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Trampled in a Land Rush, Chinese Resist

The New York Times by Michael Wines and Jonathan Ansfield, Wednesday 26 May

The Laogucheng neighborhood in Beijing is being demolished. Shiho Fukada for The New York Times

The Laogucheng neighborhood in Beijing is being demolished. Shiho Fukada for The New York Times

BEIJING — When China’s land boom excited a frenzy of popular resistance late last year — including headline-grabbing suicides by people routed from their homes — Chinese policy makers finally proposed a solution: rules to protect citizens from unchecked development and to fairly compensate the evicted.

Today in Laogucheng, a dingy warren of apartments and shops slated for redevelopment on Beijing’s far west side, the fruits of that effort are on vivid display: a powerful developer is racing to demolish the neighborhood before the rules are passed. And about 700 gritty homeowners are adamantly refusing to move until they get the fair deal they hope the rules will provide.

“This is a limbo period,” one holdout, Tian Hongyan, 49, said after a stroll amid the rubble of his half-bulldozed neighborhood. “And during it, we’re seeing even more sudden and violent demolitions occur around the country.”

China is not a good setting for a Frank Capra tale, but people do have influence over their autocratic masters. Top officials are worried that the property rush — which has led to soaring prices for urban real estate and low prices for old homes and farmland seized for development — is enriching local governments and well-connected developers at the expense of ordinary people and social stability.

Protests like those in Laogucheng — including self-immolations and deadly standoffs — have forced officials to at least consider measures to make it harder to seize property and turn it over to developers without fully compensating those who live on it or use it. Effective confiscation of land nominally owned by the state, but farmed or lived on by the poor, has been a major source of unrest for the past two decades.

In a provisional move, state media revealed this week, China’s cabinet issued an “emergency notice” in recent days demanding that local governments hold officials accountable for “vicious incidents” and, by the end of June, publicize “reasonable” standards of compensation.

But the question is whether that and the newly proposed regulations will be tough enough, or come soon enough, to make much of a difference. For those living in Laogucheng, the chances of a happy ending still seem remote.

The country’s property boom has spawned new cities, remade older ones and — not incidentally — helped float the buoyant economy that is a bedrock of Communist Party legitimacy. But its benefits are spread unevenly.

In Beijing, local officials plan to demolish about 60 areas like Laogucheng this year alone, mainly to erect high-rise complexes and greenbelts. That plan affects more than 180,000 residents, and has set off several ugly clashes.

Redevelopment plans elsewhere total scores of billions of dollars: a single city, Chongqing, last month unveiled plans to invest one trillion renminbi ($146.4 billion) in 323 projects.

Local governments have powerful incentives to stoke sales, for they control much of the land, and need land profits more than ever to finance new projects.

In China’s 70 biggest cities, government land-sale revenues leaped 140 percent in 2009, to $158.1 billion. Land sales provide up to 60 percent of local government revenues, by one semiofficial estimate — and much more by some private ones.

The losers have been ordinary citizens, ousted from their homes with cut-rate compensation and scant legal recourse. The existing loophole-ridden land rules, dating from 2001, give developers wide leeway to clear property.

Two years ago, China’s appointed legislature, the National People’s Congress, approved a law to strengthen individual property rights and ordered new rules written to regulate urban land. But that effort stagnated in the legislative affairs office of the State Council, China’s cabinet.

“They face resistance from interest groups — from people in the government and from developers,” Shen Kui, the vice dean of Peking University’s law school, said in an interview.

Without updated rules, local governments pick renewal sites at will, then leave negotiations with residents to developers, demolition companies and low-level “demolition and relocation offices.” They frequently low-ball home-purchase offers, cut off utilities and even hire gangs of thugs to terrorize homeowners.

Powerless to stay and too poor to move, many Chinese have rebelled. “Nail houses” — homes sticking out on tracts of cleared land, whose owners resist eviction — are common. So are tales of corruption and other abuses.

But public anger did not move the government to action until last November, when workers in Chengdu came to raze a garment factory and home and found the owner’s former wife, Tang Fuzhen, atop its roof. After Ms. Tang doused herself in gasoline and set herself on fire, her death created a national sensation.

A few weeks later, Mr. Shen and four fellow Peking University law professors dispatched a plea to the National People’s Congress to overhaul the land rules. The state press took note, and days later, State Council bureaucrats not only resurrected the long-stalled plans to write new land rules, but also invited the professors and others to weigh in at closed-door meetings.

As word of the proposal spread nationwide, more than 13,000 people flooded a State Council Web site with comments on the draft. In Mr. Shen’s office in Beijing, petitions from people around the country were piled from the floor to his desktop.

Angry parents wrote from Fuzhou, a southeastern city where officials were seizing a new primary school to make way for a new central business district. A plea arrived from Changshu, a Yangtze River delta city where developers sought to raze the villas of 800 relatively well-off homeowners, to make way for new villas.

Mr. Shen called the decision to finally write new rules a rare legal breakthrough. The latest draft requires developers and officials to consult homeowners, pay market rates for homes and put off demolition until sales and relocation details are settled — and, sometimes, approved by two-thirds of homeowners. It also would prohibit governments from forcibly seizing homes, in a process akin to condemnation in the United States, without specific “public interest” purposes.

Serious gaps remain. The draft covers only urban property, leaving out rural city outskirts where local governments have reaped huge profits — up to 100 times the value of a home — by converting commercially zoned countryside to city land.

“The regulation is one key step for now, but it’s not nearly enough,” said Wang Liming, a People’s University vice president and legal adviser to the legislature. He and other legal experts advocate new laws over land expropriations and planning to prevent abuses.

But despite the current draft’s loopholes, “if it’s really implemented, there will be some progress,” said Xu Zhiyong, who leads a nonprofit legal group that works on land issues.

It is a big if. Since the public comment period ended in February, China’s bureaucracy — always opaque at best — has been silent on the rules’ future.

Some scholars say central government officials appear torn between addressing a threat to stability and reining in an engine of economic growth. Regulators also could be preoccupied with other measures to curb property prices, they said, and waiting for prices to stabilize before issuing new rules.

And as in past years, lobbying against the new measures remains intense. “The obstruction and opposition is quite formidable,” said Mr. Shen’s principal co-drafter, a Peking University law professor, Wang Xixin. “Much of it derives from the local levels.”

For their part, local officials seem less concerned about reining in abuses than about mollifying those they evict. In Hangzhou, the Chinese city that made the most money from land sales last year, officials at a recent government forum “naturally were very worried about being condemned by citizens,” Mr. Shen said. But they also told him that even new regulations would allow them to designate land for redevelopment under a vague “public interest” clause.

“They basically said that what needed to be demolished would still be demolished,” Mr. Shen said. “The main issue for them was how to carry out equitable compensation.”

He and others charge that developers and officials are seizing the moment before tougher rules are imposed. Qiu Feng, an editorial writer, said in The Beijing News last month that local governments were “clinging to the mentality of catching the last bus, using even cruder means to organize demolition and relocation on an even greater scale.”

Still, the prospects of reform have energized people on the brink of eviction, and pressured at least some local governments into making changes. Cities like Hangzhou are introducing a policy of “homes waiting for people,” so that officials and developers can immediately resettle the displaced in affordable housing, regardless of outstanding disputes.

In mid-April, Beijing formed a committee under a vice mayor to supervise demolitions. Two outlying villages scheduled for urbanization this year will test models for sharing revenues from the developments with villagers.

But not Laogucheng.

More than two months past the March 20 deadline set by local officials and developers, more than half of its 1,200 homeowners are hanging on for a better settlement, impervious to cajoling, threats, and even assaults by window-smashing thugs.

Last December, just after the Peking University professors publicized their appeal, dozens of Laoguchengers marched to city and district government offices, demanding a fairer deal. In a more convivial protest, they lit fireworks in the crumbling alleyways the night of March 20.

But neither local officials nor developers want to fan Laogucheng’s hopes. “They think when the new regulation comes up, the relocation plan will change,” an official answering the phone at the district demolition and relocation office, who gave only her surname, Li, said this month.

“But in fact, the company has been informing them that the relocation plan won’t change at all,” she said. “Because this project has already begun.”

Read the original article.

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