December 07, 2009
Free to Shop
Beijing will loosen the infamous hukou system in a bid to hasten urbanization and get Chinese to consume more. The Central Economic Work Conference of China's central government met over the weekend and announced reforms of the hukou or household registration system to allow rural migrants to gain citizen's rights (access to eduction & housing mostly) in small to medium sized cities. The expansion of hukou rights may allow many migrants to settle in the cities where they find work.
The Work Conference embraced the concept, mostly imposed on China by Western partners, that consumption must be a driving (if not the driving) force in the Chinese economy. The conference said the goal was for consumption to replace public spending. Yet a more rapid settlement of migrants to China's growing mega cities will only increase the need for more infrastructure - roads, railroads, subways, housing, electricity, etc., which is reflected in the dominance of investment as a major force in China's economy. Stocks in property companies rose today, some analysts say on the news. But rural migrants are at the bottom of the elaborate class structure in China and usually too poor and too conservative to quickly become materialistic consumers.
The hukou system began in the early 1950s as a way to prevent Chinese cities from becoming overrun by poor rural migrants and end up like the major cities of the so-called developing world, that is overwhelmed by slums and unplanned development. The system became a major component of the centrally planned economy at the height of Mao's dictatorship and ultimately held back China's cities. Since 2001 it has been relaxed to varying degrees at the Provincial level and in national policy. Also as with so many laws in China it is often completely ignored....
The Work Conference embraced the concept, mostly imposed on China by Western partners, that consumption must be a driving (if not the driving) force in the Chinese economy. The conference said the goal was for consumption to replace public spending. Yet a more rapid settlement of migrants to China's growing mega cities will only increase the need for more infrastructure - roads, railroads, subways, housing, electricity, etc., which is reflected in the dominance of investment as a major force in China's economy. Stocks in property companies rose today, some analysts say on the news. But rural migrants are at the bottom of the elaborate class structure in China and usually too poor and too conservative to quickly become materialistic consumers.
The hukou system began in the early 1950s as a way to prevent Chinese cities from becoming overrun by poor rural migrants and end up like the major cities of the so-called developing world, that is overwhelmed by slums and unplanned development. The system became a major component of the centrally planned economy at the height of Mao's dictatorship and ultimately held back China's cities. Since 2001 it has been relaxed to varying degrees at the Provincial level and in national policy. Also as with so many laws in China it is often completely ignored....
Labels: china property, land reform
April 16, 2009
China to Promote Hemp Cultivation
The green light has been given to establish hemp cultivation areas in Yunnan, Heilongjiang, Gansu and Anhui provinces as well as the autonomous regions of Xinjiang and Inner Mongolia with the goal of creating a new resource for textiles and paper and bringing millions out of poverty by 2020. Already production is begun in remote district of Yunnan province.
Hemp originated in China. Archeological evidence dating back 9,000 years shows it was a cultivated plant. The psychoactive component THC appears to have occured through experimentation with the plant sometime around 3,000 years ago when varieties yielding marijuana were achieved. Although classified a controlled substance by Beijing, as visitors to China know, marijuana use is widespread and not agressively criminalized as in the USA.
But the hemp cultivation envisioned in the new programs is not marijuana but a Chinese hemp variety called Yunma I and Yunma II developed over the past 20 years to yield even stronger fibers but very low THC content....
Labels: clean tech, economy, land reform
November 30, 2008
Hu Says Faster Reform Needed
In Beijing the Political Bureau of the Communist Party of China (CPC) Central Committee met this weekend and President Hu Jintao made a headline statement about China losing its economic competitiveness if it doesn't continue to evolve. The meeting has particular significance since it falls on the 30th anniversary of the start of Deng Xiaoping's "opening up" reform movement of 1978. The era since that time was nicely encapsulated by the Swedish Ambassador to China in a talk in Stockholm today.
Hu's words and other official and quasi-official statements about the need to hasten change in China's domestic policies seem to point to full implementation of the land reform promised at October's party meeting. This is a trend worth watching...
Labels: china property, hu jintao, land reform, panic of 2008
October 12, 2008
A Real Great Leap Forward
As the nations of the world deal with the downside of globalization Beijing looks inward and is preparing Chinese for a monumental change - de facto private ownership of land. The Third Plenary Session of the 17th Central Committee of the Chinese Communist Party* concluded today with vague but profound statements on improving the lives of China's rural poor. The specifics will be hammered out in time for ratification at next year's National People's Conference (March 2009) but numerous leaks tell of the greatest liberalization in land holding since the first land reform in the 1950s when surplus and unused land held by large landlords down to "rich peasants" was redistributed to landless Chinese. After two decades (approximately 1958-1978) of mixed results with collectivization, landholding returned to the leased small plots originally devised by the Communist ("collective property") party at the the Third Plenum of the 11th CPC Central Committee under Deng Xiaoping in 1978. Now Beijing is ready to truly leap forward.
The new changes would allow for rights of sale, transfer, and extended lease (more than doubling the current 30 years to 70 years) on land to give rural Chinese de facto private ownership. The reforms are on the heels of last year's new law on private property. I predicted March 2007 that the new law protecting property could open the door to finally giving rural Chinese what they've long for for centuries - their own piece of China. This is a monumental change and very important to follow and understand its impact on the Chinese economy.
*The members of the CPC Central Committee are: Zhou Yongkang, Li Keqiang, Li Changchun, Wen Jiabao, Hu Jintao, Wu Bangguo, Jia Qinglin, Xi Jinping and He Guoqiang.
Labels: land reform, private property, reform
Subscribe to Posts [Atom]
