Communiqué: Chinese Village, Global Market

October 29, 2012
Communiqué: Chinese Village, Global Market
Yantian Village, 2010

New Collectives and Rural Development

By Kate Hoagland – Communiqué: Fall 2012, Volume 11

Co-authored by Ash Center Director Anthony Saich and Beijing Normal University Professor Biliang Hu, Chinese Village, Global Market charts the dramatic transformation of the once rural, farm village of Yantian in the 1970s to the booming industry hub it is today. The book was published October 31, 2012, by Palgrave Macmillan.

From Goose Field to High Rise
Sitting on the Pearl River Delta at the meeting point of the Dongshen and Shuibei rivers at the heart of southern China’s grain basket, Yantian’s subtropical monsoon climate with ample rainfall has contributed to its annual triple-crop production of two rice crops and one winter crop of small grains. Interestingly, the authors note that the fertile climate became an attractive habitat for geese; as a result, the village was named Yantian, literally goose (yan) field (tian) in Chinese.

Fast forward 30 years, and Yantian is almost unrecognizable from its former pastoral tranquility. “Returning in the late-nineties, the rice paddy has been replaced by highways, the water buffaloes by lorries carrying products to the global market, and the land has disappeared under high rises and factories that are part of a booming export-led economy,” the authors write. Yantian is part of Dongguan City in Guangdong Province, which is now one of the largest electronics processing and production sites in the world.

Through over 20 years of extensive field work, Saich and Hu offer an assessment of the factors that led to Yantian’s growth, and explore how the next 30 years will shape the village. Among such changes that inspired development are the Central government’s emphasis on economic growth in part through foreign investment as well as through the rise of manufacturing and export investments fueled by global demand for affordable products. The authors also point to the strength of family lineage in Yantian and the unique village collective structure of land ownership and governance as reasons for the village’s “remarkable economic and social transformation.”

Location, Location, Location
Even before its industrial boom, Yantian has always been in a prime location for business and is well connected via all transportation routes. Downtown Shenzhen, southern China’s major financial center, is less than 20 miles away, and Hong Kong is just four miles farther. The Guangzhou to Hong Kong rail line is nearby. Several highways run through the village, providing easy access to downtown Shenzhen and many neighboring towns. The Shenzhen airport is only an hour away and connects villagers to the rest of the country. Yet, under the Maoist era, much of southern China including Yantian was unable to take advantage of such close proximity to Hong Kong and surrounding towns.

All of that changed upon the creation of the Shenzhen Special Economic Zone (SEZ) in 1980, which was designed to attract foreign investment and enterprises. Because Shenzhen is just across the border from Hong Kong, foreign investors and manufacturing plants eager to save money on escalating land prices and costly labor shifted their operations to Shenzhen. Soon thereafter, Yantian began attracting its own set of investors from Hong Kong. At its peak, Yantian boasted over 400 foreign-invested enterprises; more recently it has around 200 foreign enterprises and an equal number of domestic enterprises. Hand in hand with such new industry came new jobs, and migrants from around the country flooded to the region. Yantian is now home to over 80,000 migrant workers and only 3,000 registered villagers.

Land Ownership and the Dengs
Integral to Yantian’s ability to attract foreign enterprise is its ample, available land. Under China’s household responsibility system first instituted in 1981, individual farmers were given land use rights in exchange for providing a certain quota of their harvest. Yet, the farmers never owned the land, which allowed Yantian and other villages to legally recollectivize the land and rent out its use to foreign enterprises.

Despite lack of land ownership, farmers still had to release their land use rights back to the collective. Saich attributes the relative ease by which the farmers returned their rights to the strength of the Deng lineage in Yantian. Over 60 percent of registered villagers are part of the Deng family, and the family dominates all governing and economic powers of the village: the party secretary, head of the village, and head of the Shareholding Economic Cooperative are all Dengs. Even those registered villagers that are not Dengs are still eligible to receive the benefits of the Yantian Shareholding Economic Cooperative, but migrant workers are not.

In recent years, the Shareholding Economic Cooperative has solidified its membership and no longer accepts new members. “That means that whatever happens in terms of political changes at the local level, the economic wealth is still going to remain in the hands of the 3,000 registered villagers,” explains Saich.

Political Rumblings
While economic wealth may stay with a small minority of the village, review is underway on the political and social rights of the large majority of migrant workers that now call Yantian home. “If the number of migrants stays at a high level and they effectively become permanent residents, can you operate a system where huge numbers of your community are excluded from political voice?” said Saich. “I think this is a problem across a lot of southern China.”

The Central government is making progress in delivering social services like health care and education to migrant populations, and new regulations have passed that give migrant workers voting rights if they have lived in the village for a certain period of time. “In some ways, Yantian may see a future coming where the Dengs could be out voted by migrant labor,” said Saich. Yet, such regulations require the approval of the villagers’ committee made up of officials unlikely to grant such voting privileges if it means losing status within their community.

The Economic Future of Yantian
In addition to the social and political challenges facing Yantian, the very economic model that led to its unprecedented transformation may be nearing its end. Across China, foreign-invested enterprises are relocating to lower-cost destinations like Bangladesh and Vietnam or merely shutting down due to the downturn in the global economy. Saich and Hu note that officials surveyed Taiwan and South Korea – countries that flourished under the same export-processing model – and found that such a model only had a 20- to 30-year lifespan.

As Yantian and its surrounding region near this expiration date, the authors argue that the village is faced with the threat of fewer and fewer foreign enterprises. Instead, finding new ways to expand their market through the production of more value-added exports or through increased demand within the domestic market might be keys to keeping Yantian’s economy flourishing.