China's Reforms

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    special article

    june 27, 2009 vol xliv nos 26 & 27 EPW Economic & Political Weekly308

    For my research on Wuxi during the last three decades, I owe an

    enormous debt to many institutions and scholars in India and China. I

    am especially grateul to the Indian Council or Social Science Research,

    the Chinese Academy o Social Sciences, the authorities o Wuxi city and

    Hela township and above all to my colleagues at the Institute o Chinese

    Studies, Centre or the Study o Developing Societies, Delhi, or

    supporting my study. I am, however, responsible or all the statements

    made in this paper.

    Manoranjan Mohanty ([email protected]) was at the University

    o Delhi, and is now co-chairperson, Institute o Chinese Studies and

    Durgabai Deshmukh Proessor at the Council or Social Development,

    New Delhi.

    chna refom: the Wux soy

    Manoranjan Mohanty

    Based on a 30-year micro-study of economic reforms in

    Wuxi city and Hela township, this paper points out that

    development through political urbanisation the Wuxi

    way may achieve fast economic growth but has its

    social, environmental and political costs. It traces the

    three phases of reforms the region has passed through,

    attaining a spectacular rise in gross domestic product

    and household incomes. But later developments have

    negated some of the achievements of the earlier stages

    of reform. It proposes that the authorities initiate

    genuine grass roots democracy so that local people will

    have the power to decide on matters that affect them.

    This article is based on a micro-study I carried out over a

    30-year period, which gives a picture o the nature o

    reorms that have taken place in the economy, society and

    polity o China. The area is Wuxi, located between Shanghai and

    Nanjing, which happens to be a relatively developed region o

    coastal China that has experienced rapid economic growth and

    urban construction. This was a typical success story o Chinas

    reorms with visible prosperity both in the urban and rural areas

    and with conspicuous inrastructural development. Yet here too

    several socio-economic, environmental and political problems

    have cropped up during the past decade. Thus the story o Wuxi

    and the history o its erstwhile Hela commune may be a good

    window to look at the course o Chinas reorms and draw some

    lessons or development theory.

    My objective in this essay is not so much to assess in a compre-

    hensive way the economic growth prole o the area as to under-

    stand the steps that were taken at dierent points o time to re-

    organise the administrative structure, reormulate economic poli-

    cies and intervene in managing the problems which arose. China

    being a vast country with great diversity, this micro-study

    certainly does not claim to be a representative one.Moreover, themethodology used in this work is mostly based on eld-level dis-cussions with villagers and ocials at various local levels.1 Inter-

    view-based inormation has been put together with published sta-

    tistical data and both have been interpreted with reerence to the

    national policy documents o the Communist Party o China (CPC)

    and the Chinese government, and a ew relevant studies con-

    ducted within or outside China.

    Besides being a tourist attraction because o its location by the

    side o the Taihu lake and its proximity to the Yangtze river with the

    historic Grand Canal passing through it, this middle-size city o 4.5

    million people (2007) has been rising in the recent years as one o

    Chinas global ino-cities. Wuxi had also been well known in aca-

    demic circles because o surveys conducted by Chinas most amous

    sociologist the late Fei Xiaotong in the 1930s and 1950s, which

    showed how sharp disparities in land relations documented earlier

    had been transormed through land reorms and cooperatives in the

    1950s. Fei pointed out that in traditional China the production o

    silk and its marketing had supplemented grain production in a

    major way, contributing substantially to poverty alleviation on the

    one hand and development o light industry on the other. He wel-

    comed the reorms in the early 1980s, which revived rural indus-

    tries.2 In this process, the role played by the state was signicant,

    both historically and in the post-liberation period. Thus, Wuxi rep-

    resented a model o development combining agriculture with ruralindustry, with state policy energising local households through land

    reorms and economic incentives and linking the rural economy

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    with the urban economy or mutual benet.3 The new rural eco-

    nomy in the rst decade o reorms during 1979-89 not only sub-

    stantially increased peasant income but also nanced much o the

    acilities or health and education. This development experience

    created socio-economic conditions that paved the way or grass

    roots democracy while shaping a new countryside where the peas-

    ants had rapidly increasing purchasing power. This new rural

    market became the springboard or Chinas industrialisation and at-tracted oreign investment. That model o reorm and open door,

    crystallised in the 1980s, looked promising until the early 1990s,

    when export-oriented production and the ocus on achieving a

    higher growth rate became the main preoccupation o the leader-

    ship and created an altogether dierent milieu. At the end o 30

    years o reorms, Wuxi looked prosperous with high-rise buildings,

    new real estate colonies or people working in Shanghai, multi-lane

    highways linking Shanghai with Nanjing and Hangzhou, and many

    new hi-tech industries set up by the worlds top corporations. But its

    pride, the Taihu lake, was so polluted with algae that in 2007 supply

    o water rom it to the surrounding cities was suspended or two

    weeks.4 Hela and many ormer villages disappeared with high-rise

    buildings taking their place. Silk production went urther inland

    with more chemical treatment o the abric. With many rural indus-

    tries closing down and growing unemployment in cities, peasants

    who had migrated to Shanghai and other towns in the past decade

    had to head back to their villages or ormer villages to all back on

    land (i available) and other local resources in 2008-09. The three

    rural problems ( sannong wenti: low productivity in agriculture,

    low rural income, and underdeveloped inrastructure, especially in

    health, education and agriculture), which were openly discussed all

    over China since 2000, were very much evident in this otherwise

    prosperous area as well. It should be pointed out that the rate o

    growth not only o gross domestic product (GDP) but also average

    wages in Wuxi over the 30-year period was substantial (Table 1).

    Peoples liestyles, in many ways, resembled those o advanced west-

    ern cities. Well integrated with the world economy, the city benetedgreatly but it also caused some suering with the onset o the global

    economic crisis. The Wuxi story is the story o contemporary China,

    which has been an economic success but with serious social, politi-

    cal and environmental problems. Stories such as Wuxis may indeed

    have prompted the Hu Jintao leadership to announce the concept o

    scientic development to reorient policies at the 17th Congress o

    the CPC in 2007, which included the launch o new initiatives such

    as building a new socialist countryside.5

    1 Wux and Hela: the plae and he peoleThe place o our case study is Hela (in Pinyin, using the Beijing

    dialect, it is written as Helie but in the Wuxi dialect pronounced as

    Hela, which we use here). The Hela Peoples Commune was re-

    named the Hela Xiang in 1983 (axiang, translated as a township in

    English, was the traditional rural unit below the county till 1958).

    It was one o the 10 xiang o the suburban district (jiaoqu) o Wuxi

    in Jiangsu province o China. It has been subject to urther

    reorganisation as a part o the urbanisation process during the

    reorm period. Ater Wuxi was declared a ully open city by a

    State Council decision in 1985, it took steps to set up special de-

    velopment zones that provided advanced inrastructure acilities

    to oreign capital.6 The inrastructure acilities have developed

    rapidly to cope with the demand generated by the growth o the

    Shanghai-Pudong area since the late 1990s. The Shanghai-Nanjing

    Expressway, which passes through Wuxi, was constructed in

    record time in the 1990s, considerably reducing the travel time to

    Shanghais Hongqiao International Airport and subsequently to

    the new Pudong International Airport. Several new bridges and

    waterways have also been constructed. The utilisation o all kinds

    o waterways small and big canals, rivulets and rivers and lakes

    is an important part o the modern communication system in

    Wuxi as it was in the past.

    In 1983, Jiangsu like several other provinces underwent an ad-ministrative reorganisation and was divided into preecture-level

    cities (shi) each city having both urban and rural areas. The

    guiding principle or this was the idea that cities must serve the

    countryside and that the countryside must serve the cities. To inte-

    grate rural development with urban development, the city leader-

    ship was given a key role. Hence the jurisdiction o cities was ex-

    panded to include rural counties. This new ramework represented

    a major change over the commune system where the rural entity

    had maintained a distinct character as an integrated unit o the

    political economy. The new system entailed an institutional initia-

    tive in rural-urban integration. In the 1980s, it maintained a bal-

    anced strategy, trying to ull both rural and urban demands. In

    the 1990s and later, however, it moved in the direction o what we

    may call political urbanisation under which the entire economic

    and social process was oriented towards ullling targets o urban

    growth under the leadership o the party and the state.

    Ater this reorganisation at the provincial level, Wuxi Shi con-

    sisted o its metropolitan districts and three counties (xian). The

    counties were Wuxi county, Jiangyin county and Yixing county.

    Subsequently two o these counties became county-level cities

    (shi) and Wuxi county ceased to exist as such with most o its units

    merging with the metropolitan districts and other areas o the two

    other counties. Thus Wuxi shi is the greater urban-rural area cov-ering 4,650 square kilometres. It should be noted that rural county

    governments aspire to become cities so that they have greater

    tb 1:annu avg r of Gowh of sd indo dungFv-Y pn n Wux (%)Five-Year Population GDP Gross Gross Light Heavy Grain Average

    Plan (FYP) Output Output Industr y Industr y Produc- AnnualValue of Value of tion Wages of

    Agriculture Industry Staff andWorkers

    First FYP 1952-56 1.9 4.6 0.4 8.1 6. 8 32.2 0.8 0.6

    Second FYP 1957-60 0.9 0.5 -1.7 2.1 -0.4 18.9 8.2 1.6

    Readjustment

    period 1961-1965* 2.2 16.1 16.8 19.0 15.0 30.1 17.4 -2.5

    Third FYP 1968-72 1.5 5.0 -1.5 12.7 7.8 23.1 -1.2 0.1

    Four th FYP 1972-76 1.2 9.7 5.0 12.0 10.6 13.2 6.6 0.7

    Fifth FYP 1976-80 1.4 14.2 0.2 15.5 14.3 13.2 3.4 6.0

    Sixth FYP 1981-85 0.7 16.6 6.2 19.5 14.1 18.6 3.4 9.7

    Seventh FYP 1986-90 1.3 10.6 5.9 15.3 12.1 14.3 1.7 17.1

    Eighth FYP 1991-95 0.5 24.6 9.7 36.2 28.3 28.2 -0.1 24.0Ninth FYP

    1996-2000 0.3 11.8 2.9 9.4 22.9 21.1 -3.7 8.8

    Tenth FYP 2001-05 0.7 14.3 0.6 18.8 16.7 32.3 -10.6 16.8

    * Readjustment policies worked until 1965 after which the Cultural Revolution campaign waslaunched in 1966 and continued officially until 1976.

    Source : Constructed on the basis of data in Wuxi Statistical Yearbook, 2005.

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    acilities or industrialisation and the building o inrastructure

    besides new construction or residences, commerce and produc-

    tion. This does not mean that a city will not have any rural areas

    within it. Actually there are many rural administrative units or

    xiangwithin the jurisdiction o a county-level city. But it is equally

    true that a xiang aspires or the status o a town

    orzhen or similar urban privileges. (See Ap-

    pendix (p 319) on the administrative structurein China and India.) In many rural counties,

    there may be both xiang and zhen. Xishan city

    was merged mainly with urban districts in

    2001 (Table 8). As o 2004 Jiangsu province

    consisted o 13 cities at the preecture level, 106

    entities at the county level, o which 27 were

    county level-cities two o them, Jiangyin and

    Yixing, in Wuxi and 54 urban districts, o

    which our were in Wuxi. In Jiangsu province, out o 1,410 town-

    ship (xiang)-level entities, 1,019 were already designated as towns

    (zhen) and 281 had become street communities or sub-districts

    (jiedao), o which Hela was one.7

    2 rng GDp, Gowng Unemloymen and Day

    The early 1990s are a good dividing line or the history o Chinas

    reorms and it holds good or Wuxis story as well. During the

    1980s, the ocus was on rural reorms and in Wuxi the catalytic

    role in this was played by township and village enterprises (TVEs).

    The commune system had been replaced by the Household Re-

    sponsibility System (HRS) under which land was contracted to

    households on a long-term basis or cultivation. The amount o

    land depended on the number o members in a household. The

    total cultivable land was thus equitably distributed among house-holds. The amily now engaged only a part o its labour in agri-

    culture and the vast surplus labour was deployed in TVEs. This

    development not only increased household incomes but also al-

    lowed the collectives, which owned the enterprises, to invest part

    o their prots in health, education and in improving agriculture

    itsel. This pattern was radically changed

    ater 1992 when the orientation o Chinas

    reorms was xed on export-led growth. This

    is when strict administrative steps were taken

    to promote political urbanisation.

    In 1995, Wuxis population was 4.3 million

    with 1.06 million living in the metropolitan

    districts. Wuxi was designated by the central

    government as one o the 15 key economic

    centres in China and one o the 13 relatively

    large cities, besides being one o the 10 major

    tourist centres. Its industries during the 1980s

    and early 1990s included textiles, machinery,

    electronics, light industry, metallurgy, petro-

    chemicals, building materials, ood process-

    ing and pharmaceuticals. In 1995, the GDP o

    the whole city was 78.1 billion yuan.8 In the

    decade o the 1980s, the average annual rateo growth o industrial output in Wuxi was as

    high as 15%. The ratio o heavy industry to

    light industry also changed radically to 51.6: 48.4. Large and

    medium-size enterprises were 32% o the total with 48% small

    enterprises and the remaining raw material processing units.9

    Rural enterprises contributed two-thirds o the total output value

    o the whole city. During the period 1981-91, TVEs registered a

    yearly 22% rise in their output value and the

    Wuxi region acquired a special reputation or

    their success. Wuxi has trade relations with123 countries and regions. The Wuxi Munici-

    pality and each county-level city have their

    own import-export corporations which auton-

    omously engage in oreign trade as per the

    stipulations o the central oreign trade regu-

    lations. During the 1980s, a large number o

    quality products in textiles, silk, light indus-

    try, machinery, electronics, agricultural and

    sideline products (shery, animal products, processed oods and

    so on) were exported to many countries. During the 1990s, how-

    ever, the Wuxi leadership decided to reocus its strategy on ex-

    ports and launched a vigorous plan to attract oreign investment.

    It succeeded in getting as many as 73 o the Fortune 500 compa-

    nies to invest in 138 projects as o 2007.10

    The ownership system o enterprises underwent a steady pro-

    cess o change during the reorm period with the rise o private

    enterprises leading to changes in the structure o employment

    (Table 4). Collective units, which provided jobs to 2,11,800 per-

    sons, nearly a third o the total number employed in 1980, pro-

    vided employment only to 42,300 in 2004. In the case o the

    state-owned units too there was a decline in employment o

    workers rom 3,80,300 to 2,09,000, but they were still a substan-

    tial source o employment. On the other hand, the private owner-ship system in the economy had grown substantially with non-

    public units employing 2,76,000, which was more than the state

    and collective units put together. This sector had employed only

    22,500 in 1985 and experienced rapid expansion ater 1992 when

    Deng Xiaoping called or expanding the market economy during

    tb 2: Wux: chngng comoon ofemoyd Wokfo (1980-2004)

    Selected Employed Primary Secondary TertiaryYears Workforce Industry Industry Industry

    (Total in % % %

    Million)

    1980 2.056 49.6 38.3 12.1

    1985 2.367 25.8 56.3 17.9

    1990 2.449 22.2 58.6 19.2

    1995 2.379 16.5 57.2 26.3

    2000 2.210 22.7 48.1 29.2

    2004 2.674 12.8 54.8 32.4

    Source:Compiled from Wuxi Statistical Yearbook, 2005, p 47.

    tb 3: Wux: Dmogh nd eonom tnd

    1952 1970 1980 1990 1997 2000 2004 Remarks

    Population (million) 4.32 4.34 4.47 Growth rate of non-agricultural

    Of which Non-agricultur al 1.83 2.79 population is high

    Employment (workforce) 2.32 2.21 2.74

    GDP (billion yuan) 96.00 120.02 235.00 Fast growth

    Primary Industry 4.55 4.8 5.18 Agriculture not growing muchSecondary Industry 56.3 68.31 135.35 Industry growing rapidly

    Tertiary Industry 35.0 46.89 94.47 Also growing fast

    Gross output value

    of light industry 66.46 72.60 134.49 Growing fast

    Gross output value

    of heavy industry 75.68 105.30 323.01 Growing faster

    Grain output

    (million tonnes) 0.85 1.23 1.46 1.53 1.57 1.27 0.81 Declining substantially

    Oil bearing crop

    (thousand tonnes) 2.40 13.73 18.5 41.7 39.3 59.1 36.7 Clearly not encouraged

    Aquatic Products 8.18 10.7 19.18 66.59 81.6 102.5 113.9 Slow progress of a traditional

    (thousand tonnes) strength

    Silkworm cocoons (tonnes) 5,465 6,124 5,658 2,304 1,139 1,115 603 Disappearing fast

    Tea ( tonnes) 327 1,010 2,023 5,870 4,992 4,898 4,680 Continues to be an important

    produce

    Source : Wuxi Statistical Yearbook, 2005, pp 10-11.

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    his southern tour to Shenzhen and other Special Economic Zones

    (SEZs). Table 4 shows the major expansion o sel-employed urban

    labour. Their number was minuscule in 1980, only 1,300, which

    grew to 5,98,800 in 2004, again recording a sharp rise ater 1992.

    But what remained constant was the massive proportion o rural

    labourers to urban ones. It was 14,66,500 rural to 5,14,900 urban

    in 1978 and was still

    15,64,100 to 5,27,400 in

    2004. In other words, rural

    labourers were acing a

    new situation o having to

    nd work when employ-

    ment in the collective en-

    terprises shrank substan-

    tially in the 1990s. Some

    o them ound jobs in the

    private sector while many

    went in or sel-employ-

    ment. But a large number

    remained unemployed or

    were in search o jobs.Thus whereas the eco-

    nomy recorded impressive growth in GDP, the rural population,

    including many in the city, aced an employment crisis.

    Several important trends in incomes are noticeable i we look at

    them over a 50-year span (Table 5). First, there was near stagna-

    tion o wages rom 1952 to 1977, which was as low as around 500

    yuan but grew 40 times to 20,442 yuan in 2004.11 O course, the

    prices o commodities were low and collective social services were

    available to all. And there was an egalitarian environment. There-

    ore, to characterise this situation as collective poverty and de-

    ride the achievements o the rst three decades is not air. But the

    amenities o living were indeed minimal and the inrastructure was

    poor. Second, the 1980s witnessed a massive growth o income

    rom 550 yuan in 1978 to 2,449 yuan in 1990. This was the period

    o rural reorms, especially collectively owned rural industries.

    Thereater progress was remarkable, crossing the 10,000-yuan

    mark in 2000. Thus Wuxi accomplished much more than Dengs

    stipulation o a ourold increase the target being $1,000 that he

    had set or Chinas per capita income in 1980. Third, incomes in the

    relatively rural areas o Jiangyin and Yixing were not too ar be-

    hind those in the urban districts until the late 1990s when dispari-

    ties began to widen aster. I we look at the annual average wages

    o sta and workers in 2004 in terms o where they were employed,those who worked in state-owned units got 23,879 yuan, almost

    double that earned by collective units (12,674 yuan), and those

    who worked in the private sector got 18,725 yuan, about one and a

    hal times the wages o the collective workers. That was the aver-

    age picture while some in oreign-owned companies or the joint

    sector earned much more than workers in the state-owned units.

    But the average annual earning o government employees in Wuxi

    was 31,525 yuan higher than those working in enterprises (17,955

    yuan) and in other institutions (25,538 yuan).12

    Living standards improved rapidly during the reorms periodas was evident rom rising incomes as well as expanding savings

    (Table 5). At the same time, the urban-rural gap sharply widened

    during the 1990s even though incomes in both areas grew

    steadily. Per capita savings deposits, which were substantial rom

    1985 onwards, exceeded per capita earnings in 2000 and

    remained so thereater.

    Wuxis pattern o development has been to urbanise its village

    communities. Thereore the townships (xiang) were allowed to be-

    come towns (zhen). Even the ones that remained ater 1999 ceased

    to exist by 2004. But villagers committees continued within the

    towns even though their number declined when many o them be-

    came street (jiedao) committees or village (cun)-level towns. Table 8

    points out that villagers groups corresponding to the production

    teams o the commune period continued to exist and perorm a cru-

    cial role at the village level such as undertaking collective produc-

    tion contracts. They were more unctional units than substantive

    units o sel-governance.

    We get a picture o the

    state o income inequality

    in Wuxi rom Table 6.

    Nearly a quarter o the

    population earned below

    4,000 yuan while almostthe same proportion was in

    the above 10,000-yuan

    level. More than 40% were

    in the middle-income group

    o 4,000 to 8,000 yuan.

    There were rich people in all the districts and cities and inequality

    was pervasive. Table 7 shows disparate incomes in the rural areas.

    The suburban district where Hela is located refected many o the

    eatures o Wuxi city as a whole but as a critical decision-making unit

    just as a district in India at the grass roots level, reveals some

    aspects o the reorms story not captured at the large city level.

    3 the D: Ubanaon of he rual

    The process o political urbanisation meant reorganisation o units

    both at the upper level oxian (county) and qu (districts) as well as

    the lower levels o xiang and cun. As mentioned earlier, Jiangsu

    province was divided into 13 shi in 1983. The Chinese charactershi

    is used or cities at every level, so one has to nd out each time at

    which level that city is located. For example, Beijing and Shanghai

    are provincial-level cities. Wuxi, Nanjing, Hangzhou are preecture-

    level cities. Then there are county-level cities such as Yixing and

    Jiangyin within Wuxi. A metropolitan or urban area can also be a

    shi or city. For rural China, the entity above the xiang level is thexian (county). In olden days the whole o Wuxi city was the Wuxi

    Xian (County). From 1983 to the early 1990s Wuxi had our

    tb 4: chngng Ownh sym nd emoymn p n (Million persons)

    Year Employment Staff and In In Urban In Other Urban Rural

    Workers State-owned Collective Forms of Self- Labourer s

    (Total) Units Units Ownershi p employed

    1980 2.056 0.592 0.380 0.211 0.0013 1.463

    1985 2.367 0.740 0.452 0.265 0.022 0.0097 1.618

    1990 2.449 0.798 0.480 0.269 0.048 0.016 1.639

    1995 2.379 0.783 0.444 0.205 0.133 0.044 1.551

    2000 2.210 0.593 0.320 0.086 0.186 0.108 1.509

    2004 2.746 0.527 0.209 0.0423 0.276 0.598 1.564

    Source: Compiled from Wuxi Statistical Yearbook, 2005, pp 47-48.

    tb 5: tnd n avg annu Wg ofWok nd sff(1952-2004 , Yuan)

    Year Total Wuxi Urban Jiangyin Yixing

    Districts City City

    1952 507 529 401 355

    1957 508 568 420 429

    1962 5515 580 466 451

    1970 504 523 478 463

    1978 550 574 512 493

    1980 699 724 656 639

    1985 1,113 1,137 1,086 987

    1990 2,449 2,550 2,335 2,119

    1995 7,192 7,488 6,998 6,153

    2000 10,966 11,988 9,685 8,835

    2004 20,442 21,295 20,252 15,956

    From 1952 to 2000, areas which became a part ofXishan city and then merged with urban districts

    were included in the total for Wuxi.Source:Compiled from Wuxi Statistical Yearbook, 2005, p 51.

    tb 6: lvng sndd of Ubn nd ru rdn (1978-2004 , Yuan/per capita)

    Year Disposable Net Income Per Capita

    Income of Urban of Rural SavingsResidents Residents Deposits of

    Residents

    1978 340 181 39

    1980 456 239 65

    1985 958 698 302

    1990 1,833 1,496 1,337

    1995 5,763 3,976 4,708

    2000 8,603 5,256 12,763

    2004 13,588 7,115 25,943

    Source: Wuxi Statistical Yearbook, 2005, p 74.

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    divisions: Wuxi metropolitan area along with a suburban district,

    Wuxi county and two cities the county-level cities o Jiangyin Shi

    and Yixing Shi . In 2004, Wuxi county ceased to exist and was inte-

    grated with the metropolitan area with many districts (qu). Again

    there were two kinds o

    districts in the metropoli-

    tan area shi qu (urban

    districts) and qu which were at the level o the

    zhen (town) located in the

    xian or the rural county.

    Just as a shi (city) can

    exist at dierent levels, so

    can a zhen. There are

    xiang-level towns called

    zhen and there are cun

    (village) towns also called

    zhen. There may be small

    urban centres which may not have the legal status o a xiangor

    cunbut may be also called a zhen or a town. In a xian or rural

    county there can be both xiang (township, which is a rural entity)

    and zhen. Within a xiang (township) there may be cun as well as

    cun-level zhen. Similarly within azhen (town at the xiang level)

    there can be rural areas or cun and urban areas or zhen(towns at

    the cun level).

    A metropolitan areas urban districts are divided into streets or

    neighbourhoods (jiedao), now designated as urban sub-district

    oce (jiedao banshichu), and neighbourhoods are urther divided

    into residents committees ( zhumin weiyuanhui). But the otherdistricts in the metropolitan area may have both jiedao (sub-

    districts) as well as zhen.

    The reason behind such complex intermixing o rural and

    urban entities is the reality that the urbanisation process has

    proceeded at a ast pace in contemporary China. The declara-

    tion o an area as urban changes the nature o land ownership.

    The economic planning acquires industrial direction. Land use

    is subject to commercial and other regulations. The history o

    Helas changing status rom a grain-producing, mulberry-

    planting, silkworm-raising commune across the Liangxi riverrom Wuxi town to an industrial and commercial hub with a

    modern residential neighbourhood integrated with the new

    Wuxi city refects the corresponding administrative change. It

    is important to note that the same process has taken place even

    in remote areas o rural China. Whenever I asked local leaders

    about their development plans, they said that they looked

    orward to obtaining an urban status rom the higher authorities

    so that their land value would increase and they could set

    up industries.

    Hela as a xiang was part o the suburban district when I rst

    visited Wuxi in 1979. So we start with the development process in

    the suburban district and then turn to the unolding o the reorm

    process in Binhu district, where Hela was relocated rst as a zhen

    and then as a jiedao (street or sub-district).

    The main objective with which the subur-

    ban district started its reorms was that it

    should serve the city and benet by it. There-

    ore, producing vegetables and oodgrains to

    supply the city besides producing a certain

    amount o grains or its own consumption was

    a component o its economy. At the same time,

    development o rural enterprises was encour-

    aged as part o the national policy to contrib-ute to economic development. The district

    government devised its strategy in such a way

    that industry and commerce develop rapidly,

    and agriculture be supported out o the collec-

    tives prot rom this development. One o the

    considerations underlying this strategy was

    that every year more and more agricultural

    land was taken over or the construction o in-

    dustrial and commercial enterprises. Since the

    district enjoyed autonomy in its economic

    decision-making, it could utilise its resources,

    including land, or the most protable pur-

    poses. So in the 1980s much land was diverted

    rom agriculture to industrial construction.

    Because o collective ownership o land, such

    diversions were easy. According to Chinese law, land in desig-

    nated urban areas belongs to the state and land in rural areas

    belongs to the collectives.

    The ollowing gures indicate the high rate o growth achieved

    by the suburban district during the period o high growth.13

    1978 1986 1994

    Total Output Value (million yuan) 220 1,600 13,239

    GNP (million yuan) 110 3,890

    GNP per capita (yuan) 12,727 24,072

    tb 7: pooon of p c annu Ninom of ru Houhod (2004)

    Income Level Wuxi Urban Jiangyin Yixing

    Yuan ( Total) Districts City City

    Below 2,000 5.50 4.00 6.00 8.00

    2,000-3,000 6.50 6.00 8.00 6.00

    3,000-4,000 11.00 10.50 6.00 17.00

    4,000-5,000 10.25 12.00 6.00 11.00

    5,000-6,000 11.00 10.50 8.00 15.00

    6,000-7,000 11.75 10.50 11.00 15.00

    7,000-8,000 8.75 8.00 11.00 8.00

    8,000-9,000 8.50 10.50 10.00 3.00

    9,000-10,000 5.25 4.50 9.00 3.00

    Over 10,000 21.50 23.50 25.00 14.00

    Source: Wuxi Statistical Yearbook, 2005, p 91.

    tb 8: Wux: admnv Dvon (2004)

    Di Qu/Distric t Zhen/Town Jiedao Ban Zhumin Cunmin Area Sq Km Land Area

    shichu/Urban Weiyuanhui/ Weiyuan hui/ Out of theSub-dis trict Neighbour- Villagers Total Area

    Office hood CommitteeCommittee

    Wuxi city 59 24 453 1,061 4,787.61 1,502.08

    Total (Rest being water)

    Shi Qu/

    Urban districts 22 24 298 337 1,622.64 510.44

    Chongan district (metropolitan area) 6 34 8 17.59

    Nanchang district (metropolitan area) 6 60 No villages 22.43

    Beitang district (metropolitan area) 5 60 Do 31.02

    Xishan district 8 Relatively 33 117 454.36

    rural area

    So no jiedao

    Huishan District 6 Do 16 134 327.12

    Binhu District 5 4 78 72 631.50

    New District 3 3 17 6 138.63

    Shi

    (County Level city) 37 Relatively

    rural area,

    formerly Xian 155 724 3,164.96 991.63

    Jiangyin city 16 Relatively

    rural area,

    formerly Xian 64 312 987.53 194.87

    Yixing city 21 Relatively

    rural area,

    formerly Xian 91 412 2,177.43 796.76

    Source: Wuxi Statistical Yearbook, 2005, pp 6-7.

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    The story o the development process in the suburban district

    was typical o the areas in eastern China which took ull advan-

    tage o the national policy on reorms. Beore 1978, the main

    ocus was on grain production. During the Cultural Revolution

    period, those who paid greater attention to industry, commerce

    and household production were criticised as capitalist-roaders.

    The state had xed quotas or grain production by each level.

    This resulted in an inadequate supply o vegetables to city. Therewas a large labour orce engaged in agricultural production. The

    production cost remained high while the variety o products was

    limited. Many such problems are pointed out by post-reorm

    leaders while reerring to the commune period. But it should be

    mentioned that while stress on grain production was undoubt-

    edly there, diversication and development o appropriate rural

    industries were denitely encouraged in the early 1960s and

    were part o the overall commune policy.

    With the reorms ater 1978, the countryside was asked to de-

    velop on its own and supply vegetables and other arm products

    to the city. Operating under the HRP, the suburbs diversied their

    economies and developed agriculture, industry and commerce.

    During the rst phase o the reorms, 1979-84, rural enter-

    prises experienced rapid growth. The suburbs took advantage o

    a cheap labour orce, both rom local sources as well as romacross the Yangtze river the area in southern Zhejiang which

    was relatively less developed. To their advantage, enterprises

    hired retired technicians rom the industries o Shanghai and Su-

    zhou. As mentioned earlier, Wuxi had a tradition o industry and

    commerce. Being the home o the Rong amily, the suburban dis-

    trict was already connected with national and international

    trade. It also acquired a lot o second-hand machines to launch

    its enterprises. Once rural industries sprang up, members rom

    practically every peasant household went to work in them. Every

    xiang and every cun tried to set up new enterprises in the

    early 1980s.

    The second phase o reorms in the suburban district started in

    1985 and lasted until 1991. Now, the eort was in upgrading the

    quality o production. The cadres had already accumulated some

    experience in running enterprises; managers

    were trained and workers developed skills on

    the job. Hence a good oundation had already

    been laid. Farmers had acquired technical skills

    in a variety o economic activities. Their experi-

    ence o managing rural collective enterprises

    was compared with that o state-run enterprises

    and many lessons were learnt so that these

    could be managed better. The availability ocheap labour and land now needed to be inte-

    grated with the use o modern technology,

    securing capital rom the national and international market.

    Thus during the second hal o the 1980s, as district party leaders

    proudly proclaimed, the suburban economy changedrom simple

    processes and technology to large-scale and modern production.

    During this period many joint ventures with oreign investment

    came up in dierent xiang, including Meilido Hotel, Helas three-

    star hotel with Australian collaboration.

    The third phase was one o rapid market development aterDengs speeches during his southern tour in early 1992. Initiative,

    investment and competition were the new creed. Rural enter-

    prises diversied and vastly increased their production in the

    wake o erce competition in the market. In the suburban district

    o Wuxi, there had been greater demand than supply o various

    kinds o goods in the initial year o reorms. Now the situation

    was reversed. The market had more o all kinds o goods than

    there was demand; the result was the various enterprises aced

    more competition. The competition involved collective enter-

    prises owned by the xiang and cun, state-owned enterprises and

    an increasing number o private enterprises. By now indications

    o an emerging crisis were visible. The collectively owned rural

    enterprises ound it dicult to compete in the new environment.

    The 1990s saw signicant changes in the orms o ownership

    o enterprises. The suburban district encouraged the organisa-

    tion o shareholding companies. Unlike in Guangdong Province

    where private ownership grew very ast, in the Su Nan (south o

    the Yangtze river) region, collective enterprises still continued to

    be the main orm o ownership. But they too opened themselves

    to shareholders. Shares could be theoretically bought by their

    own workers and the members o the xiang, but soon it was more

    prosperous enterprises, companies and entrepreneurs rom out-

    side the township and even outside the country who took overownership. O 1,200 enterprises, 680 units possessing more than

    three million yuan in assets were ready or a change in owner-

    ship in 1996.

    Opening to the national and the world market was the policy

    ater the Fourteenth Party Congress in 1992. In this process,

    many enterprises went bankrupt because their products were o

    a low quality and they ailed to compete in the market. Some

    loss-making companies were sold to private individuals or to

    other collectives and companies. When the Fiteenth Party Con-

    gress ocused on the reorm o state-owned enterprises in 1997,

    the policy on the transormation o collective enterprises was al-

    ready in operation and thousands o rural enterprises had been

    sold to private entrepreneurs. Thus, the reorm and open door

    policy continued into a new stage o market-oriented development

    tb 9: Govnmn Ognon n ru a (1999-2004)

    Level of Organisation 1999 2000 2001 2002 2003 2004

    Township (Xiang) government 10 1 1 1 1 0

    Town (Zhen) government 107 101 93 91 84 59

    Villagers committee Cunmin

    Weiyuanhui 2,080 1,821 1,540 1,355 1,272 1,185

    Villagers group 25,198 25,183 24,834 24,392 24,122 23,561

    Source: Wuxi Statistical Yearbook, 2005, p 165.

    tb 10: pof of town n Bnhu D (2004)

    Zhen/Town Total Employed Land Cultivated Financial Grain Remarks

    Population Persons Area Area Revenue Output

    (2004) (Hectare) (Hectare) (Million (Tonne)

    yuan)

    Hela 43,911 23,514 4,700 760 27.78 3,490 Small area for crops

    Huazhuang 89,046 43,518 5,329 1,933 43.51 10,693 Larger town, More crops

    Taihu 58,036 34,804 4,212 779 47.01 5,458 Less crops, more income

    Mashan 30,402 19,885 4,788 842 120.21 3,294 Less crops, high level industrialisation,

    high income

    Hudai 34,404 18,224 5,509 818 13.74 5,870 Less crops, more land used for non-

    agricultural purposes, still less income

    Source: Jiangsu Statistical Yearbook, 2005, pp 614-615.

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    in the 1990s in the suburban district and Wuxis urbanisation

    process proceeded with a urther reorganisation o the district. A

    substantial part o the suburban district, including Hela, was merged

    with Binhu district and was later made into urban districts.

    4 Hela: Fom rual commune and townh o Uban

    Neghbouhood

    In 1978, the suburban district had 15 communes. When the reormsbegan, the Meiyuan commune was merged with Hela in 1979 so

    that the entire western suburban area would become an integrated

    unit. By 1983, the commune structure was ully replaced by the

    xiang administrative structure. From 1983 to 1999, Hela was one

    o the 10 xiang (rural townships) o the suburban district o Wuxi,

    ater which it acquired the status o a zhen (town). In the next step

    in the process o urbanisation, it became an urban neighbourhood

    or jiedao (street or sub-district) in 200414 (Table 12).

    A closer look at the situation in Hela township in 1996 gives us

    an idea about the eects o the rst 15 years o reorms, ater

    which the process o political urbanisation was accelerated to

    meet export-oriented growth targets. In 1996, Hela had an area

    o 36 square kilometres with a population o 33,000 in 11,500

    households. The township consisted o 13 cun or administrative

    villages (ormerly production brigades) and 97 zeran cun or

    natural villages/hamlets (ormerly production teams). With the

    serpentine Liangxi river on its south, the Huiquan Hill on its east

    and the Li Yuan (Peach Garden) and the Taihu lake on its west,

    many o Wuxis beautiul spots were in Hela.

    Waterways, hills, residences, actories and elds are what com-

    prise Hela township.15 The waterways linked the Taihu lake with

    the Grand Canal and were used both or navigation and shing.

    Long rows o ully loaded boats are strung together and driven by

    a single motor. The sh brigade it was still called a brigade with

    the status o the cun is on the western bank o the Linagxi river.

    The Xi Mei road, which links the Mei Yuan park with the Xihupark, runs parallel to the Jiangxi river. The Helakou (or Hela

    gate) near the eastern end o the xiang was earlier the entrance

    to the rural township rom the city. It has become a constantly

    growing business area o the city. What was a quiet area in 1979

    had in 2008 become a bustling activity centre signalling the

    steady expansion o the metropolis.

    The villages around the Helakou have naturally lost land to

    the city and have opted or aster industrialisation and com-

    merce. For obvious reasons, the adjoining villages are relatively

    more prosperous compared to the ones that are arther rom thecity centre. Hela Xiangs richest villages are Liqiao, Xiemin and

    Sunjiang. They not only set up plants to provide ancillaries or

    city industries and the larger market, but also shops, restaurants

    and hotels early in the reorm years. Thereater, many modern

    industrial units have come up in this area.16

    The western part o Hela is an expanse o hills, the largest

    among them being the Longshan (Dragon Hill) range with Heng-

    shan (Straight Hill) and Xishan (Copper Hill) on its south and

    north respectively, besides a number o smaller hills. In the late

    1970s, the hills were ull o pine trees and tea plantations. Some

    slopes were also covered with mulberry trees or raising silk-

    worms. The picture since the late 1990s is very dierent. The

    hills have been cleared or quarries, thus presenting a sight o

    bare slopes. Much o the mulberry land, which sustained silk pro-

    duction, was rst used or orchards or later cleared or new in-

    dustrial plants. It was argued that mulberry could be planted in

    more interior villages rather than in the suburbs, which could be

    used or more protable purposes.

    A concrete road laid in the mid-1980s goes through the Heng-

    shan pass by the side o Dong Hengshan village or hamlet to the

    crematorium o the xiang. Further down this road, across the

    hills, lies Qingxing village, the arthest rom the metropolitan

    area. This is the only village where oodgrains, that is, rice andwheat, continued to be the major products till the late 1990s. Like

    other villages, Qingxing launched projects or industrialisation

    and commerce in the late 1980s and achieved rapid growth. But

    throughout the 30-year period, the per capita income o this vil-

    lage has remained the lowest in the xiang. It has its agricultural

    elds, hills and quarries on which rural enterprises have come

    up, and vegetable arming. But in the same time, other villages

    have made even urther progress with their export-oriented in-

    dustries and this western-most cun continues to lag behind in per

    capita GDP terms. The leaders o the township always pointed to

    this case as an example o an agriculture-based economy being

    the cause o backwardness.

    The southern border o Hela on the coastline o the Taihu lake

    was ull o orchards, o tangerine, peaches and pears, and nu-

    merous sh ponds in the 1980s and 1990s. This began to change

    in the late 1990s. In 1996, green hills slopes occupied 16,000 mu

    (1,066 hectares), sh ponds 3,000 mu, only 1,360 mu was used

    or growing vegetables and 800 mu as orchards. The landscape

    changed dramatically during the third decade o reorms and acto-

    ries, hotels, residential colonies and commercial buildings have

    come up on agricultural elds, the hill slopes and even lled ponds.

    During the rst 15 years o reorms, the phenomenal rise in

    amily incomes resulted in two waves o house construction inthe villages. The rst wave took place in the early 1980s soon

    ater the reorms began and the communes restriction on house

    tb 11: eonomy nd h Wokfo of town (Zhn) n Bnhu D (2004)

    Hela Huazhuang Taihu Mashan Hudai

    Town Town Town Town Town

    Total households (hu) 12,698 23,925 17,978 9,015 11,967

    Total population 43,911 89,046 58,036 30,402 34,404

    Workforce 23,514 43,518 34,804 19,885 18,224

    Persons employed in primary industry 2,334 8,577 2,383 686 2,791

    Employed in secondary industry 16,093 26,734 27,192 13,833 10,573

    Employed in tertiar y industry 5,087 8,207 5,229 5,336 4,860

    GDP (million yuan) 2,021 2,920 3,962 2,700 1,051

    Out of which

    Primary industry 32.84 96.1 51.02 60 51.12

    Secondary industry 896 2,174 2,172.96 1,680 810.59

    Tertiary industry 1,092.16 650 1,198.6 960 190.06

    Total financial revenue (million yuan) 277.85 435.18 470.14 1,202.17 137.42

    Average net income per farmer (yuan) 6,855 7,342 8,060 7,337 6,861

    Arable land (ha) 760 1,933 779 842 818

    Total output of grain (tonne) 3,490 10,693 5,458 3,294 5,870

    Total power of farming machinery (Kw) 5,728 12,060 7,071 5,510 8,749

    Total Elec tric ity consumed (million Kwh) 111.37 191.12 487.57 2,065 9,708

    Source: Compiled from Wuxi Statistical Yearbook, 2005, pp 186-192.

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    building was withdrawn. Most o the households quickly built

    new houses to provide reasonable accommodation to the second-

    generation members o the amily.17 During my visits to the vil-

    lages in Hela between 1980 and 1993, I ound most amilies

    steadily improving their housing conditions and increasingly liv-

    ing in newer houses tted with modern acilities. Whereas the

    kitchens earlier mainly used coal, now they had gas and electric

    cooking systems. Earlier they carried the night soil rom latrinesto the eld to use as manure. Now they had fush latrines. Wash-

    ing machines and colour televisions were very common in the

    early 1980s and more and more amilies acquired rerigerators

    and air-conditioners by the end o the decade. Earlier having a

    bicycle was a luxury, now more and more amilies had bought

    light motorcycles, and later, some even owned cars.

    Ater 2003 the situation started changing

    very ast. Multi-storeyed apartment com-

    plexes gradually came up once a village be-

    came an urban neighbourhood. The restric-

    tions on using agricultural land no longer

    applied in the new situation. In 2008, when

    I looked or my old contacts, they were hard

    to nd.18

    There were strict environmental regula-

    tions to prevent pollution o the Taihu lake

    and the rivers. As per the regulation o the

    State Council o China, the construction o

    certain kinds o industries within ve kilo-

    metres o the lakeside was prohibited.19 Still

    there has been alarming evidence o pollution o the Taihu. As

    mentioned earlier, the algae pollution increased year ater year

    until it assumed scandalous proportions during the summer o2007. Certain kinds o sh were not breeding the way they used

    to because toxic levels continued to rise. The water management

    system seems to have been upset in the past two decades and

    every one or two years there are severe foods in this area.

    peole and the Wok

    Beore we look at the population gures a clarication is called

    or. Because o the hukou (residency permit)system, during the

    xiangperiod, Helas population gure did not include residents in

    the quarters provided by the city government which were in the

    territory o Hela. They worked in city-run actories and oces

    though they lived in houses in the suburban area. Nor did it

    include members o rural amilies who worked in the city and

    had acquired a city residency registration. Though they had

    houses in the village, they were enumerated as city workers. This

    presents serious problems or statistical calculations. For exam-

    ple, take the case o a amily where the husband is a worker in a

    city-run enterprise and the wie in a xiang or cun-run actory; the

    husband would be counted as a part o the urban population and

    the wie, as a part o the rural population. Because o having a

    house in the village, their household would be counted as a rural

    household, actually peasant household. With the introduction o

    the HRP, their land can be contracted and subcontracted whilethey may not work on it. Yet maintaining a piece o land in the

    village continues to be a much-desired asset or most people even

    i they work in urban enterprises. For certain purposes, the am-

    ily is regarded as a rural household with some o its members as

    urban workers. It gets highly complicated when one tries to work

    out per capita output or per capita income. I this is complicated

    or the suburban area, it is not so easy in a rural county (xian)

    either. This is because there are zhen and urban enterprises in

    the rural county as well. Even in the case o responsibilities and

    privileges, an urban-rural dierentiation may be dicult. Forsecurity purposes, all citizens, irrespective o where they work,

    are covered by internal security zones. For health and educa-

    tional acilities, some items are common wherever they be, but

    or some purposes such as paying ees or availing themselves o

    social services the practice may vary rom place to place. Migrant

    labourers rom Wuxis rural areas working in Shanghai are not

    eligible or health and education acilities

    there because they still carry the hukou

    rom Wuxi. When migrants rom north o

    the Yangtze river come to Wuxi to work,

    they ace the same problem. Thus, the

    hukou system and the urban-rural identity

    problem complicate the characterisation o

    the population. One has to see the context

    in which a quantitative description o a

    group is presented. Above all, one has to

    careully check whether the per capita

    gure is per capita labour in an enterprise

    or a territorial unit or per capita in terms o

    population o an area. We have to keep all

    these in mind while examining the statistical data on Chinas

    rural situation.

    The population o Hela Xiang declined in the 1980s rom morethan 21,000 in 1979 to more than 18,000 in 1985 and urther by

    the end o the decade. This was not due to a negative rate o pop-

    ulation growth but because the status o members changed rom

    rural to urban workers. In the 1990s, with the expansion o eco-

    nomic activities in the township, the number continued to rise.

    When Hela became a town (zhen) more land was allotted or in-

    dustrial, commercial and residential purposes. Finally when it

    was incorporated as a city street ( jiedao), urban housing in Hela

    was not restricted any more. In 2006, Hela had a new prole with

    many new modern housing colonies and more and more people

    living in them.

    Women workers constituted 52% o the workorce in the

    1980s. In the 1990s, it was reported to be 50%. This change

    refected a changing trend in employment. Initially more and

    more women joined rural enterprises while men were either

    engaged in agriculture and shing or in city enterprises. In my

    interviews with local leaders they admitted that as technical

    competence became more essential, male workers were

    preerred by enterprises.

    The decline in the xiang population was initially because o

    the city absorbing more and more peasants rom it into urban

    jobs. This was partly because o an agreement between the xiang

    and the city that whenever the city acquired any xiang land, thenew enterprise had to provide employment or at least one per-

    son or each mu o acquired land. Oten the job was given to the

    tb 12: admnv su of H

    Peoples commune (Renmin Gongshe) 1958-1983

    Township (Xiang) 1983-1999

    Town (Zhen) 1999-2003

    Street/subdis trict (Jiedao) since 2004

    tb 13: pouon of H

    Population Households Workforce

    1979 (Xiang) 21,236 6,778 11,042

    1980 19,672 6,607 9,337

    1985 18,400 5,000 8,436

    1993 33,000 11,500

    2001 (Zhen) 36,000

    2004 (Jiedao) 43,911 12,698 23,514

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    aected amily or the village unit. Besides, some city workers

    had moved to the government apartments, thus reducing the

    population registered with the xiang. No doubt a strict adherence

    to amily planning norms, especially the policy o one-child ami-

    lies as well as late marriage, had their impact on the population

    gures. Employment opportunities, however, rose dramatically

    in the late 1980s and early 1990s with the launching o many new

    enterprises and urther diversication o the suburban economy.Rural income continued to rise substantially. So migration to the

    city was not on a massive scale. The xiang gave a number o

    acilities to its members which the city enterprises could not

    aord until the early 1990s. The idea o living in a spacious

    personal house, close to ones relatives in ones ancestral place,

    while earning a good income was still attractive. That, however,

    changed in the late 1990s.

    Over these years there was a dramatic change in the occupa-

    tions o the villagers. In 1979, as many as 80% o the workorce

    was engaged in agriculture, sheries and other sidelines while

    only 20% were engaged in small industries in the commune.

    Besides grain production, the villagers also grew vegetables and

    mulberry while being engaged in silk-worm culture, pig-raising,

    and the poultry, dairy, horticulture and tea businesses. At that

    time, as many as seven production brigades (later cun) were

    mainly engaged in producing oodgrains. This drastically

    changed with the coming o the new economic strategy. The

    suburban areas were now encouraged to switch to industries

    and cash crops to benet rom their proximity to the city. In

    1985, the composition o the workorce was very dierent

    6,400 workers or 75.9% in rural industries, 1,500 or 17.8% in

    sheries, 250 or 2.9% in vegetable growing and the remaining

    286 or 3.04% in grain production. It should be noted that manymembers while working in the actories also looked ater their

    land in their spare time. The picture urther changed in the

    1990s with less and less people engaged in agriculture. In 2004,

    a little less than 10% o the workorce was engaged in primary

    industries (arming, shing and animal husbandry) while

    68.44% were engaged in secondary industries and 21.63% in the

    tertiary sector. Since the late 1980s, commerce has emerged as a

    major sector o the economy. The expanding sector o develop-

    ment in this area has been what is called the third industry

    (di san ye), reerring to tourism, travel, hotels, restaurants, and

    entertainment. In Wuxis scenic environment, this sector has

    expanded very ast, attracting oreign investment and the

    deployment o modern technology.20

    the poduon tend

    The rst spurt in production in Hela township took place during

    1979-84 when the value o industrial output reached 100 million

    yuan. It rose to 270 million yuan in 1987 and more than 600 mil-

    lion yuan in 1995. Meanwhile, the composition o the economy

    changed signicantly. In 1995, rural industries accounted or

    63%, commerce 35% and agriculture and sideline production 2%

    o the total output value. Ater the announcement o the Ninth

    Five-Year Plan in 1995, Hela decided to raise the proportion o thetertiary sector to 49% and reduce rural industry to 49%, while

    agriculture and sideline production remained at 2%.

    In 1996, Hela had 185 TVEs, o which 20 were owned by the

    township and the rest by villages. In addition, there were 16

    specialised enterprises that were autonomous and proessionally

    managed. Together they possessed xed assets o 750 million

    yuan. The Hela leadership described the townships new path o

    development as a three-in-one policy, Taking agriculture as the

    gold medal enterprise, taking industry as the backbone o the

    economy and building the third industry (tertiary sector) as thesuperior enterprises (youshi qiye). The local conditions war-

    ranted that line o thought. The rural industries o Hela were

    described as standing on six pillars electronics, machinery, light

    industry, textiles and garments, chemicals and metallurgy. The

    authorities were never tired o mentioning the quality o their

    products 50 products having won quality awards at the provin-

    cial and national level, 20 o them such as electronic components,

    printing machines, kitchen devices, centriugal pumps, umbrellas

    and gloves being exported to Hong Kong, south-east Asia and

    western Europe. Besides these, the 280 items manuactured in

    Hela included electric cells, elevators both or passengers and

    goods, bearings, cast iron tubes, water pumps, woollens and

    toothpaste.21

    As indicated earlier, the tertiary industry has developed very

    ast. In 1996, there were 285 commercial units and ve market

    complexes. Mention must also be made o Entertainment City,

    Wuxi Roast Duck Restaurant, Tang Dynasty Food Street and

    Unique Wuxi Taihu Pets Centre beside the Meilido Hotel. There

    were ve joint ventures in Hela involving oreign investment. The

    township has also gone abroad and set up two hotel resorts on

    the Australian coast.

    On the agriculture and sideline ront, Hela township produced

    1,25,800 tonnes o vegetables in 1996. In horticulture, it pro-duced, among other things, honey peach in 800 mu. It achieved

    the status o a sparkling project under which one tonne o sh

    was produced or each mu o sh pond while maintaining ponds

    on 3,000 mu. The township also has a dairy arm with 100 milch

    cows and 1,000 pigs and a duck arm with an annual production

    o 500 million birds. In all, 12 components o sideline production

    were managed in the xiang.

    The annual per member income in Hela Xiang grew threeold

    to 1,100 yuan between 1979 and 1983 and rose urther to 1,592

    yuan in 1986. Ten years later, the gure was not available, but it

    was not less than 4,000 yuan. In other words, the average real

    income o a member o the township rose nearly 10 times in less

    than 20 years o rural reorms. The xiangauthorities explained

    that now amilies had diverse sources o income: agriculture,

    sideline production, and private commerce, besides wages rom

    village, township and state enterprises.

    It is also clear that income disparities are large. In 1996, some

    members o the township were getting as low as 600 yuan per

    year and some as high as 600,000 yuan. This trend widened ur-

    ther in the next decade. However, there is unmistakable evidence

    o a dramatic rise in peoples living standards as also o economic

    growth in the township as a whole. Hela, which was a suburban

    commune, has grown into a xiang with a prosperous economyand a new landscape, and is ast developing into an urban neigh-

    bourhood. Starting primarily as an agricultural suburb with

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    Economic & Political Weekly EPW june 27, 2009 vol xliv nos 26 & 27 317

    scenic beauty, it has become the hub o modern industry and

    commerce in 30 years.

    5 the Wux soy: imlaon fo Develomen theoy

    The 3,000-year-old town on the Taihu Lake has transormed

    itsel over 30 years rom one which had a rural silk industry base

    into a medium-size global city o electronics and services. Broadly

    speaking, it went through three phases o development. Duringthe rst phase, rom 1978 to the early 1990s, diversiying the

    rural economy by promoting TVEs, modernising the textile indus-

    try and expanding acilities to attract oreign investment were

    the main trends. That was a period that witnessed the ast rise o

    rural incomes.

    The second phase, rom the early 1990s to 2001, was a period

    o accelerated opening up to oreign capital and major invest-

    ment by oreign companies. This was the time numerous Japa-

    nese companies, including all the top ones, lined up to locate

    their enterprises in Wuxi in a variety o industries ranging rom

    electronics to entertainment and service industries. This period

    also saw expanding linkages between Wuxis economy and that

    o Shanghai and Pudong. The third phase began with Chinas

    entry to the World Trade Organisation (WTO) in 2001 and saw

    urther expansion o oreign capital investment in Wuxi. Ater

    Hu initiated a scientic outlook on development and called or

    a balanced and proportionate strategy aimed at ensuring envi-

    ronmental sustainability and social justice, Wuxi decided on a

    new set o priorities during the Eleventh Five-Year Plan begin-

    ning in 2006. The new emphasis was on quality rather than

    quantity in growth, and the deepening o reorms rather than

    their widening or adding more and more private and oreign-

    unded enterprises. An emphasis on innovation and more atten-tion to science and technology, and a greater stress on improving

    the environment and saving energy in the production process

    were the new thrust areas. Building Wuxi into a new ino-city

    and an eco-city was the new mantra o development. In the

    1990s, an open economy or oreign direct investment and trade

    had become the engines o development o Wuxi as indeed the

    whole Chinese economy. In the post-2002 period too that trend

    continued until the world economic crisis hit all countries,

    including China, in 2008.22

    But during this period there was a clear attempt to address

    specic social and environmental issues. The phenomenon o call

    centres has grown very ast in recent years and many kinds o

    outsourcing o services are located in this city. The per capitaGDP

    o Wuxi, which had reached $3,000 in 2003, had risen to $7,000

    in 2007 and was poised to reach $10,000 in 2010. However, Wuxis

    Eleventh Plan acknowledged that

    the problems o employment, income distribution, social security,

    public service, social saety and disaster relie that concern peoples

    economic, political and cultural rights very much, have gradually be-

    come the major concerns o government ocials who intend to make

    all citizens benet rom social development.23

    There were three aspects to Wuxis reorms strategy, (1)political

    urbanisation as the method o rural-urban development, (2) a lead-ing role played by the state and the collective economyin spear-

    heading the overall process o development, and (3) controlled

    integration with the global economy as a major actor in

    development. In each case there were economic gains with some

    socio-political and ecological costs.

    First, political urbanisation as a principle o the territorial

    reorganisation o Jiangsu province was a continuous process. The

    province was divided into preecture-level cities, o which Wuxi

    was one. Rural counties such as Wuxi county, Jiangyin county

    and Yixing county became county-level cities. Then townships orxiang like Hela rst became urban towns or zhen and then sub-

    districts o the urban district. The urban status allowed the

    enorcement o dierent rules to take over land or real estate

    development and commercial and industrial units. This brought

    economic gains. But the villagers rights over their land no longer

    existed. The democratic process o multi-candidate elections at

    the village level under the Grass-roots Government Law o 1998

    ceased to apply.24 The village-level unit was no longer in charge

    o the local environment. The district-level and city-level organi-

    sations had taken over these responsibilities. They also had to

    ull nationally set goals o production declared by the central

    government and pursued at each level by the CPC unit.

    The element o democratisation that was indicated by the

    emergence o the village (cun) as the basic unit o peoples sel-

    development, which was urther enhanced by the introduction o

    multi-candidate competitive elections ater 1998, now suered a

    reverse. Towards the end o the 1980s it was hoped that the town-

    ship and village would emerge as active units o grass roots

    democracy and development. But that process was stalled with

    the new preoccupation with growth. In the 1980s, Hela township

    had its own autonomous corporations managing agriculture, in-

    dustry, sheries and sideline production. Twenty years later, their

    economic activities were under the control o big corporationswith Wuxi city or higher authorities playing a supervisory role.

    Village-centred politics had important implications or women in

    village enterprises. In most o the villages, at least 25% o the

    members o the representative conerence were women. In a vil-

    lage party branch at least two o the ve members were women.25

    Ater the township became a street committee and the village

    became a neighbourhood committee, the unctions o these bod-

    ies were reduced mainly to overseeing civic peace, law and order

    and health and amily planning.

    Second, Wuxi was an example oten discussed at the national

    level o the su-nan modelor the model to the south o the Yangtze

    river, where the collective economy played a decisive role in

    integrating agriculture with rural industries, the rural economy

    with the urban economy, the local economy with the national

    and global economies, and the public sector with the private

    sector. Fei had enthusiastically commended this model. The

    township and village governments and their collective enter-

    prises led this process. The result was that during the 1980s there

    was an extraordinary rise in peasant income, an expansion o

    acilities or health and education, and vast opportunities or the

    employment or women. From the 1990s onwards, the political

    leadership o the state and collective units continued but with the

    changed political line o export-oriented growth. The administra-tive structure o political urbanisation now enorced a top-down

    leadership to direct local units in production and management.

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    Earlier it had been a general political direction rom the upper

    level to the lower levels. The su-nan model was now overturned

    or all practical purposes. The local collectives at the township and

    village levels became mechanical agencies o the higher level.

    Even i the local units wished to continue with rural industries,

    they could not do so or they could not ull the standards set by

    the centre. Thus the urban-rural terms o trade, which were or a

    short period avourable to the countryside, were once again turnedagainst the rural population to promote urban growth.26

    During the high point oTVEs in the 1980s, women were major

    beneciaries because even as middle-school graduates they got

    employment in local enterprises. In many actories o Wuxi,

    women constituted over 50% o the workers.27 However, the

    wages were not equal or men and women as it was said that they

    were linked to quantity o production. This phenomenon contin-

    ued in most enterprises throughout the reorm period and has

    been raised requently by the All-China Womens Federation

    (ACWF) with the leadership. The retirement age also diered or

    men and women with women retiring ve years beore men, who

    retired at the age o 55 in most enterprises. Womens employment

    opportunities shrank considerably in the 1990s and theACWF o

    Wuxi started new training programmes in 2001. These were

    mostly in sectors such as restaurants, tourism, domestic services

    and accounting.28 At the village level, the new emphasis in the

    work o theACWF was on promoting education among women

    and on health and amily planning, the latter being a continuing

    point o attention. The positive trend o progress towards equal

    opportunity, access to diverse spheres o employment and politi-

    cal participation that was noticeable in the 1980s seems to have

    slowed down in the 1990s. A growing number o discussions on

    these issues at the national level took place ater the Fourth WorldCongress o Women in Beijing in 1995.29TVEs in particular and

    the diversied rural economies in general had unleashed orces

    o democratisation and social development. Rural health and

    education had got a boost with nearly universal access to social

    services because o the allocation o collective income to these

    sectors. But 30 years later, citizens complain about medical treat-

    ment having become too expensive and the education system

    being too disparate in quality.30 The consequences o this have

    been particularly adverse to women.

    Third, the open door was no doubt an important strategy or

    Chinas successul emergence as a global economic power.

    Indeed, that was a principal component o Dengs basic line o

    Reorm and Open Door adopted by the Third Plenum o the

    Eleventh Central Committee o the CPC in December 1978. Wuxis

    geographical location between the Taihu lake and the Yangtze

    river and its proximity to Shanghai had made it a well-connected

    city with the outer world throughout Chinas modern history. Silk

    production and the silk trade had complemented agricultural

    production beore 1949. During the 1980s, the expansion o rural

    industries was the key to the regions rapid development. To pro-

    duce goods or export, these enterprises invited oreign capital,

    which initially maintained the momentum o rising income o the

    local population. In the 1990s, the transition took place to amainly export-oriented economy as a part o the new growth

    strategy. The vision o Wuxi as a modern service industry centre

    acilitated by oreign capital excited the citys leadership and tted

    well with the growth strategy o the Jiang Zemin era. The

    Japanese, who had a special ascination or Wuxi rom the days o

    their occupation o the region during the Sino-Japanese War in the

    1930s, poured in huge amounts o capital. The light industry city

    was now at a new stage o technological development and integra-

    tion with the global economy was a positive actor that helped it.

    But the terms o the integration o the local economy with theglobal economy were governed by the new elites o the area and

    the country as a whole and not by the common people. The choice

    o industries did not take into account its eects on the environ-

    ment until crises acquired serious proportions. Whether employ-

    ment opportunities or local people grew adequately to absorb

    them was not a consideration. The gains made by women in the

    1980s when job opportunities had expanded were not preserved

    and there were increasing retrenchment o both men and women

    oten women were the rst to be red. The combination o agri-

    culture, rural industry, light industry and modern service indus-

    tries was now replaced by a new economy where the leading role

    was played by service industries. When China ormulated poli-

    cies to respond to the world economic crisis ater its exports ell

    signicantly in 2008-09, the Wuxi leadership launched an exer-

    cise in April 2009 to reorient its production plans. The plan was

    to produce or the local market and Chinas domestic market

    rather than rely excessively on the world market. Even in the case

    o exports, there was a new thinking to reduce dependence on

    the European and North American markets.31

    The Wuxi story, which may be an important window to Chinas

    reorms, tells us a ew important things about contemporary de-

    velopment theory. First, development through political urbanisa-

    tion the Wuxi way may achieve ast economic growth but has itssocial, environmental and political costs. The alternative may be

    politically integrating rural and urban areas, each having its dis-

    tinct characteristics, combining democratic sel-governance with

    sustainable socio-economic development. Second, in terms o the

    role o the state and collectives, there is the need to actively

    encourage a combination o public, private and cooperative orms

    o ownership but with a clear leadership role played by the public

    sector. The danger o an authoritarian leadership wielding state

    power to sometimes promote state and collective ownership and

    sometimes private ownership or the market economy has been

    exposed. Thereore, there is simultaneously the need or demo-

    cratic institutions at the grass roots level to ormulate develop-

    ment strategies so that appropriate orms o production and

    management can be designed to achieve economic, social and

    environmental objectives at the same time. The ramework o a

    socialist market economy as practised during the last two dec-

    ades did not ensure that. It was so elastic that it was used to jus-

    tiy the development o prot-making enterprises, mainly to

    achieve high growth rates rather than ull socialist objectives.

    Third, the globalisation process that integrates local production

    with the global market has to be critically monitored to empower

    local institutions and groups to decide the terms o their integra-

    tion with the world market. Only then can there be a air balancebetween autonomy and integration o the local and regional

    political economies with the global economy.

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    special article

    Notes

    1 In 1979, I was hosted by the Minist ry o Educationand the PRC and in 1985, 1987, 1993 and 1996 bythe Chinese Academy o Social Sciences. In subse-quent years, whenever I had some conerence inChina, I extended my trip to Wuxi or a ew daysby directly approaching the Wuxi Foreign AairsBureau. I had an interpreter on most occasionsthough sometimes I managed on my own. Duringthe 1980s and 1990s, I was always accompanied by

    a local ocial or a scholar rom the host Institute.2 Fei Xiaotong, Peasant Life in China (1939, 1945),

    Kegan Paul, London. He describes the study as adescriptive account o the system o consumption,production, distribution and exchange o wealthamong Chinese peasants as observed in a villageand stresses the equal importance o the traditionaland the new orces in explaining the process ochange, 1. See also Feis Chinese Village Close-Up(1983), New World Press, Beijing, which containsthe abridged version o the 1936 study and reportson Feis visits in 1946, 1957 and 1980 in addition toa research groups ndings in a 1980 survey o the

    village by his colleagues at the CASS.

    3 Lynda S Bell, OneIndustry, Two Chinas: Silk Fila-tures and Peasant-Family Production in WuxiCounty, 1865-1937 (2001), Stanord UniversityPress, Stanord, Caliornia. She argues that

    local elites continued to ally with the state orassistance, protection, and legitimacy wheneverpossible, 11.

    4 Wuxi Water Back to Normal ater Pollution Cri-sis,Peoples Daily online (15 June 2007).

    5 For a discuss ion o the 17th Party Congress line,see Manoranjan Mohanty, Grappling with theSuccess Trap in China, Economic & PoliticalWeekly (3 November 2007).

    6 They include the Jiangsu Yixing Economic Devel-opment Zone, Yixing Environment TechnologyIndustrial Park, Liyuan Hi-Tech Industrial Devel-opment Zone, Wuxi Hi-Tech Industrial Develop-ment Zone, the Wuxi-Singapore Park and the WuxiTaihu National Tourist Resort Zone, and also theHuishan Economic Development Zone and XishanEconomic Development Zone.

    7 China Statistical Yearbook, 2006 (2006), ChinaStatistics Press, Beijing, 3.

    8 $1= 6.83 yuan; Rs 49.67 in April 2009.

    9 Data rom interviews with city cadres.

    10 Wuxi: A General Introduction by the Wuxi CPCCommittee (30 December 2008) http://xcb.chinawuxi.gov.cn

    11 Even during the commune period, township en-terprises had sprung up, making considerableprot or the collectives. The prot was said to be10 million yuan in 1958, and it rose to 109 million

    yuan in 1970. Robert Terrel (2001), The Jiangsu Miracle: Modernising Chinas Most Economically Developed Province, New World Press, Beijing,164.

    12 Wuxi Statistical Yearbook, 2005 (2005), ChinaStatistics Press, Beijing, 56.

    13 Data collected rom interv iews with district cad-res. Annual Report o the Hela Xiang Director tothe Xiang Peoples Congress (1996). While the1986 data was collected in the course o an inter-

    view with Jiang Hanling, Deputy Director o theSuburban District on 12 October 1986, the 1996data was procured through discussions withZhang Weinan, Deputy Director o the District inOctober 1996.

    14 Interestingly, a 1985 publicity brochure o Heladescribed itsel as Hela Gongsi in Chinese andHela Corporation in English. This indicateschanging the terms o discourse radically romthe commune o Marxist ideology to a moderncorporation in a capitalist market economy.

    15 We will reer to Hela as a township (xiang) as itwas still reerred to as such by the people in 2008.Only ocials describe it now as jiedao or street.

    16 In 2001, the ollowing major enterprises werelisted in the Hela Xiang brochure as invitingoreign investments:

    Wuxi Baotong Electronics Co, a Sino-Japanesejoint venture that had achieved a sales volume o14 million yuan in 1999 and exported products toHong Kong, Taiwan, south-east Asia and westernEurope.

    Wuxi Lutong Electronics Technology Co Ltd, aprivately owned enterprise.

    Wuxi Taihu Machinery Factory, set up in 1966 itsassets were worth 12.5 million yuan and its prod-ucts had a nationwide market and in south-east

    Asia. A actory designated by the Ministry o Rail-ways or purchases, it had 152 workers in 1999.

    Wuxi Jiangnan Printing Machine Plant, launchedin 1980, manuacturing printing and packagingmachines.

    Wuxi Dajishan Industrial Instrument Factory, col-lectively owned by the xiang, producing kitchenappliances, stainless steel measuring instru-ments, and medical instruments. It had a marketin China and south-east Asia.

    Wuxi Xingdi, a leatherwear company owned by aTaiwan merchant since 1993, producing ticket

    wallets and the like or export to Europe andsouth-east Asia.

    17 In the middle o 1980, I lived in one such house inDa Ding village in Hela, as a guest o Lao Mo(Madam Mo) o the Ding household.

    18 The old village Da Ding Cun had ceased to exist.My old contacts Ding Maoshen and his wie LaoMo were living in an apartment o a multi-storeybuilding while their two sons had been allottedapartments in other buildings and their grandson

    was waiting or his allotment. All this was in ex-change or the amily house they had owned intheir village until it was demolished or the con-struction o new buildings.

    19 Because o the threat o pollution caused bychemical and other manuacturing industries,there was a conscious emphasis on commerce andtourism rom the late 1990s onwards. Thirty Yearsof Reforms and Opening Up, http://chinawuxi.gov.cn (30 December 2008).

    20 Report on the Work o Government by Mayor MaoXiaoping at the th Plenary Session o the 13thMunicipal Peoples Congress, http://chinawuxi.

    gov.cn (29 December 2008).21 Interview with Hela Party Secretary in Septem-

    ber 1997.

    22 Wuxis employment situation suered setbacks inthe wake o the global economic crisis. Wuxi PartySecretary Yang Weize Discusses Plans with Leaderso Twelve Enterprises Severely Aected by theGlobal Economic Crisis, Wuxi Daily online(17 April 2009).

    See also Our City Makes Great Eorts to Stabi-lise and Promote Employment, Wuxi Daily online(13 April 2009).

    23 Wuxi Embarks on the Formulation o the 11thFive-Year Plan or Development in the Year 2020,Wuxi government press release, Wuxi Dailyonline (17 December 2008).

    24 See George Mathew, Loca l Government Systemin India and China: Learning rom Each Otherin Manoranjan Mohanty et al (eds.), Grass-roots

    Democracy in India and China: The Right toParticipate(2007), Sage, New Delh i.25 In the villages o Hela and Lihong I ound that this

    was the case in 1980, 1985 and 1987.

    26 An expert on Wuxi had hoped in the early 1980sthat the city would now on contribute to rural de-

    velopment and had said, Ater more than 30 years dependence on the rural area, which istotally disproportionate to its repayment, the citymust move along a path o development whichallows it to make a contribution to the rural area.Chi-hsien Tuan (1987) , Wuxi City and WuxiCounty An Analysis of a Pilot Census, New WorldPress, Beijing, 128.

    27 In the Wuxi Silk Factory, or example, I noticedthat o the total 1,570 workers, as many as 81%

    were women in 1980 to 1985.

    28 Interv iews with Wuxi Women Federation leaders

    in September 2001.

    29 Political leaders in Wuxi, however, took a dier-ent view o this. During interviews in 2001 and2005, they said that the new prosperity o theamilies gave women the choice o staying athome and leading a comortable lie. WomenFederation leaders, however, agreed that womenaced new diculties in the new environment.

    30 Individuals had to pay at least 50% o their healthcare expenses in 2005. With only 2.7% o GDPdevoted to healthcare and on other idices takeninto account, China ranked 188th in providingair healthcare among the countries o the world.I G Cook, TJB Dummer, Changing Health inChina,Health Policy, 67 (2004), 329-43.

    UNDP, Human Development Report 2007/2008(2007), Palgrave Macmi llan, New York, 262. Mor-

    tality under the age o ve declined sharply inChina rom 120 per 1,000 in 1970 to 27 per 1,000in 2005. In 2005, maternal mortality was 45 per1,00,000 live births in China against 450 inIndia, 263.

    31 Wuxi Party Secretary Yang Weize DiscussesPlans With Leaders o Twelve Enterprises Severe-ly Aected by the Global Economic Crisis, Wuxi

    Daily online(17 April 2009).

    andx: lo suu n conmo y chn nd ind

    India China

    States 28, Union Territories 7 Provinces 22, Autonomous Regions 5, Central Municipalities 4, Special

    Administrative Regions 2

    Divisions Prefectures (Shi)Regions 333, Cities 283

    Districts 625 Rural: Counties (Xian) 2,862 Urban: County-level cities (Shi) 374

    Zilla Parishad County representative CongressMandatory elections since 1993 County party committee

    Sub-divisions Urban district s (Qu) 852 Street/Subdistrict committees (Jiedao weiyuanhui)

    5,904 Residents committees (Zhumin weiyuanhui)

    Blocks/ Taluks Townships (Xiang): Rural 43,258 Towns (Zhen): Urban 19,883

    Mandatory electio ns since 1993 (Peoples Commune until 1979-83)

    (Panchayat Samitis) Xiang representative congress

    (About 6,000) Xiang party committee, lowest level of government

    Gram Panchayats Villages (cun), Village-level towns (Zhen)

    (About 2,65,000) Villagers committees (Cunmin weiyuanhui)

    Lowest level government (Cluster of villages/hamlets)

    (Cluster of villages/hamlet s) (About 6,20,000)

    Mandatory elect ions Competitive elect ions

    at all levels since 1993 only at village level since 1998

    Gram Sabhas Village representative conference

    Guiding role of the village part y branch (Production brigade until 1979-83)

    Pallis/hamlets Work groups (production teams until 1979-83) at hamlet level


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