Eye on China: Rural towns miss out on the boom

I finally came face to face with the Chinese countryside a couple of weeks ago. As a business journalist it's all too easy to stay bogged down in China's great cities. But an investigation into the matrix of wealth creation, poverty and environmental degradation forced me out of my comfortable existence into the province of Hebei.

Hebei surrounds Beijing, although the capital is an independent administrative unit. The term administrative unit is interesting. Chinese cities, towns and villages are all strictly graded. A city which seats the provincial government is usually the richest; a town with the county government the next richest and so on, down to the humble village. I visited a township town, one step below a county town, but ahead of a village.

Considering the township was 200 km outside Beijing, getting there was surprisingly difficult. From 6.30am in the morning we travelled by minibus to Zhangjiakou, a major rail link, before taking a taxi along mainly dirt roads to my guide's hometown.

We finally arrived about 2pm. There followed an orgy of food and drink. It was frankly pretty awful. Tofu drenched in fresh goat's blood did not go down well, although my hosts kindly provided a bottle of Chinese red wine which took the edge off.

The alcohol and powerful cigarettes helped to loosen tongues however, and I was soon being treated to an intense lesson in the township's socio-economic situation.

The main topic of conversation was the election for the town's chief which had been won by the party secretary. That wasn't too surprising, since the party secretary has been in power for the past 17 years and had built up a powerful patronage system.

What was new was that a townsman had contested the election. Surnamed Han, he was part of the new breed in the town - in his late thirties, a veteran of numerous building sites in the more developed cities, and keen to make money.

Han complained that the electoral system was muddled. In order to avoid conflict between the party secretary (elected by party members) and the town chief (elected by the townspeople ), the Government had stipulated that the posts should be combined. However, instead of having two elections simultaneously for the posts, the party election came first. Once the party secretary had been nominated, Han felt it gave him a strong chance of winning the subsequent election for head of the town, since he had all the advantages of the incumbent. For Han, it was a classic case of a good initial idea being negated through muddled execution.

The townspeople all felt strongly that the greatest problem they faced was the party secretary and the town's cadres. The lower reaches of administration are only open to those with education, since a special exam has to be passed. Once in power, these officials (who are usually party members) quickly obtain a surprisingly strong stranglehold over the town.

When I say "surprising" I am actually broaching a sensitive topic. To a Westerner, grounded in the rough and tumble of a democracy, Asian obsequiousness can come as a shock. I have had many arguments with my Hong Kong Chinese friends who complain about the high-handedness of Westerners in China.

I feel compelled to point out however, that Westerners wouldn't do that if local people stood up for themselves. Even (or especially) a wealthy Westerner in his own country is quite careful about the way he addresses a workman - he knows full well that the latter won't take kindly to being patronised or browbeaten.

Han implicitly backs me up when he talks about the townspeople. "They have a feudal mindset. They only think about accruing a bit of advantage for themselves on an individual basis. There is no effort to fight the status quo through group action," he complains.

This reminds me of a throwaway comment by a distinguished Chinese-American geneticist at Harvard who was quoted as wondering if the Chinese were "boring" because independent thinkers had been ruthlessly crushed over thousands of years.

Han regales me with tales of embezzlements and powerful cars. It was hard to check how true it was, but one instance did pull at the heartstrings. Han and his friends took me up into the hills to inspect a spring. They claimed it provided water so pure it was only one notch below mineral water. Through a system of pipes built hundreds of years ago, the water flowed down to the townspeople. But where the spring had been, there was now a gaping hole in the ground. Private contractors were excavating the valuable stone and sand deposits which harboured the spring. It was being choked to death.

Han raises a fascinating point. "The private contractors are paying off the government officials. But this doesn't belong to the officials. It belongs to the people," he says.

Indeed, China's officialdom is living on top of the greatest gold mine in the 21st century. They are selling off a whole country. Land, mineral resources, housing, factories - everything is being put on the block by local governments as the central Government moves towards its totalitarian vision of a ruthlessly capitalist economy. Yet the population is getting nothing, despite being the main contributors to the build-up of these assets.

The cost they paid, from the Great Leap Forward (1958 to 1962) to the Cultural Revolution (1969-1976) was enormous, yet they are seeing nothing in return. Government-supplied education, medicine and pensions are all conspicuous by their absence in modern China.

When liberals talk about economic reform in China, it's clear that the word "reform" can be just as Orwellian and inaccurate as anything the Communists have come up with.