Tuesday, October 10, 2017

Xi Jinping's Rural Policy Thought

Recent communist party descriptions of Xi Jinping's thoughts and discourse on rural policies assure the comrades that their "Core Leader" is a genuine Marxist committed to maintaining state control over the major factors of production--land and credit. Furthermore, he wants to build the rural economy on bureaucratic organizations created during the failed collectivization of farms 50 years ago. Xi's "innovation" is to experiment with work-arounds for a countryside handcuffed to these institutions and to pour in generous subsidies to keep it afloat. Prices are more flexible under Xi, but farm prices can't be allowed to fall enough to create unrest. Resources are reallocated through vast bureaucratic "supply side adjustment" policies to address massive imbalances between supply and demand of commodities created by inflexible prices. Bureaucrats are expected to pass along all the subsidy cash without giving in to the temptation to steal it. The bottom line for all these policies is to keep the communist party firmly in control.

Chinese news media have been burnishing Xi Jinping's credentials and achievements as the country's top leader ahead of the 19th communist party congress this month which is expected to be grant him another 5-year term atop the party. Two recent meetings held in Beijing praised Xi's rural thoughts and his important sayings on agricultural and rural affairs during his first term as maximum leader. More insight comes from an essay in a communist party journal.

A forum on "Xi Jinping's Rural Thought and Foundational Practice" held September 25, 2017 in Beijing emphasized preservation of two sacred communist institutions: collective land ownership and cooperatives. These thoughts were summarized as "two relations":
  • "the relationship between rural people and the land": China must stick to collective ownership of rural land as the "bottom line" of reform, and explore methods of reforming farming business operations around that non-negotiable institution.
  • "the relationship between people and the market": rural people must enter the market  organized as members of cooperatives following a so-called "3-in-1" system of production cooperatives, cooperatives for input supply and marketing products, and rural credit cooperatives.
Xi favors a central role for the supply and marketing cooperatives (供销合作社) and rural credit cooperatives (信用合作社) which are actually sprawling bureaucracies masquerading as "cooperatives." These organizations were established 50 years ago to finance collective farms, supply them with inputs, and market their output. After rescuing them from bankruptcy during the last decade, the plan is to make these institutions key providers of financial and technical services to farmers.

The September meeting called for focusing on the collective economy to organize rural people so they can "break into the market economy together" and "provide their own public goods and services." "By integrating the collective economy with cooperative finance," the conference concluded, "rural grass roots communist party organizations can lead rural people jointly into wealth."

A 2-day July conference on rural policies hosted by the Ministry of Agriculture's Research Center for Rural Economy was attended by scholars and officials from top ministries, think tanks, and universities. The conference's description gushed over Comrade Xi Jinping's new theory, policy, and practice adapted to the new situation in China's countryside. Xi's "theory" amounts to buzzwords--"green", "supply side", "shared," "open," "precise"--that sound good but are never defined, so the words can mean whatever leaders want them to.

The July meeting identified institutional reforms of rural land and property rights, reform of the agricultural price formation system, reform of agricultural policy support, and innovations in agricultural business operations as Xi's achievements. Agricultural supply-side structural reform got initial results, transformation of the mode of agricultural development was accelerated, while "green" agricultural development, "shared" development, and "open" development also made progress. This meeting highlighted the beautification of the countryside and "clear results" from "precise" poverty alleviation that is industry-driven and ecological.

The institutional reforms entail efforts to scale up farms and make them more productive while maintaining collective land ownership. Farm business forms as alternatives to small-scale subsistence farms--such as family farms, land cooperatives, and land trusts--are necessitated as work-arounds when land cannot be bought, sold, or mortgaged and when property rights are vaguely defined. Reform of the price formation mechanism means abandoning price supports in favor of market prices and cash subsidies. Supply side reform is a program to undo huge market distortions created by the price supports (surpluses of corn, rice, and wheat that match the deficit of soybeans) without letting prices fall too far too fast. Similarly, the government was forced into "green" development by embarrassments such as bright green lakes, dead pigs floating in rivers, and cadmium-tainted rice. The massive environmental problems created by chemical fertilizer runoff, nonexistent regulation of livestock, and ignoring the hazards of farming, mining, and metal-smelting side-by-side got so bad they could no longer be ignored.

In January 2017, an essay by Minister of Agriculture Han Changfu in the communist party's journal Seeking Truth described Xi's "new thought, new theory, and new judgments" for rural policy.
Slogans that repeat certain words are the life blood of Chinese officials, including the oft-repeated pledge to subsidize the "three rurals" (rural people, the countryside, and agriculture). Minister Han recited three sets of three-character aphorisms that Xi Jinping used to explain his "three rural" commitment:
  • "Three musts" articulated at the 2013 rural work meeting: “For China to be strong, agriculture must be strong; for China to be beautiful, the countryside must be beautiful; for China to be rich, rural people must be rich.”
  • "Three cannots" pronounced during an inspection of an ethnic Korean area in Jilin Province during 2015: "We cannot at any time ignore agriculture; we cannot forget rural people; we cannot be indifferent to the countryside." 
  • "Three unwaverings" stated during a symbolic visit to Anhui's Xiaogang village: "Unwavering deepening of rural reform, unwavering development of the countryside, unwavering preservation of rural and harmonious stability.  
Minister Han praised Xi's ability to come up with pithy sayings that are easy to understand, such as, "At all times the rice bowl of the Chinese people must be held in their own hands," and "If you want to know whether our society has reached the stage of being moderately well off, take a look at the countryside." This communication skill is based on Comrade Xi's extensive experience working in the countryside, Minister Han said.

Minister Han's essay focused on assuring the rural peasantry that the communist party leadership is concerned about their interests and will not let them fall behind. In particular, the concern about narrowing income differences between rural and urban people means that leaders are very careful about decontrolling farm prices. They waited too long to cancel cotton and corn price supports, and they are being very cautious in reducing rice and wheat support prices because they are worried about the impact on rural incomes.

Communist party officials were warned in the July meeting and in Minister Han's essay to take their responsibility seriously and they were admonished to strengthen their sense of urgency and sense of mission to implement the party's rural policies. 

While not stated explicitly in these texts, Xi's signature anticorruption campaign may be his most critical initiative. Xi's campaign to reform communist party cadres down to the grass roots to restore the confidence of the common people in communist party rule is a struggle that began with rural tax and fee reform in the 1990s. Central authorities banned local tyrants from taxing villagers and instead started sending subsidies and budget transfers down to the countryside to win back the favor of the common people.

The Xi approach empowers a bureaucracy of men and women to make decisions about resource allocation and expects them to distribute billions in subsidies without succumbing to the temptation to skim off the money or use their power to solicit bribes and patronage. There have been a string of reports about rural officials disciplined for skimming subsidy funds and submitting fake reports to inflate their subsidies. Ahead of last week's National Day holiday, officials were warned against "high-end" consumption of expensive liquor, cars, palatial buildings, 5-star hotels, and extravagant office furniture.

The party's attention to the countryside is driven in large part by their worry that unrest in the countryside could produce a rural uprising or movement that could challenge their authority. This explains the Party's obsession with "organizing" farmers -- from the top down. Leaders fear truly spontaneous self-organized farmer organizations could morph into a competing political movement, so they are obsessed with incorporating cooperatives into trustworthy communist party-controlled bureaucracies. While the communist party has a nominal organization extending down to villages, the party's control of the countryside remains tenuous, with clans, business leaders, organized crime syndicates and religious groups having de facto power in many local areas.

Chinese explanations of Xi's rural policies emphasize that China needs unique and extensive policy interventions to address the unique problems in China, but the struggle between rural and urban interests is common to all industrializing societies. The United States had a disruptive agrarian movement during the 19th century which began as a farmer cooperative movement intended to help impoverished backward farmers gain equal footing in an era of rapid industrialization. It became a chaotic, sometimes violent, and politically forceful national movement--exactly what Chinese communists fear in their countryside today.

The American agrarian movement eventually morphed into rural populism that became a potent political force by the early 20th century and contributed to many reforms.  It could be argued that the disruption of the 19th century agrarian movement created the conditions for the strong economic and social position American farmers enjoy today -- and which Chinese leaders envy -- through advocacy for railroad regulation, a huge Department of Agriculture, education and technical assistance for farmers, extension services, subsidies and credit programs.

China's communist leaders are keeping a tight rein on all rural organizations and pouring subsidies into the countryside to avert the type of chaos and strife that dominated the 19th century countryside in the United States. But doesn't Marxist dialectical theory suggest that disruption and conflict are necessary to bring about a synthesis in order to improve the status of the oppressed?

If Marx was right, the obsession of China's "communists" with order and control may be dooming their rural population to eternal peasantry. Perhaps the Marxists of China should study a little Marxism instead of making up clever 3-character slogans to pass off as "thought."

2 comments:

Godfree Roberts said...

"the failed collectivization of farms 50 years ago."?

Seriously? The New York Times reported[1] the visit of a team of American agronomists, quoting Nobelist Norman Borlaug, “You had to look hard to find a bad field. Everything was green and nice everywhere we traveled. I felt the progress had been much more remarkable than I expected”. The delegation’s leader, plant geneticist and father of the Green Revolution, Sterling Wortman, described the rice crop, “Really first rate. There was just field after field that was as good as anything you can see. They’re all being brought up to the level of skills of the best people. They all share the available inputs”.

[1] New York Times, September 24, 1974

Richard Gudaj said...
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