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Beijing: Unification of urban and rural 1. Beiwu and Dawangjing

May 24, 2012

konjaku: I hope to follow up in detail various aspects and histories pertaining to this massive project of urbanization in the outskirts of Beijing. How do the inhabitants of villages soon to be demolished deal with their situation? What happens after their villages are demolished? The overview is described in this wonderfully incisive article which appeared in Caixin.

Requisitioning the Land, Demolishing Houses and Removing the Inhabitants –will this Logic behind Beijing’s Urban Expansion be applied to the Whole Country?

Source Xin shiji (New Century Weekly Magazine) Caixin

2010-04-26

Reporters Gong Jing, Zhang Yanling

If you open a map of Beijing, before one’s eyes there clearly appears a diagram of expanding concentric circles. Taking the Forbidden City as the center, there is the Second Ring, Third Ring, Fourth Ring…circle after circle, marked by the Ring Roads, expanding ever outward in layers.

The peasants, and migrant workers have been waging a dispute with the government over the tearing down of non-conforming buildings for almost ten years now. This structure of expanding circles has been continuing since 1949 till today.

But nowadays, Beijing is undertaking a new urban transformation. From the end of 2008, the Beijing city government has decided to remake the rural periphery, under the rubric, “Unification of urban and rural.” They will tear down and rebuild several hundred villages that are “inside” the city. The timetable for this has already been formulated. Already in 2010, 50 villages are on the point of being demolished.

This will be a huge engineering project. The development zone will comprise half again as much as Beijings current area. The project will affect 620,000 registered permanent residents, and 2,800,000 members of the floating population.

This will be a difficult project. In recent years, demolishing and relocating the inhabitants, and requisitioning land, has exposed one of society’s largest contradictions. To gain the attention of the authorities, there have been incidents of protest, some going so far as to incinerate themselves. There is an expectation that the capital should be “the best of places,” but the cost of this is unendurable. At the same time, real estate prices have gone up rapidly, and the net cost of dismantling and relocating has sharply risen. There is a battle for any and all existing land, straining the capability of the finance and taxation system to adopt to the changing conditions.

Confronting the population increase and the powerful demands of urban transformation, the Beijing city government has a powerful motive for bringing to completion the new urban plan. Constrained by actual conditions, and peculiarities of the economy and politics, the Beijing government has been forced to try for an audacious breakthrough.

Yet the Beijing city government always spares no pains to be low key. This time, as opposed to the previous traditional form of demolition and relocation, the government has cautiously picked two new models as improvements on the old: the Dawangjing model and the Beiwu model.

Dawangjing is in the Chaoyang district, Beiwu is in the Haidian district, both are ordinary villages. The Dawangjing model is to increase compensation to the villagers being relocated, and to explore the possibility of giving them a share of the future profits for ground rents in the redevelopment. The Beiwu model is to allow the villagers to have a say in the urbanization process, and through control of village collective land, to partake of the gains of urbanization. Anything beyond this, and the situation becomes extremely complicated.

Although these two models are different, in the tidal wave of urbanization, they both represent a beneficial outcome in the match being waged between the government and the people. But the Beijing government is faced with a complicated situation. The administrative systems of the past, both new and old, with their own histories of development, are already in place. There is the system of the already existing urban plan, the land system, the finance and tax system, etc, etc., constraining their freedom of action. In addition, there is the objective reality that city and countryside are structured differently. The government’s methods and outcomes often run counter to the peoples needs.

A discerning person said, the Beiwu model clearly subverts the above mentioned systems. The problem is, given the special characteristics of Beijing as the capital, it can only be applied on a case by case basis. It cannot by itself completely undo the internal logic of dismantling and relocating as it currently exists, and it will be difficult to apply to other areas of the country.

When all is said and done though, the Beiwu model actually exists now. In the surge of the future it may become deformed or aborted, but it will be a reference point for the urbanization process throughout the whole country.

In the 4th month, at Yuquan Mountain in the northern suburbs of Beijing, there is still a nip in the air. Several hundred meters below the mountain, workers are finishing the construction of a 30 hectare green garden space.

It is hard to believe that just 10 months ago, there was a village of over 20,000 people living their lives here. 2009-06, this was the first pilot project of the Beijing city “unification of urban and rural.” This village with close to 1000 years of history, called “Beiwu village” was entirely demolished.

The scale of transformation is unprecedented. The 50 villages to be demolished in 2010 comprise an area of more than 100 square kilometers. 2010 will see the largest amount of demolition. Over the next several years, in all directions around Beijing, 450 natural villages (within 227 administrative villages) will be completely made over, a total area of 753 square kilometers. When the plan is completed in 2020, all of these villages, in the districts of Chaoyang, Haidian, Changping, Shijingshan, Fengtai, and Daxing, will be no more. Beijing City will be larger by one half its present size.

In the eyes of many Beijingers, the government has begun a new “city creation movement.” But in fact, since the start of the period of reform and opening to the outside world(1978-1992), this trend has been continuously getting stronger. Beijing, accelerating its outward expansion, like a caterpillar eating through town and countryside, has been unceasingly expanding its territory in “spreading out the flatbread” style.

In 1991, Beijing initiated a master plan, expanding its development zone from the 395.4 square kilometers of 1990 to 491 kilometers in 2000. The city proper was within the four loop roads. In 2007, the city area was 1289 square kilometers, ten times that of 1949, and two times larger than the 490 kilometers of 2000.

As the next round in the ongoing process of the “city creation movement” Beijing at the end of 2008 began the experiment to fully merge urban and rural. That year on 12-30, the Beijing Municipal Party Committee released a document, called “ Ideas regarding the Beijing Municipal Party Committee taking the lead in developing a new pattern of economic and social unification of the urban and rural.” This became the operation plan for the next large scale demolishing and relocating action.

The document stated that, in order to succeed in hosting the 2008 Olympics and Special Olympics, Beijing had already entered into a new development phase, from being a second tier developed city, to a fully developed city. It was necessary to go a step further in accelerating reform and development, and do away completely with the city and countryside as two entities structured differently from each other.

The main points of the document described how the joining between urban and rural would be remade. Since entering the new century, Beijing had already become a world class developed city, but insufficient linkage between city and countryside was an obstruction to the form of the fully modernized city. Therefore, based on the “unification of urban and rural blueprint” in the document, no matter what the overall arrangement of building, management, infrastructure, and social services, these would all be funneled into urban and rural unification.

Shortly after, the demolishing and relocating began quietly. The rate of advance was rapid. By the beginning of this year, demolishing and rebuilding in Beiwu village in Haidian, Dawangjing village in Chaoyang, and Jiugong in Daxing, were all close to completion, and the embryonic form of the new city was emerging. In Haidian the village of Tangjialing bordering on Shangdi Software Industrial Park, and in Cuigezhuangdeng village in Chaoyang, the demolishing and relocating had begun in earnest.

A Beijing City Construction Committee official told this reporter that the reason it was decided to procede with demolition and relocating on the city periphery, was because of the chaotic public security and management situation.

Since rents and living expenses are relatively cheap in the outlying areas where city and countryside come together, these places function as a kind of first stopover for migrants without permanent residency. 88% of Beijing’s floating population lives in these areas, spread out beyond the city proper and the suburbs, in the outer suburbs.

The Beiwu village Party Branch Secretary Guo Yuming said to this reporter, according to the Beijing city plan, villages between the Fourth and Fifth Ring Roads are to become a green belt zone. But, in reality, because so many temporary workers have come in waves to live there, the villagers’ principal income now derives from building rentals for them in their household compounds, the so-called “ tile income.” In the final analysis, it is just not possible to make a fully integrated and complete green zone according to the plan, without something having to give.

In response to this a city manager said, they are breaking their contracts which are for a house and garden, and building in their compound buildings that do not conform to code, in order to rent. The contradiction is this: the peasants who rely on renting non-conforming buildings are reaping “grey profits,” but the fact is, having lost their land, they have no other choice. Because of the continual expansion of the city, more and more agricultural land has been requisitioned. The era of tilling the land is almost at an end, and the majority of the peasants have already lost their traditional occupation. [ Grey profits –not quite legal, not quite illegal, under the table income].

In the “tile income” born from the huge influx of migrants, the local public facilities and services cannot keep up. The “dirty, chaotic, inferior” environment has a serious impact on the city, and the pressure on the government to maintain public order suddenly increases, Take a look at any one story building, and chances are it has a waterless toilet. In villages that lack the most basic sewage system, to suddenly admit a large amount of migrants, is to court a certain kind of embarrassment.

As Beijing Academy of Social Sciences Head Ping Xiaoying analyzed the situation to this reporter, the villages are lacking in publicly held natural resources, but they are bearing the weight of more than ten times the population of the cities. Every major city in China has this problem with “disordered hemlines” on the city periphery. Naturally, Beijing is no different.

2010-04-07, Beijing City Public Security Bureau stated that in the inverted population villages there were numerous buildings not conforming to code, small drinking places and hair salons etc., generated from low end real estate. These were places where criminal and public security incidents easily occur. These areas with a high number of incidents form concentrations of chronic disease that have a grave effect on stability and public security of the whole city. The Public Security Bureau will consider these areas encircling the city as a focal point for operations.[Inverted population village: a village in which the number of migrant workers renting rooms exceeds the number of village residents,]

In fact, this trend is not new either. Since the 90s, on the periphery of Beijing there have emerged one after another a large number of villages with many special characteristics, “villages inside the city.” For instance, in the Nanmuxiyuan area, the proliferation of small enterprises making clothing shoes and hats, with the flocking there of workers to these small factories engendered “Zhejiang village.” In the northwest, around Yuangmingyuan (the Old Summer Palace), there was Huajiacun, the “Artist’s Village.” Also in the north, a large number of independent artists lived in “Shu Village” (Tree village). In the past these have all been focal points of government operations.

In these “villages inside the city” the peasants and migrants on one side, and the government on the other, have waged a dispute over the tearing down of non-conforming buildings, continuously for more than ten years. Frequently the government tears down, and the residents simply rebuild. Taking Beiwu as an example, many villagers told this reporter, that for the last ten or more years, the district, town, and village governments have repeatedly demanded they tear down non-conforming buildings. The villagers resisted to the end.

In 2006, as the Olympics drew near, Beijing, in order to fulfill the promise it made to the international community to make it a “green Olympics,” having already allotted 100 million yuan, began a large scale project to renovate those villages within the city,

For instance, in 2006 Beijing invested 30 million yuan in a pilot project to renovate the environment in Beiwu. They widened the roads and hardened them. They put in streetlights to illuminate certain selected roads, added running water on these routes, and sewage pipes to carry off rainwater and soiled water, They built a hygiene service center and a police affairs service center, An important part of this was tearing down the non-conforming buildings.

Even so, it was just another round in the dispute. The government had merely treated the symptoms. As soon as the Olympics passed, the offending buildings went up again. The hardened roads, tap water and sewage, ameliorated conditions, were simply not enough to truly transform the “dirty, chaotic, inferior” appearance. The final outcome was that with the demolishing and relocating, the government escalated its management hold over the village.

Naturally, as Beijing looked to the next stage of joining urban and rural together, the underlying motive was to increase the land available for development.

The next stage was the “2007-2010 Midterm Plan for Land Supply.” This called for increasing the land available for development by 70%, in both districts designated as new development zones, and those designated as ecological self-restraint zones. These districts then fell into the urban and rural joining concept.

However in 2008 and 2009, the Chinese real estate market fell into a depression, slowing the development of land. In the latter half of 2009, values began to rise again, and Beijing was faced with a shortage of land available for development. The pressure to make more land available rose sharply.

Lying behind this was challenges from all corners to the government land finance program from those who were waiting for land to develop. In 2008, the income Beijing received from selling off land to developers was 493.9 hundred million yuan. In 2009 this climbed to 929 hundred million yuan, a rise of 88%.

Demolishing and relocating, a “powder keg”

In the old model of demolishing and relocating, conflicts between peasants and government, peasants and industry, as well as interior conflicts within villages, all became increasingly fierce. Reform of this model was imperative.

An expert in land authority believes that the secret behind Beijing’s “spreading the flatbread” lies in China’s unique land system. Property rights in China are different from the western developed nations, in that land in China is under public ownership. Specifically, city land is owned by the nation, and village land is owned by the village collective.

Between city land and village land, there is a wide gap which may be difficult to bridge. Under existing law, village land which is in the process of being changed into city land, especially village land which is in districts which are subject to city planning, cannot be sold on the public market. Unlike western countries, the city cannot simply treat the land on its periphery as part of itself, and open it up to development.

In order to accomplish the plan of joining city and countryside, it is first necessary to requisition all the village collective land into state owned land classified for development use. First, the peasant homesteads of house and garden are demolished and the inhabitants removed.The village collective uses its compensation fund from the conscription of the land to buy new places to live for the villagers. The village collective land then becomes state owned land. The government uses bidding through public auction to sell off the land. The final step is that, according to certain usages, those whose houses have been demolished and have been relocated receive partial compensation.

As land prices climb to record breaking levels, the net cost of demolishing and relocating rises. Land is the “real estate” which villagers have been able to pass down from generation to generation. For a considerable number of people, it is still their sole means of livelihood. Beijing real estate has already reached a value of 30,000 yuan per square meter, making this a problem that must be confronted.

In the beginning of the fourth month, this reporter went to villages south of Beijing. He discovered villagers putting up simple and crude buildings in their compounds. These were spare buildings propped up by large quantities of steel pillars and planking. They were put up side by side next to the original buildings in the villagers’ homestead compounds. The tallest were three or four stories. These were being built by teams of construction workers who specialize in this type of work, and can finish them in just a few days. Since this village was about to demolished, the only reason the villagers were rushing to complete these buildings, was to influence the amount of compensation they would receive.

To a certain academic, this type of behavior is entirely understandable. “When the amount of compensation is not at the level it should be, a family’s sense of their own land becomes based on what they can get for it.” The traditional model for requisitioning land has in recent years been the cause of more and more disputes. The legal stipulations for compensation to be paid are widely believed to be severely lacking, and the increased profits brought about by the increase in real estate values are mostly taken by the government and developers.

This irrational system of requisitioning land, demolishing homesteads and relocating the inhabitants has sparked increasing repercussions from the people. From 2003 until today, there was the forced relocation of the Jiahe neighborhood in Hunan (2004), the Nanjing resident Weng Biao 翁彪 who set himself on fire and died (2003), the Anhui resident Zhu Zhengliang 朱正亮 who attempted self immolation in Tiananmen Square(2003,but survived), the “most persistant “nailhouse owner” (dingzihu 釘子戶; i.e., a homeowner who refuses to relocate to make way for a development project) who stood off the developer for three years in Chongqing, and in Chengdu Tang Fuzhen 唐福珍 died after self-immolation (2009). Besides these serious incidents, there were similar group protests, too many to count.

As the capital of the country and the supposed “best of places,” Beijing is unable to endure the assault of these sorts of extreme events. Compared to other areas of the country, Beijing’s level of compensation to displaced peasants is considerably higher.

According to the investigation of reporters of this newspaper and other scholars, those peasants who have been well compensated for forced removal are not necessarily satisfied. Those who lose their land and change from rural to non-rural, have a difficult time getting employment. They do not have the skills for a position in a high-level industry, and low-level industries are also reluctant to take them. A considerable number of these have long term problems earning a livelihood, and become a hidden danger to society.

A number of academics are worried, that when these peasants who have lost their land use up their one-time compensation, they will not enjoy the rights townspeople have for health insurance and old age protection. Without employment or the income they derived from rentals, their compensation money goes to pay for water, heat, and other necessities, which all come to them now at a higher cost than when they lived in the village. The decline of their standard of living brings out a new social contradiction.

This sense of worry is not just speculation, but comes directly from past experience. An academic has seen with his own eyes this pattern unfolding in Gaobeidian in Chaoyang district.

Nowadays Gaobeidian has become just the name of a town in Beijing. People are quite familiar with the names Sihui, Sihuidong, and Gaobeidian as stops on the subway line, but originally Gaobeidian was a county town in the countryside. From 1993 to 2002, the state requisitioned the land and relocated 10,765 workers. At one time those who had themselves found new employment was as high as 8600, but at the end of 2002 this had dropped to 5950. In 2004-05, there were 2539 who had no job, and 2600 who had flexible employment without a guaranteed income. As an aftereffect of the demolishing and relocating, since 1998, Gaobeidian became the town with the highest amount of petitions to the authorities from village collectives, and there were many incidents of group protests. Among those enumerated by the academic, are 1) the Gaobeidian solid waste plant being surrounded by a group of residents, 2) petitioning to authorities over the demolition of houses to make way for high voltage electrical wires.

The consensus in the academic world is that under the current system the village collectives are not given the right to have a share in the long term increase in the value of their land. They become a group on the margin, excluded from the urbanization process. If the government continues to stubbornly use the old model of demolishing and relocating, there is a good chance in the future of hastening the growth of the urbanization powder keg.

The academic world also believes that if the flaws in the urbanization process going on in various localities in China are not rectified, clashes between peasants and government, peasants and business, and internal conflicts in villages will all be exacerbated and will intensify, as has already been seen in Gaobeidian.

In 30 years, China’s urbanization process is slated to be completed. If it continues along the present course, it is probable that the urbanization and modernization process will break down entirely.

The Dawangjing model — an improvement

In 2009, Beijing declared that the Dawangjing model and the Beiwu model would become in the future the method used in all urban and rural unification projects. Describing the operations of the Dawangjing model in detail: Beijing transferred 105.6 hectares in Chaoyang district into state-owned land. Using this as collateral, the bank granted a loan for preparing the land and building housing for those displaced. Finally, by putting 42.6 hectares into land held in reserve by the government for development, they recovered their capital and repaid the loan.

Comparing this to previous models of requisitioning land, the village collective was able to keep more of the land’s appreciated value. A considerable amount of the profits realized by the government were returned to the village collective. The collective was able to compensate individual villagers quite lavishly. Some villagers chose to receive replacement houses, those who did not received even larger sums. In detail, villagers received a replacement dwelling equal in value to the going price of 50 square meters of land. Compensation for a homestead with land for crops amounted to 8100 yuan per square meter. Those who did not choose to buy back a replacement dwelling received a further compensation of 3000 yuan per square meter. Those who did not go to live in the replacement building right away received 800 yuan a month as housing allowance. In the end this cost the government 50 million yuan.

For the 820 villagers who did not yet receive the social services due to city residents, the Beijing city government in a mere 45 days completed their transfer from rural to non-rural persons. In a one-step process they became residents with old age protection and social security. At present there are only 87 villagers still in the process of the transfer to urban residents and to becoming workers.

An even more significant step is that the government promised to return to the village collective 50,000 meters of land containing commercial buildings with shops on the ground floors. The line of thought is, “the property changes to being owned by shareholders, and villagers will be the shareholders.” The villagers turned urban residents will turn the village collective into a business enterprise, and as shareholders can enjoy profits in perpetuity.

In addition, the government will invest a considerable portion of the profits to create green areas for public use. As opposed to the previous model of paying a one-time compensation for demolishing and relocating, the Dawangjing model gives the villagers a whole spectrum of different shades of benefits.

But as one academic pointed out, behind the Dawangjing model, the shadow of government land finance machinations never completely goes away. Since another 198 of the 227 administrative villages will be used to create reserve land for development, these concerns are immediate.

[Translator’s note: it has been widely reported elsewhere that the government has fallen into a pattern of using the large profits accrued from transferring collective land to state-owned land to make up its own budget shortfalls. Revenue from land sales now exceeds all other sources of government revenue.]

As reporters for this paper have discovered, in Dawangjing the government continues to requisition land to build on, to a large extent because of market pressures for more land. In 2009 Beijing planned to put aside land for development equal to 1 trillion yuan, of which 20% was in the Chaoyang district. In the Beijing city master plan, Dawangjing was situated in the area slated for development by the Wangjing Group. The government and business arrangement was all set up, the value received by the business side was extremely clear. Except for 64 hectares set aside for roads and green areas, the rest was slated for development.

Also in 2009, corresponding to the master plan, Beijing through public auction sold off 247 grouped parcels of land, for the unprecedented sum of 92.8 billion yuan. That year, Beijing city’s influx of revenue was 202.68 billion yuan.

For 2010, Beijing city’s plan is to receive 1 trillion yuan for land set aside for development. Since land in every district and every county is in the process of rapid development, it is not hard to imagine that this year will also set a new record for revenues taken in.

The Dawangjing model has a lot of good aspects. But, if the government decides it has discovered a way to smoothly transition villagers into urban residents, it can continue as before to requisition land and develop it. The larger and more complex decisions about urbanization are put off, and the system remains in a state of inertia.

In 2010, two parcels of land from Dawangjing were put up for auction. They were sold respectively for the bargain basement prices of 27,000 yuan and 24,000 yuan per square meter. In an instant Beijing had some new “land kings” –all of which were centrally administered enterprises. This was the spark which instigated the State Council to call upon 78 centrally administered enterprises to withdraw from the real estate sector. [Translator’s note: this refers to the fact that the new “land kings” were not previously in the real estate business. Successful bidders in 2010 land auctions included China National Tobacco Corporation and the military-related China Bingqi Zhuangbei Group (Arms and Equipment).]

The Beiwu model — villagers given control in the urbanization process

“The Beiwu model is the plan we cannot help but select” — “We ourselves move out of our homes, we ourselves then build the new buildings, manage, and control the capital fund.” The villagers through their collectively held land participate in the urbanization process.

Of course, for the Dawangjing model to work, a key factor is that there needs to be an abundant amount of land available. In Dawangjing there was more than 105 hectares. Putting aside the land used for the green belt, 41.6 hectares was left over to be set aside for development.

But in many of the peripheral suburban areas subject to the urban and rural unification project, available land has already been developed commercially or appropriated by the government. All that remains is the household compounds of the villagers, in other words, the main village area. An academic characterized development in these villages as, “gnawing on the bones after all the meat is gone.”

Beiwu village is like this –it is hard to find even the bones. It has a large population and little land.There were more than 700 houses, 2700 people, on 33.6 hectares of land. The majority of this appears in the Beijing plan as part of the future green belt. The villagers stopped farming some time ago, and the majority of the village land was contracted out over time. Except for a small amount of land used for schools and businesses, what remained in the land collective was the villagers’ household compounds –their sole remaining property.

Aside from the certain number of villagers who can get employment in the green belt workers corps, the village collective has few jobs to offer. By renting rooms to migrant workers, the village managed to eke by.

Villager Hou imitated what his neighbors were doing. He renovated and built a second floor on his house, with 10 partitioned rooms barely one square meter in size, which he rented out for 400 yuan a month. This gave him a monthly income of 4000 yuan, which is what his family lived on.

As the villagers built rentals in their compounds, their living space become more cramped. The five members of the Hou family were pressed into rooms no larger than the ones they were renting.

The village infrastructure of water, electricity and sewage was overloaded. In the summer peak period for electricity use, the circuits tripped daily. When it rained, the water pipes became blocked and raw sewage flowed in the streets. As non-conforming buildings multiplied, the streets became narrow, electrical wires dropped lower, management costs for the village committee increased. In 2008 the village committee of Yuquan [the administrative village of the area –the administrative entity which includes the natural village of Beiwu] strove to tear down non-conforming buildings in an area reaching out to10,000 square meters, but the results were unclear.

Yuquan village is one of the eight villages in the Shijiqing Town government development in Haidian district. Along with Beiwu it is in a unique position, close to the beautiful landscape of the Summer Palace and the southern slope of Yuquan Mountain. Because the motorcades of the high-level leaders pass by here, it is an important road. Anything which is dirty and disorderly along this road draws high level attention. Therefore the renovation of Beiwu was classified as a project focal point.

However, from the government’s position, Beiwu has no land left to sell off. The past model, in which the cost of dismantling, relocating and rebuilding was defrayed by the income received when the land was sold and placed in a capital fund, is not applicable here. Besides, the Xijiao Airport is nearby, therefore there is a limit on the height of buildings. There are many three story buildings already, and it is not possible to expand the number much further.

For this reason, since the usual model of requisitioning land, dismantling and rebuilding in Beiwu would be profitless, a different way had to be considered. From the beginning of 2009, the cadres in charge of this issue repeatedly came to Beiwu for on the spot investigations. They formed specialized research groups to draft the plan for Beiwu.

2009-02, the plan was put forward. It was said that it had been amended 19 times. The villagers all voted on it, and finally accepted it as, “We ourselves move out of our homes, we ourselves then build the new buildings, manage, and control the capital fund.”

Roughly, the plan works like this: the town government through a land swap made available to Beiwu a separate parcel of some 10 hectares of land reserved for putting up housing for the dislocated villagers. Although this parcel was requisitioned as state land, it was not put up for public auction, but was directly transferred to the village collective. A special real estate corporation was set up in Yuquan to develop the parcel with housing units.

In the vicinity of this land, an additional 4 parcels of 21.5 hectares was set aside for the corporation. In this way the Beiwu village collective had direct participation in the urbanization process.

According to the plan, the majority of the original Beiwu village was to be turned into Beiwu Park. Opposite the park, the new housing units would be built for the dislocated villagers, with water and gas lines installed. Four roads would circle the periphery of the development. Once the buildings were completed, a pre-school, medical service center, and a supermarket would be constructed.

It happened very quickly. In March, the 700 households of Beiwu Village moved to the “Beiwu Excellent Garden,” a development of just completed six story housing complexes.

According to the Beijing city urbanization plan, Beiwu, as part of the administrative village of Yuquan, had no land for buildings allotted to it. In order to guarantee that the evacuation and resettlement of the villagers would take place as “rise up once and settle down once,” Beijing city specially approved the re-designation of 22.5 hectares of timberland as land for building. 10.5 hectares of this parcel would be used for the relocation development. The old village site was to be turned into a green area.

The projected ratio of the move and relocation had to be 1:1. Since the surface area of the relocation site was smaller than the original village area, the new housing development was changed from three stories to six stories. Converting from the original 775 household compounds with garden, every family received either two or three units in the complex.

The work of demolishing the village and constructing the new housing complexes was all given over to the building corporation run by the village collective, according to the plan. To a large extent, this appeased the villagers and lessened the opposition to the process. The corporation considered the villagers’ requests in the design of the building. They added a brick wall outside the complexes, and gave each family their own elevator. Comparing their situation to that of neighboring villagers which had been demolishing in recent years, the villagers were quite satisfied.

In addition, the villagers received a compensation payment of 3500 yuan per square meter of land and buildings, slightly higher than the standard, and 200 yuan per square meter for renovation costs. Because of this high compensation, one winter day in 2009, close to one hundred villagers purchased small cars.

Although this seems like an old tale in which the protagonist gets rich overnight, it doesn’t mean the villagers became happy. The villagers said that in the exchange from household compound to flat in a housing complex, their actual living space had shrunk. Some complained that with the loss of the “tile income” which had been their subsistence, they were worried that they would simply fritter away their new fortune.

The household of Villager Hou consisted of five members. His homestead with garden consisted of 120 square meters. “Previously, aside from my own family, I had space to rent to people from elsewhere. Comparing that to what we got in exchange, there is not room for just my family.” Mr Hou hoped they would give compensation based on the number of people in a family, with each person counting for 40 or 50 square meters.He said, even if he was able to rent some rooms to outsiders, how could he rent in a place like this?

In addition, the property rights to the new housing were not initially clear-cut. According to current law, village land is owned by the village collective, “a homestead with garden is defined as one family to one residence.” It is something that cannot be bought and sold on the market. Since development of Beiwu village land did not follow the normal course [and get auctioned off to developers], in theory, it still belonged to the collective.This was what is often called “small property rights” [The individual or family do not own their land or real estate outright. They have the right to live there but not to sell, as it is still controlled by the collective, therefore their property rights are “small.”].

Many villagers raised the question, that if they wanted to sell their housing units for profit in the future, since they only had “small property rights,” putting their parcel on the market would be difficult. Once the procedure to requisition land is begun, the guiding rule is that the land must go through the public auction stage and be offered publicly on the market. If this does not happen, the land doesn’t have a real existence on the market, and the profit they might receive would be compromised. This became a complicated issue.

The solution chosen by Beijing city government was characteristically understated. They designated the land on which the Beiwu replacement housing units stood as a “green zone thoroughfare” with “special characteristics.” In this way they avoided the public auction stage, and directly made it into state-administered land.

Although the amount of one-time compensation the Beiwu villagers received was less than the Dawangjing case, the land the village received was as much as 21.5 hectares. The idea behind the Beiwu model is that because it is difficult to predict the long terms profits for the villagers in the future, they should be given a comparatively large amount of land for their use.Plans for this land include apartment houses to rent to migrants on 20,000 square meters, a car dealership, an ecological garden restaurant, and a high end restaurant and bar.

Therefore, this real estate still remained in the hands of the village collective. The collective will organize its development cooperatively, attract businesses and invest capital, and provide jobs and increased income for the villagers.

The Beiwu village Party Branch Secretary Guo Yuming said that the projected profit for the high end restaurant was 100 million yuan over five years, and 15,000,000 yuan for the rental apartments.

If the pilot project in Beiwu is to succeed, the most important factor is maintaining sufficient capital. In the future this will be decided by the corporation’s ability to manage the real estate properties, and by market demand.

Academics and voices in the media are looking to see if these pilot projects in Beijing will set an example for the whole country. If these approaches to urban and rural unification are followed, these may set the course for urbanization over the entire nation.

In the case of Beiwu, the Beijing city government could not use the previous model of requisitioning land for development, since there was no extra land available. It was required by the plan to turn the existing homesteads with gardens into green space. In terms of net cost, the government had to requisition both the original village land, and the land for replacement housing for the villagers. Then it had to build the new housing complexes. These costs threaten to eat up any profits accrued through development.

In the end, the government avoided the requisition costs by directly transferring the land to the village collective. The government permitted the village collective to itself build the replacement housing. By economizing, the collective saved on the building costs and made some profit. The villagers moved out of their own houses, and by that economized on demolition expenses. All these factors led to a cost of as little as 1 billion yuan. If the government had proceeded in the traditional matter, they would have had to spend much more.

In general, for the government to subsidize a project to this extent, while knowing that it would realize no income from the sale of land, is something rarely seen. Perhaps because of this, the Beiwu villagers initially did not receive any assurance of social security, nor did they receive the transfer in legal status from agricultural to city resident. After visiting Dawangjing [whose residents did receive these benefits] the Beiwu collective put out a new demand for equal treatment. After meeting once with government representatives, their demand was accepted. However The Beiwu village Party Branch Secretary Guo Yuming said he was worried because they had only gotten an oral agreement, “I have not seen any document, nor have I found out if written minutes were taken at the meeting.”

Guo Yuming said to pay social security for the 2000 villagers would cost 100 million yuan altogether. At present he had not seen any of this money.

Another problem is that although the demolition of the village was a year ago, there has been no development on the land. The government promised to provide a certain amount of the capital to build the replacement housing, but the main capital is supposed to come from the village collective, which would be granted a loan, with the government providing a discount on the interest attached to the loan. For a short time there would be no profit, and in the future the collective will have to manage the risk. This prospect makes the village collective that much more cautious about starting any development. If the Beiwu pilot project is to go smoothly, the key factor appears to be whether the collective can start with sufficient capital, actually manage things successfully according to market demand, and truly generate profits.

In any city, especially any large city, these days it is a a normal fact of life to encounter a tidal wave of demolition and relocating residents to transform the urban fabric. Almost every major city in China is undergoing rapid expansion, extending into the rural land on the urban periphery. This is no accident. In every area of life — economy, culture, employment opportunities, public services, infrastructure, media –the city offers greater advantages. Large numbers of people are flocking to the cities with an unprecedented rapidity. In 1995 China’s urban population was 300 million, but by 2009 it had doubled to 600 million. The expansion is driven by the demands of this mass of people for a better life.

This has caused an intolerable burden on the cities. Environment and public services are overloaded. The crowding, with non-standard residences densely packed together, shows up must pointedly on the urban periphery. It is no wonder that every city government has a project to turn these areas into a new urban development on its calendar of things to accomplish. The problem is that, constrained by the rules of the land, finance and taxation systems already in place, and faced with the objective reality of the structural duality between urban and rural areas, the government’s building projects often end up running counter to the demands of the people.

A clear proof of this is the intensification of protests over demolition and relocating. Village collective land is requisitioned and made into state land. While the villagers are paid a pittance in compensation, the city government puts the land on the market and reaps large profits. The land finance system and the sudden huge profits accrued from putting land on the market is driving the urbanization process, rather than the needs of the people. The rural villagers are stripped of their land and their means of livelihood, and new migrants have no place to live.

Each time a new city development appears, the net cost of building and the high real estate prices propel each other in an ever higher spiral. Local governments seize these new opportunities to invest more capital. To raise money for more building projects, regional governments put up land as collateral to get loans, and risk to the banking system quietly accumulates. Up to the end of 2009, the amount of land in 84 cities that was held as collateral was 217,000 hectares, accounting for loans of 2.6 trillion yuan, three or four times up from the previous year.

All of this goes to show that as long as the urbanization movement proceeds by brute force, the way available to it becomes increasingly narrow.

konjaku: Key terms:

城乡一体化 unification of urban and rural

城中村 villages within the expanding city perimeter, “urban villages”

拆迁 tear down old houses, buildings, and relocate occupants

大望京 Dawangjing

北坞 Beiwu

摊大饼 spreading out the flatbread

Haidian海淀区

Tangjialing village 唐家岭

Shangdi Software Industrial Park 上地软件产业园区

Chaoyang District 朝阳区

崔各庄等村庄–Cuigezhuangdeng village

烂边儿 disordered hemlines (lit, messy hems)

瓦片经济  tile income, income derived from building rental units for migrant workers

朝阳区高碑店  Chaoyang district, Gaobeidian

玉泉村 Yuquan village

四季青镇 Shijiqing town

北坞嘉园 Beiwu Excellent Garden –the new housing complex for displaced residents

小产权 small property rights

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