Discontent over taxation levels erupted last month in southern China's Yuandu county when an estimated 20,000 peasants engaged in a week of protests and fought pitched battles with armed police sent to suppress them. Initially centred in the township of Yuandu, in the province of Jiangxi, the protests were joined by peasants from the neighbouring towns of Baitu, Duantang, and Xiaotang as well as villages surrounding the area's main city Fengcheng.
The Hong Kong-based Information Centre for Human Rights and Democracy reported that on August 17, some 2,000 peasants assembled to protest at the Yuandu county government offices, after tax collectors were sent by the local administration demanding a 180 yuan ($US21) tax on each mu (0.0667 hectares) of land worked. The farmers, who make roughly 400 yuan per mu before paying expenses, claim that taxes are consuming two-thirds of their income.
After authorities refused to meet them, the peasants stormed the government building, smashing furniture, windows and doors. Swelling in size, the protesters then targeted the homes of wealthy local Communist Party officials, reportedly tearing down up to 12 houses. The unrest then spread to other towns and villages.
A farmer from Yuandu told the Hong Kong Centre: “We farmers do not have enough to eat while even a junior township official will be able to own at least a car and a house. We are feeling very bad about this, we have been forced to fight”. A government official from Xiaotang township told Reuters: “The farmers misunderstand us and even hate us.”
From August 19 to 23, Yuandu county was placed under virtual martial law as 2,000 armed police were brought in from other parts of the province. Unconfirmed reports claim that three people were killed, 100 injured and 50 arrested in clashes between police and peasants. A worker who was in Yuandu at the time reported: “The battle was really fierce. Many villagers were beaten badly by the police.”
After the protests were put down, a curfew was enforced in the town by up to 550 militia. A farmer described the situation: “You can see militiamen everywhere in the town, the atmosphere is still very tense.”
Before the outbreak of open unrest, a loose peasant association in Yuandu had been distributing photocopies of “Farmers Friend,” a compilation of central government documents that call for the reduction of the tax burden on poor farmers.
However, it is decisions by the central government that are now being played out in the countryside. The breakup of the collective farms in the 1980s and the restoration of market relations gave a layer of local officials the opportunity to enrich themselves. As in urban areas, the wealthy elite in the countryside has close connections to the government and Communist Party, through which it gained control of the most profitable land and business enterprises.
Tens of millions of peasants have been returned to working tiny plots of land that are incapable of providing anything more than a semi-subsistence income. Recent surveys indicate that over 20 percent of peasant households depend upon one or more family members having other work, generally in the township-level enterprises and factories often owned by former Communist Party officials. An estimated 150 million rural Chinese are either unemployed or underemployed.
To finance commercial activities, rural governments have raised money outside of the state banking system by promising high interest rates to lenders. However, under conditions of economic deflation across China, many of these manufacturing projects and real estate deals have failed, leaving the local bureaucracies in substantial debt. They have sought to pay it back through increased taxation on the already suffering peasantry.
Rural incomes have fallen since 1996. Another downturn in domestic grain prices, coupled with a sharp decline in employment by township enterprises, has reduced rural incomes by a further 2.9 percent in the first half of this year. Social tensions are extremely sharp, with reports of protests and political demonstrations filtering out to organisations like the Hong Kong Centre, which estimates that 100,000 incidents took place last year.
Now a series of natural disasters is creating an even deeper rural crisis. Drought is affecting areas from the northern provinces of Heilongjiang and inner Mongolia, down to the central and southern provinces of Ningxia, Henan, Anhui and parts of Jiangxi. The South China Morning Post reported that the central government estimates 30 million hectares of farmland have been affected by lack of rainfall, leaving 35 million people with water shortages throughout the country.
In Anhui, the drought's impact has been particularly devastating .A majority of the area's 61 million inhabitants are subsistence farmers and officially two million do not have sufficient water to meet personal needs. Thousands of villagers have been forced to leave their homes in search of safe drinking water and tens of thousands have taken to the road searching for work in other provinces.
A letter published in the state media last month by Li Changping, a local Communist Party secretary in a rural township of Hubei province, provides a glimpse of the hardships facing broad layers of poor peasants in China.
“Local level cadres mainly curry favour with the leaders, always jacking up statistics and saying everything is fine. Honest words are not listened to. If someone speaks the truth, immediately he is said to be politically immature and not reliable,” Li wrote.
His letter explained that as peasants abandon the land in search of work in the towns and cities, rural communities are sinking into destitution. Village councils, faced with the loss of tax-payers, respond by increasing taxes on those who remain and going into debt in order to finance the operation of schools and other basic services.
Peasants in the area are now paying up to $US365 in taxes per year, more than the average rural income in China, for land, education, holding livestock and owning a home. About 80 percent of peasants in his township were losing money and 85 percent were already in debt. The average village debt is already $US75,000 and is rising at the rate of 20 percent per year
A vicious circle is in motion, replicated across rural China. As taxes increase and living standards collapse, more peasants leave. In Li's township of Qipan, 25,000 people out of a total population of 40,000 had left. Li's letter declared: “The farmers are leaving, hoping only for luck or with the idea that ‘If I die, I'm going to die in the city. In the next life, I don't want to be a farmer'.”
The Beijing regime, which has its origins in Mao Zedong's peasant-based movement and rests upon a military predominantly recruited from rural areas, is well aware of the threat that widespread rural unrest could pose to its rule, particularly if it linked up with working class discontent in the cities.
As in previous protests, the central government has responded to the Yuandu incident by firstly crushing it, and then seeking to strengthen the illusions in the countryside that it supports the peasantry against excess taxation and the endemic corruption of local and regional officials.
The August 24 issue of Ziangxi Daily, the major newspaper in Jiangxi province, reported that disturbances had occurred in Yuandu and quoted a local government circular stating that several local officials would be punished for putting added taxation burdens on farmers. According to a September 4 report in the South China Morning Post, the Communist Party secretary and the mayor of Yuandu have been removed.