Why there are no urban slums in China

China has not seen the emergence of urban slums as in many capitalist countries, but instead, there has been a narrowing gap between urban and rural areas.The Chinese government is committed to rural revitalization and to reducing the urban-rural income gap and developmental imbalance. The attached article proposes a concept of “Neo-ruralism” as a way to rebuild urban-rural relations and address the problem of uncoordinated development.

Urban-rural relations in China need to be investigated from the perspective of China’s gradual involvement in global capitalism since the early 20th century, and within the context of Western industrialization and capitalist globalization. During this process, China is building its own modernization by means of revolution while remaining part of the global process. In this sense, China’s rural development and urban-rural relations are to some degree “globally universal.” China’s traditional urban-rural relations underwent historic changes during the country’s modernization process. Rural development and urban- rural relations were central to China’s revolution and modernization in the 20th century.

Europe and North America’s failure to effectively tackle urban-rural relations

The western path of industrialization and urbanization is what is commonly known now, that western civilization is urban civilization and urbanization is seen as the ultimate form of civilization. But this Western urbanization has resulted in urban-rural polarization. Does China really have to take the same path? Going back to classic Marxism, Karl Marx devotes in length to discussing in Capital that urban-rural polarization is an inevitable result of industrialization. As history and present-day reality have both proved, industrialization has indeed widened the gap between urban and rural areas and caused the proletarianization of peasants.

Across the globe, the process of peasants becoming urban proletariat and working class did happen and is still happening. However, unlike what happened in the Western First World, the urban-rural polarization in the Third World does not mean industrialization has been completed. Especially in many Third World countries, peasants migrate to cities but end up living in slums, and industrialization has not been completed. One could also say that it is precisely because their failure to industrialize that the city could not absorb peasants who left their land, and that these peasants cannot return to the countryside. This why we can see the emergence of the Landless Workers’ Movement (MST) in Brazil.

Brazil is a country with high concentrations of land ownership, with 46% of the land in the hands of 1% of the landowners. Unlike in Latin America, urbanization in China has never produced large-scale slums, even though hundreds of millions of Chinese peasants have moved to cities. The reason behind this difference is China’s collective land ownership. In contrast, China implemented a system which ensures that rural communities own the land, meaning every villager has the right to use the land, even after they return from cities . This is also the difference between the present-day industrialization in China and the early industrialization in the United Kingdom.

We can examine the European path of industrialization from this perspective, Britain for example. From Raymond Williams’ The Country and the City it is clear that British industrialization was premised on treating its colonies in the Third World as its rural areas. In other words, Britain only achieved “urbanization in its own territory in Europe” and did not, in this sense, go through the real urbanization process. It only treated the Third World as its rural areas, which was truly a manifestation of colonialism.

Let’s also look at the United States. Their severe racial conflicts of today are rooted in agricultural and peasant issues. As agricultural modernization pushed peasants out of southern plantations and into cities, rural issues were transformed into urban and ethnic conflicts, but they are still caused by the US’s failure to resolve its urban-rural relation issues. Agricultural modernization also triggered the slave trade. As the labor requirements of the southern plantation economy increased, colonists were driven to buy slaves from Africa. When the South later asked for tax exemptions while the North demanded tariff increases, the conflicted interests triggered a civil war that brought an end to the slave trade. However, despite the end of the civil war and the freeing of the slaves, their consequences still linger. For example,racial problems remain the core social issue in the US, as demonstrated by the recent Black Lives Matter movement. But what is the essence of this issue? It is the unresolved urban-rural relations, even though this no longer seems a rural issue but an urban and racial one.

How China’s socialist legacy supplements its market economy

Back to China. If Chinese peasants working in cities today could not return to their villages, urban slums would emerge, and the peasant issue would be an issue of the working class. From this perspective, no country, not even the UK or the US , has ever entirely completed its industrialization process and urban-rural integration. Therefore, issues surrounding urban-rural and worker-peasant relations are still great challenges faced by all humankind.

How has China been dealing with this issue? Though large-scale “urban villages” do exist in China, they are not slums. They are where people working in the urban industrial and service sectors congregate. People living there have jobs, no matter how they work. They are different from those in India and Brazil, where the land is illegally occupied and most residents are unemployed and live on one or two dollars a day. Apart from being different in function, Chinese “urban villages” are also smaller in size. Most importantly, if an “urban village” resident cannot find a job, they can go back to their village. They gather in the “urban villages” simply because they cannot afford the high rents in cities. It is interesting that most of the land for early “urban villages” was the land under rural collective ownership. For example,the land of “urban villages” in South China’s Guangzhou is collectively owned and cannot legally be marketized, resulting in relatively cheap rents. In this sense, I believe that the socialist legacy supplements the market economy. Without this, China’s market economy could not have developed to what it is today.

The marketization of urban housing in China went smoothly at the very beginning, thanks to the socialist housing distribution system. Chinese citizens accepted that housing was equally marketized and capitalized so that everyone had a place to live. For example, as housing in Shanghai used to be inadequate, the early marketization was highly welcomed, as it granted wealth and the chance to buy a larger home. However, as such a market logic furthered, they have today led to the exclusion of local residents from the city center because of its high housing prices. Now, local residents have gradually moved to the outskirts of the city, with the city center packed with shopping malls and high-end residences.

In my opinion, the urban capitalization in China is not completely the same as the capitalist urbanization in the West, because local governments in China invest a large amount of their land revenues in urban infrastructure. Why is the urbanization in China moving forward at such a fast speed? It is largely based on land transfer revenues. Certainly, this process once offered huge profits to real estate companies, and real estate entrepreneurs like Wang Shi accounted for a huge proportion of the rich — they were the so-called heroes of the era. Currently, they have given this title to internet monopoly giants. Such a change shows the transformation in China’s capital market.

Land revenues also contribute to the funds for China’s targeted poverty alleviation and the country’s project of eastern cities supporting western rural areas. Therefore, the capitalization of urbanized land in China is partly capitalization, and partly of public and socialist nature. This is how China is going through urbanization.

Why there are no slums in Chinese cities

Whenever the economy does not perform very well, some economists in China will advocate selling rural land, since urban land has been sold out. This is worrying, because the capitalization and privatization of rural land would place peasants in a vulnerable position. At the start , peasants would be willing to sell their land even for a low price since farming is barely profitable. But, similar to what happened during the state-owned enterprises reforms, where workers were given seemingly fair shares, capitalists would quickly capture monopoly positions. In the process of land capitalization, the increased value generated by the land would not go into peasants’ pocket. It would be easy for them to sell the land but difficult to buy it back. If the capitalization of rural land took place, slums might really show up in Chinese cities.

So far, we have not seen the emergence of urban slums in China, but instead a narrowing gap between urban and rural areas, which indicates that we are not really following the Western path of urbanization. Two kinds of land ownership systems are implemented in China’s urban and rural areas. Urban land is owned by the whole people and rural land by collectives. Such land systems are a socialist legacy, and also represent the socialist system or socialist foundation. How this foundation works in a socialist market economy and how its benefits are distributed are important concerns, and determine whether China’s system is capitalist or socialist.

The collective ownership system adopted the contract responsibility approach after abolishing the People’s Communes. Still in the framework of collective ownership, the system allows individual contracting. The collective ownership of rural land is stipulated in the Chinese constitution, meaning that any change to the system would change the nature of socialism. General Secretary Xi Jinping also says that, regardless of whatever reforms are undertaken, rural collective ownership cannot be changed, otherwise it would lose its socialist nature.

What is the importance of collective ownership of rural land? It means that the system is based on rural communities. As land, traditionally used as a means of production, is linked to population changes, rural areas can adjust how land is distributed based on the local population to make sure “every peasant has land.” Therefore, the collective ownership of rural land is a form of socialism that protects the community and guarantees peasants ownership of land.

The contract responsibility system protects the right for small farmers to contract and manage rural land, since it is based on the subdivision of the land. For those who have abandoned their land, migrated to cities, and obtained an urban household registration, the collective should take back their uncultivated land and give it to other villagers capable of farming. For the collective, as they can independently decide how and how much land to use, the most efficient and comprehensive use of land can be achieved. The collective works if the system can function well in the two above-mentioned aspects. Back then we were particularly worried about the inflexibility of the contract and management rights and how the rights would be circulated.

The contract right is de facto peasants ownership of land. As long as you have a rural identity and household registration, you more or less “own” a piece of land. It is similar to urban housing distribution, where you will certainly get a place to live, big or small. The land is given to a peasant by the state according to their household registration, and it is called their contract right. People with an urban registration are ineligible to own or contract rural land. Nowadays, this makes a rural household registration valuable, and many urban people desire one, because being a rural person means you are born with land, a kind of socialist guarantee. This also explains the controversial part in the Chinese rural land contracting policy that “the land stays the same size whether the population increases or declines.”

Risks of rural land transfers

Many peasants have moved to cities, leaving their land uncultivated, and some are too old to farm. To solve issues concerning rural agricultural marketization and modernization, China has launched property right reforms. By the way, during Mao’s era, agricultural modernization was expected to rely on the People’s Communes operating on a large scale. When People’s Communes gave way to the household contract responsibility system, the small-scale peasant economy became dominant, making it impossible to carry out agricultural modernization. To solve the issue of land subdivision and change the vulnerable position of peasants in the small-scale peasant economy, China launched a policy: to free the land contract right, which means the right to contract rural land can be sold and transferred. If a peasant does not farm their own land,they can sell the contract right, and let others farm the land or conduct a large-scale operation.

Although it is still under the framework of collective land ownership, we were worried about where it would lead, that it would appear socialist but in essence a capitalist privatization. Even now, disputes remain, as transfers may threaten the guarantee function of the contracting right which plays a critical role considering that the market economy is unstable and many migrant workers are on the move and informally employed.

Rural community members are bound with the land contract right, which is an institutional dividend offered to peasants by China as a socialist state. However, given the vulnerable position of the small farmers in the market, the benefits that they can derive from their land are small, resulting in them preferring to work in cities rather than farm, leaving tracts of land uncultivated. In this case, the dividend seems only nominal: neither is it paid out and nor seen as their own dividend by the farmers. At present, the dividend land policy dividend is delivered through the sale or marketization of the land contract right, in form of rent or shares.

Through their land or labor, peasants become shareholders of and participate in the construction and operation of agrarian cooperatives. China has also issued many encouraging policies such as the cooperative law. The motivation is good, and I hope that it can truly solve important issues. However, the problem lies in the vulnerable position of agriculture in the market and the nature of grains as public goods, causing big risks for the marketization of agriculture. If the value of the transferred land on the market is weak, the social guarantee function derived from the contracting right would be unavailable for the peasant, who would lose the right to use their own land for self-sufficiency. For example, before the 18th CPC National Congress, the so-called mass incidents in many places were related to landless peasants . In these cases,the peasants’ land was transferred to industrial use, and when the industrial enterprises failed, the peasants couldn’t take their land back, which then resulted in social upheaval. This also formed the background for the “Wukan event” which attracted intensive attention from Western media. Further observation and study are required to examine whether transferring land management rights can be a driving force of China’s agricultural marketization and modernization.Further observation and study are required to examine whether transferring land management rights can be a driving force of China’s agricultural marketization and modernization.Further observation and study are required to examine whether transferring land management rights can be a driving force of China’s agricultural marketization and modernization.

Another problem concerning the circulation of land management rights is that it may break the boundary of land ownership. If the management rights of the land originally owned by rural communities is free to circulate, ab extra land owners and capital will come to enclose rural land. The capital is not motivated by the marketization of grain, given the low profit and the state control over grain prices. It actually comes for state subsidies, which leads to rural land circulation being questioned. Once the land management right is transferred, it is not so easy for the peasant to get it back. Peasants can quickly become landless and have to work in cities without any security. In this way, the slums of most of the Third World may find their way to China.

China’s political mission to overcome urban-rural polarization

The problem facing China’s rural areas is that the small-scale peasant economy finds itself hopeless under the context of market economy. The Ministry of Agriculture and Rural Affairs tries to change the social atomization that the contract responsibility system brought to the small-scale peasant economy , and hopes to complete agricultural modernization by legally transferring the management rights from small farmers to new market-oriented agricultural management parties who can conduct a large-scale operation. The consensus is that rural areas need a reorganization, while the divergence lies in how and in what ways the scattered small farmers should be reorganized.

In fact, various social experiments have been seen during the three or four decades of marketization and reform and opening up in China, including some models that carry on with the legacy of the People’s Communes, continuing to develop rural economy by means of the Commune, and some that explore how to return to the community-based collective economy to realize agricultural marketization under new historical conditions. I’m particularly concerned about how to draw upon new developments and experiences of China’s socialism from peasants’ own innovations. This is also the The main connotation of my “Neo Ruralism,” that is, the practice of rebuilding urban-rural relations. Therefore, Neo Ruralism means addressing urban-rural polarization caused by the capitalist globalization which is doomed to generate urban-rural polarization.

In Mao’s era, we used political means to solve this problem, namely the so-called three major differences — between industry and agriculture, urban and rural areas, and mental and physical labor — all rooted in the urban-rural relations. From the perspective of constitutions, those of socialist countries such as the USSR and China are different from those of capitalist countries. Socialist constitutions must be constitutions of the alliance of workers and peasants. The relationship between the working class and peasants itself contains the political mission of overcoming urban -rural polarization brought by the capitalist globalization; it is also the political mission of China to build socialism.

The worker-peasant alliance is not only a political relationship but also an economic one that emphasizes the mutual benefits of workers and peasants. During Mao’s era, urban industrial development was designed to provide conditions for agricultural modernization, and agricultural development in return was to provide raw materials to support urban industrialization, which determined China as a socialist country led by the working class and based on the worker-peasant alliance. After reform and opening up, China transformed to an outward-looking economy and the contract responsibility system was implemented in rural areas, transferring the rural economy to atomized small-scale peasant economy. Therefore, the original economic relationship between urban and rural areas has been disintegrated,and industrial and agricultural development have been decoupled, right before the emergence of a rural crisis. The internal economic circulation we propose today asks for the relinking and mutual facilitating of urban industry and rural agriculture, with an embedded logic to reconstruct the urban-rural and industry-agriculture relationships.

After reform and opening up, many peasants became migrant workers and many workers in state-owned enterprises were laid off; these were our growing pains. How to review the history of reform and opening up? Apart from brilliant successes, we also see costs, for example, the current problem of rural left-behind children. How to overcome these problems in a new round of high-quality economic development? The urban-rural gap was manifested by the waves of migrant workers. A new expression for today’s worker- peasant alliance is needed, because the boundary between workers and peasants has been blurred. I put forward “Neo Ruralism” more than a decade ago, trying to explore the theoretical and practical paths to overcoming the urban-rural gap; this concept can still be developed today.

The Three Rural Issues (referring to the issues relating to peasants, agriculture, and rural areas) in China cannot be solved by rural areas alone, but should be tackled in the urban-rural relations and during the process of building common prosperity. In this sense, be it targeted poverty alleviation or rural revitalization, the socialist logic remains in all such endeavors.

The Author: Lu Xinyu is a professor and the director of the Center for Comparative Humanities, East China Normal University.

Source: Maku Insights, 12.28.2021.
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