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Rural Poor Passed Over by China's Economic Growth - 2004-08-09

Despite China's staggering economic growth, the number of Chinese poor is on the rise. Beijing is promising relief as frustrated peasants demand a share of the country's newfound prosperity.

The number of Chinese living in abject poverty surged by roughly 800,000 last year.

The government's poverty task force disclosed last month that the gap between the middle classes in the cities and the impoverished peasants in the countryside is increasing.

This was the first time in more than 25 years that China lost ground in its struggle to reduce poverty.

The government says there are now 85 million people in the countryside who live on less than $75 a year. Meat is rarely eaten, school fees are beyond the reach of most families, and children as young as eight or nine work in the fields.

China analysts say the economic divide not only challenges China's communist ideology, but also threatens its social stability.

Angry workers and peasants have blocked roads, beaten tax collectors and stormed government agencies demanding assistance and protesting injustices.

Christopher McNally, a research fellow at the East-West Center in Hawaii, says: "It's a political issue because it can cause massive social unrest, both in the form of farmers blindly migrating into cities and not finding jobs and then staging sit-ins or creating crime, and in the form of rural unrest where farmers go after the cadres that exploit them and that has happened, there have been lynchings."

Mr. McNally says the uneven development is at least partly the result of a calculated policy by Beijing.

Throughout the 1990s, investment that favored the eastern coastal cities was seen as a key to economic growth for the entire country. And indeed China has experienced an incredible economic boom.

Since 1987, more than 400 million people have escaped abject poverty in China, but predominately in the industrial east. Many in the more rural west still live at the subsistence level.

Now leaders in Beijing are promising to do more to help the poor in the countryside, where some 70 percent of the population lives. Experts familiar with rural China say the challenge is enormous.

Millions of peasants still cling to traditional farming techniques and crops that have little or no market value. Droughts and floods regularly cripple agricultural reform.

McCleod Nyirongo, who works for the United Nations Development Program in China, says Beijing will have to transform subsistence farmers into market-savvy agriculturalists.

"They have to be helped through better technology, better productivity on agriculture, better use of land," he said. "They need to switch to better-paying crops, horticulture, fruit, vegetables."

Over the past 18 months, the East-West Center's Mr. McNally says Beijing has formulated a three-part strategy to help farmers adjust.

First, Beijing says it will simplify the onerous array of fees, levies and taxes that rural residents are forced to pay. The government wants to move toward a single flat tax, which it says will cost less and be less confusing.

Second, Beijing promises it will help farmers hold onto their land. In many cases, Mr. McNally says, corrupt local officials have kicked farmers out and sold their land to buy luxury cars or open their own businesses.

"Rural government officials tend to be very autonomous, they can really be more or less a law unto their own, and that leads to large amounts of corruption and also large amounts of non-compliance with policies that come from the central government," explained Mr. McNally.

The bright side, according to Mr. McNally, is that the government has taken steps to deal with the situation.

"The government has become very much aware of that and has actually issued a new law on land tenure in rural areas that should increase the security of farmers and entitles them to much better compensation," he said.

As a third step in its program, Beijing says it will improve economic opportunities for rural Chinese. Rules restricting migration to the cities could be relaxed, and local industries will be promoted.

The United Nations is also pushing for greater investment in the countryside's health infrastructure. Mr. Nyirongo says new jobs are meaningless if people are too weak to work.

"China has to go back to those older policies where they deliberately invested in water, in sanitation, improving food availability, improving health facilities, improving education, particularly in the west," said Mr. Nyirongo.

While the government struggles to deal with the problem, frustration among farmers continues to mount.

Last week more than 600 heavily armed police used shotguns and teargas to break up a demonstration in Henan Province. The impoverished villagers claimed officials sold their land to developers, and embezzled nearly $5 million.