June 1st, 2013
A couple of months ago, I helped organize an event with the Ash Center on urbanism in China addressed by Meg Rithmire of HBS and Tony Saich of the Ash Center。 I learned some really fascinating things that I‘ll try and recount here。
For decades， the village was the focal point of Chinese (People's Republic) planning： it was where Mao‘s revolution started， it was where the majority of people lived, and it was where the economy was rooted， and so where society organized itself。 Since the opening of the economy in the 1980s， however， this started to flip on its head。 Foreign investments constructed manufacturing plants on China’s eastern seaboard， and people flocked to find employment in those factories。 More neoliberal policies encouraged these investments and the growth of industrialized， urban spaces.
But what hemmed some of that migration (and continues to) was the HUKUO system that documents and assigns peoples‘ locations in China。Hukuo is essentially a card that tells a citizen tht they belong to a certain place, where they were born---usually urban or rural。 If you have rural hukuo， you are granted land rights as well as social welfare in the place that your family was from； you could get food rations， farm a certain tract of land （and give the produce to your collective), but you were not allowed to live in any other place。 Essentially hukuo was a way of restricting mobility within China。 If you had rural hukuo you could not live in cities legally, and you certainly could not get social welfare benefits （housing， food， healthcare） in cities if you had rural hukou.
Yet over the last ten years or so， China has allowed municipalities to start “leasing” hukuo and land rights to developers。 This had the effect of urbanizing what was essentially rural land。 But it also split up the collective farms that individuals and families had rights to。 Many of the rural protests we hear of have these hukuo leases at their source。 So even while rural peasants were losing their land to local officials (who leased it to developers, often for massive kickbacks), they weren‘t given urban hukuos to enable them to live and work legally in the city and get access to the social welfare provided there。 This kept China’s peasants in an awkward situation。
Some of their family members （usually a father or son， but often a female member as well） would work in a city in the factory and send some of the money home，and be forced to return home to the village if discovered by an urban official。This wound up tearing families apart without any backup。And if anything happened to the worker in the city， the family had no recourse as they were not there legally and had no social welfare。
At the same time， the development of this urban land was based on a very precarious financial system。Legally， municipalities are not allowed to issue debt， yet they are responsible for all of the development in their jurisdiction。 Instead， they‘d create semi-government investment corporations to seek loans from the national bank of china in order to develop their land into apartment complexes，factories，subway systems， malls， or what have you。 They’d use the leases on this land （usually 30 year leases） as collateral on these loans。 They‘d construct these infrastructures even if there was no real demand for them. That's why, nearly anywhere you go in China, you'll see massive amounts of construction of massive buildings, residences, malls, and other infrastructure. (Pictures to follow)
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