put aside, and micro subjects’ behavioral pattern and behavioral logic becomes a major research proposition. Villager committee election, as a prime means of villager autonomy, is also an indispensable part of rural residents’ political participation. Based on SEM model, the research firstly analyzes the decisive factor of rural residents’ voting behavior in villager committee election. As a general rule, behavioral analysis involves quantitative dependent variable model. Logit model and Probit model based on maximum likelihood estimation enjoy an edge in efficiency. After all, affected by survey design, independent

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variables involved in the research also include few qualitative variables. Therefore, it is rather hard to explain the outcomes of Logit model, Probit model and other similar models. In order to better explain model results, the research consults Logit model results and takes weighted least squares (WLS) to remove the inherent heteroscedasticity problems in qualitative dependent variable models, and use WLS estimation results to explain Logit model estimate results. Unquestionably, SEM provides a rational framework for the analysis of rural residents’ voting behavior. Though collective behaviors may be the simple sum of individual behaviors, the logic of collective behaviors can’t be simply rendered as the sum of individual behavioral logic. Therefore, this research will further investigate factors affecting villager election voting rate at town level in combination with analysis on rural residents’ participation in villager committee election so as to better find out the similarities and differences between individual behavioral logic and collective behavioral logic. Explanation and Extended Discussion of Model Outcomes Introduction to analysis process is omitted here. Though model estimation outcomes seemingly contradict with empirical observation in general survey, it has profound implications. Therefore, profound explanation for research model estimation outcomes will help deepen cognition about rural political governance. 1. Explanation for Few Main Correlations

(a) What is the significant discrepancy between family annual income and per capita income in the influence on rural residents’ political participation? As displayed by model estimation outcomes, peasant households’ family annual income is not related to their political participation behaviors, while rural residents’ per capita income leaves significant influences on rural residents’ political participation degree. The author judges that such situation exactly reflects the political and economic relation ignored by people.

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Political participation passion3 is closely related to the marketization degree of a region (Dang Guoying, 1999). Per capita income level in a region constitutes a major indicator showing local marketization level. Because of this reason, in regions with high per capita income level, residents also have high political participation passion on average. In this survey, comparing with Henan Province and Ningxia Hui Autonomous Region, Guangdong Province is a fairly developed region with higher marketization degree and also higher rural residents’ political participation passion. Whereas, despite the huge income gap between peasant households, a region with high marketization degree naturally has higher rural residents’ political participation passion and vice versa. In addition, political participation passion mutually affects inside a community. This implies that political participation passion is not greatly varied among rural residents from communities with discrepant income level. This is the reason why we can’t discover significant correlation between household annual income and political participation passion in model estimation outcomes.

(b) Why is the correlation between rural residents’ education background and political participation passion rather weak? This theory has been well demonstrated by model estimation outcomes, i.e., the rise of democratic politics depends on social requirements for democratic politics, instead of so-called residents’ education background (Dang Guoying, 1999). “Education background” here in the model refers to the education year of residents. Strictly speaking, education year is different from cultural quality, as the latter includes residents’ cultural edification and public authority identity ability in the living environment. The main factor that maintains traditional squire autonomy is moral credibility, non-related to general residents’ education year. Under market competition context, the variability of competition enables people to act in a strange environment, and the

3  Political participation passion has the same implication with participation in villager committee voting election. As to model dependent variable “whether to join in villager committee voting election”, the closer the value approximates 1, the higher rural residents’ political participation passion, while the closer the value approximates 0, the lower rural residents’ political participation passion.

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c­ onstraint of traditional customs can’t satisfy people’s requirements to handle public affairs. Besides, it is costly to defend squire moral credibility in a competitive environment. As a result, only a legal environment is acceptable. Legal environment is featured by professionalization, with specialists working at legal affairs. Therefore, rural residents’ education year is not so important to the participation of villager committee election. Democratic political activities have low technical requirements, which means that illiterate voters can also give a vote. The key to the progress of democratic politics lies in the attitudes of social elite class. If social elite class disagrees that democratic politics increases personal rights and interests, it will not gain any progress. In general, social elite class more approves of competition and legal institution.





(c) Why is households’ health condition positively correlated with political participation passion? In present rural areas of China, households in poor health condition usually have poor living standards. This group is also the beneficiary of minimum living security policy. As found by the author in the survey, minimum living security work is rather arbitrary as rural residents have a lot of complaints about it. Village cadres’ style has direct influence on the life of this group. Therefore, this group has higher passion for villager committee election. (d) Why is households’ dwelling time in the village negatively correlated with political participation passion? The outcome has great theoretical decomposition value. Those households with long dwelling time in the village are mostly agricultural laborers. As agricultural laborers are mostly the old and women, their age and gender lead to the weak correlation with political participation passion, and their profession is in significant negative correlation with their political participation passion. The main reason should be ascribed to simple connection with agricultural production, high transparency of national policies, minor influences of village cadres’ administrative discretion on agricultural producers’ interests, as well as weak political awareness. For this, rural residents who live longer in the village throughout a year usually have lower political participation passion. (e) How to recognize the regional discrepancy of rural peasants’ political participation passion? The discrepancy of rural peasants’

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political participation passion is very remarkable among Guangdong Province, Henan Province and Ningxia Hui Autonomous Region. To be specific, rural residents in inland villages of Henan Province and Ningxia Hui Autonomous Region have obviously lower political participation passion than those in Guangdong Province. Above sections ascribe such discrepancy to per capita income level and marketization degree. Essentially, it is a problem about urbanization. As found by the survey in Guangdong rural areas, local agricultural added value just accounts for a small proportion of local gross production, and agricultural labor force also accounts for a small proportion of local gross labor force. In Guangdong Province, a majority of peasant households are no more peasant households in real sense. Especially in Huizhou, supposing the proportion of labor force employed in the city is taken as the indicator of urbanization rate, its urbanization rate has reached 80%. From this sense, rural residents’ political participation in fairly developed areas is actually urban residents’ political behavior problem. This point will be further discussed afterwards. 2. Extended Discussion

(a) Can traditional rural society be permeated by democratic politics? Research results do not support the view that communities at varying development levels generally have democratic political participation passion. According to the knowledge of the author, the outcomes possibly imply the support for the argument that “traditional rural society is hardly permeated by democratic politics” (Dang Guoying, 1999). In traditional rural society, the maintenance for village appearance primarily relies on patriarchal relation, limited public expenditures rely on squire donation and religion relief, while the disposal of internal affairs and other public affairs rely on all sorts of “volunteer”-alike squires. Such governance mode has lower cost than democratic politics governance mode. Some argue that traditional rural society is defined as “a society with no accumulation”. Similar view defines traditional rural society as a self-sufficient society. In such a society, there is basically no change in its production mode. Correspondingly, its public life is very simple. As public affairs are usually ­handled as per routines and customs, there is no need to discuss new public affairs.

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The application of this democratic politics principle featured by “minority subordination to majority” in traditional villages seems rather luxurious. Democratic politics applies more to a market-oriented society. The survey shows that the main goal for peasants to elect village cadres is to affect material benefits distribution and prevent village cadres from illegally appropriating collective belongings. But it just reveals that modern social relations begin to give impacts to traditional rural society, but does not mean that rural society has strong democratic politics demands. Across the world, the rule of democratic politics make a start in upper class and it takes much time to replace traditional rule in grassroots society. A country may have a democratic revolution, or a democratic constitution, but its social governance mode and democratic politics are completely non-­related. This is roughly the case in Indian society. For countries like America, the reformation of grassroots society also experiences an extremely far-flung process. (b) Reality and demands for democratic politics in Chinese rural areas. To be sure, reality transition is always in a gradual process, rather than a pure structure compliant with theorists’ definition. But theory is still meaningful: projection for gradual change is nothing but a condition in need of change of theoretical hypothesis so as to align theory with reality. Real rural society in China is obviously not a pure traditional society, but it is also not a complete marketization society. We can roughly claim that Chinese rural society is in a period which transitions from traditional rural society to marketization society, and correspondingly, Chinese rural society has growing higher demands for democratic politics. Backward villages more approach traditional rural society, and villages in developed areas more approach marketization society with growing high demands for democratic politics. Related statistical data prove that marketization degree in Chinese rural areas has been significantly promoted as of reform and opening up. The marketization degree in the east, middle and east has been gradually improved on the whole (Table 7.1).

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Table. 7.1  Market development condition in rural areas (unit: %) Nationwide East Central West Northeast Townships with integrated markets Among them: villages and towns with comprehensive markets with an annual transaction value of more than 10 million yuan Townships with professional markets Among them: towns and villages with professional markets with an annual transaction value of more than 10 million yuan Townships with specialized markets for agricultural products Among them: Villages and towns that have a professional market for agricultural products with an annual transaction value of more than 10 million yuan

68.4 23.9

78.8 36.9

73.7 25.9

59.0 15.7

69.5 20.2

28.2 10.5

36.0 19.0

38.5 12.4

18.2 4.7

24.2 9.6

23.0

27.8

33.9

14.7

16.5

7.6

13.4

9.4

3.3

6.4

Data source: State Statistics Bureau: Second National Agricultural Census Data Bulletin, cited from website: http://www.gov.cn/gzde/2008?02/22/content_897216.htm

Furthermore, more developed rural society easily evolves to urban society. When agriculture becomes a branch of urbanization labor division system, professional peasant households will be also involved into urban economic system as “suburban citizens”. Therefore, when we say that only developed rural society has demands for democratic politics, it is more rational to say urban society has demands for democratic politics. In another word, the expression of “developing rural democratic politics” is false in effect. It should be stated as “developing urban democratic politics”. Once a district generates demands for democratic politics, it has already become an urbanized society. Maybe we still call it a “rural society” according to conventions, but it is essentially in an urbanized social structure.

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3. Conclusion and Meaning of Policy Adjustment The main conclusion derived by the research is that Chinese rural areas’ demands for democratic politics are highly correlated with rural economy marketization degree. While extended discussion proves that the formation of rural society’s demands for democratic politics is accompanied by the collapse of rural society and also the replacement of urban society by rural society. Certainty, it is a progressive progress. But no matter how long this process is, the nature of transition will be never changed. Discussion in this section is indeed subversive in theory and political criticism. When typical rural society is supposed to realize democratic autonomy, it actually does not need democratic politics. When it finds that it requires democratic politics, it has become a marketized urban society. In a manner of speaking, “rural democratic governance” is a wired expression. This finding certainly has heuristic meaning to policy criticism which should be avoided. If the expression of “rural democratic governance” is still used among the public, people may find some day that professional peasant households’ residence districts in traditional main agricultural production areas have been contracted to the existence which does not support villager committee. Transformed villages in developed areas completely become part of the city. Enlightenment of the conclusion to related policy adjustment includes three points as below. Firstly, decision-makers should properly deal with all sorts of difficulties in the implementation of Villager Committee Organization Law. Considering the traditional property of Chinese rural areas to varying degrees, it is a little bit difficult to exercise democratic governance mode in these places. Such difficulty should not be simply attributable to cadres’ inaction and poor mass quality, nor should the government excessively go after the perfection of policies to duplicate organizations. Observation for the reality manifests that relative to rural governance, rural property right reform is possibly more important. What the government needs to do is to make villager committee just assume village public service functions, and totally peel off the management right over land and other collective assets to peasants or peasant economic organizations. In developed districts where villager committee has been transformed into neighborhood committee, public services may be deregulated to government agency. Experience in the Nanhai District and Shunde District of Foshan City, Guangdong Province illustrates that such practice

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is very positive. If village cadres’ power can be deregulated, more volunteers would be likely to act as grassroots cadres. This move will greatly vary rural social relations. Secondly, decision-makers should establish the concept of “transiting from rural governance to urban governance”. To be specific, the coverage area of urban governance had better be expanded to the whole society so that alleged “rural governance” is no more an independent problem. In this sense, more efforts should be made to achieve urban-rural basic service integration, instead of equalization. In order to adapt to such changes, urban governance mode also takes adjustment. Thirdly, the government may consider amending Urban Neighborhood Committee Organization Law to cover rural residents. Former Villager Committee Organization Law can be abolished upon its enactment.

7.3  Solve Rural Elderly Care Problem in China Speciality of Rural Elderly Care Problem Rural elderly care is faced with tough difficulties in the transition period of Chinese rural society. In traditional rural society, patriarchal relation and traditional morality are basic resources of peasants’ elderly care. The elderly care level of peasants under such conditions can’t be overestimated certainly. Usually, traditional society is one without savings and capital formation rate. Old people will not liberate from production activities as long as they can do labor. Or otherwise, they may fail to feed their families. It is impractical for them to enjoy old age in peace after reaching a age (say 60). Once losing basic labor ability, old people often depend on the support from younger generations and they themselves do not have resources for exchange except some rich families. Therefore, it is hard to maintain a long and dignified life for old people by morality. Such situation is often seen in folk works. Exactly, because of the reality of such situation, traditional rural society has proposed various elderly care-related moral doctrines. In Chinese rural areas, especially in North China where patriarchal relation is rather weak, old people hardly obtain sustained care after losing basic labor ability. The “new rural insurance” policy which has been generally implemented nationwide has special meaning to rural old people. Coupled with urban residents’ basic old-age pension plan, “new rural insurance” policy lays a firm foundation for the long-term development of rural elderly care

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unemployment. But limited by fee payment ability, it is hard for rural old people to raise basic pension level, and the regional gap of elderly care level between the city and the village is expected to widen. In the final analysis, the rise of peasants’ pension level still depends on the rise of income level. The final way out for peasants to raise their income level is to introduce peasants into modern labor division system and convert by-business petty peasants to professional peasant households. For this, it is imperative to introduce existing peasants into urban economic sectors, and promote urbanization rate. Once professional peasants’ income measures up to urban average level, they are possibly enjoying equal elderly care service with urban residents. But in a long time of period afterwards, a large part of by-business petty farmers who don’t turn to farmers nor find livelihood in the city will still face up the dilemma in elderly care. The elderly care for these peasants will pose a challenge to the Chinese society. On the other hand, peasants of this group are also accessible to other supporting resources. Land system reform will activate rural construction land, and reinforce financial support for them. Rural Construction Land Resources and Rural Elderly Care According to the research of geologists, the land suitable for human living and agriculture is around 6 billion mu, including 4.3 billion mu for construction of cities, towns and mines (including non-urban traffic construction land). Given population migration and possibility of village reclamation, it is still possible for China to remain 300 million mu non-­ agricultural construction land. In the long run, if 3mu construction land has been well utilized, the land demands required by future urbanization will be totally satisfied. Supposing the index in countries with high land use level is the benchmark, and output GDP of non-agricultural construction land per mu is 3 million RMB, 300 million mu land altogether produces 900 trillion RMB non-agricultural GDP, about 15 times more than national economic output. In 4.3 billion mu construction land, peasants nearly control 300 million mu collective construction land. Regardless of farms, reclamation land and waste villages, it is conservatively estimated that around 100 million mu rural construction land will be converted to urban construction land in the future. According to the general situation of land market value in marketization countries in which rent market value is about 30 trillion

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RMB, if land price is about 8 times of land rent, the market value of 100 million construction land is about 240 trillion RMB. If half the value is successively realized as pension fund in future 30 years, it will be a huge source of fund. To be sure, it is certainly an ideal situation. But if the government can upgrade land management concept and execute land system reform, it is no wonder the ideal becomes the reality. Rural elderly care is not simply related to capital, because it requires a series of other supporting policies. In addition to land system reform, attention should be paid to other three aspects. First of all, peasants who successively turn to non-agriculture industry should be retained in the city for elderly care so as to save land resources and improve elderly care conditions. Secondly, diversified elderly care service facilities should be built, such as hone-based elderly care service center, nursing home, terminal care agency, etc. Thirdly, the government should build elderly care cooperatives and innovate elderly financial service products. The author disagrees with the “pension by agriculture” concept proposed by some scholars. The government should not expect old people to provide competitive agricultural products by a plot of land. The alleged “pension by agriculture” in effect indicates sort of consumption behavior. If considerable farmland is incorporated into the “pension by agriculture” system by policies, great waste of land resources will be caused. Taking an extreme hypothesis for example, supposing 200 million households rent 4 mu farmland on average, probably 800 million mu farmland will be rented. And if the rent of 1 mu land is 500 RMB, most urban families obviously have enough financial power to afford it, but it will lower the efficiency of agriculture. Therefore, it is totally infeasible. It is proper to develop low-­ density residence districts in urban edge zones, but it is improper to apply “pension by agriculture” concept in any form.

7.4  Social Governance under Rural Population Decline Trend Rural population reduction is the main feature of urbanization. As of 1992, the urbanization rate of China increases by 1 percentage point year by year on average. If population mobility trend is measured by international definition for the village and the town, urbanization rate in China maybe much faster. Under such a background, rural social governance indeed runs into some new problems. By reference of comparative analysis results, though China has higher urbanization growth rate than other

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developed countries, there is no significant difference in the general trend. Developed countries’ social governance practice in condition of prompt rural population reduction should be learned by China. Rural Population Reduction Overview in Main Developed Countries According to the data of World Bank, the proportion of rural population in gross population in 2014 was 18.553% in America, 6.979% in Japan, 24.906% in Germany, 17.655% in Britain and 20.711%in France. In 1700, urbanization rate in America before independence was only 7%. Bu the proportion rose up to 35.1% in 1890. From the late eighteenth century to the 1970s, America stepped into the stage of fast urbanization. Urbanization rate exceeded 50% in 1920 and 73.5% in 1970. After the 1970s, America became a highly urbanized society. In post-World War II days, American suburbanization realized large-scale expansion. Residence-­ centered suburbanization in the 50s transited to industry and office-­ centered suburbanization in the 60s and 70s. In 1970, American suburban population exceeded downtown population, and also non-downtown population. American suburbanization is the combined result of objective demands, market economy and government policy.4 It just takes decades of years for Japan to reach the urbanization level of developed western countries. After the 1990s, Japanese urbanization realized stable development. From 1920 to 1946, urbanization level rose from 18% to 53%. With unprecedented economic growth after World War II, urbanization level rose from 27.8% in 1945 to 72% in 1970. In 1991, population in less populous areas of Japan made up 6.5% of gross population.5 The urbanization process of Britain began in the mid-eighteenth century concurrent with its industrialization revolution. In early eighteenth century, urban population simply accounted for 20%–25% of gross population, By 1801, the figure rose up to 33%. In 1851, British urban population made up 54% of gross population. Till late nineteenth century, 70% British population lived in the city. Britain hereby became the first country 4  Li Feng, Foreign Urbanization Mode and Its Gain and Loss (3)-Laissez-faire Urbanization in America, Urban-rural Construction, 2005 (8). 5  Synth, Agriculture Theory, translated by Zhang Yulin et  al., China Renmin University Press, 2003, pp. 205–206.

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which had realized urbanization in the world. France had 10% urban population in 1800 and 35% in 1880. France didn’t realize urbanization until 1931. From 1871 to 1910, Germany took nearly 40  years to realize urbanization.6 Three Modes and Problems of Population Layout It is generally acknowledged that American population layout suburbanization, Japanese rural population overcrowding and European small city development mode connecting the city and the village are three different modes under great urbanization trend. Related scholars propose different reviews about the three modes, no lack of opposite opinions. Some consider that American suburbanization also gives rise to a series of problem while narrowing the gap between the city and the suburb and between villages, like severe waste of land resources, high economic cost, growing serious destruction of ecological environment, huge consumption of resources, intensification of wealth gap, etc.7 Population overcrowding in Japan triggers some social problems. Firstly, overcrowding not only leads to population reduction in some areas, but also accelerates local change of population structure and old aging process. Secondly, overcrowding accelerates old aging process so that social security becomes a serious social problem in many overcrowding areas. Thirdly, in overcrowding areas, social public service facilities’ functions related to residents’ daily life like medical treatment, education and administrative service begin to fade away, and related service level continually decreases, which directly lowers local living standards. Fourthly, population outflow in overcrowding areas is mostly middle school graduates and other laborers of proper age, which leads to the sharp reduction of local labor force and restricts local economic growth. Besides that, overcrowding also triggers sub-replacement fertility and many other social problems.8

6  Tian Dewen, Enlightenment of European Urbanization History, Contemporary World, 2013 (6). 7  Li Feng, Foreign Urbanization Mode and Its Gain and Loss (3)-Laissez-faire Urbanization in America, Urban-rural Construction, 2005 (8). 8  Rao Chuankun, Japanese Rural Overcrowding Dynamic Mechanism and Policy Enlightenment to Chinese Rural Construction, Journal of Zhejiang University (social science edition), 2007 (6).

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The urbanization in main European countries preserves a large batch of small cities (large cities in the eyes of Europeans). Some villages and towns are transformed to cities with habitable living conditions and humanistic environment. Even residence districts with few hundreds of people can create beautiful, comfortable and habitable environment proper for living, life and employment. Professional peasant households in Europe mostly live in dispersion and hold onto their own farms. Few Opinions About Rural Governance Experience in Developed Economic Entities 1. Does Rural Governance in Developed Economic Entities Have Special Meaning? According to related research literature and exchange with international professionals, it can be easily seen that except Japan, developed economic entities rarely have formulated a full set of special rural governance policies. If rural governance policy is taken as government public goods supply policy for rural areas, it is easy to find that fundamental public goods supply policy is universal across the city and the village. There is no urban-rural social governance policy with overt dual-structure characteristics. Policies related to rural governance are mostly combined with environment policy, land use policy and agriculture policy. To be sure, it does not mean that the rural society in developed economic entities has no speciality. We tend to ascribe such speciality to historical traditions. Interpreting such historical traditions is more meaningful to recognize the rural society in contemporary developed economic entities. 2. Is Government Intervention of Population Mobility a Good Public Policy? Generally speaking, European countries and America rarely intervene spontaneous population mobility, nor take immigration policies to handle rural poverty because of some special causes. For instance, affected by religion and customs, rural residents in some areas of America are reluctant to apply modern production technologies in agricultural production, and get involved in social labor division. They mostly live in poverty, but American government has not helped them improve living standards by “overall progress”, “immigration” or other poverty relief policies.

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The Japanese government has taken a series of measures to dispose rural overcrowding, but it is narrowly successful. In 1970, Japan enacted Practices for Emergency in Overcrowding Areas, with a view of promoting industrial development and infrastructure construction to ensure people’s minimum living standards, and meantime prohibiting population reduction. In 1977, aiming at overcrowding villages in the mountainous area, the Japanese government formulated Third National Land Comprehensive Development Plan to encourage full exploitation of farmland, forest, river course, coast, featured culture, ancient building, and other natural and humanistic environment, create local characteristics mountainous village landscape, reinforce the development of local resources and revitalize local economy. The Japanese government also formulated Agricultural Regional Revitalization Law to encourage the development of featured tourism leisure industry. In 2000, the Japanese government formulated Special Measures for Local Autonomy in Overcrowding Areas, specifically stressing the importance to reinforce the independence of overcrowding areas, and promote sustainability. According to our communication with Japanese experts, these practices of Japanese government did not gain remarkable progress. As commented by one famous Japanese planner in the communication with the author, Japanese government’s supporting policy for rural tourism industry does more harm than good, and many lessons of failure should be learned. Japanese rural tourism demands can’t support the normal operation of Japanese rural tourism facilities. Excessive surplus of tourism resources actually lowers Japanese peasants’ income, and also delays the modernization progress of Japanese agriculture. It is worth noticing here that some scholars also criticize American rural tourism industry. Based on the analysis on American rural poverty rate variation in 1990–2000, Deller (2010) adopted geographical weighting regression method to focus on the spatial discrepancy between rural tourism and leisure in changing poverty rate. As proved by the conclusion, in Deller’s research scope, the role of rural leisure and tourism is rather limited in explaining poverty rate changes, and the spatial discrepancy is rather trivial.9 3. What Is Effective Rural Autonomy Policy? Contemporary law-based countries universally apply local autonomy principles. This is also true for rural communities. No attention has been paid to the legal implications of autonomy here. This section talks about 9  Deller, S., Rural Poverty, Tourism and Spatial Heterogeneity. Annals of Tourism Research, 2010 (37): 180–205.

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some real occasions of rural autonomy. According to the preliminary research of the author, at least some small residence districts in European and American rural areas are under the governance of “incomplete government”. These residents satisfy their demands for public goods via different channels, and get rid of government governance under the same framework. For instance, in America, churches, schools, cooperatives and other agencies all probably provide public services for rural residents, and county government may provide them with infrastructure services. They take part in political activities in the electoral districts, and adjacent municipal government may assume election-related service affairs. When farmers across a district constitute an acquaintance society, people may also afford certain public service mutually. In such acquaintance society structure, there possibly exists certain order, or service, short of formal public authority so that people do not have to pay tax for it. Such condition forces European and American farmers to preserve conservative political propensity, which has become the political foundation for related parties. Such political propensity would reinforce farmers’ sharp attitudes to protect farmland and revolt government intervention. It explains why there still exists significant traditional rural society in highly developed countries such as America. 4. What Kind of Speciality Is Required by Rural Public Policy? Public policies implemented by European and American developed economic entities in rural areas have no significant urban-rural discrepancy in basic civic rights, such as election policy, social security policy and public basic education policy. However, due to the speciality of rural population layout and agricultural production, government public policies also have some speciality ins some aspects. Firstly, agricultural support policy is rather miscellaneous, but it generally pushes forward agricultural modernization, increases peasants’ income and supports the export of agricultural products. Secondly, as to rural infrastructure construction policy, we notice that developed countries in Europe and America do not stress the universal requirement of road, power transmission and other infrastructure. For instance, rural roads are mostly simply paved as they are mainly used for agricultural machinery purposes. The third concern is environmental policy. Developed economic entities usually have higher requirements on rural environment, encourage the development of low-­emission agricultural technologies and manage to protect natural ecological system.

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For instance, European rural ecological green net plan takes the preservation of forest, wetland, pond, grassland and habitat of other wild creatures as the priority, supports farmland environment for intensive use, and avoids the isolation, dispersion and reduction of creatures’ habitats to remove obstacles of wild creatures’ biological activities. At the same time, as there are few residents in the village, domestic emission may be naturally degraded. Moreover, government’s household emission requirement on peasant households is not as rigorous as that on the city. The fourth concern is residence district layout policy. The formation of urban-­rural layout in European countries and America is basically a natural process. Together with the progressive progress of urbanization, agricultural professionalism level has been continually promoted, and professional peasant households in rural areas have increasingly large arable area and live in dispersion. Disperse residence of professional peasant households makes convenience for cultivation, while residents away from agriculture who live in the city may also enjoy benefits of the city. However, such classified living mode can’t be spontaneously formed in the short run. In countries which has realized prompt modernization, professional peasant households possibly live near to other non-agricultural residents. As professional peasant households’ production equipment has special requirements on land use, their daily production activities possibly generate negative externality to other residents. For instance, professional peasant households have obviously different requirements on roads suitable for vehicles and agricultural machinery from urban residents. If the government builds infrastructure according to city standards, the benefits of investment will be also lowered. Therefore, some countries, like Denmark, have special laws to request that farmers’ permanent residence must be their own farms. Similar regulations reinforce the disperse living pattern in rural areas. 5. How to Promote Urban-Rural Deep Cooperation by Developing Multi-Functional Agriculture? Though agricultural products’ market transactions supported by traditional logistics greatly promote agricultural economic efficiency, its drawback is the peasant households hardly meet with urban consumers so that urban residents and farmers easily have dissents in concept and lifestyle. In recent years, driven by the folk force, such situation is changing now. For instance, there is a tourism association comprising 50 tourism companies in Sweden that supports visitors to profoundly join in agricultural

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producers’ operation and life. It introduces visitors to visit private forest, or helps them rent farmhouse and fishing-boat, handle fishing license and experience agricultural production activities. Additionally, visitors are also able to join in conferences of rural communities, and raise related improvement suggestions to local residents.10

7.5  Meaning of Municipality Reform Exploration “Number One Document” of the central government in 2015 raises the requirement of innovating and improving rural governance mechanism, claiming that the government should “expand villager group-based villager autonomy experimental units, continually develop community-based villager autonomy experimental units, and explore effective villager autonomy realization form in accordance with local reality”. Qingyuan City of Guangdong Province has made an attempt in this regard. In May 2015, CASS Rural Development Research Institute Research Subject made a survey on villages in Qingyuan City, and analyzed related background materials. This section briefly outlined our research conclusions and related reflection. Deregulation Reform Background and Necessity under Autonomy In most historical periods after 1949, basic management organization in Chinese rural areas was successively production cooperative (primary cooperative and senior cooperative), production brigade and administrative village. The building and revocation of production cooperatives are decided by county-level people’s government with no specific normative requirements. Therefore, the quantity of cooperative greatly varies. In 1960, there were 464,000 production brigades. In 1994, the quantity of administrative villages totaled the maximum as 1.007 million. In 2013, the quantity of villager committee was reduced to 589,000. At present, rural land collective ownership unit in Chinese rural areas is mostly villager group which evolves from production brigade under people’ commune system. A small part of collective ownership units in China are villager committees. In addition, collective land in some areas, like Foshan of Guangdong, is owned by villager committee and villager group. 10  European Parliament. Directorate-General for Research. Working Paper, European Parliament L-2929 Luxembourg.

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Only collective property right in few areas is owned by villager group, villager committee and village-level people’s government. In most cases, rural administrative villages in China do not have the property of “community”. As indicated by officials statistics, if natural village is viewed as rural community, there are 3.3 natural villages in rural administrative villages on average. If villager group is viewed as rural community, there are 8 rural communities in each administrative village. In our opinion, considering the fuzzy boundary between natural villages and the administrative intervention imposed on villager group, natural village and villager group are no more rural communities in strict sense, Such situation indicates the difficulty for the government to decide autonomy setting deregulation with administrative sweeping approach. In 2013, the average registered population and permanent population in each administrative village in Chinese rural areas was respectively 1.487 and 1069. As villager autonomy unit, the scale is fairly. To be specific, the average population scale in administrative villages in fairly developed areas is larger, and the scale of administrative villages in mountain area is far above the average level. As proved by our survey, present villager autonomy setting is defective because of its large coverage of population and district. First of all, cadres in administrative villages busy with county government affairs do not have enough time to respond to rural residents’ demands for community public services. Secondly, social management resources and service resources contained in natural villages or villager groups are not used effectively or even marginalized, which goes against the improvement of rural social service quality and rural social stability. Thirdly, the government encounters plenty of problems in rationalizing rural public services, as public service expenditure to be assumed by the government is transferred to village collective economy. This move not only indirectly aggravates peasants’ burdens, but also prohibits rural property right reform and delays rural economic growth. Aiming at above problems, some local governments in China reform villager autonomy setting, by properly shrinking autonomy district and population coverage, and decomposing existing autonomy into few autonomies. New autonomy organization is usually set in natural villages or villager groups. The government may also allow fewer residence districts or groups to establish one autonomy organization as per the will of peasants. As shown by our survey in Qingyuan, Guangdong, there are some benefits brought about by the deregulation of villager autonomy setting.

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Firstly, the order in rural society significantly turns up. Upon the implementation of reform, mass accidents in rural areas have been greatly decreased, the frequency of petitioning and complaint has dropped down, and villagers have stronger will to solve conflicts and reconcile interests relations throughout democratic negotiation. Secondly, public service and social management efficiency have been significantly improved. In villages of Qingyuan, Guangdong Province, cadres usually work with no remuneration in the new autonomy organizations established after deregulation reform. As village cadres can solve tough problems in effective way, village construction expenditures have been saved to a large extent. Thirdly, the use efficiency of financial fund for agriculture is remarkably raised. In rural experimental units in Qingyuan, Guangdong Province, the autonomy organization raises fund use efficiency by soliciting opinions over the rational use of minor fund, and investing the fund in emergency fields according to the will of peasants. Fourthly, rural land resource use efficiency is remarkably raised. One of the key factors constraining agricultural modernization is poor land scale operation conditions, disperse land plot property right subject and high negotiation cost for intensive land use. The deregulation of villager autonomy setting helps solve this problem. By March 2015, Yangshan County, Guangdong Province had integrated over 200,000 mu land. At the same time, Yingde City integrated over 6 million mu land. Autonomy organizations play a leading role after the deregulation reform. Meaning and Function of Autonomy Setting Deregulation 1. Rural Autonomy Deregulation Reform Conforms to Social Governance Law Public goods includes community public goods and outside-­community public goods (can be further stratified). We used to take on all public goods, but community public goods supply system has not been established yet. Taking modern society as the subject, so-called community, refers to the acquaintance society unit in a small population scale which is formed by residents for residence-related public goals by informal rules like conventions and moral pressures in certain district.

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Because of the speciality of agricultural production and the implementation of collective economic system in China, rural communities need to handle complicated public affairs in 12 aspects, including village appearance, habitable environment, neighborhood relation, festival customs, production mutual assistance, poverty relief, external contact, land arrangement, property right protection, ancestral sacrifice, enlightenment learning and public land use. Some common services usually commented by the public, like social security, also have the property of public goods, but they do not belong to community public goods. As the key factor affecting habitable environment, rural drainage is a public affair. But tap water supply can be basically viewed as a private affair. The distinction between public goods and private goods is decided by whether goods “externality” problem can be internalized by market transactions. In a traditional society, community public goods in above 12 aspects are mostly provided by communities, and more importantly, the supply of goods is basically free of charge. This means that residents generally do not have to pay tax for it. In contemporary China, the government has actually intervened community public life to a large extent. In public affairs in above 12 aspects, probably the government is only free in festival customs and ancestry sacrifice. But public goods supply principle reveals that the formation or supply of these public goods should had better be realized inside the community. It is the foremost principle ensuring public goods supply efficiency. Larger scope of public field implies fewer opportunistic risks and lower “lift-­ taking” cost. Therefore, when community governance resources are marginalized, and the government or derivative agency, like villager committee, tries to provide public goods supposed to be offered by the community, there will generate extensive “lift-taking” behaviors among residents. It is a low-efficiency public governance mode. To a large degree, autonomy organization deregulation avoids such low-efficiency mechanism, and forms a high-efficient small acquaintance society unit-based public goods supply mechanism. This mechanism has three implications. Firstly, moral pressures constrain peasant households. But in a stranger society, moral pressures do not play a role. Secondly, public goods “lift-taking” consumption forms other low-cost constraint besides moral pressures. For instance, villagers can sanction minority peasant households who refuse to pay and exclude them from the beneficiary list of public goods. In this way, residents’ “lift-taking” cost is greatly increased. However, if resident scale is excessively large, such spontaneous

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sanction method will be too high to be implemented. Thirdly, acquaintance society in rural areas will form special pressures, i.e., patriarchal pressures, that force residents to obey specific preset rules. We learn from the survey that in annual religious sacrifice, and daily ritual activities like wedding ceremony and funerals, villagers’ evaluation can be faithfully expressed by the courteous reception. Such pressures far surmount the pressures imposed by outside-community village cadre on someone. 2. Rural Autonomy Deregulation Management Resources

Reform

Fully

Uses

Rural

Pursuant to the survey, in rural communities, a group of able persons spontaneously control community public life. It can be roughly judged that these able persons are much like middlemen in traditional rural society who leave critical influences on rural society.11 However, if an administrative village is excessively large, this group of people will be marginalize din effect and excluded from formal system of social governance. When the government pays high attention to this group of people, they possibly become the cooperators of the government. But when the government ignores them, they possibly add resistance to government work and even the planner of massive accidents. As a matter of fact, rural leaders deserve trust. As long as the government indeed serves residents’ entire interests, the finalization of working goals is not decided by the amount of public expenditures, but the practitioner of government policy. Therefore, one of the secrets to the success of autonomy setting deregulation reform is that lots of rural social public affairs management resources that have not been focused and used begin to cooperate with the government and play an important role. 3. Rural Autonomy Deregulation Reform Reduces Rural Social Governance Cost Autonomy setting deregulation reform greatly lowers rural social governance cost. The formation of moral pressures and customs usually does not request the administrative cost from government. In traditional rural society of China, squires who play a role in social governance never charge 11  Chinese Rural Habits Survey and Publication Press, Chinese Rural Habits Survey (Volume III), Yanbo Bookstore, 1955, pp. 97–98.

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any remuneration. Such condition has been recorded in considerable literature. In European countries and America, officials elected by people in grassroots autonomy, like villages and small cities, do not charge any remuneration, except special secretary or professional manager (government secretary in charge of daily affairs). Roughly speaking, there exists a rational “volunteer efficacy” mechanism in grassroots community governance. In above-mentioned 12 rural community public affairs, most affairs can be settled by moral pressures and customs. In particular, once affairs like village appearance, neighborhood relation, festival customs, production mutual assistance, poverty relief, and ancestral sacrifice form favorable customs, the village will be maintained stable and community leaders do not have to pay more energy for it. While other affairs, like habitable environment, external contact, land arrangement, property right protection, ancestral sacrifice, enlightenment learning and public land use request the government to create and run supporting systems. If social institutional environment is in a good state, village cadres do not have to pay more energy for it. As indicated by our survey, community cadres now still have to pay much time and energy for village appearance, land arrangement and property right protection. But such condition is temporary and transit, because community cadres’ workload is expected to greatly alleviated once government reform work is implemented. Reform Principles and Operation Points In our opinion, rural autonomy setting deregulation has generalizability across the country. 1. Few Principles of Rural Autonomy Setting Deregulation

(a) Separation of Politics and Economy

The basic law of operation shows that public services and collective assets operation are totally two different things. If different channels could be proposed to further the development of the two independently, they will be in proper place. We hold the opinion that villager autonomy setting deregulation is not necessarily associated with collective ownership practitioner. Existing villager group, is the basic practitioner of collective ownership, but the real condition is more sophisticated than expectation. Taking

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Pearl River Delta for example, “two-level ownership” is not uncommon, and some administrative villages also possess collective assets.12 In combination with former surveys, we notice that when collective economy is weak, villager group cadres’ public service functions will separate from collective assets operation and management functions. Such separation proves to do favor to collective assets management, and to some degree, avoids the intervention of administrative public power for collective assets operation. Collective economy income may satisfy public expenditures by cutting down the fund granted to autonomy organizations. In the long run, village public services must form a public budget-supported public service operation mechanism. Collective assets operation ought to conform to economic law. In the long run, if the government wants to introduce collective assets into the market, it must shape up the symmetrical relation among investment, risk, responsibility and earnings. This requests the government to incorporate modern joint-stock company governance principles into collective assets operation system, convert present “joint ownership” (deformed in most cases) mode to “share joint ownership” mode and realize cross-­community share operation. Following this mode, it is no need to place public service principles inside the organization. As to public services, as discussed in this chapter, run according to another set of laws. (b) Law-based Autonomy The foremost thing to be avoided is to intervene more village affairs in autonomy setting deregulation reform. In contemporary law-based countries, autonomy principle has been universally practised. The autonomy principle includes four principles. First of all, private and private agencies can dispose their own affairs, including some public affairs, with maximum discretion. Secondly, in national and local governance systems, public affairs should be handed over to subordinate public agencies or local governments to the uttermost, and superior public agencies or governments only handle those unsettled affairs. Thirdly, any legislative agency should possess legislative right. Fourthly, governments at all levels are equal 12  In former surveys, we have learned that in the rural areas of Pearl River Delta, those administrative villages which do not have operational assets form “dual-ownership” property right structure by gaining all collective assets through former township enterprise accumulation, purchase of villager groups’ land and grasping villager groups’ land.

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before the law. Laws formulated by subordinate legislative agencies have legal binding force as long as they do not violate host law. Moreover, superior legislative agency must obey the laws formulated by subordinate legislative agencies, except that the Constitution Court or Superior Court deprives the legal binding force of laws. (c) Adaptability to local Conditions Both the level and population scale coverage in villager autonomy setting deregulation reform are of great importance, but there is no need for the central or provincial government to implement “sweeping approach”. For instance, deregulated autonomy is not necessarily deemed as natural villages for all, because villages in some places have no natural village settlements. Moreover, it is not essential for the government to define each villager group as the new autonomy, because such villager group is rather small in some places. In line with the implication of “community”, the practice for government to determine which rural group belongs to community, or a which rural group is autonomy setting carrier is not feasible nor essential. The best way is to conduct more meticulous work, widely solicit peasants’ opinions and determine autonomy deregulation degree by overwhelming peasants’ opinions. (d) Equal Service Consistent with the basic criterion of modern civilization, public service is oriented towards all residents within a district. In Chinese rural communities, public service is unequal between community aborigines and migrant workers and their family members. Therefore, the government should take the opportunity of reform to clearly demand rural autonomy public services to target at all residents, including external permanent residents, and stick to the equality principle. As long as the government separates politics from economy, and gives share dividend to some aborigines, it is easy to practise equal service principle. 2. Concrete Instructions in Rural Autonomy Setting Deregulation Reform Operation Firstly, in principle, autonomy setting deregulation degree should be determined by overwhelming peasants’ opinions. As a macroscopic guider,

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the government just needs to offer general reference. By and large, after the implementation of autonomy setting deregulation, population coverage had better be set 300–100. Under this instruction, local governments may make breakthroughs in practice within this scope. Secondly, autonomy agency may not keep pace with collective economy practitioner in terms of district and population coverage. Thirdly, few conditions should be taken into account for autonomy setting deregulation and related adjustment. In history, administrative villages composed of few separate natural villages in space can be dismantled into few autonomy organizations. Moreover, the government is supposed to possibly set up one autonomy inside a natural village. After obtaining the consent from overwhelming peasants, those communities which have been improperly merged as agriculture-oriented villages should be recovered as rural autonomy organizations. For those in large scale, the government should restore them as smaller autonomy organizations according to the history. Except special circumstances, the permanent resident scale of each autonomy organization should be over 100. In mountainous areas and hills in which peasants live in disperse, autonomy organizations should be established around large residence districts or natural villages in the principle of facilitating peasants to enjoy public services and spontaneously handle community affairs. The permanent resident scale of each autonomy organization may be below 100. And administrative villages used to be merged in these districts should be properly dismantled. Fourthly, “village-converted residence” used to be practised by local governments do not necessarily implement “dual system in one village” in the future. In communities in which most residents are no more farmers and have their own listed villager committee, related institutional setting can consult Neighborhood Committee Organization Law. Fifthly, partition is not advocated under the following circumstances: Those administrative villages can be preserved if they have large permanent population scale and permanent residents’ agricultural income accounts for one tenth of gross income. Those autonomy organizations can be preserved if they have large permanent population scale and migrant workers reach over half community members. Under these circumstances, it is feasible to implement “village-converted residence” system.

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If administrative villages have a large population scale, and village social management is in a favorable state, the government does not have to separate these villages unless peasants apply to deregulate autonomy organization setting. 3. Few Problems about Deepening Rural Autonomy Setting Deregulation Reform In nature, autonomy setting deregulation reform is a radical work in Chinese social governance modernization. When the work begins, the government has to formulate supporting reform measures to deepen the reform. (a) Improve Urban-Rural Demarcation Laws Given numerous policy operation difficulties caused by the vague urban-rural concept, it has great practical meaning to determine the concept of the village and the city. There still lack uniform urban-rural demarcation standards in developed countries by now, but foreign scholars’ socioeconomic theoretical studies still provide great enlightenment to the formation of urban-rural demarcation legislative standard in China. The formation of urban-rural population mobility balance is tenable in theory. Therefore, the government may outline the basic trend of urban-rural population distribution in China by reference to such balance analysis. According to our research,13 the setting condition of minimum city in China may be stated as below: if gross population scale inside a district totals 50,000, population density per sq.km in populous district exceeds 8000, gross coverage is less than 4 sq.km, and this district is separate from local city or other populous districts, the government may set a city here. Above threshold may be broadened after city setting system has been implemented for a period of time. For instance, gross population scale may be reduced to 15,000, and the coverage of populous district may be reduced to 1 sq.km. Furthermore, provincial people’s government or People’s Congress may spontaneously determine the lower limit of city setting.

13  Dang Guoying, The Definition of City and Country and Its Meaning in Politics[J], Academic Monthly, 2015 (6).

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If the city is rationally viewed as large-scale dotted residence district, instead of administrative jurisdiction, then all districts inside the small cities can be determined as rural area. (b) Reform Public Finance System Existing financial system in China is not helpful to budget balance between grassroots government and rural autonomy organizations. If above-mentioned small city setting system can be put into force, it is also imperative to establish public finance for small cities. To be specific, small cities may determine their own categories of tax, and join in national tax distribution system. Rural autonomy may not necessarily determine their own categories of tax, but it is allowed to take charges subject to strict norms. External services purchased by superior government from autonomy have to submit to strict norms and related expenditure supervision. (c) Develop Rural Crosswise Social Economic Organization Our recent survey illustrates that in addition to all sorts of statutory organizations, villages may establish charity organizations, recreation organizations, homeland construction organizations, and law self-help organizations. In particular, the government needs to encourage peasants to form professional cooperatives. But it does not mean that every village is proper for the development of one or few cooperatives. On the contrary, the government should encourage the cross-district development of cooperatives, and support cooperatives to afford public services for communities. (d) Take Urbanization as the Necessity of Rural Governance Poor peasants hardly support the building of modern beautiful villages. Peasants’ prosperity must depend on rural modernization so that peasants are able to transit to professional peasant households. China is expected to realize the rough income equality between rural and urban residents when urbanization rate reaches around 75%. The finalization of this goal not only means massive migration of peasants to the city, but also the disappearance of lots of villages or reduction to small residence districts for professional peasant households. Meantime, a few villages either evolve to small cities or professional villages. Such condition implies a huge waste to

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be caused by “new rural construction” in millions of natural villages. In this sense, there is no need to worry about “hollow village” problem on a large scale. From another perspective, if left-behind villagers’ public services are totally ignored, especially left-behind children and left-behind elderly problem, the government may also violate socialist countries’ governance principles. However, these problems can be gradually overcome by supporting reform, and should not be used as the excuse to deny urbanization. On the premise of peasants’ freewill, the government should help the poor directly migrate to the city as much as possible. The case in China is different from that in Europe and America because no peasants stay in the village in the name of religion. In the future, Chinese villages will probably be dominated by the middle class and peasants are more likely to settle down in the city. In reality, such population layout is more conducive to lowering social poverty relief cost and improving social equality. (e) Establish Rural Governance Mechanism Featured by Urban-rural Integration and Focus on Discrepancy This section hereby makes a rough introduction to rural governance features under agricultural modernization conditions. First of all, under agricultural modernization conditions, peasants’ community features are no more significant. Considerable villages will disappear and peasants will live in dispersion. Few agriculture-related population settlements will become primary agricultural product processing and trading centers, in a social structure similar to small city. Few villages will evolve to tourist villages with loose connection with agriculture. Secondly, the country will be the leading supplier of agriculture, and the relation between peasant households and the country will turn more intimate. Elderly care and medical security provided by the country greatly devastate traditional patriarchal relations. Thirdly, peasant households’ consortium turns increasingly professional to form all kinds of special cooperatives and undertake certain public service functions. Fourthly, as peasant households live in dispersion, and discharge limited life emissions, the country does not have high environmental standards on peasant households. Peasant households’ life emissions are mostly converted by natural force. This requests peasant households to be highly self-disciplined in daily life. Apart from above features, there is no significant discrepancy between

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peasant households and urban residents in public field. In this sense, rural governance is eventually a fading concept. Fifthly, the government is expected to gradually unify urban and rural social governance. The distinction between villager committee and neighborhood committee had better be canceled. It is sensible for the government to enact related laws, like Neighborhood Committee Organization Law. Furthermore, the government may try to establish most organic towns and few small villages as “county-controlled cities”. With the advancement of agricultural modernization, existing natural villages can be progressively converted to small professional peasant residence districts subordinate to “county-controlled cities” so that peasant households become ordinary residents. On this basis, an urban-rural social governance framework centered around democratic autonomy should be fabricated.

CHAPTER 8

Urban-Rural Land Planning Management Reform

Urban-rural land planning management system reform has not held high attention across the whole society by now. Conventional comprehension about land ownership reform is rather too narrow. The goal of ownership reform is to promote the rationalization of land interests formation and distribution. The significant role of the country in land interests formation and distribution is decided by the externality of land use. Inadequate land planning management system easily forces the government to handle land affairs by direct control, which in turn adds difficulties to ownership reform. This rests in the root of land system reform plight for years.

8.1   Proposal of Questions The so-called land planning proposed in this chapter refers to a series of binding provisions enacted by the government or other authorities on land use purpose and means in a specific district. Land planning management system means the power space set by the government or other authorities for land planning formation, execution and monitoring, as well as power distribution relations between governments at all levels. By virtue of such control and regulation, public problems caused by land marketization use may be solved. Land planning management system reform constitutes a major part in entire land system reform. Land system reform is composed of three © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 D. Ying, W. Wu, A Study of China’s Urban-Rural Integration Development, The Great Transformation of China, https://doi.org/10.1007/978-981-19-2756-0_8

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aspects, i.e., clarifying land ownership; facilitating the marketization of land factors; and reforming government land management system. The reform decided at the Third Plenary Session of the 18th CPC Central Committee primarily involves the former two aspects. As a matter of fact, the reform of government land management system, including land planning management system, has significant importance. We are of the opinion that government land planning management system must be reconstructed, but it is not feasible to simply remove the power of central government in land planning management. The orientation of reform should be straightening out the various interests relations formed by land resources, changing present irrational land planning management authority allocation pattern and building government land planning management system up to market economy requirements. Main drawbacks in existing government land planning management system may be presented by the following three points. Firstly, concentration of power which depends on mandatory directives as management tools greatly restrains local governments’ initiative in the rational use of land resources. Secondly, unscientific government participation in land planning management affects land use efficiency. Thirdly, as local governments now fail to perform land planning management functions according to the requirements of market economy, land planning management legalization conditions severely run counter to practical demands. At present, ownership reform, market mechanism foundation and government land management system restructuring are interdependent, which means that other reforms will be fruitless or run across bottlenecks in breakthrough as long as any one of them lags behind. In case of the misplacement of land ownership reform, it is impossible to form main bargaining subjects responsible for their own interests, and land factors market will not operate in line with market mechanism. On the contrary, even if greater efforts have been made to push forward land ownership reform, like realizing perpetual rural ownership reform or issuing related certificates to peasants, but the government still fails to establish a sound, uniform and equal land market, property value will be significantly discounted. In such case, it is meaningless to clarify property ownership. Likewise, government inaction in land management system restructuring and reform will also deprive the meaning of land ownership reform

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and land market system building. Essentially, government land management right is nothing but the segmentation of property. Either excessive government power or high uncertainty in power execution greatly adds up the transaction cost in land market, and even leads to land property depreciation and distortion in land market. It is rather difficult to fully carry out land ownership reform under the condition of unclear land planning management reform thinking. Upon the enactment of land reform plan at the Third Plenary Session of the 18th CPC Central Committee, land reform plan gives rise to a heated sensation. According to the decision of the Central Government, there shall form a uniform urban-rural land factors market nationwide, and rural land property right protection intensity may be improved by a set of reform measures. Soon after the release of the decision, officials from related departments point out that “market can’t play a decisive role in land use and rural land planning”.1 Rural construction land is partially excluded from the market, as only so-called “mercantile construction land” enters the market.2 Such explanation gives rise to numerous controversies.3 for more discussion about related controversies. In our opinion, the misgiving that over-opening of land market results in excessive appropriation of rural land is grounded in reality. As suggested by related literature, even in European countries and America with sound legal systems, such situation still occurs without the planning management constraints imposed by superior governments.4 Land ownership reform can hardly obtain great achievements devoid of rational land planning management from the government. In nature, government land planning management power actually segments land ownership, and the allocation of this power means the division between private land power and public power. Ambiguous demarcation of the boundary makes it hard to build entire land ownership reform and land factors market. It is imperative to reform land planning management system in China now.

1  See “Balance” Talked by Chen Xiwen, the 21st Century Business Herald, November 21st 2013. 2  See Chen Xiwen: Not All Rural Land Enters Construction Land Market, cited from website http://theory.people.com.cn/n/2014/0306/c148980-24548971.html. 3  Please see Wen Guanzhong, Do Purpose Control Filter Market Failure or Non-stated-­ owned Land Listing Right (Academic Monthly, 2014:8) 4  Daniel Mandark: Land Use Management in America: Case and Regulations, translated by Xun Wenju & Duan Wenji, CAU Press, 2014, p381.

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8.2   Basis of Land Planning Management Reform The root of numerous problems in Chinese land planning management should be attributable to antiqued concept, backward method, and mismatch between principle of rule of law and management requirements. Revising land planning management concept and straightening out the scientific evidence and legal basis of land planning management is the prerequisite of land planning management reform. Humanistic Care Requirements of Land Planning As the general principle of socio-economic growth, people-oriented principle must be also embodied in land planning management. But in reality, this principle has not been well demonstrated in land planning management practice. At present, the general requirement of land planning management in China stipulated by official documents is to save land. Humanism concept has not been clearly expressed yet. Humanism principle in land planning is primarily stated as below: The first one is to meet public interests requirements on the premise of respecting individual interests. Driven by the urbanization wave in China in current stage, large-scale residence districts have been classified as the non-residence districts, and forced land acquisition and demolition of houses frequently occur in these districts. In particular, “public interest” is often treated as the justified reason by related authority. However, though contemporary countries with sound laws and regulations engage in economic development and urban construction, these activities can’t be a reason for forced acquisition and demolition. In general, as major control facilities like transportation junctions are superior to urban construction, land market price is not very high. Government’s offer is not higher than market price, and it needs to take the influence of its procurement action on surrounding stakeholders into account. Though some countries stipulate that the construction site of key controlling public facilities shall not be arbitrarily changed, the government may compulsorily purchase the land as per related procedures. But in reality, such condition is often replaced by compensation.5 For construction land under other circumstances, the government may enact 5  See Dang Guoying, Scotland Land System Reform and Its Meaning to China, Land System Reform: International Comparative Study, Social Sciences Academic Press, 2010.

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“negative list constraints” to give choices to land owners and prohibit any form of forced purchase. It is no need for the government to worry whether few “tartars” on the street affect urban landscape construction. Even most senators or civilians feel that they do not like urban landscape caused by tartars, they will not compulsorily demolish these houses in the name of “public interests”. The reason is that people all know that public interests easily become the discourse hegemony of most people. As long as it treads on the rights of the minority, more and more people can’t escape from the control of destiny. Secondly, land planning management should afford conditions to ensure human spatial living quality. Human spatial living quality relies on the spatial radius required by different lifestyles. For instance, diet, daily life and offspring feeding require indoor activity space, while acquaintance contact requires outdoor courtyard space. The two layers altogether constitute private space of individuals. Community activity space meets people’s demands for daily life activities. Commuting activity space forms a radius between human living space and production space. The last point to be mentioned is public cooperation space. In public cooperation space, people achieve the multiple functions of land through a series of institutional arrangements and satisfy the common requirements of social members on the ecological security and landscape beauty of land resources From this perspective, it can be easily seen that Chinese land planning management is very problematic. On the one hand, the private space of individuals or households has been severely compressed. Most urban residents do not have single houses, especially in populous districts in East China. Urban resident districts account for 26% of urban built-up districts on average.6 While this indicator in large cities abroad is around 45%.7 In Tokyo, Japan, urban built-up districts accounts for 57.7% of gross urban districts (excluding natural parks), and residential land accounts for 59.2% of urban built-up districts. In particular, single house residence districts account for 33%, and collection residence districts/buildings account for 26.2%.8 On the other hand, urban public sectors in China account for a 6  Tianze Economic Research Institute: Resource Allocation Efficiency and Justice Research in Administrative Departments (internal issue), 2013. 7  Shi Yishao et  al. Research on International Metropolis Construction Land Scale and Structure Comparison, China Building Industry Press, 2010. 8  Tokyo Prefecture Urban Planning Bureau: Land use in Tokyo, 23th Year in the Reign of Heisei (2011), Tokyo Prefecture Life and Culture Bureau Management Class, p8.

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large proportion in urban built-up districts, around 25% higher than that in international metropolis. Such situation severely affects residents’ physical and mental health, and runs counter to universal people-oriented land planning philosophy. Thirdly, people-oriented planning philosophy should be reflected in man-nature relation. In land planning management, there prevails extreme “greenism” which exaggerates the influence of human activities on natural environment sustainability and advocates to compress people’s activity space by constraining energy-consumption activities throughout land planning. In specific planning specifications, such philosophy insists on high-density residence, takes high-rise buildings as main residence carriers and maximally shortens commuting distance. In effect, human progress is an accommodation process of both man and nature. Human beings now have entered a times in which self-awareness mutually adapts to natural environment. High-energy consumption is related to industrial production scale. With the progress of energy-saving technologies and economic restructuring, economic system energy consumption and discharge level have been greatly reduced, and land planning seeks a balance between human living quality and environmental protection. Property Right Separation Is the Foundation to Determine Land Planning Justice Land planning in itself possesses the property of public power operation. If land property right is also of public power property, land resource use will be concentrated by public power, which inevitably provides a hotbed for the abuse of public power of land. Tow pieces of basic codes of conduct related to property and service constitute the foundation of human civilization. The first one is that public power shall not compete with citizens nor gain business assets from citizens in the field of wealth production and distribution. He who invests obtains gains. Secondly, all stakeholders shall equally enjoy public services provided by public power with no discrimination in public domain. Execution of the former principle must prioritize clearly established ownership, as the country can be only energetic and economy can be only prosperous on this basis. While the execution of the latter takes the rational allocation of public power as the premise. Only in this way can the society turn harmonious and the basic interests of the vulnerable social

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class be ensured. To apply the two principles in land planning management, the government should bear in mind that residents must be allowed to have necessary land property right in business domain, and independently determine land use means or transact land property right with market principle based on bottom line purpose regulations. At the same time, certain resulting social inequality should be compensated by the redistribution of public resources, which means that public authorities do not directly intervene the land use means in business domain. Land resources only obtain high-efficient and sustained use in this way.9 Former principle processes the classification of property right as a technical issue. Ownership essentially reflects the relation between people. As a general rule, property private ownership means the contract reached by individuals over market-dominated transaction, while property public ownership means the contract reached by property holders over authority-­ dominated transaction. Two situations complicate such relation. Firstly, the use of private property generates public issues so that it also involves non-market contract. Secondly, the establishment and maintenance of public property is not a contract reached at free will, but a forced outcome. In the latter circumstance, the technical properties of property right, i.e., the match between rational property and economic activities, will not be changed. In realistic economic activities, how to act based on technical interests correlation and how to determine land property category is always a blind spot in decision recognition. Statically speaking, human industry chain and interests chain are intertwined to fabricate a sophisticated three-dimensional space. If every subject at a node acts under the instruction of market information, no deviation between private cost and social cost will generate, and public ownership will not be required because authorities are not required to make decisions for individuals. Reversely, it is very possible to establish 9  The demarcation between public and private property right is a core subject in modern social sciences, and classical discussions all come from political philosophers and economists represented by Locke and Hayek. Comprehensive discussion made by American economist Arthur Oken has balance in theory, but his advocacy of viewing right distribution as a moral choice leaves a giant space for public power expansion. We more approve of the discussion of power distribution in neoinstitutional economics based on transaction cost theory. Such discussion obviously has more overt technical properties and more easily becomes the theoretical evidence in power distribution legislation. See Friederich August Hayek, Freedom Chapter, translated by Yang Yusheng, China Social Sciences Publishing House, 1999; Arthur Oken, Equality and Efficiency, translated by Wang Benzhou, Huaxia Publishing House, 1987.

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public property. Such situation comes down to technical factors. For instance, if rural roads for peasants are closed and charged for use, the government had better establish public property for public goods supply considering the high regulation cost. If the scope of public property right is inappropriately expanded, then the gap between private cost and social cost will be continually widened. The statement which emphasizes the ideological provision of public property right is rather superficial in theory. While solving the distribution problem of public goods, it is impossible for public property right to set the price according to the market, or otherwise, the base of goods exchange equality said by Marx will be devastated. Power rent-seeking space and corruption exactly comes from the execution and maintenance of public property. Setting public property right is nothing but a helpless move to overcome market transaction cost. Due to the great difficulty in dividing and selling technical public goods, extremely high transaction cost will be incurred. Therefore, establishing public property right is conducive to cost reduction. The difference between private sectors and public sectors and that between private ownership and public ownership is essentially an issue concerning transaction cost. Public property boundary of land is very clear in theory, but is rather strenuous in practice. After all, we still propose some feasible practices for policies. If the government establishes common property for any land related to public interests, and executes its land acquisition right, it easily leads to the abuse of public power. After all, the concept of public interests is rather ambiguous and fuzzy in itself. In a manner of speaking, any specific private economic activity may give rise to public issues or contradict with and promote public interests. For instance, an investment project in the development zone may increase employment growth or government tax revenues. This fully depends on public interests. If the land can’t be used for investment construction because of property right, should the government acquire the land by force? Such situation is also controversial in European countries and America too. But after years of discussion, the propensity is to remove forced land acquisition and establish common public property right for land. As stated above, private ownership (formal public ownership or substantial private ownership), private cooperative ownership (ownership by share), community public ownership (common ownership), national common ownership (national ownership) are four common types of land ownership.

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Social Justice Requirement in Land Planning We often acknowledge that besides common land property right, other types of property rights all run into above-said mismatch between private cost and social cost to varying degrees in operation. It is known as externality problems or publicity problems. Actually, practical execution of common land property right also gives rise to public problems.10 How to solve the publicity problem of land? As proved by the practice in countries governed by law and experience in China, there are often four ways to solve the publicity problem of land. Firstly, the country may enact laws and regulations to directly bind the action of land right executors. For instance, should a family enclose a large plot of land by barbed wire for fear of intrusion? If not, what is the opening condition on the land? The government should make specific regulations for such similar affairs in legal terms.11 Secondly, external “internality” is realized by executing tax policies to change land right executors’ financial budget. The third means is to restrain land right executors’ right by folk cultural traditions and force parties of power transaction to change transaction conditions or price. Fourthly, a common practice in countries under the rule of law is to solve related problems through land use planning constraints and purpose control. Obviously, the power generates tremendous impacts on private property right and vigorously intervenes the execution of public power in private domain. From this perspective, due to the segmentation between public power and private power, modern private power is rather incomplete.12 Then how should the government react to privatization behaviors and resulting externality problems caused by property right separation? Given the involvement of value judgement, it is often thought to be closely related to ideology. Whereas, with the improvement of all sorts of laws and 10  Despite the necessity to establish and perform national public power, public power may not always make sure of social justice. This is also true for land planning. See Arthur Oken. Equality and Efficiency, translated by Wang Benzhou, Huaxia Press, 1987. 11  British government has already prescribed the “access” condition of public and private land. As this affair requests right owners, and especially tourists, to acutely know about their own rights, the government even prints leaflets to distribute among people. Apart from the liability of land opening, the government is also supposed to make restrictive conditions on “incomer”, including pets. The law concurrently divides the private space exclusive to land owners. 12  Daniel Mandark: Land Use Management in America: Case and Regulations, translated by Xun Wenju & Duan Wenji, CAU Press, 2014.

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regulations regarding the solution of external problems, and especially the rise of living standards, people now have more time to access public affairs and more adapt to public rules’ constraint on private power execution. Such change usually demands the establishment of property right separation system, namely the so-called private ownership. Different from classical private ownership, private property right subject to public power constraints has different social attributes which can be known as “socialist private ownership” or “social ownership”. In another word, private right in modern society does not have absolute exclusiveness so that the government can restrict it according to the requirements of public interests. For instance, if a person owns a vast plot of land, and encloses a closed and private park on it, he causes harms to the society (externality). Under such circumstances, the government that executes public power should refrain his private scope and demand him to open the land. If he grows trees, then the forest ought to be open to the public for free sightseeing. To be sure, the public have to submit to certain codes of conduct after being allowed to access here. In a word, what the government should do is to treat all sorts of property rights in the same way with no discrimination. Meaning of Democratic Autonomy to Land Planning Recognition about land planning management also involves land planning management subject problem and operation philosophy problem.  rassroots Commune Is the Fundamental Platform of Land G Planning Management The exernality arising from land property right separation will extend to different districts. For this, governments in different districts have raised different land planning requirements and other intervention requirements. The management level that land planning formation and execution belongs to is a problem worth of more discussion. America has a similar territory with China. As proved by its experience, communes subordinate to state rather than county (including large and middle cities) and communes subordinate to county rest in the focus of land planning management, which means that all sorts of cities act as the fundamental platforms of land planning. Such system conforms to the law of land planning. For large countries like America, the formation of state boundary is ascribed to historical wars and political game. The formation of boundary

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does not necessarily mean the high stability of inter-regional political and economic relations. In reality, the inter-regional relation among main powers in contemporary age remains uncertain. Under such a background, besides inter-regional collaboration problems in residents’ collective behaviors caused by natural force majeure (like watercourse river system management), human economic behaviors try not to intervene more than two districts with different policies. Inter-regional behaviors triggered by economic activities merely request inter-regional market unity, but not natural discrepancy. As a general rule, inter-regional responsibility and power distribution in water system use, inter-regional road construction, and protection for natural diversity of main powers are all goals chased by political forces. This highlights the role of planners. While intervening land resource allocation in main powers, planners actually submit to the will of politicians. Technical work here does not have scientific meaning.13 By now, even America still needs to confront a long-standing political game for the building of interstate express or railway. If it exists, such planning must obey to politics. A company will not invest in the governance of rivers nor any interstate engineering before politicians’ insights into its right relations. Entrepreneurs’ investment actions should possibly evade political uncertainties. Whereas, economic operation of a country primarily depends on entrepreneurs’ investment, and entrepreneurs’ investment centralizes in cities. In an agricultural district inside the city, political uncertainties are much lesser if a government takes charge of overall public affairs. Such land planning for grassroots governance units involves the economic aggregate of a country. Planning similar to land function districts occurring in such small-scale space unit does not request the intervention of superior government. For instance, American Congress enacted State District Planning Enforcement Law in 1924, but no policy guide had been given. All statutory responsibilities for land use had been transferred to the municipality. State government could only raise principle requirements for municipality’s specific district planning, or affect municipality’s specific district planning in combination with financial subsidy.14 13  As pointed out by Feng Xingyuan & Liu Yejin, the trivial and rigid planning made by central government in main powers “generalizes economic activities in space”. See Feng Xingyuan & Liu Yejin, Evolving Urban Planning and Its Chinese Implications, Institutional Economics Research, 2012:3. 14  Randall Arendt, Rural Design in Foreign Countries, translated by Ye Qimao et al, China Building Industry Press, 2010, p266.

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From the perspective of land planning management, so-called local self-­ governance means the control of land planning publication right. The planning in itself is law. In contemporary times, grassroots communes in prime countries ruled by law are generally small in scale. For instance, in Germany, a city with over 100,000 residents is a large city, and a city with no more than 5000 residents is a small city. The population size is much smaller in rural communes. The situation in Japan and America is much similar. Land planning management in such small-scale communes helps form urban diversity and motivate the public to join in land planning formation.15 Stakeholders of land planning may lodge “constitutionality” lawsuits against local planning to defend their own interests. In America, “constitution” here may either denote federal constitution or state constitution. If federal parliament or state parliament directly makes land district planning related to private interests, the equilibrium principle of law will be inevitably devastated. In consequence, the emphasis of land planning management should be minimum commune.  inimum Commune Must Be Democratic Communes M The reason why grassroots communes become the fundamental platform of land planning management is not always because they can have a good job as they are smaller grassroots communes. In history and reality, grassroots communes can be either patriarchal communes and power centralization communes or democratic communes. Democratic communes pave way for the formation and execution of land planning. This is decided by the property of land planning in the first place. Land resource is different from general goods. Every plot of land is in a varying state. As a result, no land district planning management practice well conforms to overall conditions. That is to day, district planning management of local government inevitably generates sophisticated entanglement of interests. International experience shows that land district management stakeholders should be authorized to have a say in district management. However, for avoiding endless bargaining, one feasible way is for local government to formulate district planning as per justified procedures and allow stakeholders to lodge right loss query and lawsuits against the court. Judges’ verdict will be a major aspect in practical land management. The establishment of such mechanism unquestionably relies on communes under democracy and rule of law. 15  Huang Mengmeng, German Urbanization Path and Enlightenment, German News and Research, FLTRP, 2013.

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Grassroots communes probably behave absurd in land planning without the support of democratic politics. Related international experience in this regard is that if local communes’ land planning right lacks due constraint mechanism, then (1) low-income groups can’t take a foothold in the community; (2) it will cause damages to agriculture, like “granting public investment in non-agriculture production and development, public land acquisition, merger and town combination”; (3) the government prefers no compensation or low compensation when district planning damages the interests of stakeholders.16 Countries under the rule of law have sound institutional arrangements. Commune parliament, folk organizations and independent court system make up a balance pattern. Therefore, above problems will not evolve into chronic diseases, nor give rise to any instability in Chinese villages because of government planning behaviors.  egal Framework for the Operation of Commune Land Planning L Management Right The execution of grassroots communes’ land planning right requests a basic legal framework. The core of the framework is that communes’ planning with legal binding force can be questioned and complained. If a country has not established such right, it suggests that land planning management legalization, democratization, and scientization are nothing but empty talk. Usually, the entire framework requested by land planning legalization is constitution (state constitution in powers)+government authorization rules+commune district planning+ judges at all levels. Due to the discrepancy of cases, no clause can be directly cited for grassroots commune land planning, especially land district planning. In such case, no reference can be consulted for lawsuits against district planning, which means that no direct clause in host law may be directly cited to judge the rationality of commune district planning. Both civil law system and common law system run into this problem. Practically, the solution varies between civil law system and common law system. Common law system primarily lodges the lawsuit on following grounds: (1) the lawsuit against planning “constitutionality” in which the prosecutor claims that the planning goes against constitution; (2) lawsuit against the justice of interests in which the 16  Daniel Mandark: Land Use Management in America: Case and Regulations, translated by Xun Wenju & Duan Wenji, CAU Press, 2014, p6, p381.

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prosecutor claims that planning factors discriminate stakeholders; (3) lawsuit against planning execution results, in which the prosecutor claims that planning actually acquires the land and requests planning bureau to make compensation for land owners. In civil law system, communes’ land planning should be refined in a lengthy process and invite the participation of considerable stakeholders. The process of formulating planning is a process of social consultation, and also a process of balancing interests and resolving disputes. Following this practice, lawsuits may not easily occur upon the enactment of commune planning. Land planning practice proves the validity of Hayek’s thought on order evolution. The core idea talked by Hayek in numerous masterpieces alleges that though order is formed by human actions, it is artificially planned or fabricated, but made by massive individuals on the basis of respective cognition and game of common interest pursuits. Morality and traditional customs also play a role in this. According to Hayek, such situation is ascribed to human knowledge state. Due to the local and disperse properties of human knowledge, entire construction consistent with natural evolution law hardly survives.17 Hayek actually disapproves of executing uniform principle in land use. However, Hayek does not object construction, i.e., planning in any form. To his mind, “sparse construction order” and “common construction order” compliant with spontaneous order coexist. After all, such order ought to be compatible with freedom and allow for intellectual labor division and mistakes.18 “Negative Planning” Theory and Its Social Meaning The evolution of land planning thinking basically experiences the transition from “primitive planning thinking” to “modern forced intervention planning thinking” and “regression weak intervention planning thinking”. Affected by backward building technologies, land planning thinking in early times did not stress full intervention of nature and society. Since the nineteenth century and especially the early twentieth century, with the promotion of building engineering technologies and changes in ideologies, some large-scale intervention planning thinking and practices come into being. For years, people begin to reflect over the negative outcomes  Von Hayek, Friedrich August. Economics and Knowledge. Economica, 1937(4): 33–54.  Feng Xingyuan & Liu Yejin, Evolving Urban Planning and Its Chinese Implications, Institutional Economics Research, 2012:3. 17 18

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of such forced intervention planning thinking, and propose some new land planning ideas. As an attempt, this chapter tries to have systematic cognition about “negative planning” and learn to perceive the significant value of such cognition in the right adjustment and reconstruction of rule by law involved in land planning.19 The following are the main implications of negative planning:  inimize Planning Intervention for Nature M Human land use means is apt to plunder the nature. Formidable and widespread land use planning easily forms excessive intervention on the nature. Generally, land use planning possibly intervenes objects in the nature, like watercourse, animal migration route, animal and plant growth conditions, soil quality and air quality. Malignant transformation of nature eventually affects the living quality of human beings. For this, land use planning should try to minimize the intervention for nature objects. Urban construction history in Nara, Japan is a typical case about human land planning intervention for nature. In 710 AD, Nara, the capital of Japan, launched a magnificent city building plan which named the new capital as Heijokyo. Patterned after Chang’an, the capital city in Sui and Tang Dynasty of China, it had a length of around 6 miles from east to west and a width of around 4 miles from south to north. According to historical statistics, it had finished over 80% urban network pattern construction, and approximately 200,000 people migrated to the city in its heyday. In 794 AD, Mikado’s transfer of capital to Heiankyo marked the end of “Nara Age”. Nara did not gain sustained investment after being built by the country for more than 80 years. In the lengthy 2000 years from then on, Nara did not continue its majestic glory as the capital, and those rivers used to be harnessed by watercourses reverted to the natural spreading state. Splendid Avenue of Rosefinch, most bustling place of the country, had sunk down in the ribbing. The city was restored into former appearance upon the full collapse of intervention constructions on river

19  Such “negative planning” thinking is formed in the execution process of few planning projects undertaken by Wu Wenyuan. Episodes of such thinking have been cited by some influential planners in contemporary times, but no systematic consensus has been derived in present planning theory community. The negative planning philosophy-centered planning theory raised in this chapter symbolizes an attempt in need of more practices for verification and improvement.

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orientation.20 To the opposite, if Nara were still the capital of Japan, people must pay more costs to maintain it than to maintain a spontaneously developed city.  inimize Planning Intervention for Reality M Forced intervention land use planning gradually takes shape after the rise of industrialized industry on the whole, while some habits that withstand the test of history in the long run also find their rationality with the progress of human society. Especially in European and American society, such rationality proves to be more reliable because of traditions of local autonomy and legal practices for the protection of private ownership. Based on such cognition, a sort of “existential priority principle” has been observed by some planning thinkers in the legislation of land planning. Aborigines’ survival priority is the embodiment of this principle. Here the book cites the operation of agricultural land use planning practices in America. Farms’ habits of operation possibly intervene the interests of surrounding land owners. In line with farming laws and regulations in America represented by Recognized Agricultural Management Habits, in judicial sentence, judges firmly believe that the protection for such agricultural habits precedes local district planning.21 The persistence of such philosophy contributes to the diversity of urban-rural landscape. If subsequent land use planning denies historical land use conditions, forced demolition and reconstruction easily reoccur, historical heritage protection can barely receive protection, and all cities shall be built in the same style. On the contrary, if minimal intervention land planning philosophy indeed exists in reality, it does not prohibit the economic growth of a country, but turns economic growth more healthy and urban landscape more beautiful. The city will have more diversity only when we respect valuable history. Establishing land owners’ “priority in maintaining status quo” does not mean that status quo can’t changed absolutely. In general, if it is high time to change the status quo, the government can only make it when inheritance occurs by law upon the death of land owners, like demolishing ground building facilities.

20  Innovation Corporation Co., Ltd, Ohta, Nara Age MAP, Mitsuura Academy Co., Ltd, 19th Year in the Reign of Heisei (2007). 21  Daniel Mandark: Land Use Management in America: Case and Regulations, translated by Xun Wenju & Duan Wenji, CAU Press, 2014, p382.

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 inimize Planning Intervention for Free Option M Land use planning is expected to respect private right and individual freedom of choice as much as possible. In public domain, the role of folk contract and folk organization should be given full play. This responds to the third major principle under “negative planning” theory. Negative consequences incur at the time when the government shows disrespect for individual freedom of choice but behaves arbitrary and compulsory in land use planning. A typical case is the construction of Brasilia. In history, Brazil successively built its capital in two costal cities, i.e., Salvador and Rio de Janeiro. In around 1950, Rio de Janeiro, as then capital of Brazil, became the center of politics, economics and culture of the country. However, the high concentration of urban population incurred serious urban diseases. With the aim of altering Brazilian industry and city concentration condition in coastal regions, and developing underdeveloped inland districts, Brazilian government decided to build the new capital—Brasilia on Goias plateau 1100 m above the sea level in the year of 1956. For a time, the construction of Brasilia was credited as a grand occasion in then world urban planning industry and construction industry. But this is any successful grand occasion on a short view. Limited by the simplicity of urban functions, residents have rather restricted life choices and the city gradually appears to be more and more inhabitable. It is reported that government officials have to perform their duties here, but they always quickly escape from it after work.22 Coastline protection in California, America is a typical case about folk contract and folk organization. The premise for folk organizations to take a lead in land use is favorable public awareness and collaboration traditions. This is also akin to “cultural awareness” advocated by Mr Fei Xiaotong. Based on this condition, environmental protection becomes a trading condition in land transaction under the call of law. Similar cases about land planning philosophy can be also seen in China. In an academic seminar about urbanization held in Jiaxing, Zhejiang in 2013, the author learned that few small cities under Jiashan County had submitted to government planning intervention to varying degrees. Among these small cities, Xitang County suffered least government planning intervention, but it had most beautiful landscape, most stable economic growth and highest per capita income. As demonstrated by anthroposociology surveys, for small cities like Xitang County 22  Serge Sarate, City and Form—Research on Sustainable Urbanization, translated by Lu Yang & Zhang Yan, China Building Industry Press, 2012.

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without forced intervention of government planning, the society will spontaneously develop a consultation mechanism and personal behavioral constraint mechanism in public and private land demarcation, building design and public boundary maintenance, and generate astonishing effects of “creating the beauty and maintaining the beauty”. Respect for individual freedom of choice may be also seen in many aspects of land use planning technicality. Firstly, implementation of the planning by step avoids concurrent advancement. For instance, prior to the construction of a new urban district accommodating 100,000 residents, “negative planning” advocates not to do a general planning in legal significance, but decompose a strategic goal into few settlement cluster goals so as to put urban construction under a semi-finished state for a long time. In practice, few functional cluster goals can be decomposed in different implementation stages so that urban functions are self-consistent, sound and appropriate in every construction cycle and construction land functions prevail. In this way, surrounding land will not be wasted even if economic stagnation and slowdown occurs. The more important benefit of the thinking is that it greatly reduces government planning intervention in residents’ future freedom of choice, and makes for the natural growth of cities and harmonious execution of government planning. Secondly, individual freedom of choice can be guaranteed farthest by certain “structural right allocation” under old city reformation planning. In effect, this philosophy has been carried out in the land planning management practices of many advanced countries. In general planning, general management departments merely make forced requirements on controlling pivotal projects, but simply raise “negative list” for the planning of other districts, therefore endowing aborigines with maximum freedom of choice. Subject to this practice, the government probably needs to buy land in around 20% planning district, and does not have to buy land in other planning districts. In condition that the land in control pivotal projects has been chosen properly, such as in a less populous place, the workload of demolition is rather limited. Now that the land in other planning districts is excluded from demolition, aborigines or owners of idle land can construct or reform their houses as per the “negative list”. A great many cities in Japan basically retain the former appearance in past high-speed urbanization process. To our surprise, though tartars are commonplace in large cities, the growth of the country is not affected by it at all. For instance, in a section on the busy street of Tokyo, a resident has a

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plot of land of no more than 30 sq.km (11m in width, with 2.5m at the widest point and 0.6 m at the narrowest point) close to a building. The land owner invites a famous British designer to design a small building for him for jewelry transaction. It now has become a spotlight on the street.23 There is a popular saying in the planning circle, i.e., beauty is created by accident, but such creation unquestionably depends on the protection for private property right and respect for individual freedom of choice. Thirdly, coercive norms and constraints should be weakened as much as possible to encourage planners to satisfy folk characteristic demands in space innovation and make planning innovation. Land planning requests specification and even concrete indicators, but how to design and use specification is a headache. Comparing the documents about planning specification in China and America, it can be easily seen that the difference between the two is rather conspicuous. Related legal documents in America are much like a textbook which primarily illustrate design basis, and concrete indicators for reference.24 This leaves a huge space of innovation for planning designers. By contrast, the documents of China are filled with massive rigid norms, and some indicators just come from predictive data. Derived binding indicators formed on this basis inevitably have limitations. Fourthly, mechanical and stiff function division practices in urban land use planning should be replaced by tolerant function division principles to make sure of diversity and elasticity. Existing planning practices show that function division arrangement with clear boundary not only enlarges commuting radius, but also compresses residents’ choices and small companies’ living space and more seriously decreases residents’ freedom of choice. A lot of cases indicate that stiff urban function division practices often fail to withstand the test of time, and need to radically change function expressions, As commented by Serge Sarate, urban planning theorist, urban structure continuity function is decided by organization complexity, network complexity, continuity richness, as well as diverse and sophisticated fractal order created on few remarkable dimensions.25 The author keeps a follow-up research on the construction of a development zone in  Luss Slade, Micro-construction, translated by Lv Yuchan, Jincheng Press, 2011, p98.  American Planning Association.Planning and Urban Design Standards.John Wiley and Sons.Inc., 2006. 25  Serge Sarate, City and Form—Research on Sustainable Urbanization, translated by Lu Yang & Zhang Yan, China Building Industry Press, 2012, p122. 23 24

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East China in recent years, only to find that those new districts built after traditional function division philosophy easily gives rise to a series of social disputes, like residents often breach the rule to open stores at their home, government “neighborhood center” causes resource waste and landscape defects due to the lack of passenger flow, as well as other community management problems. Maybe it is more proper to call our traditional urban planning “land development and use planning”. Its feature is to take development as the sole explanation condition and evidence. Plenty of urban planning proposals tend to implement the spatial layout after roughly judging the status quo, and outlining ideal expressions for the development orientation. Afterwards, they will embark on investment in all sorts of public facilities as per long-term goals to quickly sell property. The hierarchy in planning management guarantees that problematic general planning can rigorously guide and manage subordinate regulation details in projects. Likewise, existing planning qualification management system also succeeds in the training of sophisticated planners who never take a roundabout course in design. Existing planning qualification management also ensures the monopoly of planning industry. Professionals in this industry not only enjoy the sense of achievements brought about by monopoly business saturation,but also have powerful discourse right in organizations, then how could they launch a reform to question the full set of mechanisms? More seriously, they have even conceived a set of skilled norms to cover their indolence in business.

8.3  Discussion of Few Major Problems Problem in Living Mode Living mode refers to the spatial form formed by people in the nature or man-made environment as social members and social organizations, including house form and construction, population density, and spatial relation between people and surroundings. Land use planning-related theoretical research involves the expertise of multiple disciplines, including economics, sociology, psychology, politics, etc. International planning community pays high attention to the influence of living mode on human survival quality, especially the influence of population density on living quality across a district. It is generally stated

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that in a large-scale district, either overpopulation or underpopulation causes detrimental impacts on human living quality.26 Under identical population density, different population layout modes also affect human living quality.27 Land use planning in Chinese cities seems irrational in a number of aspects. Firstly, large street grids at varying levels and blocks but small road transactions about 1/10 of those in American and European cities easily lead to traffic jam. Secondly, urban buildings have high height but basically same building density. For instance, buildings in Pudong, Shanghai are 3 times higher than that in Paris and 10 times higher than that in Tokyo.28 Thirdly, such planning layout causes adverse influences on residents’ living quality, and especially prohibits the growth of acquaintance society in cities, which delays the establishment of urban self-governance mechanism. The most prominent and most oblivious problem in large cities of China is that urban built-up districts have low average population density but residence districts have high population density, about 2–3 times more than that in European residence districts. Large cities in China mostly compress residents’ residence districts into 25% of urban area and force most residents to live in high-rise buildings. Meantime, there are lots of large green land and squares in cities. This is also true to some small towns and cities. Under such circumstances, members in all kinds of acquaintance society are inclined to “square action”. Community residents in cities like dancing in the square, eating at street food stall, negotiating business at roadside and gathering in cluster to watch the scene of bustle, etc. All of these are closely associated with city structure. Connected with disorderly political campaigns, “square action” is often launched by the government in political mobilization. It is much easier for anti-government force to take advantage of it. By contrast, cities in Europe and America pay high attention to the respect for individuals. Available literature indicates that urban residence districts in Europe and America usually make up 45% of urban built-up districts. From a dynamic perspective, a good deal of international cities in foreign countries continue to increase residential construction land. Taking Chicago downtown  Edward Glaeser, Victory of the City, translated by Liu Runquan, SASS Press, 2012, p87.  Serge Sarate, City and Form—Research on Sustainable Urbanization, translated by Lu Yang & Zhang Yan, China Building Industry Press, 2012, p110. 28  Serge Sarate, City and Form—Research on Sustainable Urbanization, translated by Lu Yang & Zhang Yan, China Building Industry Press, 2012, p110. 26 27

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for example, its proportion of residence land was 24.1% in the 1970s and later went up to 43.27% in 1990.29 In these urban centers, there are no large squares and green land. Their road surface density is much lower, and line density is much higher, which therefore makes interpersonal contact more convenient and provides rich perception and exchange opportunities for people. Acquaintance circles often have gatherings in the courtyard of one household instead of squares. As private and semi-open gray space, courtyards and balconies serve as new sites of private parties. Besides, different circles and interests help form manifold cultural plates. Environmental psychology studies about the correlation between high-­ density living environment and human psychology and physiology malignant transformation reveal that children in multi-story and high-rise buildings have poorer ability to acquire life skills and get along with others, and are more easily infected with respiratory diseases, aggressive, susceptible to insomnia and nerve system diseases. Buildings with more floors generate more negative influences on residents, especially in families with nuclear “parents+child” pattern. Living in high-density residence districts, people would generate intense sense of crowding, and evolve other negative attitudes, like reduced security sense, privacy, and satisfaction, and deteriorated neighborhood relations. In low-density residence districts, in particular single houses, neighbors are more likely to help each other than those from high-density high-rise and multi-story apartments. Related studies also show that the correlation between density (population density in room) and sociopathy at smaller level is higher than that between at larger level (such as urban and community density). Thus it can be fitly judged that high-density living environment damages physical health and produces “crowding syndrome”.30 The development of shallow mountainous area enables affordable Chinese families to live in single houses, and in the meantime, improves local economy and solves labor force’s migratory problems. If more policies that prohibit the low-population and low-economy development in plain cities are enacted, housing expenditures in plain will ascend, and decreased living conditions inferior to shallow mountainous area will force superior labor resources to migrate from coastal cities and plain cities, and propel capital inflow to transfer to less developed districts. In that case, 29  Shi Yishao et al., Comparative Study on International Metropolitan Construction Land Scale and Structure, China Building Industry Press, 2010, p135. 30  Taylor et al., Social Psychology, translated by Xie Xiaofei, Peking University Press, 2004.

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rural labor force’s propensity of moving from the middle and west to the east and from the mountain to the plain. Then will the adjustment of this policy deteriorate the ecological environment in mountainous area? Will the rich invest to build a large farm here? Will the rich acquire famous tourist resorts like Mount Huang and Mount Lu? Though these are not hypotheses, they are able to be regulated throughout rational land planning and purpose regulation. We are not going to convert Jingshan Par, Beihai Park or Badaling scenic spot in Beijing to houses. It is rather hard to prevent such phenomena, and besides, mature experience in developed countries may offer a hand. Land Acquisition and Planning-Incurred Compensation Problem Now that certain problems about interests distribution caused by land use planning implementation have been fully discussed in theory and law, we do not make any further analysis here. In our opinion, there are some other important matters which have not been fully discussed.  an the Government Implement the Same Compensation Standard C in Peasants’ Land Acquisition Irrespective of Land Category? The land in the hands of peasants falls into agricultural land and construction land. The high price of land in cities for construction purposes is elevated by planning-incurred monopoly. Peasants’ construction land is inherited in history. Thus, it is inappropriate for the government to turn such construction land to general farmland with monopoly power, and then acquire the land at the price of general farmland. In most countries, the trading price of farmland will not be so high if its purpose has not been changed. The selling price of a piece of farmland is about 10 times of its rent. It is rather abnormal to charge the price 20 times of rent. In condition of land use purpose changes, and agricultural land is sold at a high price after being acquired in the secondary market, then should peasants or rural collectives share the incremental earnings? The author considers that the government has due right to refuse such request. Incremental earnings come from changed land use purposes under the call of government planning. In this sense, the government has the final say to dispose incremental earnings. It is a political issue as to whether the government returns incremental earnings to villages and peasants.

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The case is totally different is rural construction land, mainly peasants’ house sites, has been acquired. The sort of land belongs to construction land in nature, which means that such property is not endowed by government planning. Then in the acquisition process of such land, the government should determine compensation standards according to local urban construction land market, but not refuse to pay at the market price in the name of public welfare.  roblems of Land Acquisition Standards P The fairness of any transaction is a relative concept. Roughly speaking, a transaction is fair if multiple parties involved are voluntary and no forced factors take effects. If parties can make a bargain with adequate information in the transaction process, it is nonsense to doubt its fairness. Price formed by free transaction is market price. If there is no sound market environment, even if the government pays at the market price, peasants may still feel unsatisfied. This results in failure or conflict in transaction. Consequently, market factors make for the reduction of transaction cost and stability of social cost. Generally speaking, primary land market in China is not the market in real sense. There is no alleged price function in the market as the market remains incomplete as usual. Resulting land transaction is questionable for its fairness. In another word, under such context, the fairness of land transaction is accidental, and non-fairness of land transaction is essential. This is the root of so many conflicts in land acquisition. We hereby equate the justice of land incremental earnings distribution to the justice of system. On the premise of institutional rationality, any distribution plan raised by the government shall have its rationality as long as it is acceptable to peasants. The reform principle featured by “clear property right and purpose regulation”, and the proposition of establishing a uniform urban-rural construction land market as advocated by the central government illustrate the orientation of reform. Planning should formulated by the government, and planning management should be legalized. On this premise, peasants may refuse the complete marketization of business land transaction. Nevertheless, peasants can’t refuse the land acquisition of government at market price at the time when public welfare land needs to be compressed. For preventing local governments from deceiving peasants, and persuading peasants to sell land at a cheap price without adequate information, the government shall timely disclose planning information as

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per legal procedures and give peasants the right of rescission in a given period. What should the government do in condition of unknown land market price in an incomplete local land market? Here introduces a routine in Scotland.31 Despite the fact that price setting is a sophisticated problem, British government insists that the acquisition price means the currency amount acceptable to owners/ or persons in pursuit of compensation. This suggests that acquisition behavior should not affect the earnings of land owners. For explaining this fact in theory, British jurists employ the concept of “unplanned world”. In this world, land acquisition bureau never issues any pre-land acquisition notice nor formulates any land development plan. In another word, the setting of land price ought to take foothold in the unplanned world. The term “plan” here indicates the projects enacted by the government after land acquisition. Specifically speaking, the setting of land acquisition price in Britain takes the following few factors into account: (1) Market values. Firstly, no extra subsidy for forced acquisition is allowed. Before 1919, given that forced procurement may run counter to owners’ will, the government tended to grant a subsidy coupled with procurement price. But this practice was abolished in legislation in 1963. Secondly, the basic criterion in price setting is to suppose possible earnings gained from voluntary land transaction in public market. Thirdly, no price subsidy should be given to the parties because of the special purpose of acquired land. Fourthly, resulting earnings will not be considered in acquisition price if current land use violates public interests or laws. Fifthly, land court prefers replacement price to market price in specific conditions. For instance, if a church is sold at market price, and the payment gained by the owner can be hardly used to establish the same church in other places, then land acquisition bureau needs to reexamine replacement expenditures. The last point is disturbed compensation. (2) Legal planning hypothesis. Land market price just reflects the market price of current purpose, but it does not mean that land has potential development values, including the influence of legal development planning. If a piece of land has been planned as residential development district by the government, 31  Please see to Angus McAllister & T.G.  Guthrie:Scottish Property Law, Edinburgh: Butterworths, 1992: 237–244 for concrete discussion, and Dang Guoying,Scotland Land System Reform and Its Meaning to China, Land System Reform: International Comparative Study, Social Sciences Academic Press, 2010 for general discussion.

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then government planning affects the sales decision of land owner in public market. Admittedly, this factor also plays a part in subsequent earnings. Such rational planning hypothesis is supposed to manipulate acquisition price. Unplanned world is just about what has not happened but is going to happy with land procurement action. (3) Appreciation or depreciation outcome. Planning under implementation probably leads to the appreciation or depreciation of acquired land values, but such factor is excluded from acquisition price. (4) External detrimental or beneficial influences. If a whole plot of land has been acquired in part, and such partial acquisition damages the value of entire land, then the government is required to compensate such damages in land acquisition price. If partial acquisition leads to the appreciation of entire land, then land compensation price may deduct added values from land acquisition price. Once appreciated values equate to or surmount compensated price, it means that no compensation is required. Above routines in Scotland offer reference to the compensation price of land acquisition in China.  awsuit About “Actual Acquisition” Caused by Land District Planning L Land district planning restricts the purpose of land, which will be considered to affect the finalization of supreme land values by the parties. In serious conditions, the parties may claim that land district planning actually or partially acquire the land, and accordingly lodge value compensation lawsuit. Such phenomenon often occurs in agricultural district planning management practices, where peasants or farmland owners usually acknowledge that their land is limited by agricultural purposes and results in the sacrifice of right. Such judgement obviously has its own rationality. Some scholars advocate to compensate the loss of peasants by opportunity cost compensation means.32 But such opinion has not been universally approved in the international society. In judicial practice, American courts do not support property value loss-based “acquisition compensation”, with the basis that land function district is a justified action taken by a legal government for sake of public interests, and the government has indeed taken other measures to compensate peasants’

32  Wen Guanzhong, Do Purpose Control Filter Market Failure or Non-stated-owned Land Listing Right, Academic Monthly, 2014(8).

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loss.33 Related government actions include (1) real estate tax preference plan oriented towards peasants, in which farmers are excluded. (2) farm land is allowed for minimum non-agricultural use, like building non-­ agricultural facilities according to the size of farms. (3) support for agricultural production in furtherance of cost reduction and profit growth. If there are well-planned agricultural protection zones in China, China does not have to pay interests loss to peasants according to opportunity cost. Equality and Efficiency in Land Development Right Security Mechanism—Brief Discussion on the “Land Ticket System” of Chongqing In theory, implications about land development right may be described as below. In condition of zero transaction cost, land development right means the arbitrary use right over land after land user’s payment of consideration. In condition of non-zero transaction cost, land development right means the land owner’s disposal right under the constraint of legal planning right (district planning). Legal planning right, as an institutional arrangement for saving transaction cost, inevitably contradicts with market price. In particular, the technical difficulty lies in the measurement of “externality”. Under marketization conditions, the “development right value quantity” carried by the individual equivalent land may not be equal. This property may be the inherent regulation of district planning. Can the “development right value quantity of a piece of farmland measured? Theoretically, we may assume that the benchmark of development right is calculated by the product of shadow price and development probability. This probability can be the inverse ratio of distance from the city. Adhering to the thinking, the development right price of a piece of remote farmland is not very high. While compensating land development right, the government shall not always follow the uniform price and it is no need to worry if the government bears heavy financial burdens because of the compensation of development right.

33  Daniel Mandark, Land Use Management in America: Case and Regulations, translated by Xun Wenju & Duan Wenji, CAU Press, 2014, p382.

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Considering extra values created by development right, district planning involves equality problems. Development right can also show efficiency by transaction to some degree. However, the base price of transaction has certain association with quantity and planning. Probably there is a development right transaction system bound up with scale in a farm, which stipulates that more land can’t be traded nor the government pays compensation. In essence, such occasion is not possibly against the role of “complete market”. The reason lies in the fact that even if the market plays a decisive role, participants won’t acquire farmland here and there to establish cities. Satisfying the requirements of equality ought to be the tenet of planning, such as ensuring low-agriculture cost in favor of the poor; ensuring base line private space in favor of public psychological comfort, etc. TDR is an attempt that balances equality and efficiency. Originated from America, this concept refers to a sort of innovative land development control means. After being tried in large cities represented by New York, it has successively spread to other districts. The history of first TDR can be dated back to New  York as early as 1978, which was specifically proposed to protect New York historical landmark—central station. By virtue of plot ratio replacement, the development right of plot where central station was situated at was transferred to surroundings for high-density development, and the train station spent the fund gained from selling TDR in the renovation and maintenance of relics.34 With the elapse of time, TDR’s initial role of protecting historical relics has been fully exerted and widely applied in the protection of farmland and ecological land so as to cater to increasingly serious suburbanization and urban expansion. By 2010, TDR projects had been applied in more than 200 towns of America to protect over 400,000 acre (around 24.3 million mu) land. Considerable farmland, forests and ecologically sensitive land gained perpetual protection. Up to now, 23 states in America have licensed TDR across subordinate jurisdictions. In particular, TDR is most intensively applied in northeast cities of New York, but less observed in middle underdeveloped districts.35

34  Zhou Jun, Analysis on Land Linked to the Increase or Decrease Mode in America, Land News, PICCUD, March 20 2015. 35  American Planning Association.Planners Advisory Service Memo, May/June 2010.

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Table 8.1  Lancaster government’s TDR transaction norms Partition Residence district R-1 Residence district R-2 Residence district R-3

Original scale (living units/acre) 1.5 1.75 2

TDR rewards (living After the transaction units/acre) (living units/acre) 1 1.5 2

2.5 3.25 4

In strict accordance with the regulations in Lancaster government, developers from the transfer districts who have bought TDR may gain extra development rights. Taking its residence districts for example, different types of residence districts correspond to different TDR development intensity rewards. As stipulated by district regulation norms (see Table 8.1), residence district R1 is limited to the development mode of 15 units per acre. For 1 acre land, developers can gain the development right for one more unit whenever they buy 1 TDR.  After the transaction, developers can develop 25 units per acre on R1 land. On the part of farmers, they can sell 1 TDR whenever they forsake 4 acre farmland development right, and gain $160,000 earnings on average from 1 TDR. When farmers gain earnings, the land also obtains perpetual conservation right, which means that the land as farmland shall not engage in any development. Apparently, TDR price here is a competitive price instead of a uniform price. This is totally different from the land ticket price in Chongqing mentioned below. The land use dispute in 1926 in which Supreme Court of the USA supported local governments’ land district management affirmed the rationality of district land management planning in Constitution for the first time. In this dispute, though grassroots court supported the claim from Ambler Real Estate Company, Supreme Court of the USA revised its verdict by insisting that local government division land management was compliant with the equal protection of law clause stipulated by the 14th amendment to Constitution. In addition, Ambler Real Estate Company failed to present any clear evidence to prove the depreciation of land or economic loss. This is a milestone event throughout American history about division land management, and also the last important division land management case submitted to Supreme Court of the USA by now. From then on, no case has occurred in America.36 36  Gao Xinjun. Origin and Change of American Division Land Management, China Economic Times, January 12 2011.

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Fig. 8.1  Side effects of b district purpose on a district purpose

A

B

In practice, as presented in Fig. 8.1, the government basically does not make special compensation for the use restrictions of Area B.  Although Area A can engage in non-agricultural construction, it will be affected by Area B. This is a side effect, which limits the construction of Area A. As to the marketization of collective construction land, different districts have made different explorations in this regard. The land ticket system of Chongqing is simply one of them. It can be easily observed that this system actually goes against the marketization of collective construction land throughout careful analysis. The market plays its mediating role in resource allocation, and reflects the scarcity of resources by competitive price. With demands unchanged, higher resource scarcity means higher price, and vice versa. Land resource scarcity varies with specific functions. To be specific, the price of land should vary with position. Demand discrepancy also plays a part here. Inadequate demands mean low degree of scarcity. Existing information shows that position does not affect land ticket transaction, as the price of 1 mu land is the same everywhere. In this way, land ticket price can’t demonstrate the scarcity of resources. In reality, land ticket sales is the threshold for land sales. Now that land demanders pay for the threshold in land ticket transaction, they have to consider the expenditure after acquiring this piece of land, and add it to all-in cost. If no such threshold exits, land demanders may also consider the all-in cost in real land transaction. There is no difference in counting. In consequence, the practice of Chongqing divides one transaction into two steps and increases transaction cost. Developed countries also have land market. We can not claim that there is market economy just because there places do not implement land ticket system. On the contrary, transaction here cuts down the transaction cost. A friend from Chongqing expresses that in any given time, equal price of different plots of land facilitates collective construction land in remote districts to gain equal income. This ensures social justice. While we hold

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that it doesn’t make sense because equality can’t be established on the distorted market basis. If equality is a problem in public domain, it needs to be solved by other means, such as secondary distribution of national income. The government can support residents in remote districts by payment transfer as long as it gains enough tax revenues. Briefly, the priority is to give full play to the role of market and seek higher economic efficiency. The government can only solve public problems after collecting tax revenues. Such practice actually involves the assistance given by one group of residents for another. It depends on the operation of other rules in decision. For instance, if the government is about to exert the role of democracy, it should make sure of the democracy of budget first of all, and prohibit the arbitrary policy made by the minority. Market does not play a role in such circumstance, for the reason that market is an improper solution for public problems.

8.4  Land Planning Management Reform: Few Conclusive Suggestions Land is the fundamental resource related to the survival and existence of people. If government land planning management works well, land resource will become the source of national welfare. By analyzing the social and political conditions favoring the operation of land planning management, this chapter investigates the right relations in land planning in international comparison, points out the manifold drawbacks of existing land planning management of China, and talks about the few realistic problems in land planning management of China. Furthermore, this chapter also sums up suggestions for Chinese land planning management reform mentioned above. 1. To further liberate the mind, by converting the perspective about land ownership cognition from ideology to technical judgement, establishing land property reform thinking featured by efficiency priority and equal consideration to equality and boldly propelling pluralistic land ownership reform. 2. To differentiate public power and private power in land resource use, give full freedom to private power, and constrain the externality of private power by public power. On this basis, the government should vigorously develop land market transaction system and exert the decisive role of market in land resource use.

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3. To upgrade land planning philosophy, by giving dual consideration to people-oriented philosophy and energy-conservation philosophy in land use planning. Land use must serve the people. In land use planning, the government should expand the land for public activities and compress the land for public department. 4. To enhance land planning management system and improve land planning management efficiency. It is imperative for land planning management to change the shortcoming of power concentration, and properly deregulate land management authority. The central government may proactively push forward the regulation on land property protection, river governance and agricultural protection zones, as well as the construction of judicial system. For provincial government, the emphasis of work may be placed in environmental protection. On the premise of adhering to the host law, administrative city (district/county) government may coordinate local land use planning principles. On this basis, actual land use planning right can be fully deregulated to grassroots governments in the city and the village, and designed according to democracy and the rule of law principles. 5. To accelerate land planning management legal system construction and realize the legalization of land planning management. For instance, the government may enact the Housing Law to ensure public land use rights, and also Agricultural Protection Zone Law to more vigorously protect the farmland. In a word, grassroots governments have to legalize land use planning and totally prevent the prevalent arbitrariness in land use planning practices. 6. To adjust technical norms about land planning formation and reinforce its scientificity. Corporation qualification approval should be canceled now. Additionally, the government has to further consummate planner responsibility system. For ensuring that land use planning technical norms better show people-oriented and energy-conservation land planning orientation, the government must change outdated land use planning system. 7. To abandon conventional cognition that land in urban planning district must be acquired, and revise existing laws concerning national land ownership in cities. Another important move is to compress the scale of acquired farmland, and allow peasants to sell land at market price. It is a good choice to differentiate the properties of farmland and rural construction land and respectively count the acquisition price in limited land acquisition plans.

CHAPTER 9

Urban-Rural Development and Planning Innovation

This chapter will further go into urban-rural development problem from the perspective of planning technology. For years, China has formulated a full set of planning technical specifications concerning urban-rural development, but these specifications are problematic in effect. In general, urban-rural planning technical specifications are too rigid to propel the diversity of urban-rural development.

9.1   Recognition about the City Spiro Kostof comprehensively introduces discussion about this problem in Formation of the City—City Mode and Meaning in Historical Process. In the planning field, the most pervasive opinion concerning the formation cause of city is the theory of residual. Followers of the theory of residual hold that when rural economy deviates from conventional single self-sufficient mode, production surplus liberates some peasants from the land and professionals engaged in non-agricultural profession come into being. At the same time, production surplus also generates transaction demands, and simulates the emergence of fair and the city. But in realistic recordings, in early towns, “city” is not an essential factor. To our knowledge, fixed fairs in the Middle Ages did not develop any embryo of the city, and even Troyes City came before famous Troyes Fair.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 D. Ying, W. Wu, A Study of China’s Urban-Rural Integration Development, The Great Transformation of China, https://doi.org/10.1007/978-981-19-2756-0_9

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Another genre of naturalist view insists that special geographical conditions constitute city formation factors, like river intersection, road junction, and defense-favor highlands, etc. However, if it is a universal law, it can’t explain why cities do not come into being in so many places rich in natural conditions. “The city is built by and for man. The geographical position of cities is decided by man, instead of any irresistible maneuvering of substance.” In Introduction to City History, Harold Dekat summarizes in one word that “no matter what structural changes have taken place in social organizations as a result of economy, war or technology, such structural changes can only gain institutional persistence after seeking sponsorship from certain instrument of authority”. “Exactly, it is such instrument of authority, instead of any activity in special form, that motivates the rise of countless towns”.1 Throughout the overview of history, it can be fitly judged that city originates from human creation instead of spontaneity. Therefore, any city is created by planning so that man can convey his will. Though some planning finally presents “organic growth” state by technical level, social structure, natural transition and even war, we may still trace the planning routes clearly in time slot. At the same time, urban planning should always cooperate with public power, and reach public interests and management order by intervention for external factors. Though modern planning has more wide and sophisticated implications than traditional planning, it is a key factor that has never been changed. The result of research which lists modern urban planning theories and formation time in chronology table is a little bit striking. The theory of “garden city” and “organic evacuation” is proposed at the time when the city develops fast and downtown environment continually deteriorates, while the theory of “new urbanism” and “compact city” that calls on the resurgence of urban values and appeal is proposed at the time when people successively escape from cities, and downtown area depreciates with urban expansion. Every new planning theory is going in the opposite side. People seemingly have no idea about the form of existing material space. In other words, we can realize that the foothold of planning science is always to solve current problem no matter how great its vision is. Any lofty spatial form should be developed from reality. 1  Cited from Spiro Kostof, Formation of the City—City Mode and Meaning in Historical Process, translated by Shan Hao, China Architecture & Building Press, 2005, p32, 33.

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Retrospecting existing urban planning compilation system, an overall urban planning is generally composed of superior planning, present planning compilation term, population prediction, among which population prediction nearly decides and affects all related construction indicators. Traditionally, natural growth and perennial experience statistics-based mechanical growth in stepwise uptrend can be predicted. As of the reform and opening-up, great population migration propelled by urbanization tide quickly breaks up traditional mechanical growth empirical statistics, and urban population increases at an unexpected speed. Taking Shenzhen for example, its population has reached 4 million when the government begins to formulate a development planning accommodating 2  million people, and likewise, its population has reached 10 million when the government is busy revising a development planning accommodating 7 million people. This quickly alienates the sole traditional population planning growth evidence, and makes population planning a practical goal that can be accomplished by strategic planning. Actually, many places have reached this goal, which emancipates the imagination of planners and local governments in an unprecedented way. On the premise of population indicator mis-sequence, the inspection of all sorts of cooperative indicators also loses reasonable reference. For instance, if a small city accommodating 150,000 population is expected to reach the goal of 700,000, then all available supporting indicators should match the goal, including water works, sewage treatment, schools, industrial development land, residence land, etc. In particular, residence and industrial land compliant with central and local government land finance should be “developed across a large scale. This promptly disintegrates the scientificity of evidence which allots public finance according to urban planning. Simultaneously, the general planning featured by functional divisions also facilitates the rapid formation of countless new cities. Coercive division also results in massive demolition, devastates former pattern in compact cities, and damages urban diversity on an unprecedented level. In a manner of speaking, as for contemporary urban problems in China, planning plays a crucial role, and it is time for the government to entirely reflect over planning management system and design specifications.

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9.2   Formation and Planning of City Charm Urbanization is an inevitable procedure experienced by backward countries on their way to be developed countries. With the speed of development unchanged, the urbanization rate of China probably reaches 75% in around 2030. In the past decades, prompt growth of economy in China was benefited by the rise of urbanization rate. In the future, the development of China will still rely on gross urban expansion. Whereas, will our cities be high-quality and charming cities as urbanization rate reaches a high level? This question deserves further exploration. Urban construction research field can hardly determine precise standards for a charming city. Few standards on city charm mentioned in this chapter are summarized by the author after reading and pondering. Stipulation about Urban Functional Zones Profound historical and cultural deposits rest in the key factor affecting whether a city has charms, while cultural deposits are related to the hierarchy and diversity of the city. We have to clarify here that history does not mean brilliance in a given period, and the authentic value of space and history comes from stories and appeal in consecutive evolution. Prevalent “urban beautifying” and “gentrification” reform thinking in contemporary times eradicates the trace of time, and highlights the charm of beauty in the name of beauty. Cultural diversity of a place formed by climate, material, population and historical events helps reinforce residents’ cohesive force and sense of proud, adds trust to business transactions and provides social capital for urban economic prosperity. There are two movements in recent urban construction of China. One is to build a beautiful village, and the other is to build a charming city. According to its name, we have subconsciously realized at the beginning that the foremost value characteristic of the city, comparing with the village, lies in diversity. In her famous work titled Life and Death of Great American Cities, Jane Jacobs explicitly calls on that diversity is the nature of the city. Unfortunately, the charming city engineering projects that we have seen are almost all built according to the single criterion of beauty, and it has developed a powerful paradigm for reference and imitation. However, it quickly disrupts exclusive possibilities of the city in the name of construction, unifies rich and colorful experience as single visual

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impacts, and fixes specific moment by planning regulation. This process is more like making a living specimen. For years, we seemingly notice the importance of diversification. However, in practical planning measures with pluralistic functions, we often just long for complicated and rich urban structure in big cities, but refuse to fix its problems, pressures as well as diversity. The land function district planning thinking that has been rigorously practised by us actually leads to the dual loss of efficiency and charm in the city. Urban planning layout which mixes history and all kinds of interest game constitutes the internal decisive factor of city charm. Time is the most outstanding designer. Those generous designers are more apt to kill the charm of the city. Citizens prefer blending urban functional districts, while by contrast, urban leaders enjoy different functional districts in fuzzy borders. It is exactly this group of urban leaders who destroy the charm of the city…. All of these are new insights acquired by urban planning researchers throughout reflection. Taking the case of Pudong for example, it is firstly built according to ideal city model in our mind, but Shanghai people themselves more like Puxi, suggesting that the sunlight conditions and facility upgrade stressed by conventional specification are less appealing than blending historical blocks. One important move to protect city diversity is to concentrate on specific elastic factor in urban construction to adapt to unexpected changes. Elastic factor refers to more functional possibilities. So to speak, temporary plot may empirically mix different functions in clearly divided functional districts that possibly highlight future trend or gain chances of reinforcement. Another sort of interpretation for function mixture is the promotion of publicity. The stagnancy of countless downtown areas in European and American cities should be attributable to land privatization. Segmented private sectors greatly undermine the vigor in downtown areas, especially parking demands brought about by the advent of Auto Era. It has become a key factor damaging regional vigor. Now that throngs of people fill public spaces and buildings, parking demands are inevitably amplified. Shortage of public parking stalls in early times is exactly one causes of desolation across the district. Nowadays, European countries and America are managing to systematically transplant public facilities, like pavements across independent property (including government organs and religious buildings), to shape up new business environment at roadside, and timely share parking stalls. The sole purpose is to revoke the vigor in downtown

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area. To our surprise, such mixture between public and private sectors has infused new vitality to desolate downtown areas. However, in the inquiry about old town upgrade cases in Hong Kong and Boston, we also find that dimension is a major influential factor in planning. Downtown areas in cities now are usually built with wide roads and large communities, which brings huge difficulties to embedded public facility implementation in law, technology and fund. Urban diversity constituted by rich landscape also adds the charm of the city. Graceful environment does not mean more large squares, wide grass land and wide roads. What counts is the few factors. Firstly, a city should not be composed of uniform and neat building landscape, which requests moderate preservation of “tartars” and personalized building facilities. Landmark public architectural design requests scientific verification for fear of abnormal design, and avoids high maintenance fees caused by misleading public aesthetic awareness and massive non-standard products. Nevertheless, private buildings may be allowed to exist in strange shape. Secondly, for promoting the pass-through degree of urban transportation, walls need to be demolished to the uttermost. Thirdly, private grassland in low-density residence districts should be open to the public. Fourthly, a modern rubbish discharge, disposal and supporting hardware system needs to be established to keep the city tidy and clean. Stipulations about Urban Economy Competitiveness It is generally acknowledged that urban competitiveness is related to scale, but such correlation is so sophisticated that people can’t find precise linear law. What size of city is moderate? Should the city have boundary of development? Researchers seem to hold different opinions in the discussion, but a consensus is that the city should have small-scale, independent and functional units. The reason is that such units effectively shorten commuting distance, lower infrastructure maintenance cost and meantime, form industry or culture circles featured by particular functions and styles. In addition, larger cities tend to demonstrate greater diversity and charms. Existing functional district planning modes tend to directly amplify small cities with single centers, which not only ignores sophisticated living demands, but also results in long-distance commuting, jam and pollution. The key to maintain urban economy competitiveness is professional standards of local companies. It suggests that more professional enterprise composition is accompanied by more vigorous urban economy. What

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supports urban professionalism is those competitive leading industries in international market. Even if a city merely has few tens of thousands of people, it will be energetic as long as it breeds a large-scale and competitive company. Competitiveness of company is the basic condition that ensures full employment. To lower unemployment rate by around 3% is an important prerequisite to defend the health and vigor of a city. Under full competition conditions in the labor market, laborers’ income is decided by their labor time. Full employment not only guarantees laborers’ income, but also provides source for social security fund. Full employment is the fundamental condition to lower urban crime rate, while all sorts of primitive and traditional small service industries are exactly the sponge that increases full employment. Therefore, the government is supposed to support and care such small service industries based on urban management, rather than take measures to clear up and crack down upon them. Professionalism constituted by urban companies may bring beneficial changes to crosswise social interactions in the city, form the acquaintance circle in modern cities, and replace traditional acquaintance circle linked by patriarchal clan or power relations. This rests in the foundation of bearing city charm. A small city accommodating tens of thousands of people is often supported by one or two large companies, or public institutions like colleges. This is also true to those smaller gathering points like villages, tourism resorts or special agricultural product distributing centers. In such settlements, the acquaintance society is not directly bound up with basic economic interests anymore, and people’s super-economic contacts do not restrain their basic freedom. As to professional peasants, they do not have to face heavy pressures brought about by comprehensive acquaintance circle in traditional villages due to high-dispersion settlement. More importantly, as their agricultural product can be sold to any place across the country, close contact is not necessarily interlaced with material interests. One of the expressions of urban economy competitiveness is urban residents’ low living cost. Low living cost makes for raising citizens’ sense of satisfaction, improving citizen-government relations and boosting citizens’ public participation initiative. The price level in the city may be cut down by rationalizing commerce and trade facilities, offering business operation sites for community stores, and enriching circulation business. Observation shows that the service industry can better adapt to service

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demands through enhancing the mixing degree of cities and blurring the boundary between functional districts as much as possible. The move should be complemented by increasing walking opportunities and decreasing motor vehicle traveling demands. Living cost also includes the time cost of traveling, as traffic jam lengthens the time of traveling. Pursuant to strict statistical analysis, with road coverage unchanged in a specific scope, widening road network density will strengthen vehicle through capacity and transportation convenience. Stipulations about Urban Spatial Layout Humanity We tend to consider that medium and low-rise buildings will significantly reduce residents and lower land use efficiency, but we now need to notice that with higher building coverage rate, medium and low-rise buildings can have identical residence density with high-rise buildings. Related statistics proves that the residence density in front gate district in the Republic of China Era was 30,000 person per sq.km. Besides that, medium and low-rise buildings have more functional transition adaptability which adds city functions and diversity. However, due to massive duplicate units, high-rise buildings equalize human personality and eradicate city culture. At this layer, we should reflect over our sunlight management provisions and building coverage rate provisions. This set of provisions actually advocate land equalization and impair city charm to a large extent. Then can Chinese people catch up with Europeans in living standards? Can 70% urban households of China have or rent single house or low-rise buildings with terrace? This suggestions may sound ridiculous, as everyone emphasizes that China is a country short of land. Actually, there are vast mountainous districts, waste land, hills, intertidal zones, and other plots with low agricultural use values in China. From a dynamic perspective, in either new city construction projects or old city reformation projects, the problem can be well fixed just by reducing public land use proportion and raising residents’ construction land use proportion. It is no need to worry about the acquisition of farmland at all. Since existing system and land use planning exclude considerable land plots with low agricultural use values from residence land, residents’ residence construction land has been severely compressed, and land price rises up to a high level (the price of residence construction land is very high, but that of industrial land is very low). Therefore, only few billionaires and

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stars can own expensive single houses in downtown areas. Such situation fabricated by high land price and idle non-agricultural land must be practically changed. Stipulations about Urban-Rural Relation Equality Harmonious urban-rural relation is a necessary condition in the building of a charming city. To build a harmonious urban-rural relation, the government must guarantee that rural area will be the prime living and residential district of the middle class, peasants must be professional peasants who earn average urban-rural resident income. More importantly, partial counter-urbanization population should belong to high-income group. For this, the urbanization rate in large districts in a city needs to reach 75% at least. Equality in urban-rural relation means the equality of rights between urban and rural residents, instead of the equality of construction investment in the city and the village. It is not problematic to build villages without farming work or with rare farming work as cities. Whereas, how can the government build 600,000 administrative villages with no more than 2000 residents as cities? If a residence district in natural villages is inhabited by around 400 residents on average, how can the government build modern infrastructure for them? Therefore, it is an impossible and costly mission to build such villages into modern cities. If cities are built on the vast rural land, a large group of “false cities” will come into being. Now, such phenomenon has existed in some places as a result of “relocation and resettlement”. As a result, the so-called “rural public service” problem that we have faced is the problem in cities in essence. To be specific, it comes down to the inability of government in affording urban living conditions to considerable rural population not engaged in agriculture. It is not because of urban-rural inequality, but the inequality between citizens. In another word, we wear the “iron hat” for some people. Even though they are not peasants anymore, and their hometowns are not agricultural zones anymore, we still habitually view them as peasants and their hometowns as villages. The construction of new countryside that the government has claimed can’t be accomplished in such cases. To be sure, peasants and villages can’t perish anyway. Then should the government improve rural public service standards? Absolutely! However,

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we should keep our mind clear that we are not going to offer “rural public services” to more than 900 million residents and 600,000 administrative villages. We need to change our mind now, by only affording “rural public services” to peasants engaged in agriculture. Such professional peasants should make up of around 10% or less of gross population in China, for the reason that agricultural GDP is forecast to decrease to 10% in gross economic aggregate in our country. These residents do not have to live in 600,000 administrative villages. What the government needs to do is to covert most natural villages amounting to 2 million into small residence districts, with each residence district accommodating tens of households. These small residence districts do not have to build village committees or cultural centers and road networks, because they can satisfy their public demands in all sorts of cities about few or tens of miles away from their homes. In addition, their social security expenditures are also gained by modern financial network. To put it simply, when peasants become “rural citizens”, the village degenerates into the wild land instead of tribe settlements, and alleged “rural public services” are nothing but part of urban public services. As long as the goal has been reached, residents may write on their business card that “Zhang Haonong, “Farmer” of Dreamland, No.18, Mixiang Road. Guangzhou City. By this business card, he does not need to worry whether he can receive the mail because there are possibly 18 households on this road, even if the road lasts for 18 miles. Well, it is just a hypothesis now. Stipulations about Urban Openness Adequate openness inside the city is an important premise to form city charm. A city should not be enclosed by fortified villages. Change is a remarkable feature of the city. Factors contributing to such change include the class mobility of people, urban-rural landscape, mobility of goods and materials, human activities in the street, transition possibility of life scenes, etc. The premise of growing mobility is exactly adequate openness. We hereby can not help questioning the broad market that whether they offer real urban life even if being equipped with sound supporting facilities. We do not expect to build China a “fence society”. It is a characteristic practice in China to enclose buildings, communities and even villages with high walls, but it is not beautiful at all. In London, there is a garden plot between Prime Minister’s Office and Buckingham Palace on No.10 Downing Street, about the same size of Zhongnanhai and Beihai Park in

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Beijing. There is no wall here nor No.10 Downing Street. But there are walls around Buckingham Palace. Probably it is because that wall is a symbol of royal power in former times. Whereas, the walls around Buckingham Palace are confined to the all rounds of this royal building in a limited scope and besides, its metal handrails do not obstruct visitors’ appreciation of scenery. For satisfying the sight-seeing demands of tourists, royal honor guard also performs activities outside of the palace. No that the palace is not well guarded by forces, it is often reported that the palace has been intruded by thieves or other guys from time to time. It seems that British people are very content with such walls indicative of self-discipline spirits, because no one or group claim to demolish them. But I firmly believe that if No.10 Downing Street aims to enclose itself with such walls, its efforts probably ruin in the end as it contains the subtle “building politics” in Britain. This is also true for Prime Minister’s Office, because the place involves public interests. However, since the royal palace generally symbolizes people’s memories about the old days, it can be enclosed by walls. Members of the royal families are allowed to still live inside walls because their deeds get rid of the constraints of law, and more importantly, they show strong self-disciplined spirits. What can No.10 Downing Street trade in exchange of such walls? Nothing at all. Do Chinese people like walls in nature? Not exactly. Walls built in ancient times are used for war defense purposes. The sole difference is that Europeans mostly unify walls and buildings as a whole to form castles, but Chinese people make full use the functions of walls. Walls in China lose viewing values unless they become part of the long walls. Whereas, castles possess such viewing values. Now that walls in modern society do not perform military functions, why do Chinese people still prefer walls? It is rather perplexing. But after a second thought, you may not feel so astonished at all. Another function of walls in China is to occupy a plot of public land. Not all public land plots are worth of appropriation, like state-owned deserts. However, once such public land has potentials to create wealth, it is easily coveted by people. Actually, enclosing a plot of public land by walls means establishing exclusive rights and turning public land into quasi-private land. Once such mindset has been followed, even residents inside a community will subconsciously encroach land and enclose themselves with high walls. People do not necessarily enclose land as long as the scope of public land has been confined. In modern times of peace, people are able to demarcate the boundary of private land by way of high technologies. It is totally irrational to defend property right by enclosure. As a consequence, the government

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should remove walls and open more vacant land by the reform of land systems, encourage the public to compete with one another in beautification and share common wealth free of charge. Road network in which grid square extends in a balanced state possesses supreme openness. The core district in Manhattan, New York, sets a pattern of modern metropolis for many Chinese cities in terms of its all-­around grid square road network design. In reality, back to the 1960s when vehicle consumption obtained explosive growth, Manhattan municipality had discovered that uniform network road system would lead to substantial border crossing, which later caused traffic jam and obstructed the formation of centers. Therefore, with existing road network unchanged, Manhattan municipality sensibly built a ring road through traffic constraints so that capillary transportation inside units accommodates walking and the pass of multiple vehicles. This move significantly enhanced the charm and value of blocks, and meantime, made crossing more smooth. It is very akin to a biological nutrient transition system, full of trunk, branches, microcirculation and other rich hierarchies. Please refer to Fig. 9.1 for more details about the relation between urban road design and population density.2 The reason why New York can upgrade its city quality throughout the simple reform should be attributable to the small scale of blocks. For instance, general block scale of Manhattan is merely 75 × 150m, about the size of a building. Supposing if the block scale reaches 400 × 400m, then public transportation access may be cut off, capillary microcirculation becomes impossible and people rely more on motor traffic. Such simple and convenient reform can hardly play a role in such circumstances. Inspired by New  York experience, the intermediateness of road network structure (alongside road trunk or not) motivates the development of the city, and centrality greatly affects the quality of the city. A great many cities in China are built near to national highways and provincial highways. We tend to consider that roads bring about more opportunities of development. Therefore, upon the great expansion of population and city scale, the government firmly introduces through traffic flows into the downtown areas. This directly takes over and undertakes urban traffic functions, prohibits the improvement of city quality and even obstructs the formation of central downtown area in real sense. We may notice openness here. 2  Cited from Johathan Barnett. Urban Design as Public Policy, translated by Shu Da’en, Taiwan Shanglin Press, 1983.

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present employment density

future employment density

present crossing traffic

correction of future crossing traffic

present inlet and outlet

future inlet and outlet

243

Fig. 9.1  Urban road design and population density

Stipulations about Urban Land Ownership Miscibility Rational allocation of land ownership makes for the reduction of urban facility construction and maintenance cost, and the convenient access to urban public facilities. In urban downtown areas, one major philosophy about miscibility is the integration between public facilities and private land. The recession of numerous urban downtown areas in Europe and America comes down to the inability of private system to upgrade and secure public services. This affects the vitality of city. At present, the popular move is to systematically rebuild public facilities, like consecutive pedestrian footpaths crossing overall independent land property (including government departments and religious buildings). Such new philosophy and pertinent operation in practice essentially upgrade ownership theory, and force people to have new opinions about private land ownership. Rational and equal use of land and changeable flexibility of land further add the charm of cities. Public departments should be banned from

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occupying too much land. For possibly expanding the ratio of resident building lot, public departments’ building facilities may be extended upward. Large-area private mansions in either city or suburbs should be open to the public, or included into house property taxation. Pertinent laws and regulations need to enacted as soon as possible. In addition to special zones protected by forces, all courts of public departments should be open to the public too. No closed privilege exists. The topic of migration is predicted to be more and more popular among large, middle and even small cities. The growing mobility of people naturally poses higher requirements on the changeability of space functions, like opening a store under shabby walls, opening a company in a garage, or conversion of plant functions. All of these are signs of urban industry and culture upgrade requesting further research instead of rigid control. After investigating the “village in city” in Shenzhen, some scholars find that community business types that spontaneously emerge here are three times more than that in model city development zones. Young studies are attracted to settle down here because of its high convenience and low living cost. At present, it is time to briefly talk about complex architecture. Such high-­profile and dazzling huge building style favored by all Chinese people occupies at least two or three hundred thousand square meters and at most millions of square meters. One of the reasons why such lofty image of cities are favored by the public is that it integrates so many advanced planning philosophies: like conservation of land (the plot ratio of a complex can be as high as 10, non-comparable to general profits), function mix (such multi-functional complex usually contains large parking lot, restaurants, theaters, boutiques, high-density hotels, apartments and residence. A group of such complexes may form a stereoscopic city), compact development and hotel TOD (transit oriented development), and public transportation-oriented development theory proposed by Peter Calthorpe in the 1990s. This theory emphasizes that land intensive utilization is a controlled, and public transportation-oriented compact development mode. To put it simply, it reduces the reliance on private vehicles throughout high-density development in rail traffic junction stations. Retrospecting the development history of cities, it appears that no single theory alone can perfectly fix all problems. Then is there any difference between stereoscopic city and TOD theory? We take much time to verify that diversity is the nature and necessity of sustainable development to a city. Inside such giant complexes, business is in a flat pattern, and what differs is area, decoration and price. Residence

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has been simplified as few units. To be sure, even transportation modes bear high similarities. Such inherent mix of business types probably simplifies business structural hierarchy to the uttermost so that it can not generate rich and diverse experience with the elapse of time nor adapt to changes and produce new social relations at any time. The sole variable here is frequent mobility and migrant population. Therefore, it is nothing but a station between large cities and external traffic. One of the major causes that we object such complex is the life cycle of artificial buildings. In 2008, Life After People directed by David de Vries shocked us. The film originates from such a thought : what the Earth will look like if human beings vanish suddenly? How long does the great nature take to eradicate the signs of human beings? As emphasized by the director in this film, it is not a science fiction film, but a simulated evolution based on discipline verification. The film predicts that all artificial buildings will disappear 230 years later. But what puzzles us is that throughout human architectural history, there are numerous buildings with a long-standing history of more than 1000 years, and those buildings with over 200 years can be also seen anywhere. Sustained intervention of human forces nearly exist in all historical buildings, like repairing, reconstruction, upgrade, reformation, etc. It is exactly the sustained investment of human will, wealth and technology that makes these buildings look as we have observed. The most universal, global and giant building of human being is city with no doubt. We can’t measure how many efforts that people have committed to build up cities for over thousands of years. For the past few thousands of years, sustained growth of population, and continuous progress of technology and evolution of urbanization encourage us to practise urban planning and investment in a developmental and proactive way. Therefore, complex aggregates considerable social and personal wealth in a given time, and it is aging concurrently, we possibly discover that it is like a giant cell that can’t be upgraded decades later, and it possibly threatens the existence of city. Therefore, people can’t be too cautious to plan such complex.

9.3  How to Realize Compact Development Chapter 8 of the book has briefly discussed the form of city development. Next, this section will continue to analyze the development problems to be faced by compact cities.

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We have to develop our discussion in the Auto Era. As the most typical factor of industrial civilization, automobile nearly changes our recognition about traditional cities once and for all. Urban diversity has been severely diluted because of the urban expansion driven by automobile transportation, compact structure evolving from the walking pattern in old towns has been disintegrated, disordered expansion in the city expedites environmental deterioration. Moreover, as shown by massive urbanization data int he country, in case of urban population stagflation and even negative growth, urban construction land still speeds up to spread. This also facilitates urban operation cost to grow exponentially, which greatly deprives the sustainability of development. The proposal of compact city formed in response to new urbanism trend in late twentieth century and early twenty-­first century has been reacted by all countries, and these countries have made great experiments and efforts to revise related construction provisions for reference. For China which joins in the great trend later, the concept of compact city seems to still remain at all kinds of planning philosophies. It can be hardly executed as it contradicts with existing specifications. In a manner of speaking, during the transition from disorderly expansion to compact city, land development extreme and environment pressure are two foremost influential factors. Table 9.1 presents the prime influences brought about by social transition and cultural reformation.3 A compact city should develop the following five factors. . High density and intention to further improve the density. 1 2. Develop from a sole center of the city to a neighboring center of people’s daily activities, and offer multiple functions at different layers. 3. Avoid disorderly expansion of the downtown area and outward expansion. 4. Daily demands can be also satisfied by reducing the use of motor traffic. Neighboring green land and open space may be utilized to sustain a cyclic ecosystem, protect and effectively utilize nearby farmland, green land and costal areas. 5. City circle connects compact city clusters by public transporta tion network.4 3  Hokaido, Compact City Planning and Design, translated by Su Liying, China Building Industry Press, 2011, pp233–234. 4  Hokaido, Compact City Planning and Design, translated by Su Liying, China Building Industry Press, 2011, pp233–234.

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Table 9.1  Changed society and space Wisdom in the twentieth century (shrewdness) Strength: Conquest of Nature Command structure from top to bottom Material development Monoculture Interdisciplinary International External subordinate State intervention Huge output Military correspondence Normative science Environmental protection Hardware technology Development of resource capital Mass production Land use zoning planning Car Abandoned and forgotten Entertainment from a fixed concept City expansion Urban sprawl (diffusion) Redevelopment, transformation Forced to accept Employment in the workplace TV Broadcasting Network In-line telephone Mail Impact assessment Easy to discard packaging

Delicacy in the twenty-first century (sagacity) Wisdom: symbiosis with nature Bottom-up knowledge sharing Human development Compound culture Multi-domain integration Regions and places Trust between countries Regional actions and results Moderate output Non-military attitude Earth Biosphere Science Environmental Defense Software technology Get rid of resources Flexible production Sustainable planning Walking, bicycle, bus, tram Repair, recycle, reuse Subjective and diverse entertainment Urban activation Intensive, merge (unified) Repair and effective use (renovation) Support Home employment Local radio Mobile phone Fax and email Impact avoidance Reusable packaging

Now that compact development requests high density, should a high-­ density city be filled by high-rise buildings? When it comes to high density, does it refer to population density on land or building area? Is the distribution form of building area vertical or not? In the “village in the city” covering an area of 0.45 sq.km, Gangxia village in downtown area of Shenzhen has the population of 68,000. Some land has been developed for companies and school facilities. After careful pondering for years, the new demolition plan predicts that the plot ratio

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Fig. 9.2  Building height and urban population density. (Date source: Meta Berghauser Pont, Per Haupt, Spacematrix)

b

a

c

of this new built area will exceed 5.5, and pertinent population will reach 7000. This plan is a little bit confusing and difficult. To count it roughly, even if the city does not add new population, the land requested by urban upgrade alone will increase by ten times.5 In Servigny Salat’s meticulous mathematical model research, building density does not necessarily synchronize with vertical height. Districts with high vertical heights like Pudong, its density is just one third of that of Paris even if Pudong’s buildings have 30–100 layers but Paris’ buildings have just 7 layers. He even indicates that Beijing quadrangle courtyards absorb more heat radiation than conventional high-rise buildings so that they can save about 20% energy in chilly winter. Please see Fig. 9.2 for the simplified model about the building height and urban population density. As shown by the comparison of plot a, b and c in equal building area in Fig. 9.2, with identical building area, the smaller the building site is, the higher the building requires. In effect, though buildings occupy 65% floor space in old downtown of Paris, there still exist vast open space, including public square for residents, integrated gardens and even private gardens. In

5  Cited from Shenzhen Branch of China City Planning Design Research Institute, Overview of Reconstruction Planning Projects in Heyuan District, Gangxia Village. Non-public publication, April 2008.

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skyscraper districts of dazzling cities, the floor space of buildings is merely 5%. From the perspective of pure geometry, as Corbusier skyscraper merely makes up 1/13 area of that of Osman building, it can only reach identical building density when its height is 13 times higher. Considering that the average height of Osmand building is seven layers or 20m, skyscrapers must be built with 90 layers or 270m to have identical density. The tower in Corbusier is merely 220m (it is tall enough even to this day. And moreover, its construction and use take substantial energy consumption). Above statistics fully indicates the absurdity to raise density by height.6 Admittedly, this research inspires us that the most efficient way to increase density and realize compact development is to utilize diverse and flexible building coverage rate and combination form. Theoretically, the correlation comparison of different building forms with the same building density is as shown in Fig. 9.3. We have made a statistical research for Beijing. Beijing’s registered population and average population per household was respectively 8.5  million and 4.14  in 1978; respectively 10.01  million and 3.22  in 1988; 10.91 million and 2.85 in 1998; 122.99 million and 2.56 in 2008. The statistics shows that family units turns smaller increasingly. Therefore, we firmly believe that even if population growth has been controlled, urban construction is impossibly refrained. We compare Beijing’s population and built-up area in 2006, 2007 and 2008, discovering the expansion trend of construction area. To be Specifically, population increased by 1.3% and urban built-up area increased by 5.6% from 2006 to 2007; population increased by 1.4% and urban built-up area increased by 5.2% from 2007 to 2008. A sustainable way to promote compact development is to change the sole management on development density by plot ratio and explore a feasible development mode proper for middle and low-rise high density. We can imagine that cities crowded with middle and low-rise buildings and high-density street lanes can have richer values, allow more diversified construction technologies, provide more autonomy to communities and offer more chances for residents to join in planning, because of small and flexible building units, diverse property forms, functional shift and more

6  Servigny Salat. City and Form—Research on Sustainable Urbanization. Translated by Lu Yang & Zhang Yan, Hong Kong International Culture Publishing Co., Ltd.

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Type

high-rise

mid-rise enclosed block

low-rise determinant building

Morphology 10 0m

0m

10 0

m

10

0m

10

10

0m

0m

10

Density Plot ratio Building density Feature

75household/hm2 98% 5%

75household/hm2 88% 30%

75household/hm2 75% 38%

On the large spacing about 7m wide and 16m deep, high-rise buildings are surrounded by vacant parking lots and open

green land enclosed blocks. Residents share the courtyard, and blocks connected to nearby communities are in good order.

On the large spacing about 5m wide and 10m deep, the courtyard is 7m deep, and the road is 12m wide. With curb parking, there is no public green land here.

Condition

Building plot is a square with a side length of 100m. The exclusive plot accessible to every household is 100 m2 and public plot accounts for 30%.

The 19-storey building lot is a square with a side length of 100m. The exclusive plot accessible to every household is 100 m2 and public plot accounts for 10%.

The 3-storey building plot is a square with a side length of 100m which contains 6 service facilities. The exclusive plot accessible to every household is 100 m2 and public plot is 0. The 2-storey building

Fig. 9.3  Comparison of different building forms with the same building density. (Hokaido, Compact City Planning and Design, translated by Su Liying, China Building Industry Press, 2011, p70)

access of service facilities. It seems that the only thing in need of transition is planning specifications and management means, as well as our top-down design philosophy away from realistic demands.

9.4  Discussion about Small City The concept of “small city” here refers to concentrated settlement gathering less than 10,000 non-agricultural residents. It is worth of detailed interpretation as it is so different from official definition and public conventions.

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In contemporary China, it is not rare to see a village accommodating over ten thousand residents, nor an administrative village accommodating more population. But unquestionably, when nearly ten thousand residents gather together, a few of them must be engaging in agricultural production. It is not incomprehensible. To specialize in agricultural products, peasants have to live on their own land as much as possible or otherwise it is rather inconvenient to do farming. According to the law in Denmark, farmers must settle down in their farmland as place of residence. Some officials in China say that peasants have to live in the city for sake of urbanization, and even advise the government to dispatch special cars to take farmers to and from farmland. They think that peasants can live as workers in this way. Whereas, officials who hold such mindset are really muddled and decrepit. As a consequence, if peasants’ settlements are allowed to spontaneously evolve, it is absolutely impossible for few thousands of peasants to gather together. The saying that “30 mu land and 1 cow” used to be the minimum standard to feed a peasant. It actually requests around 100  mu land. If 3000 peasants who live up to the standard gather together, the gross area of cultivated land will total 15 km. How can they agree to live together? They would not do it unless they were insane. In normal cases, a cow takes 4 hours to walk for 10 km. By now, many settlements in rural areas just have few households. Some large villages in main agricultural producing area in North China are formed either by population density or rural combination by Japanese in wartime in the twentieth century. Moreover, some large villages in East China are both busy with agriculture and business activities. Modern agriculture is incompatible with large villages composed of pure peasants. In the long run, the production scale of cereal may be further expanded. In view of present agriculture technical level in main agricultural producing area in China, a peasant household with two laborers can easily plough 100  mu land of cereal. Such household farm pattern suitable for present situation of China does not adapt to clustering settlement. Briefly, as agriculture is not the leading industry in settlements accommodating 2000–10,000 residents (probably smaller in some specific regions), it is reasonable to view these places as small cities. Cities with more than 10,000 residents naturally can be classified into middle cities, large cities, mega-cities, as well as metropolitan areas. Different countries follow different methods of classification. It is not

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necessary to formulate any universal law in this regard. For instance, Germany determines cities with more than 50,000 residents as large cities. Cities such as Beijing, Shanghai, Guangzhong and Wuhan in China are nothing but metropolitan areas under this criterion. Cities with around 30,000 residents can be very effective or energetic. A city will have vigor as long as residents earn high income and public finance runs in good order. Generally, the competitiveness of a city is related to its scale. Nevertheless, such association is so sophisticated that no clear linear law can be traced. The most radical condition to propel the successful transition of traditional acquaintance society is to sever material interest relations and patriarchal clan system or its variant, and submit material interest relations to the market. The small market that members of an acquaintance society depend on must be part of a larger market so that members are able to satisfy their respective material interest pursuits. Such sort of society integrated by market relations inevitably possesses certain professional state. People begin to solve their life necessities by professional technologies. The rise of such labor division greatly emancipates man. Since people’s communication demands are not directly bound up with material interest, they have free choice right for communication. Here is the origin of separation between private right and public right. Private right merely tied to human skills is used to meet the demands for material life. Public right is used to transact public affairs. Only people who have preference for public affairs are more likely to enter the communication field. Freedom in the execution of public right is possibly reflected by the choice for public right representative (government official). As long as public decision has been formulated, the minority have to enforce it. However, right sacrifice of the minority is limited to some public spheres, as their material demands remain in the scope of private right and their basic freedom is not affected. Such a society is generally harmonious. In economically developed societies, any large settlement, even small cities accommodating tens of thousands of residents, laborers are inevitably involved in international labor division system.

9.5   Rural Planning Problems and Methods Despite growing investment of Chinese government in rural construction, our survey indicates that many problems are incurred by government investment. Related problems may be proved by planning application. The

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first one is excessive investment in the infrastructure of pilot villages, which is primarily evidenced by the oversupply of public goods. Public investment in some model villages even reaches up to 2 million RMB. Secondly, defective investment structure leads to waste of fund in infrastructure system building process in the long run, and insufficient resource utilization and also waste in the short run. Thirdly, due to the rampancy of will of opinion leaders in execution, it is very commonplace to see improper intervention or variation on planning work. By reference to rural planning experience in China, we consider that the following three principles are most important. Firstly, a negative list should be set to clear out what can’t be done, including what can’t be done in the short run and what can’t be done forever. Secondly, maintenance cost is prioritized in the assessment of construction cost. Thirdly, public facilities and public service facilities should be built near to the target as much as possible, and besides, small systems and even independent units should be preferred. Negative List Rural planning contains many basic beliefs that we are practising nowadays, like sustainability, smart growth, low-disturbance development. One point should be noted here that the basic starting point here is for man. Either mutual support or mutual game seeks to settle down in peace in nature. Those construction and development efforts consistent with natural conditions do not mean the obedience to nature, but the intelligence of knowing about individual power instead. In this sense, the starting point to build crisscrossed roads in villages is not for aesthetics, but full of communities stories concerning game of interests, organization taboo, and power distribution. If the key factor of man has been separated from planning, the collapse of beautiful moments can be seen here and there in contemporary Chinese villages in the face of fast urbanization. Rural planning begins with a negative list. Negative list makes up the foremost link in rural planning. The so-called negative list is formulated to notify people what they can’t do, what they are not able to do, and what they must do to measure the price and maintenance cost. In another word, it motivates people to take ecological conditions and resources into account and seek a balance between production and life. Besides, the main purpose to design a negative list is to determine the proper site of a village, and control its scale, among which the primary task is to circle unusable

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plot. Such list is much like “coercive regulations” recorded by former rural village construction files. Water and arable land are almost the most important components to all negative lists. Water, as the necessity in production and life, and also the origin of flood disasters, needs to be stipulated in spatial distance in the first place. While means of impounding also plays a vital role in this stage. At present, the water resources in China are mostly stored in reservoirs, which brings about two problems. Firstly, drainage of watercourse and devastation of vegetation along the coast intensify the risks of water and soil loss and debris-flow disasters. Moreover, reservoirs facilitate the evaporation speed in places with large evaporation capacity and cause huge waste of water resources. Based on this point, the government should recover watercourse water impounding functions, and develop capillary impounding systems traditionally in these areas. For instance, conventional trunk—branch-bucket-agriculture-capillary water storage system in Texas, America should be further studied and improved. The western coast of the water system can be planted with trees and vegetation for shade and reduce evaporation amount. Natural ecological system develops alongside the water system, and birds and animals also migrate alongside the water system. All of these produce significant influences on sustainable development of agriculture and diversion to organic environment protection. Any arbitrary cutoff and rigidification probably damage water ecosystem. Thus, it is great importance to preserve the natural state of watercourse, and it is also a concern in negative list studies. The scope of arable land is traditionally related to day-trip farming commuting. In contemporary era where automobile, airplane and other modern vehicles have obtained considerable application, the arable land coverage tolerated by a village has been greatly expanded, and the interval between villages is not measured by former criterion anymore. Mountains and woodlands are also concerns to be listed on the negative list. As the source place of water, habitat of animals and also origin of energy, local building materials and by-products, these places need to be protected in combination with ecological disaster prevention and control and depletion of life necessities. Simultaneously, possible dangers caused by intrusion of external animals and plants should be also taken into account in related local production development requirements. Please see Fig. 9.4 for more details about village and watercourse management layout.

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Hilly area

river course field

village Fig. 9.4  Rational layout for villages and watercourses

Priority for Cost All human buildings, including residence and facilities, request sustained maintenance. The workload of such maintenance work can not support any professional industry in rural areas, and therefore, related maintenance engineering, materials and technologies should be solved on site, or simplified or reduced in frequency. As we all know, presents now prefer concrete houses to brick houses. This is not the mediocrity of aesthetic taste, but the accounting outcomes based on cost. Furthermore, even local traditional material can’t be sustainable resource in case of any change of raw material source place. For instance, many costal regions in Guangdong used to decorate walls by oyster shells and sticky ice clay, which seemed beautiful and stylish. But now, as most regions do not feed on oyster industry anymore, it is inevitably pretentious to still build oyster shell walls in landmark buildings, and it is probably resisted by aborigines. Considering that building rubbish brought about by rural construction causes heavy environment burdens in the future, residences in places with habitable climate and temperature should adopt light steel structure as much as possible. Due to the high labor cost of young laborers in rural area, traditional house construction work assumes heavy workload, long hours and high cost. Light steel structure buildings can save labor cost for simple and fast engineering. Storey-adding, transformation and consolidation problems pervasively prevail in rural areas, and with the progress of rural construction, building rubbish cleaning work will become

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increasingly severe. Traditional brick-concrete structures in rural areas are confined in the position of doors and windows. By contrast, light steel structures have prominent advantages in flexible position of doors and windows, lighting conditions, ventilation and pipeline arrangement. A great many architects have tried to break out paradigms for reducing the cost of light steel structures. Driven by this trend, light steel houses will more cater to the low maintenance cost in the long run, and rural planning should be vigorously promoted as the leading-end industry in rural planning. Public Facilities, and Public Service Facilities Should Approach Residents and Take Small Systems and Even Independent Units as Much as Possible Attention should be given to endpoint facility construction in infrastructure network engineering, including drainage, electricity and all sorts of cultural service systems. If endpoint has been arranged in a rational way, small network will be more rational and conservative than large network. In response to local conditions, it may be also proper to avoid the building of network. We refer to such engineering technical thinking as end-­ oriented infrastructure construction. There ought to exist some discrepancy between urban and rural public service modes owing to different residence characteristics. The city has high-density population, and enjoys efficiency advantage by systematically solving facility problems. However, this is not the case in the village. For instance, it is not feasible to handle rural domestic sewage problems by centralized collection and treatment means as residents live in disperse houses and rural land is rather uneven. Therefore, planning projects should possibly apply end-oriented solutions, and utilize purification tanks to dispose scattered sewage with different means according to the size. In view of the reality of population migration in the village, smaller units seem to be more practical. In particular, single house alone can be viewed as a processing unit. This is also true for water and electricity supply. Distributed energy and water purification technology already prevails in less populous districts in Europe and America, for the reason that it is capable of raising public service efficiency and decreasing waste incurred by systematization. Furthermore, education and elderly care problems appear to be more complex, but the target should be also decentralized strategy. Taking

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education for example, instead of demolishing nearby villages and merging schools for centralized schooling, it is much sensible to transfer financial subsidy to individuals so that students can enroll in nearby cities and counties or even choose online education. Online quality education resources compensate the inequality of urban-rural education resources. It points out the future direction of public services. Critical Constraint in Rural Public Facility Construction Planning: Arable Land and Water Arable land and water constitute the rudimentary factors in support of the existence and development of rural villages. The adequacy of such resources determines the bearing capacity of a place for population. In scarcely populated areas in North China, population bearing capacity is confined to water, while in populated areas in South China, population bearing capacity is confined to land. Consequently, the size of a village should not be continually enlarged without restriction. Throughout the agglomeration or reproduction for generations, as the population in a village has reached the limit of land bearing capacity, some residents have to migrate to seek new residence. Taking Qukou Village in Yongjia County, Zhejiang Province for example, Quchuan Ye Family Genealogy during the regime of Guangxu records that “There is a long canal across the village surrounded by a large stream… Its branches are connected to four directions. The picturesque farmland is as if arranged like a hanging scroll. Trickling sound of spring gives a feast of ears. The land here is not isolated, and mountain is not barren as people can chop firewood, and grow crops and vegetables row by row.” Apart from the comprehensive investigation for widespread natural conditions, some meticulous augurs even verify the fertility of local soil. A more feasible practice is to sow seeds in spring and check the size and quantity of grains in autumn after determining the new site of villages. Prudent decision-makers even take three years to do the survey.7 From production to life, disaster prevention and relief, construction of basic life facilities, predecessors always follow the principle of minimum cost. We can observe the living wisdom of “minimum cost” nearly in all villages with a long-standing history. The thinking of design that should be followed can be traced if we discompose the thinking of minimum cost. 7

 Li Qiuxiang. Village, SDX Joint Publishing Company, 2008, p8.

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First of all, we have to respect and understand the status quo. As we all know, construction in line with nature laws and mechanisms rarely incurs natural destructive revision. For instance, the prior solution of disaster prevention and relief is to avoid building in dangerous places. Defense ranks the second place. Secondly, when we weight the cost, the priority should be given to the plan with minimum maintenance cost, like choosing local building materials, to save unnecessary expenditures and make convenience for future maintenance. It rests in the prime guarantee of sustainability. Among all mountainous villages visited by the author, rural houses and main roads are all above the 20-year flood disaster bottom line. The height won’t separate peasants from main production areas, but also effectively secure life and property. More importantly, it will not cause long-term inconvenience to people’s life and high maintenance cost due to excessive requirements on guarantee. Thirdly, entire facilities should have the possibility of flexible expansion and reconstruction so that conventional production and life facilities can be preserved, and huge waste can be avoided. Fourthly, it is vital to control development scale at a level where life resource security and life consumption metabolism enter natural recycle. Supported by external public services, rural drinking water, sewage discharge security and energy supply problems should be fixed on site. The solution is not added facility or external purchase, but is restricting the scale within a recyclable and sustainable scope. Mountain and water belong to natural constraints. The first step is to demarcate the non-recyclable boundary, especially water system related to human basic living quality and security. In many so-called ecological protection plans, old villages with a long history of hundreds of years can be often seen in man-made construction limited areas. How the great nature to which human footprints adapt become a non-recyclable and preserved zone? Our measurement criterion should be whether people can securely use, afford and pay for resulting cost. Additionally, as a precious production resource, arable land needs to be preset as a non-recyclable constraint. As found in rural history studies, peasants are often reluctant to build houses on arable land, and nearly all villages are situated at hills improper for tillage. Such practice also complies with the security principle. Particularly, in rice production areas, the irrigation system is usually formed by few generations. Therefore, the plan which advocates to build houses on arable land and reclaim construction site is rather questionable.

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Critical Constraint in Rural Public Facility Construction Planning: Population Size and Living Mode As Chinese rural area is undergoing drastic population changes, rural design must take this factor into account. Urbanization generates significant and measurable impacts on the hydrology, morphology, water quality and ecology of surface water. Under high-level development conditions, waterproof surface approaches or exceeds one fourth of basin, and the water it receives has limited beneficial purposes. Besides, the received water has rather limited beneficial purposes, and poses numerous adverse influences from waterproof surface, including growing serious flood threats, change of morphological height, and scarcity of aquatic species. To maintain biodiversity and prevent accumulative pollution, construction hardening capacity should be controlled within 10% with watershed as the boundary. Biodiversity is affected in condition that construction hardening capacity exceeds 10% (including road coverage), and biodiversity is deprived in condition that construction hardening capacity exceeds 25%. The hardening capacity inside an impoundment area is no more than 10% at its peak. Accordingly, village planning design is supposed to fully examine construction hardening capacity, and introduce sewage processing once construction hardening capacity surmounts the limit. Please refer to see Figs. 9.5 and 9.6 for related simplified analysis. In reality, public infrastructure in rural residence districts, like water supply, drainage system and electricity supply system, may also restrain residents’ land use to some degree. If residents in a village can build houses at their will, public infrastructure construction and operation cost will be necessarily increased. This is unacceptable to the municipality. From the perspective of the market, public infrastructure has lower cost if their use has higher degree of concentration. In consequence, infrastructure and public services do not extend outside the boundary, which means that it is illicit to forbid the access of residences to infrastructure service system. The influence of related discharge on environment is free of control. For instance, residences without fire hydrant can’t be viewed habitable. Roads in American rural residence districts appear to be inferior, but hydrants are equipped everywhere.8 8  Randall Arendt, Foreign Rural Design, translated by Ye Qimao & Ni Xiaohui, China Building Press, 2010, p20, 21.

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Basin catchment impermeable surface percentage

(%) 60 50 40

Loss of aquatic creature diversity ( over 25%)

30 20

To be affected (11%-25%)

10 Keeping the aquatic species diversity (0~10%) 0

Superio

moderate Water resource quality

inferior

Fig. 9.5  Relation between waterproof surface and water quality in impoundment area

At this point, the upgrade and development construction of American rural residence districts is confined by local infrastructure carrying capacity. Thus, instead of taking administrative means to control the land use in American rural residence districts, it is better to constrain the improper use of house site by infrastructure. Moreover, this is the experience in European countries. Critical Constraint in Rural Public Facility Construction Planning: Ecological Security Generally, it is acknowledged that the village naturally possesses the property compliant with the nature. But in reality, existing agriculture is the field which human beings take longest time to make continuous transformation, and also the most widespread man-made structure on land. Especially, in rice production area, artificial water supply system makes the actual water-holding capacity of paddy field far weaker than that of surrounding natural surface. What we need to do first is to learn the referent of ecology and the concept of ecosystem. The bottom of “ecological pyramid” is soil that supports the existence of all living beings. It is made of decomposer, producer and consumer.

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Catchment are (including development plot)

Sub-collecting area

Collecting area

River basin (or sub-basin)

A local collecting area possibly contains dozens of sub-collecting areas within the boundary; Collecting area planning tracks the planning and management of independent sub-collecting area Collecting area management unit Fig. 9.6  Natural purification in rural area

Decomposer, also known as soil organism, means creatures feeding on dead organisms like earthworms, ants, and fungi. Their responsibility is to decompose dead organisms into the soil. Producer means those green plants which can directly take in solar energy and create organism. The importance of “ecological pyramid” is that the lower the level of ecological environment is, the more it will be in quantity. Surface soil is obviously the basis of ecosystem as countless decomposers contribute to soil fertility

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and provide nutrients required by the growth of creatures. The formation of 1cm surface soil takes around 100–400  years, including hundreds of millions of decomposers.9

9.6   Public Participation Planning Diversity In description concerning about the basic properties of urban-rural planning, “public policy” and “democracy” are often held the attention of people. This requests urban planning to fully consider and represent the interests of people in the redistribution of social resources. While throughout the compilation of urban planning at all levels of government, both general planning and detailed planning have been dominated by “power-­ centered” will, and planners ignore the voice of the public. Upon the execution of resulting planning proposal, it definitely arouses a heated discussion in the society. More seriously, as the planning leads to largescale demolition conflicts and loss of urban diversity values, the public easily generate disappointed and contradictory emotions about the government and urban planning. Urban planning in western cities also encounters a similar dilemma. In one and two decades after World War II, western countries initiated widespread urban development and construction activities. However, brand-­ new apartments and convenient expressways based on the beautiful vision for administration elites and technical elites did not obtain the approval from the public, but instead aroused the indignation. Planning decisionmakers made thorough reflection. From then on, a series of theories such as advocacy planning theory, communication planning theory, collaboration planning theory, and incentive planning theory had been successively proposed. Afterwards, urban diversity was determined as the core value, and public participation in urban planning had been raised and development incessantly. By the mid-1060s, it had become a very important statutory link in urban management administrative system of numerous developed countries in Europe and America. In 1969, Sherry Arnstein published a famous paper titled A Ladder of Citizen Participation on the magazine of American Planning Association, which produced tremendous influences on public participation means and technologies, and laid a theoretical foundation for public participation technology and assessment system. Even to this day, it has been widely 9

 Lin Xiande, Urban-rural Ecology, Zhanshi Book Store, 2009, p6, 7, 10, 11.

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followed by worldwide researchers and practitioners. Sherry Arnstein divides public participation into 8 ladders, namely manipulation, therapy, informing, consultation, placation, partnership, delegated power, and citizen control. Present public participation forms are mostly limited to informing, consultation and placation as symbolic public participation. For realizing partnership and higher levels of public participation in decision-­ making, it requests considerable experiments and reforms in instruments and empowerment mechanisms. As of the 1980s, China began to discuss and explore public participation in urban planning, which can be proved by Urban-rural Planning Law of People’s Republic of China executed on January 1st 2008. Prior to the approval of urban-rural planning projects, compilation authority should disclose the draft publicly, and solicit opinions from experts and the public from demonstration meeting, hearing or other means. The time of announcement should be no less than 30 days. Moreover, compilation authority should fully examine experts and public opinions, and attach opinion collection condition and reason to approval materials. The effective development of public participation work not only demands the government and planners to cultivate favorable vocational quality, but also requests citizens to possess power corpus characteristics. We find that working method is extremely crucial in practical operation. Only correct method can excavate people’s true demands at the bottom of heart, and easily reach consensus among dissenters. In 2015, the author performed an experimental public participation decision-making design test in Qicha Village (village in city) in Chancheng District, Foshan City. The result of the cooperative work between villagers and the government is very satisfactory. “Village in city” is the reality commonly seen in rapid urbanization areas. In past urban development process, areas referred to as “old villages” are excluded from the planning and entire functional arrangement of the city in functional definition, or directly defined as “to-be transformed areas”. With regard to municipal facilities, security administration and other public services, these difficulties and dead zones actually constitute the root of chaos in urbanization. However, these old villages usually undertake the function of satisfying low-cost life demands, and their population density is often higher than that in planning built-up areas. Population density in some of these villages is even tenfold higher. Village and rural residents in such “village in city” remain at the margin of urbanization. Most buildings in such old villages were built in the 1980s and

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1990s. As to its building life, demolition and reconstruction mean the huge waste of social resources. As they are located in core urban area, related demolition cost is very high. Demolition and renovation is also one of the motivators of high housing price. Besides old villages, some unit houses built in around 1980s also enter the renovation stage. Related property right dispute is obviously more sophisticated. Exploration in old village renovation project is making preparations for old community reformation means, technologies and specifications. As to buildings, these villages have been busy in active self-upgrade process. The reason lies in the fact that those villagers who seek profits from rent invest the income in house reformation and reconstruction. The most common phenomenon in this process is the transition from trial to comparison of encroachment of public space, which narrows public space, and leads to security risks as well as environment problems. As most owners rent the house but do not live inside, they are not concerned about public environment at all. For instance, Chancheng District has been making concerted efforts to improve the environment in these old villages. It promises that for all environment improvement projects, the rural collective contributes 49% and the government grants 51% subsidy with no ceiling While it seems that villagers are not moved by the generous decision. We find in preliminary survey that villagers have realized all sorts of environment problems, but they ascribe it to government inaction, and consult government transformation experience in other old villages to conclude that environment improvement shows the ambition of government to do surface engineering rather than the consideration for old village upgrade and modernization. Additionally, the government’s practice of simply renovating street landscape also aggravates public mistrust and disgust. At present, the common practice of old village reformation in each city is to compensate for demolition or sell land for investment. Though villagers can take this opportunity to gain a large amount of money, they also lose the chance to serve the society and exchange decent life by labor. Meantime, substantial compensation deprives peasants’ judgment and belief in traditional culture values. The sole negotiation chance is that peasants keep raising the valuation for demolition, and transfer huge land cost to housing price. Peasants themselves also become the maker of urban diseases.

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If peasants are not mobilized to proactive join in this work and transit to citizens, and villages are not transited to urban functional districts, it is far from enough to realize urbanization in the city. We find that in the initial stage of work, existing public participation means like publicity, and opinion consultation can’t satisfy public demands at all. Likewise, even voluntary questions about “should a park be built near to riverside” can’t reflect the real vision of the public in an effective manner. Therefore, we creatively adopt renovated survey instruments so that the public no more simply give answers but have the right to make a balance and choice. Based on group sampling results for government departments and peasants, the government and peasants share more common points in related concerns. During the full process of public participation, this is a very critical link as peasants are willing to sit down for discussion and reach consensus to solve common concerns from then on. Those concerns respectively focused by the government and peasants are put aside for the time being. Inspired by the fruitful outcome, we improve the design instrument once again, by removing peasants’ strangeness about dimension and scale with technical means, and directly inviting peasants to planning design with mapping and other template ratio means. Once peasants’ initiative has been fully boosted, altogether six design plans have been proposed, and the optimal one has been chosen via public vote. When compared with former pure design launched by design institutions, these creative ideas and questions are more practical and full of concession spirits, and in return, conducive to the reflection and progress of design discipline. For instance, peasants raise that as construction land in surrounding cities has been built at a higher altitude, villages probably become low-lying land gathering rainfall flood. Targeted at this problem, design institutions later negotiate a solution with peasants, and form many new landscape features in response to local circumstances. During this process, the most affective feeling is that “nostalgia” has been sought again. Villagers used to hold abhorrent attitudes towards social participation, “our village does not require a new environment. It is all right for the government to just give us money to demolish the houses, and help us migrate to new communities as urban citizens.” But now, for protecting the ancient tree in the village, they repeatedly emphasize that “it is our flagpole, and the sole remain left by “eight ancient scenes of Qicha”. When our descendants come to the tree, they will realize their

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identity as a Qicha person.” Moreover, peasants even design the route for wedding and funeral ceremony, saying that “we do not need to build any museum because the route is exactly the museum of our village”. During this process, the government gradually becomes proactive. As peasants directly take a part in planning formation and reporting, they have understood multiple factors and realized the difficulty in choice. In many cases, they would like to present solutions by themselves. For instance, there is a plot of land that has been transferred to the government. In the design work, peasants submit to build a community activity center with government subsidy. Similarly, when straightening out the traffic network, many illicit reconstruction projects have been found to block fire prevention and rescue channel. Peasants therefore advise to formulate guiding instructions for the governance of illegal buildings. This is exactly what the government wants to gain from public participation. Whereas, devoid of bottom-up self-organization, any rehabilitation activity of traditional culture will be criticized by peasants, and any demolition of illegal building will be rendered as hegemony. The similarity of Chinese cities is severely endangering and threatening the formation of city culture. City diversity is not just the charm of city, but also the prime quality in reaction to decline brought about by industry transfer and many other similar factors. Maintaining and building urban diversity takes three prerequisites: mix of space and building functions and forms; historical and new epochal characteristics; participation of diverse subjects and related stakeholders. Obviously, old villages enclosed by cities enjoy natural advantages and irreplaceable conditions in this regard. It can not be denied that man-made buildings in old villages have to be renovated. But for the time being, what matters more is to break up the fetters imposed by rigid cognition, working practices, attitudes, and even planning industry specifications and management provisions. Additionally, reform of technical norms and management systems will greatly save urban upgrade cost, and improve facility efficiency. This apparently makes for the inheritance of social harmony and culture.

CHAPTER 10

The Netherlands’s Coordinated Urban and Rural Development and Enlightenment Thereof

The Netherlands is one of the countries with the highest level of development in Europe. The population density of the Netherlands is nearly three times higher than that of China. Its natural conditions are not very good, but its development achievements are outstanding. The citizens live and work in peace and contentment, the urban and rural scenery is beautiful, and the per capita income is in the forefront of European countries for a long time. Besides, it is particularly commendable that the Netherlands keeps a large proportion of the agricultural population among developed countries, but its agriculture is highly developed. Its national territorial area is less than half of the area of China’s Chongqing, but the gross export value of its agricultural products is the second in the world. The development mystery of such a country is worth exploring, and its experiences are worth learning from.

Dang Guoying, one of the authors of Chap. 10, went to the Netherlands in 2013 and visited ranches, the Agricultural University and relevant governmental agencies there. Partial contents of the chapter derive from this visit. © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 D. Ying, W. Wu, A Study of China’s Urban-Rural Integration Development, The Great Transformation of China, https://doi.org/10.1007/978-981-19-2756-0_10

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10.1   Highly Developed Netherlands Dairy: Taking Development of the Dairy as an Example [*2] Status of Dairy Economy of the Netherlands in the World 10% of Dutch GNP comes from the agricultural sector, thus the status of agriculture in the national economy is very important. According to the data of 2010, the agricultural economy of the Netherlands is 49.3 billion Euros, accounting for 9.5% of the total economy, wherein 6.2 billion Euros comes from the dairy, accounting for 13% of agriculture. The dairy exports are 5.4 billion Euros, while the agricultural exports are 72.2 billion Euros.1 The Netherlands is the second largest exporter of agricultural products in the world after the United States. The labor force of Dutch agriculture accounts for 10% of the total labor force. The number of cows in the Netherlands is 3.7 million, of which 1.4 million are dairy cows. The concentration ratio of the Dutch dairy economy is high, with more than 90% of dairy and dairy products controlled by FrieslandCampina (FC). In 2012, FrieslandCampina’s gross profit was 842 million Euros, with a year-on-year growth of 65.7%; and the net profit was 274 million Euros, with a year-on-year growth of 26.9%. FrieslandCampina ranks the top among the dairy companies in the world, which was the seventh in 2012. FrieslandCampina ranks the second in the world in terms of cooperative companies. Milk processing ranks the second in the world. Economic Efficiency of the Dutch Dairy The economic efficiency of the Dutch dairy is high. Based on some economic indicators, many links of the industrial chain of the Dutch dairy are at the world’s leading level, and its products are quite competitive in the world. Cheese produced in the Netherlands is especially famous in the world, and the Netherlands is a major exporter of cheese. Considering the balance between product quality and quantity, the comprehensive level of the Dutch dairy economy should be at the top level in the world. The

1  The above data refer LEI research institution of the Wageningen University, and are quoted from: http://www.wageningenur.nl/en/ExpertiseServices/ResearchInstitutes/lei/ AboutLEI/History.htm.

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income and expenditure status of Dutch professional dairy farms in relevant years can be seen in Table 10.1. The income conditions of the Dutch dairy farmers are better than those of other types of farmers. In addition to the dairy industry, Dutch agriculture also has production categories such as flower, pasturage, pig farming, and fishery. In comparison, the dairy economy has a higher income level (see Table 10.2). The average of annual per unit yield of the Dutch cows of is not the highest in the world, which is about 28% lower than that of the United States. According to the data grasped by the authors, this circumstance is related to the production mode of the Dutch dairy industry. The Dutch dairy ranches emphasize on natural feeding and encourage grazing. Family farms are principal, and the intensification degree is controlled at a low level. Per unit yield of China’s cows is 3003 kilograms, which is about 40% lowers than that of the Netherlands, ranking about 43 in the world. Win with Quality The Netherlands values the quality of the dairy products and encourages the farms to produce high-quality milk. FrieslandCampina has formulated the standards for cow feeding and provided different types of milk and milk products for the market pursuant to such standards. In addition to the biological milk, the Dutch dairy farms also produce organic milk, Campina milk and Landliebe milk. To produce the organic milk, the farms should sign a single agreement with FrieslandCampina and pass the certification of SKAL (Dutch inspection and certification institution for organic products) Fund, so as to ensure the engaged production conform to the applicable standards. Campina milk is a product with a certificate of origin, which contains richer iodine and biotin (Vitamin B8). To produce the Campina milk, the dairy farms must get the license and apply for special forage grass for the feeding. Landliebe milk is also a product with a certificate of origin, the production of which should follow the customized feeding methods and use true local fodders. On the basis of the single agreement with FrieslandCampina, Landliebe milk can be produced by German companies within the specified area. According to the obtained information, the milk quality indicators in Europe, including the Netherlands, are different from those of China. The

57,136 63,022 1664 2168 0 0 11,758 13,429 47,915 45,997 115,145 120,281 19,664 22,707 1672 2072 5732 6815 12,259 13,820 −1853 −2454 26,399 20,836

2002

2003

2004

62,821 65,251 2475 6064 0 0 14,092 15,379 46,602 48,134 121,040 122,701 22,175 21,744 1916 1693 6663 6464 13,595 13,588 −1794 −1409 22,633 24,981

Data source: Farm Accountancy Data Network, European Commission

productive consumption balancing subsidies and taxes decoupling subsidies depreciation net increase in farm output total output external factors salary rent ncome tax net farm income

2001

2006

66,802 70,628 10,648 15,127 92 2653 16,044 16,997 54,300 55,292 126,497 127,790 21,133 23,106 1469 1735 5885 5913 13,779 15,459 −207 −1471 32,960 30,715

2005

77,076 14,259 13,760 17,020 68,680 148,517 25,763 1923 6075 17,764 −1538 41,380

2007

Table 10.1  Average income and expenditure status of Dutch Professional Dairy Farms (unit: Euro) 2009 89,813 83,082 13,015 13,971 13,275 13,290 18,795 21,568 56,700 33,359 152,294 124,039 27,234 26,721 1894 2163 6225 6353 19,116 18,205 −1585 −680 27,881 5958

2008

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Table 10.2  Multiple of net income of the Dutch Dairy Farms relative to the income of the Dutch agriculture 2000

2001

2002

2003

2004

2005

2006

2007

1.39

1.21

1.45

1.24

1.45

1.56

1.29

1.83

Data source: Sorted by the author Dang Guoying according to the data provided by an institution when the author visited FrieslandCampina years ago

influence of such differences on the comprehensive quality of the milk should be judged by nutritionists, but not rashly judged by the authors. The European standards have stipulated the contents of 18 amino acids, which can reflect the strictness on quality. Relevant agencies in the Netherlands have strict requirements on the environment of dairy farms, especially the strict regulations on the discharge of cow dung. The Netherlands transports 800,000 vehicles of cow dung per year, costing 350 million Euros. 52% of the cow dung is returned to ranches, 26% is applied to cultivated land in the Netherlands, 15% is exported to Germany and northern France after dried and formed, and 7% is used as raw material of fuel. The EU and the Dutch government not only have regulations on the treatment of cow dung and pig dung, but also have regulations on the output of livestock dung. Technicians have developed some techniques to control the total amount of dung discharge. We noticed when we visited the ranches that the dung in the cowsheds was basically cleaned up at any time and would not head up. It is quite different from some domestic cowsheds. Building the quality management culture plays a major role in the Dutch agriculture. Foqus planet is a lean management system adopted by the EU.  Markets within the EU are highly opened in the way that the consumption markets are not subjected to national boundaries, and organizations in the industrial chain can be freely distributed among the countries. In this case, product quality of each country must be ensured by the transnational agreements. Foqus planet is one of those transnational agreements. Foqus planet is a system adopted by FrieslandCampina and ranchers in the Netherlands, Germany and Belgium to satisfy the requirements of buyers, governments and the society in quality, food safety and sustainable development. The farms can use the important elements (network consultation, seminars and training farms) of the Foqus planet as a way to learn, so that the farms can be further developed technically and economically. Foqus planet answers questions of the farmers and provides

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supports for them, so that the farmers can remedy their own problems. The work of Foqus planet involves four themes: milk, cows, production processes and the environment. Many of them are closely linked with the legislation or the demands and aspirations of customers and consumers. Sustainable projects in Foqus planet are evaluated every three years. Giant Cooperation Supports Agricultural Industry Chain Royal FrieslandCampina Company is composed of two Dutch giants in dairy industry, Friesland Food Company and Campina Internal Company, which experienced a similar development history. Royal FrieslandCampina Company originated from the Netherlands in the nineteenth century. There were no refrigerators at that time, and the milk must be shipped out before rotted, therefore the Dutch ranchers joined the milk factory cooperative organization throughout the Netherlands to ensure sale of the milk and they gained greater discourse in the markets. Later, many local medium-sized and small-sized dairy enterprises gradually joined them, which were developed into one of largest cooperative dairy enterprises in the world. Name of Royal FrieslandCampina Company has reflected the long history of this company. Friesland is a province of northern Netherlands, which is famous for its vast grassland, lakes and high-quality dairy hers; Campina is a thick grassland farm in southern Netherlands, which was named by Roman more than 20 centuries ago. In 1871, 9 farmers took over a cheese factory in Weringerwaad, a small town of the Netherlands, and started their cooperative production. In 1880, the first cooperative dairy enterprise was established, which was developed to Campina in the future. In 1886, 6 farmers created a cooperative dairy enterprise, which was developed to Friesland in the future. Afterwards, the two cooperative enterprises constantly merged similar enterprises, extending to Belgium, Germany, Switzerland and some Asian countries, and expanded towards the industrial chain of dairy production. In 1960s, such mergers reached a climax. The two enterprises were already the two largest dairy enterprises in the Netherlands before their merger in 2008. At that time, the newly established enterprises accounted for four fifths of the Dutch market shares. Like many European and American farms and agricultural cooperatives it joined, FrieslandCampina is also faced with two interlaced problems: one is the processing of the relationship between its internal farms and the

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cooperatives; another is the processing of the relationship between the entire cooperative and agricultural institutions of the EU. It’s always been controversial whether the cooperatives can truly help the farmers to improve their earnings.2 The authors consider that there is no doubt the cooperative has supported the farmers, but whether relevant systems of the cooperative are the best should be another pair of shoes. At present, the EU has permitted and even encouraged conditioned farmers to retreat from the cooperative, while most farmers have not tried to quit. It proves that joining the cooperative is beneficial for the farmers. To stabilize internal production and market supply, the agricultural institutions of the EU have carried out the production quota system since 1984 and allow quota free trade. Within the quota, the EU provides subsidies for the producers. This system is unbeneficial neither to owners of large-sized farms, nor to free competition and efficiency improvement. Under the influence of the United States and WTO, subsidies gradually become “direct payment”. The quota system was fully canceled in 2014. Overall, FrieslandCampina is more beneficial to farmers than other EU dairy enterprises (cooperatives). Over the years, the milk purchase price of FrieslandCampina is 1.86% higher than that of other European companies in average. This difference is not small.

10.2  Secret of Achievement of the Dutch Dairy The representative enterprise of the Dutch dairy’s achievement is FrieslandCampina. In this part, this company is taken as an example to introduce the internal factors of the Dutch dairy’s achievements. Equity Basis: A New Socialist Private Ownership The cognition on ownership in China’s intellectual community is basically adhered to the knowledge framework of decades ago. In fact, before the 1930s, European and American countries were deeply influenced by the liberal tradition, emphasizing the free operation of enterprises, opposing government intervention, and opposing monopoly. After the Second World War, the situation changed. Private entrepreneurs found that something that was once considered a natural right had gradually changed, 2  Niek Koning: “The Netherlands: Brief History of Cooperative Development Since 1890 and Influences on Earnings of Farmers”, see the website of the Wageningen University.

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some rights had been transferred to the organizations created by the entrepreneurs themselves, and some rights had been transferred to the government. Such transfer means that the boundaries between public and private rights have changed. The Dutch ranch land is mostly owned by the ranchers. This relationship is interpreted as private ownership. However, this kind of private ownership will be constrained, and such constraint mainly comes from cooperatives constituted by the ranchers, mainly FrieslandCampina, but also from the Dutch government, regional transnational agreements and agricultural institutions of the EU. In the eyes of farmers, the EU is also a government. Members of FrieslandCampina spread all over 21 regions. Each regional council represents a region. The regional council is composed of at least 10 members. Members of each region directly elect the representative of the regional council among themselves. Chairmen of 21 regional councils jointly constitute the cooperative council which mainly provides consultation and reflects the opinions of the management board. The highest institution in the cooperative is the member council. Important advices or decisions of the board should be approved by the member council. The board is in charge of managing the cooperative, which comprises 9 members. According to the binding recommendations of the cooperative council, the member council can appoint the board members. The board determines individual’s application for membership and confirms the basic principles for accepting members. The milk provided by the new members must satisfy relevant quality requirements and the cost structure of collecting milk. New members will enjoy membership rights from the time they are accepted as members and will also make economic contributions. For example, each member shall contribute 100 kilograms of milk with a unit price of 4 Euros per year. Members are highly dependent on cooperatives and relevant regulatory agencies of the government. The agricultural institutions of the Dutch government and the agricultural institutions of the EU influence the behaviors of the members through cooperatives. This relationship will be discussed later, and a case will be introduced here to illustrate the constraints of the government and cooperatives on member behaviors. At the beginning of 1990s, with the rise of green politics, politicians had a strong desire to let the Dutch cows out of the cowsheds and have a certain time to graze on the grass every day. This desire was not welcomed by the farmers at first, and many farmers had taken actions to resist and refused to

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cooperate. To promote this action, the cooperatives convened over 100 meetings within one year and finally made the farmers accept this raising method. At this point, the rights of the farmers are certainly constrained. There is a similar example. When visiting a ranch, the authors noticed that the living and production facilities such as the house and the cowsheds of the ranch covered and area of about 0.3 hectares, and there was still space available on the ground. The authors specifically asked the owner if he could build a facility in this space, and if yes, what approval procedures would be passed. The owner replied clearly that adding facilities is a very complicated matter, and they could not take actions casually in that space, and they need to get the examination and approval of the regulatory agencies on compliance. A large number of literature can prove that private farmers are increasingly becoming a large production unit in the system composed of countries, transnational alliances and owners’ associations, and their space for independent decision-making is small. They are served, guided and supervised, like ants in the ant kingdom. The so-called “externality” generated from free competition of traditional private enterprises in the market has been decomposed into “cake slices” by the giant institutions and become the condiment of the institutions in many links. For this condition, different people have different views. The author holds that there are many unsatisfactory things in this process, but it can be considered as the achievement in the evolution of human industrial civilization. This is a new scene after the modern society private ownership was born. At this point, “externality” is resolved, the transaction cost is saved, and especially the modern concept of “sustainable development” has a practical carrier. Mutual Trust and Interconnect Mechanism Between Cooperatives and Family Farms The cooperatives establish the mutual trust and interconnect relations with their members though a highly transparent information transmission platform. Members can require the cooperative board to discuss subjects which are beneficial to the cooperatives in written form. Relevant articles in the cooperative regulations can ensure this right. A proposal must get the support of at least 100 members. The cooperative has a set of release and adjustment procedures for the milk settlement price which is concerned by its members. The monthly

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guarantee price is determined by the milk price of that month and has nothing to do with the company’s performance. Corrections to the annual guarantee price can also be settled at the same time as the performance pay. The guarantee price of the month is announced on the first Monday of each month through the milkweb website. At present, the effective range of the guarantee price is 4.41% fat and 3.47% protein per 100 kg of milk, and an average supply of 500,000 kg of milk per year. Then, it is converted into the price of fat and protein per kilogram. The settlement between the cooperative and the members has a settlement concept called “performance pay”, the level of which depends on FrieslandCampina’s financial performance and the agreed booking policies. In principle, 30% of the company’s net profit is paid to the members in cash as the performance pay after deducting the membership certificate fees, membership bonds and membership fees based on the guarantee price. After the annual accounts are liquidated, the performance pay is issued in proportion to the supply of milk. In addition to the above two basic accounting items, there are other agreement settlement items such as seasonal adjustment arrangements, volume surcharges, grazing fees, and the cost of paying for organic milk, Campina milk and Landliebe milk. The cooperative requires the farms to bear part of the costs which consist of fixed costs, variable costs and excess surcharges, of which the excess surcharges are charged at progressive rates. Collection of the surcharges forms a constraint on farm overproduction and is beneficial to stabilize the total production scale of the cooperative. Collection of the fixed costs encourages the farms to ensure the minimum production. Such an interest calculating method is worth learning by Chinese cooperatives. The cooperative also has a very important internal financing arrangement. 20% of the company’s net profit will be distributed to members in the form of fixed member bonds, enabling the farmers to become creditors of the cooperative. The amount of the credit is based on the value of the milk supplied by the members in the previous year. The company stipulates that members’ membership certificates can also be converted into fixed member bonds which cannot be transferred. When a member’s business and membership are terminated, its fixed member bonds will be automatically converted into free membership bonds. The bond interest rate is determined by the board every six months, floating upward of 1% is based on a 4-to-5-year government bond yield. When the

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rancher’s business is terminated, the bonds will be repurchased at par value. In addition, as the first owner, the rancher can sell it back to FrieslandCampina at a fixed rate of 75% of its original value. “Golden Triangle”: Cooperation Among Government, Cooperatives and Universities Another factor in the development of the Dutch dairy industry refers to the close cooperation among scientific research institutions, the government and cooperatives. Among the research institutions, Wageningen University and Research Center (Wageningen UR or WUR) has made outstanding contributions to the development of the Dutch dairy industry. Here, we mainly introduce the impact of Wageningen University in the relationship among the three. According to the data provided by the university, the university ranks top 3 in the world in the field of dairy research and top 100 in the world university rankings. Currently, the university has 11,000 students and 6000 faculty and staff. Expenditures used each year exceed 700 million Euros. The university takes delight in claiming that it is committed to establish the “Golden Triangle” and build close cooperation with the government and the business circles. Academic goals of the university are mainly: ( 1) Agricultural production facing the twenty-first century; (2) Sustainable use of resources; (3) Bio-based systems and products; (4) Food, health and behaviors. Experts studying on dairy industry at Wageningen University believe that the world dairy industry is constantly growing, and this growth has created a huge demand for experts and expertise in dairy. For this reason, the university should provide outstanding dairy experts and the latest scientific knowledge to enhance the value of milk products. The university proposes a famous R&D concept: knowledge innovation in the dairy chain from grass to glass (g to g). This concept has been supported by the Dutch Dairy Industry Organization. FrieslandCampina has participated in the dairy technical R&D project of Wageningen University and applied its techniques into the production link. At present, Wageningen University is mainly engaged in the research on the components of the output of the whole industry chain in the dairy

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industry, and explores new methods to enhance the value of product components. The specific projects include: ( 1) Analyzing change mechanisms of milk composition; (2) Cognizing functions of milk composition and nutritional quality of milk products; (3) Finding new methods to change milk composition and quality; (4) Studying on immune proteins of human milk and cow milk; (5) Studying on infant milk formula adaptive to health requirements of infants; (6) Studying on formation of milk foam and its stability At present, the largest “Golden Triangle” project for food and nutrition research carried out by Wageningen University is the study on the formation mechanism of milk foam. In the present study, Chinese scholars made positive contributions. This study has positive meanings for improving the food characteristics and processing characteristics of milk. The other end of the “Golden Triangle” is the government and its agencies. Within the EU, agriculture is one of the sectors most intervened by the government. The agricultural institutions of the EU, transnational agreements, the state’s central government and local governments can all formulate regulations on the agricultural economy. The upper and lower relations of the regulations are clearly defined. Various laws in the Netherlands involve the regulations on the dairy economy, and multiple management departments jointly constrain the dairy economy. The Dutch Commodities Act has specific articles on infant milk formula. The Dutch Food and Drugs Authority is responsible for the supervision on production of milk products. In addition, the Netherlands also has a specialized Controlling Authority for Milk and Milk Products which is independent of the government, which guarantees the quality and safety of milk products. The authority is also responsible for supervising the implementation of various dairy-related regulations in the Netherlands and the EU and issuing export licenses. Animal Welfare: Meaning of an Advanced Conception of Nature Humans are a part of nature. The respect and protection on nature and other animals are not only beneficial to people’s own health, but also a correct concept of nature. The Dutch dairy economy is increasingly showing this new concept of nature.

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The main concept about animal welfare is: focusing on animal welfare, animal health and human health in the scaled ranch management; reflecting the “industrialization” of animal resource management for large cowsheds; turning the concept of feeding economic-use animals; strengthening integrated management on animal health in rural ranches; enhancing the relations between the ranchers and the public in the community and deepening public’s understanding on food production. In terms of dairy cows, the key points to realize animal welfare are: building identity records for the cows; avoiding removing the ox horns casually or getting the approval of the veterinarian if necessary; strictly imposing restrictions on branding on cow’s body; forbidden to bob the tails of cows; maintaining necessary space of the cowsheds and activity spaces and establishing a good space system; preventing the cows from mastitis; keeping the cow hoofs in a good state. The goal of improving the environment of animal welfare is mainly: clean and tidy farms; promoting grassland grazing for most Dutch dairy cows must forage on grassland; maintaining mineral balance of grassland soil; Dutch dairy retailers must sell milk and milk products gained from cows grazed on the grassland; implementing new energy application incentive policies; protecting biodiversity; implementing strict dung disposing procedures and so on. According to Dutch dairy experts, dung pollution in animal husbandry may greatly threaten the environment. The amount of dung will be increased at the time of improving the output of animal husbandry, which will not only pollute surface water and groundwater, but also can increase the pollution of the atmosphere and increase the ammonia content of rainwater. Generally, agricultural pollution in ranches is greater than that in cultivation. Enterprise Scale and Product Quality The role of giant cooperatives in the field of agriculture has been controversial. Like many European countries, FrieslandCampina is the only largest cooperative in the Dutch dairy industry. Will this lead to the common problem of poor efficiency in the monopoly? Based on the current market relationship in Europe, this situation is not easy to happen. Cooperatives in various countries may be monopolistic or oligopolistic in their own countries, but they have competitors within the EU market. For example, among the top 20 dairy enterprises in the world, there are 7 within the

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EU. Therefore, competitions still exist even though the scale of the agricultural cooperatives or dairy companies in the EU is large. It is generally considered among the market theories of mainstream economics that monopolistic competition is a relatively good pattern, which can avoid the deficiencies of high transaction cost and difficult quality supervision generated by excessive competition, but also can avoid high price equilibrium and welfare loss caused by complete monopoly. According to the data grasped by the authors, the dairy market in the EU is a monopolistic competition market in principle. Even though the EU dairy industry cannot be considered as a complete monopoly market, the agricultural institutions of EU still pay considerable attention to protecting the free competition of the market, especially protecting small enterprises which are independent of giant cooperatives. The intervention of the EU in the merging process of Friesland and Campina can present this management idea. As a condition of the merger between Friesland and Campina in December 2008, the Commission of EU stipulates that FrieslandCampina should formulate a plan to encourage those members with an annual supply of over 1.2 billion kilograms (which is a large number, approximately 200 times of the average output of current Dutch dairy farm) to separate themselves from the cooperatives. In general, the guidance and management of the EU on the scale of the agricultural enterprises are correct. Here, the authors intend to discuss the relation between enterprise scale and product quality management through more words. Basic principle of this plan is that those who voluntarily terminate the membership of FrieslandCampina under certain conditions and supply milk to other places will get a sum of startup bonus, which is equivalent to the amount converted according to 5 Euros per 100 kilograms before leaving FrieslandCampina. Salty butter is sold as fresh butter after spread with a layers of fresh butter; waste left after making soaps is sold as sugars after mixed with other things; clay is sold after exquisitely smashed, rubbed with mutton fat and then mixed with cocoa powder; tea mixed with vitex leaves or brewed tea leaves is sold as good tea—where did these things happen? Readers might think of current China, but these things occurred in Britain in 1840s, over 160 years from now. The description on these things comes from The Condition of the Working-class in England in 1844 written by Engels. At that time, Britain was a place where commercial fraud was rampant. Commercial fraud at that time seemed to be naked. Famous tobacconists said openly that none of their cigars were fully made of tobaccos. Flour

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merchants usually mixed the flour with land plaster or chalk powder. Costume merchants vigorously stretched flannel and socks and then sold them to consumers who would immediately know that those were short flannel or socks after washing them. Engels hated this kind of commercial fraud, but it is worth noting that Engels did not discuss such a thing as a moral topic, which is mastered than current reviewers. He noticed that great merchants were generally reluctant to engage in commercial fraud. He said that the bosses of big stores cherished their reputation. If they sold inferior adulterated goods, the most disadvantaged are themselves. Large retailers invested a large capital in their businesses, and they would lose their credits and suffer bankruptcy once the frauds were seen through. Business of a small shopkeeper was usually restrained in one street. If the fraud was exposed, what would be the loss of the shopkeeper? He could move to another street if he lost his integrity in one street. Adulterate behaviors were rarely subject to legal liability except those related to tax evasion. At that time, the British economy was still underdeveloped, and there were many small businessmen, and commercial fraud was commonly seen. According to the data provided by Engels, the proportion between bosses and employees was 1:3 at that time, which could be seen the scale of industrial and commercial enterprises was small. Police officers could not take charge of all the commercial frauds. It is incredible that in the reports of the police station, there were many records of penalty charges due to commercial fraud each day. Engels excerpted the records of penalty charges disclosed on the newspaper on one day in 1844, appearing that the police’s disposal of commercial fraud was superficial. The profundity of Engels’ review on commercial fraud is that he noticed the biggest victim of commercial fraud was the poor. He said that the rich were particular about eating, their taste was sensitive, and thus they could easily see through the frauds. However, the poor would calculate each penny they paid and buy more things with less money. Thus they would not pay attention to quality and be weak in doing so, because they did not have the opportunities to practice their taste. As a result, all adulterate and even poisoned food had been sold to them. This review by Engels reminds the authors of the “poisoned milk powder incident” that occurred in China in 2010. Those who bought the poisoned milk powder were poor peasants in villages. They wanted to strengthen nutrition of their kids when they got some money. They wanted to buy milk powder but could not pay for expensive ones, thus they bought the cheap milk powder. The

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oppidans were different, who had higher income and more sensitive taste than the peasants, as said by Engels. They would buy expensive or imported milk powder for their kids. Thus “poisoned milk powder” would not easily harm the kids of the rich in town. There was no market in the cities for the illegal merchants, so they went to the villages to do their business. In this way, the peasants have suffered from lack of land and low price of cereals, still have to experience the exploit and fraud from the merchants. It appears that in China, only the industrial and commercial personnel are responsible for the market order, but the enforcement of industrial and commercial personnel is relatively weak. It is likely that they have been numb at the fraudsters like the flying cockroaches. Nowadays, people first and building a harmonious society have become the government’s policy objectives. To implement this policy, we must start from concrete things. The method to helping the poor should be comprehensive, including the fight against commercial fraud. Above all, this is not just an economic issue, but also a political issue. Engels’ review on Britain’s early commercial fraud gives us other inspiration. The authors have repeatedly heard that Westerners seem to have the genes of integrity in their bones, and things like commercial fraud seem to be the endowments of Chinese. This viewpoint will not be accepted by us as long as we have read the books of Engels. Few years ago, the authors read the literature saying that Nordics once conducted commercial frauds on a large scale in the Mediterranean area and took their military force as the protection, resulting in the destroy of economic prosperity of the Mediterranean area in a period of time. Besides, it seems that the history of commercial fraud in Europe is long. Comparatively speaking, commercial fraud is irrelevant with the so-called nationality, but only related to the economic development level and basic system. Under the condition of excessive competition, the cost of government’s crackdown on commercial fraud is relatively high, thus commercial fraud may be a common phenomenon. At this time, although it will poison the entire social life if government officials collude with businessmen, it will not make commercial fraud a big thing. When there is a moderate monopoly, the average scale of the enterprises will increase, and the cost of the government crackdown on commercial fraud will be reduced. Meanwhile, the benefits of government officials colluding with fraudsters will be greatly increased. This is a critical period to observe whether the society can successfully suppress commercial fraud. At this point, spread of commercial fraud can be well restrained through a proper system, such as

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effective administration established on the basis of democratic politics. Obviously, the Westerners have successfully crossed this threshold, while Chinese are marching toward this threshold. Experiences of the EU and the Netherlands tell us the problem of dairy economic scale cannot be generalized. The dairy economy has a relatively long industrial chain. Each link of the industrial chain has enterprises (ranches) or management agencies attached to them. As for the dairy industrial chain, the scale of a ranch should not be large, but other management institutions on the industrial chain can be large. Ranches in the Netherlands are normally operated by families mostly with a raising scale of less than 100 cows. Thus, two labor forces can operate a ranch. Ranches which exceed that scale might need hire labor forces. The conversation between the Dutch ranchers and us indicates that in the link of rank production, family operation is a better organization form. The ranchers told us that in the process of nursing cows, many knowledge could not be found in the textbooks, but daily experiences were very important. Accumulation and utilization of experiences are highly correlated with responsibility. The employees and the owner of the ranch do not match in terms of responsibility. The owner can supervise on a small number of employees. If the scale is too large that employees increase and must be arranged at different positions with the owner, the supervision cost will be immediately increased. This is the primary cause why the scale of Dutch ranches slowly increases but the organization form of family operation is basically unchanged. The scale of family operation has been extended continuously in recent decades. According to the prediction, the number of cows raised in the Dutch family ranches will be doubled by 2020. This change mainly relies on technical progress but not increasing employed labor forces. Except ranch production, other links of the dairy industrial chain can be highly specialized and form a large-scale cooperation system. For example, Qlip is an institution that focuses on the test of milk and its products, and its scale is huge. It provides testing services for the milk, milk products and environment quality of production sites in the Netherlands and surrounding countries, and establishes service files. It has nearly 200 employees and an annual output value of more than 200 million yuan. The testing process is highly automated and informative. The logistics, processing, marketing and after-sales services of the dairy industry chain are also highly centralized in order to take the advantage of scale economy.

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10.3  Urban and Rural Land Use Planning of the Netherlands Land planning management of the Netherlands is quite acclaimed in the world planning circle. The famous American land scholar Jim Riddell has fully affirmed the achievements of the Dutch land management and the maturity of the rule of land law system. Under the conditions of high population density, the Netherlands has protected high-quality agricultural land and scale management. It also has cities with convenient transportation and beautiful living environment. Meanwhile, it has established a rule of law guarantee system that rarely causes disputes. Scientific Land Management Objective and Basic Concept The reason why land space planning of the Netherlands is widely acclaimed is related to some important ideas. (1) Establish land planning system on the basis of respecting the rights of land owners According to the Dutch laws, any owners of a piece of land can solely enjoy the profits brought by this land on the premise of not affecting the interests of other related people, including public interests. Based on this idea, the clear land planning idea of the Dutch is established. As long as public interests are involved, the government needs to plan different plots in the main form of land district planning, namely, restricting or arranging the basic purposes of the plots in different areas. The idea of government-leading arrangement on land use is similar to the government’s intervention on market, which does not conform to the principles of market economy. In fact, the Netherlands is one of the countries doing the best in business. The Dutch loves free trade and has a long historical tradition of integrity. The Dutch once defeated Spain depending on their rigorous business spirit and took the lead in world trade in history. Adam Smith, the British economist who first established the theory of free trade, highly praised the Dutch business spirit. The Dutch business spirit has a profound impact on Japan. Strictly speaking, the Dutch opened the gate of Japan not by cannons but trades. Land district planning is actually the reflection of commercial order on land management. Equal transaction is the core principle of commercial

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activities. Nevertheless, public issues will be formed if the right relations involved in the transaction are too complicated which cannot be handled properly through negotiation. Using a third party accepted by the transaction parties to deal with such public issues can improve the efficiency and promote trade development. Government serving as a third party is actually regulated by the contracts of each transaction party. Land utilization is full of various public issues, thus it is absolutely not lowering the standard of free trade that the Dutch establishes the order of land utilization through district planning. (2) Equality between private right and public right is the core principle in land use planning According to the regulations of the Dutch law, the government, as a land owner, is under the same legal jurisdiction as a private land owner, and they are equal in rights. The government can own land as a private person, and its rights are similar to those of privately owned land. The conversion of private land into government land with reasonable compensation must meet the requirements of the public interest. At the same time, the land owned by the government must also comply with the requirements of the district planning. District planning change has strict procedures, and the government must comply with such procedures. When implementing the district planning, the government usually considers the need to build compact cities and retain vast rural areas, the spatial accessibility requirements between settlements, the diversity and differentiation of environmental sites, and the fairness of spatial development, and thus regional development and local development are equal in terms of services and facilities. (3) Sticking to the principle of democratic consultation formulated by land district planning The Dutch government attaches great importance to communication with landowners in the formulation of land development plans, ensuring that the claims of the property owners are satisfied as much as possible through equal consultation. The Spacial Planning Act of the Netherlands has made detailed procedures for the formulation of land utilization planning to ensure that the opinions of relevant parties in land utilization are consistent. If there is any inconformity, the act has also regulated the approach to solving the problems through litigation.

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Paying Attention to Decentralized Management System of Land Resource Utilization Efficiency The Dutch government is divided into three levels, respectively, central, provincial and municipal. According to the Spacial Planning Act, the formulation and supervision of national spatial planning are also carried out by three levels of governments. The three levels of governments will formulate a long-­run land utilization planning, while the local governments also need to formulate and execute the detailed plans of land utilization. Major infrastructure projects are regional or national projects, which are prepared and implemented by the provinces and relevant departments respectively. Since 2012, the Dutch national infrastructure and spatial planning strategy has been further adapted to endow regional and local authorities with greater flexibility. The land district planning is made by the council at the city level or the city government. The government is always the dominant power in planning formulation and implementation however the decentralized management system is set. Will this basic institutional arrangement form the will of the leader in the land planning and impede the “natural evolution” process of urban and rural population adjustment? Theoretically speaking, it is not impossible that this circumstance occurs. However, the fact is that the Dutch cities have reserved the landscape of natural evolution, the countries and fields have kept their beautiful sceneries, while the cities have shown the rich historical and cultural traditions. It is considered that there are four factors which have made contributions to the urban and rural construction of the Netherlands. The first is respect on private rights. Some near-street buildings in the Dutch cities are quite narrow that one household only has a long and narrow house. The government will not restrict this dwelling mode on the excuses of fire protection or landscape governance. Affected by the Netherlands, streets of Japanese cities also have such landscapes. The second is local self-government system. According to the Dutch land planning laws, the central government and provincial governments will formulate the planning rules and implementing large-scale projects only on the basis of the overall public interests of their jurisdictions so that the municipal government has great autonomous right in land utilization. The third is land planning negotiation system. The fourth is the protection on old buildings. The Netherlands rarely conducts large-scale demolition and reconstruction. For undeveloped and unutilized land, the Netherlands will also require a variety of plans and make choices after full negotiation.

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Based on the practice, the land planning management of the Netherlands has not only achieved the purpose of land saving, but also met the construction requirements of a livable environment. The concept of compact cities was introduced into the urbanization policies of all levels of government in the Netherlands after 1985, and gradually became a popular word, occupying the center of planning and guiding ideas, and even becoming the cornerstone of national development. However, we have many misunderstandings about this concept. We believe that only by restricting the area of residential areas and allowing residents to live in high-rise residences can a compact city be formed. It is actually on the contrary, the dwelling environment of the Dutch is much looser than we imagined. As shown in Fig. 10.1, as a country with an urbanization rate of 90%, the proportion of single-family houses in residential buildings is as high as 65%, which is nearly 50% even in provinces with a high degree of urbanization. Unit buildings are generally low-rise below 5 floors. The population density of each main city in the Netherlands is generally 5000 persons per square kilometer. The experience of city construction in the Zuid-Holland Noord-Holland Utrecht Groningen Lirnburg Gelderland Overijssel Noord-Brabant Flevoland Drenthe Zeeland Friesland

Single house unit building

Nederland 0

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60

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Fig. 10.1  Housing condition across provinces of Holland (See website: http:// www.cbs.nl/nlNLmenuthemas/bouwen wonen/publicaties/artikelen/archief 2013 twee derde van alle woningen eengezinswoning pub.htm for the dwelling conditions of various provinces of the Netherlands. Data unmarked with sources are taken from the official website of the Statistics Netherlands)

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Netherlands shows that for a country with high population density, enabling urban residents to have a comfortable living space is not contradictory to the protection of land resources (see Fig. 10.1). Strict Land Utilization Supervision System Strict enforcement is the guarantee to manifest the rule of law. The effect of the Dutch land planning management is related to strict supervision. As mentioned above, one of the authors of this book has visited the Dutch ranches. When the author saw a relatively large piece of land in the facility area of the ranch, the author asked the owner why not use this land to build a resort facility. The rancher was quite stunned and answered that it was impossible to do so because the government had strict restrictions on this. Construction of any land-related buildings must accept the supervision and approval of the government. Under this condition, the government will not approve the construction unless related laws are modified. Actually, as long as legislation can guarantee basic fairness and minimal intervention and is provided with stability and predictability, people will make some self-compensation for the sacrifice of interests by means of the market even if the law is imperfect. Strict supervision is the guarantee of predictability of the law. Land utilization supervision is inevitably accompanied with permission system. At present, the Dutch legislative institution has released a series of laws to make detailed regulations. People who want to build a house on their own land need to get construction permissions; a lot of permissions are also required to build a factory. Strict supervision has enhanced the predictability of land rights. For instance, the government issues a temporary special permission for construction, the only premise of which is that the building will be dismantled or removed five years later. Otherwise, the special permission will not be set up.3 Similar strict regulations have greatly improved the predictability of land utilization, which are beneficial to reducing land speculation and interest conflicts between concerned parties. Full and accurate cadastre data and highly transparent information are important conditions for the effectiveness of land planning supervision in the Netherlands. As claimed by a friend in the Dutch academic circle, each piece of land with separated rights in the Netherlands has a detailed profile 3  Cheng Xueyang: District Planning, Land Expropriation and Real Estate Management in the Netherlands, Research on Administrative Law 2012 (2).

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which can be consulted in relevant institutions. In recent years, the information has been disclosed on professional websites increasingly. Information publicity has not only reduced the transaction risks, but also reduced the rent-seeking space of the administrators.

10.4  Enlightenment of Dutch Development Experiences on China The development experience of the Dutch dairy industry is worth learning from. In the authors’ opinion, it should make our agricultural modernization take a healthier pace if we can promote reform in the following aspects. Change of Right: Thinking of Public Right Operation Throughout the Dutch dairy industry, operation of the industrial chain actually focuses on four major objectives: the first is that the investors (mainly ranchers) must gain profits; the second is to ensure production safety and quality of milk products, avoid public events caused by quality and safety issues; the third is to guarantee environmental sustainability; and the fourth is to maintain the stability of milk product prices. To realize the four objectives, right allocation should be used as the guarantee. Particularly, a healthily operated public right system is required. Here the authors will generalize the features of this right allocation system and make some extended analyses. Firstly, free enforcement of private rights is still the foundation of economic system operation. In economic operation, as long as the enterprises do not cause public problems, namely, not producing the “externality” problems mentioned by economists, they should have the freedom. Free enforcement of private rights still conforms to the theoretical principle of Adam Smith in market economy. In the inspection of the Dutch dairy industry, the emphasis on responsibility by the ranchers and dairy experts impressed us deeply. The ranchers will not have the responsibilities if the profitable objective is not allowed to exist. Even if the Dutch ranch has been highly modernized, it is still not a system compelled by the technical characters of machines. Once the sense of responsibility is lost, economic efficiency will disappear. Such economic units are not suitable for large-­ scale employment production, nor suitable for public ownership. Family operation is a reasonable form of ranch.

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Secondly, in the field of production, the boundary of private rights is shrinking, while the domain of public rights is enlarging. The changes in the boundaries between public and private rights are asymmetrical. In the field of consumption, private rights of human are mainly enlarged, the range of consumption choices is expanding, and personalized consumptions are increasingly respected. However, in the field of production, public rights of human are mainly enlarged. Quality safety is no longer an affair which can be handled by enterprises themselves. As long as it is difficult for consumers to judge the quality, the public authority will intervene to balance the symmetry of the information; the baseline of quality safety is mandatory to the enterprises. Disposal of environmental influences also becomes a public fair in order to make the externality caused by production to the environment “internalized” to the greatest possible. The pricing power of products was originally a classical right of the enterprise but now is almost confiscated. Price level or stability is related to enterprise finance, and also related to public life and social stability, and thus irreversibly subject to public intervention. Generally, the adjustment of the boundary between private and public rights is the result of the improvement of human civilization and the positive response of human beings to the challenges of ecological problems. Thirdly, organizational form of public rights has diversity. Public rights are not equal to governmental powers. Since human enters into the post-­ industrial civilization era, the organizational structure of public rights has greatly changed. From the economic system of the Dutch dairy industry, institutions of exercising public rights mainly comprise four parts: the first is governments of sovereign countries; the second is transnational institutions; the third is production federation, including cooperatives entered into by the farmers; and the fourth is horizontal social organizations (including social enterprises and charities), such as Qlip in the Netherlands, which is a quasi-social enterprise. Here is a brief discussion of the role of cooperatives. The main function of the Dutch cooperatives is to solve the problems which can only be solved through the cooperation between the ranchers and make the scale problem of the dairy industrial chain relatively independent. This can be regarded as the technical progress in enterprise management and marketing. Actually, the cooperatives also intervene in product quality control, environmental effect scope and price control, and thus they undertake the functions of public departments. From the relation between the cooperatives and the farmers, the cooperatives themselves have the function of financial settlement which enables

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them to have the resources in transaction cost to realize the public functions they undertake. From the relation between the cooperatives and the government, they can get some supporting policies from the government, thus they seem to help the government to undertake the public functions; the resources possessed by the cooperatives decide that they can more effectively exercise the public functions than the government in certain aspects. Can China learn from the institutional factors of the above aspects? The answer is positive. We cannot say that there is no relation between these institutional factors and the political system. The relation is not so big or direct, thus it is absolutely possible to learn these factors. The principal disadvantage of China’s agricultural economic system is that the boundary between public and private rights is obscure. Thus China’s agricultural economic system should be innovated focusing on solutions to this problem. Only in this way can China’s agriculture get healthier development. Innovating Farmland System The biggest disadvantage of China’s agricultural economic system is the improper intervention of public rights in private rights. In a traditional collective economic system, public rights tend to directly dispose of the assets according to the centralization principle of bureaucracy or the voting principle of majority. For example, farmers’ land contract right is regarded as the property right of farmers in the official policy statement, but also as “private goods” in economic analysis. However, the land contract right is often disposed of by public rights in legal provisions and in practice. The law stipulates that if two-thirds of the villagers vote through, the owner’s land contract right can be changed. The problem of “no solution to rationality of membership in collective economic organization” has been amplified after public rights cover private rights. Generally, allocation of public goods in a community is limited to the community members. When the number of the public goods is small, people will not strictly screen the qualification of community members because the public goods have a “spillover” effect. In a larger area, people will not haggle over the flow of different community members if the differences between the public service levels of different communities are small. The rationality of how to determine the qualification of community members is in fact “insoluble”. Certain cultural state will also

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affect the affirmation of the qualification. However, once the allocation between community members is not limited public goods, such as community dividend widely existed in the Pearl River Delta, the members in a community might haggle over the change of the number of the community members. It is commonly seen that out-married women maintain their membership, demobilized soldiers and college students move their household registrations back to the villages and urban resident identity turns back to farmer identity. Such problems are still bothering the local government. Thus problem of “no solution to rationality of membership in collective economic organization” has been amplified. The solution to solving the above problem is vigorously encouraging the development of family farms (ranches) based on the translation of land contract right to permanent property right. Land contact right affirmation and certification in rural areas should be carried forward reliably. According to the authors’ investigation, this job should be started as soon as possible, but not required to be finished within 5 years at all places. Therefore, it is suggested that the NPC and government departments should speed up the revision of relevant laws and regulations, introduce directive opinions on land rural land right affirmation and certification and leave some leeway for local decisions. The “professional agricultural operator registration system” which aims at protecting the production enthusiasm of professional farmers should be carried out so as to improve the accuracy of the national financial support for agriculture. We should establish a reasonable agricultural access threshold should be established and support agricultural operators to achieve specialization and scale. Professional agricultural operators can be divided into two legal person and natural person, and the latter is family farm. Reforming National Agriculture Management System The agricultural economic management system should emphasize on two problems: one is the land planning and utilization management system; another is the system of financial support for agriculture. Concerning the first aspect, we should establish a land planning management system with explicit functions, reasonable division, effective supervision and smooth operation so as to enhance the effort of protecting farmlands. It is suggested to carry out “national agricultural conservation area system”. Essentials of this system comprise: (1) Designate agricultural conservation areas nationwide with an area larger than the basic farmland, which shall be planned and approved by the central government on a macro

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level and directly managed by higher-level local governments. (2) Nonagricultural projects in agricultural conservation areas are not allowed to be developed after transferred in a certain period of time. (3) Establish an imperfect government in the agricultural conservation area and simplify the regulatory agencies in the area. (4) The regulatory agencies in the conservation area is directly governed by governments of or above the county level, without the need of GDP achievement assessment. (5) Under the premise of establishing this system, the management rights of other types of land will be decentralized, and the land planning and management power of local governments will be expanded. The biggest advantage of establishing this system is to reduce the administrative cost of farmland protection, protect agricultural land more effectively, and meanwhile liberalize local land planning management and promote the healthy development of urbanization. As for the second aspect, the following reforms should be performed. Firstly, distinguish the category of input in “three rural issues” and establish an independent agricultural support account system. Gradually reduce financial supports specific to “leading enterprises” in the field of agricultural products circulation and processing. Improve the accuracy and transparency of financial support in agriculture based on “agricultural conservation area system” and “professional agricultural operator registration system”. Secondly, formulate work regulations on financial support in agriculture as soon as possible and realize support in agriculture legally. Preparation for supporting funds, application for approval procedures, registration management, information distribution and effectiveness evaluation should be executed as per laws. Thirdly, vigorously promote agricultural finance innovation and perfect the agricultural financial system. Develop competitive policy banks and enhance the vitality of policy-based agricultural banks. It is suggested to build a national agricultural modernization bank to form a competitive relationship with existing agricultural development banks and focus on supporting major technological breakthroughs and structural transformations in the process of agricultural modernization. Separate inclusive finance from commercial finance. Moreover, the central government should set up a special fund in poverty alleviation funds and cooperate with local governments to develop inclusive public rural finance such as microfinance. General commercial banks should completely liberalize their activities in the rural areas, expand the range of interest rate fluctuations and should be allowed to not participate in inclusive public financial activities.

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Changing the Patterns of Agricultural Technology Progress At present, there is a big deviation in the choice of the direction of China’s agricultural technology progress, which is unbeneficial to China’s development of internationally competitive agriculture. It is a significant problem whether to choose irrigation farming or dry farming as the core of technical breakthrough. Although irrigation farming helps to improve the per unit area yield of grain, its disadvantages can not be ignored. Firstly, labor expenditure on irrigation is high, which is unbeneficial to improve agricultural labor productivity. According to the authors’ preliminary investigation, in normal years, the time spent on irrigation by peasants in northern agricultural irrigation area accounts for over one third of the labor time. Secondly, the costs of the irrigation canal system of facility maintenance are high. Irrigated farmland might hinder the adoption of large-scale agricultural machinery. Thirdly, the use of groundwater to develop irrigation farming has a negative impact on the environment. For instance, in recent two years, peasants in a county of Hebei have only grown single-season corn and given up wheat planting. The main reason is that the underground water level continues to decline and the irrigation cost is increasingly high. If it goes on like this, the pressure of guaranteeing balance of China’s grain market through irrigation farming will increase constantly. Meanwhile, developing dry farming is full of promise. The average yield of cereals produced by dry farming in the United States is about 30% higher than that in China. Nearly half of China’s cereal production area has irrigation conditions, which shows a great potential for dry farming. The authors noticed in the investigation in Dingxi, Gansu province that the efficiency of developing dry farming there has been greatly improved due to the use of a water retention technology. The higher yield of corn can reach 1 ton per mu, and even the average is 0.7 ton per mu. This achievement is amazing, which has reached the average yield level of the United States. It can be asserted that if agricultural technical improvement inclines to dry farming, China’s agricultural competitiveness will be notably enhanced, and China’s agricultural modernization will have a promising prospect. Reform and improve the agricultural technology research and extension management system, vigorously improve the equipment level of modern agricultural technology, and take the dry farming technology development as the main direction of agricultural technology progress.

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The first is to reform agricultural technology development and extension system, fully activate the vitality of agricultural technical innovation. The operation experience of “Golden Triangle” formed by the university, enterprise and government in the Netherlands is worth learning. Particularly, agricultural engineering related to land preparation should get rid of the dependence on experiences and move towards science planning. This relies on specialized intensive study of disciplines. The second is to centralize agricultural water conservancy investment into the areas with abundant water resources. Other areas should vigorously develop dry farming. We should learn and promote the experience of developing dry farming in Dingxi, Gansu Province, strive for high yields on land with a precipitation of 300–500 mm, gradually reduce the farming area irrigated by extracting underground water, formulate financial policies to support development of dry farming and draw a certain proportion of funds from national “water transfer” funds and general water conservation funds to develop dry farming. The third is to encourage private capital to develop desert by more positive policies in order to improve economic value of the grassland. China claims to have 5 billion mu of grassland, but a lot of them is close to the desert. If our grassland can raise 1 cow per 10 mu, the total amount can reach 500 million cows, which shows a ecological sustainability. Such effectiveness is enough to make China the strongest animal husbandry country in the world. In recent years, the Chinese Academy of Sciences has systematically developed the desertification prevention technology, which has initially shown its effects. The state should support its trial spread in a wider range. We should take the property right protection policy as the core, take the national support funds as supplement, vigorously introduce market factors, encourage private capitals to enter into the field of desert transformation, and expand various types of dry farming. Making Farmer’s Cooperatives Bigger and Stronger It is an open question to compare farmers’ cooperatives with agricultural companies in the agricultural field. According to the authors’ understanding of the Dutch agricultural pattern, and based on the authors’ domestic research, it can be considered essential to significantly develop the farmers’ cooperatives in China.

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In view of the fact that the corporatized agricultural leading enterprises will not provide farmers with income returns, and they will run the enterprises fully pursuant to the principle of marketization, thus the state should not provide financial support to them, but should transfer and use the existing support funds for leading enterprises to support cooperatives.



Postscript

The two authors of this book are complementary in knowledge and work in the aspects of urban and rural development research. In recent years, the authors have particularly conducted in-depth observations on urban and rural development in the Pearl River Delta region. Dang Guoying has presided over a number of national-level agricultural research projects. Meanwhile, as a consultant to the Foshan Municipal Government, he has conducted various research works in Shunde, Nanhai and Sanshui for many years. Wu Wenyuan’s urban and rural construction planning and design work is mainly conducted in the Pearl River Delta region as well. In addition, the authors had practical and research projects in provinces such as Shandong, Jiangsu, Zhejiang and Fujian. Although our works are carried out respectively and independently, similar reading and common interests enable us to discuss on various questions and reach consensuses. Several papers published by us jointly in recent years are formed on the basis of repeated discussions. These works are the basis for the completion and publication of this book. We should express our thanks to our friends in China Institution for Reform and Development for this publication. The leaders of the institute organize scholars and experts nationwide who have conducted indepth researches on reforms to write books on multi-field reforms. We are honored to be selected as authors. Thanks a lot for Ms. Yang Rui and

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 D. Ying, W. Wu, A Study of China’s Urban-Rural Integration Development, The Great Transformation of China, https://doi.org/10.1007/978-981-19-2756-0

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Ms. Yang Ruoxi who provided many supports and helps to the writing of this book. We are also grateful to enthusiastic support provided by Zhejiang University Press. Mr. Jiang Jingyong, editor in charge of this book, has worked hard for the publication of this book. We appreciate his professional spirit and strict requirements which are helpful to the final accomplishment of the manuscript. Researches on the subject of urban and rural comprehensive development are innumerable. We hope that our work will not fade, but will be beneficial to friends who are destined to read this book. Dangguo Ying June 2016

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