Tuesday, July 05, 2005

Chen Xiwen, vice director of the head office of the Central Financial and Economic Affairs Leading Group, the highest body for economic decision-making in China, recently conducted a remarkable interview with South China Morning Post reporters (Congratulations to the said reporters by the way; it's a big scoop). In it, he reveals several important insights about the future course of rural policies in China.

First, as per the riot article (the second one), he tacitly admits that there are some 30,000 "mass incidents" in rural China every year. Second, he unambiguously stated that township election will not take place. This signals the Hu-Wen leadership's reluctance to expand direct election, at least until the 17th PC. Instead, some counties are experimenting with "inner-party democracy" at the township level, i.e. having all CCP members in a township elect the local PS.

The streamlining of township government is happening in a lot of places, so it's not that remarkable. Finally, I think there is a definite move nation-wide to freeze the prefecture level out of the transfer payment chain from central down to county/township. Most of the central transfer payments to the county government currently still get sent down level-by-level, with each level capturing a share of he transfer regardless of who the intended recipients are. It is an odd coalition whereby provincial and county governments lobby to freeze the prefecture level out of
the transfer chain. Chen's remarks confirm that this trend will accelerate.

Monday, July 4, 2005

Shake-up of grass-roots government in pipeline

CARY HUANG in Beijing

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Copyright ?2005. South China Morning Post Publishers Ltd. All rights reserved.

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Chen Xiwen says reforms being tried in some provinces could be implemented nationwide with the aim of alleviating the burden on peasants. Picture by Ricky Wong

Beijing has embarked on a five-year programme to restructure village and township governments, aimed at streamlining bureaucracy and reducing expenditure, according to a senior central government official in charge of agriculture.

Chen Xiwen , vice-minister of the Office of the Central Leading Group on Financial and Economic Affairs, told the South China Morning Post the government hoped the move would eventually reduce the financial burden peasants must bear.

But he ruled out expanding direct elections in small villages to upper-level villages or townships.

The mainland's 37,000 village and township governments employ nearly 1.1 million cadres, but taxpayers actually foot the bill for more than 10 million workers because local governments employ people to provide social and agriculture services.

"There are a lot of social and services institutions, such as agricultural science and technology stations, farm-machinery promotion and forest-protection stations under grass-roots governments in the countryside," Mr Chen said.

Acknowledging that many services provided by social institutions were useful to peasants, Mr Chen said the reform should focus on streamlining bureaucracy.

It also should look at repositioning the functions of grassroots governments in tandem with on-going reforms of the fiscal system.

Mr Chen said a recent reform that stripped village and township governments of their tax-collecting function made many local cadres nervous about their duties.

He said Beijing encouraged provincial governments to initiate reform experiments and a pilot programme underway in Hubei province could be implemented nationwide.

In the Hubei experiment, the number of government departments at the village and township levels have been reduced from as many as several dozen to three, and they are responsible for taking care of party and government; economic; and social affairs.

The party and government office is made up of the party committee, government administration, the People's Congress, or local legislature, and the local Chinese People Political Consultative Conference - the so-called four leading organs at all levels of governments on the mainland. The offices for economic and social affairs are supposed to implement central government laws and policies and provide all services to local residents and peasants, Mr Chen said.

"Hubei province is moving forwards in the reform of village and township governments and has achieved good results," he said.

Guizhou province , one of the mainland's poorest regions, has also launched a pilot reform of its fiscal system. It involves giving the provincial government the power to directly oversee the fiscal affairs of county governments, bypassing municipal governments.

There are five levels of government under the mainland's hierarchy: the central, provincial, municipal, county, and village and township governments.

"The Guizhou reform is aimed at stripping municipal governments of their fiscal power over county governments in order to reduce red tape and stop the interception of funds earmarked to support agricultural development and help farmers," Mr Chen said.

This year the central government has allocated a record amount of funding to help lift the living standards of peasants, including 66.4 billion yuan to speed up plans to cut back and then abolish the agricultural tax by next year. Another 15 billion yuan is also set aside in this year's budget to help fight poverty in rural regions.

In Guizhou, county governments are now managing funding for village and township bodies.

Mr Chen said the results would be evaluated by Beijing before a decision was made on whether to extend the reforms to other parts of the country.

Regarding the expansion of democratic elections from the small village level - which outside observers have seen as the first step towards a democratic China - Mr Chen stressed that there was a constitutional difference between low-level and upper-level elections.

Beijing currently allows small villages to hold direct elections for most grass-roots management committees. But Mr Chen said while a small village management committee was a collective and non-governmental organ, village and township administrations were seen as government bodies under the constitution.

Any change to the formation of village and township governments would require amendments to the constitution.

While he acknowledged that some regional governments had introduced direct elections in village and township governments, Mr Chen said Beijing had never endorsed such reforms.

"Even though the reform of village and township governments have been going on for years, we could not introduce direct elections at those levels as the overall policy could not allow such experiments." He said experiments in some regions were illegal.

Monday, July 4, 2005

Mainland official hails bloody riots as a sign of democracy
Vice-minister says protests inevitable as country undergoes huge changes


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Violent protests by the mainland's farmers are inevitable due to the country's enormous social and economic changes, according to a top central government official in charge of agricultural policy.

Chen Xiwen also hailed farmers' willingness to speak up against injustice as a sign of democracy.

While stressing that he did not approve of using violence, the recent spate of protests demonstrated that farmers now knew how to protect their rights and interests, said Mr Chen, vice-minister of the Office of the Central Leading Group on Financial and Economic Affairs.

Reports of such protests also helped the central leadership act quickly and solve problems faced by farmers, Mr Chen said in an interview with the South China Morning Post.

The mainland has been hit by a spate of violent protests by farmers in recent weeks, mainly over land disputes and pollution. In April, thousands of farmers fought a bloody battle with police and officials over unpopular chemical plants in Huaxi village in Dongyang , Zhejiang province , while at least six people were killed in Hebei province last month when several hundred armed thugs attacked villagers who refused to hand over their land to an electronics factory.

"On the one hand, riots like the one in Dongyang are a tragedy and show that local authorities failed to do a proper job," Mr Chen said. "But on the other hand, they show that our farmers know to protect their rights, which is a good thing.

"It shows farmers' democratic awareness is improving, but unfortunately their sense of law and order has not improved as quickly."

Mr Chen, who has studied mainland agricultural issues for more than 20 years, is the key official credited with drafting a series of central government documents in the past two years that have helped reduce farmers' tax burden and allocated more funds to boost agricultural production.

Uncharacteristic of officials' usual aversion to sensitive issues, Mr Chen is ready to admit the problems and discuss policy from a unique perspective.

Referring to several damning reports on the plight of farmers that have attracted international attention in recent years, he said more protests had gone unreported.

"There are at least 3 million villages across the country and you can imagine how many problems crop up each day," he said.

"If there are 30,000 villages having problems, that accounts for only 1 per cent of the total. People have to look at this from a national perspective and against a backdrop of phenomenal social and economic changes taking place.

"Overseas media tend to play up the riots, and it is their job to do so. But you have to remember, things are getting better for farmers generally and few of them would tell you that they want to go back to the past, despite their complaints."

Mr Chen hailed the role of the media and internet in reporting the riots, which he said enabled the higher authorities to act quickly.

"Now, thanks to the internet, any incident will quickly come to the attention of the highest level of mainland leadership. In the past, they could easily be covered up by local officials," he said.

He said as China was going through a critical stage of reform, the interests of certain groups like farmers could be easily hurt.

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