Wednesday, October 19

Money talks nobody walks: why Beijing stopped democracy in Taishi Village

If you haven't heard the news yet, Beijing succeeded in canceling the October 7 Taishi Village recall vote on their village chieftain. Foreign reporters have been beaten up for nosing around Taishi, and the village is now under a "virtual stage of siege" according to Reporters Without Borders. If you need a refresher:
The Taishi standoff, widely seen by Chinese scholars and the legal profession as a test of local governments' commitment to village democracy and rule of law, began in July after a 100 million yuan (U.S. $12 million) land deal involving more than 2,000 mu (133 hectares) of village land. Villagers and their lawyers said accounting procedures around the sale were not transparent, and they suspected Chen of embezzling public funds.(1)
The mystery has been why China's leaders preferred to lose Face on the international stage, rather than allow one small experiment in democracy in one small village.

This year Premier Wen Jiabao and President Hu Jintao made speeches overseas about their willingness to give grassroots democracy a try in China. Wen said in one speech, "If rural communities can be trusted to run their own villages, then they should also be trusted to run townships."

Yet China's central authority was unwilling to trust even one rural community to run their affairs. Beijing got their way in Taishi by ordering local authorities to conduct a "white terror" campaign against every villager who showed support for the recall vote -- and against outsiders who tried to help the villagers.

The terror campaign included death threats, intimidation and a particularly nasty kind of extortion. When the villagers finally held street demonstrations to protest Beijing's moves to stack the Taishi reelection committee, police turned a water cannon on the crowd, which included several elderly villagers. The police then arrested protesters in their 70s and 80s. Then families were told that if they voted against the recall of the chieftain, their elderly relatives would be released from jail.

The local bosses also had carte blanche to go after the legal profession. A human rights attorney working for a law firm in Beijing disappeared in September while advising Taishi's residents how to mount a legal campaign to have their elected village chief removed from office. He disappeared after he and another attorney and a law professor were chased and beaten.

The missing attorney, Guo Feixiong, turned up weeks later -- in jail, where he'd been since his disappearance. The authorities got around to formally arresting him only once rumors of his detention spread. He's being held without bail. So much for the rule of law in China.

The terror campaign extended to foreigners. A Chinese official was beaten up while he accompanied a UK Guardian reporter to Taishi -- this as a warning to the reporter to leave the village. A Malaysian reporter and a French reporter were also beaten when they showed up in Taishi, according to an October 10 report from Reporters Without Borders.

So what in blazes is really going on in Taishi Village? Are they sitting on a gold vein or a petroleum gusher, or what?

Well, it turns out that Taishi is located near a manufacuturing hub in Panyu district, in the province of Guangdong. Here readers who closely followed the China Mystery Illness will be sitting up straight.

Yes this is the very same Guangdong province where Daya Bay is situated, and where a big American trade delegation showed up, not long after two unfortunate customs officials were set upon by "black smugglers" and soon after disappeared forever -- along with their families and fancy women -- on account of being stricken with Preston Virus, oops, Ebola Virus.(2)

So now we're down to bedrock:
"The truth is that a victory in Taishi would have thrown into question the legality of a whole slew of similar property deals right across the Pearl River Delta region," U.S.-based commentator Liang Jing said on a recent broadcast on RFA's Cantonese service.

"Because an awful lot of property there is built on illegally acquired land in which the original land-rights holders -- the farmers -- had not consented to these transactions. The fierce reaction by the Guangdong authorities to the Taishi campaign shows just how clearly they realize that the Taishi issue is not an isolated phenomenon."

Liang said the authorities had to react with all their power to "avoid precipitating a wave of similar challenges to already established land deals in the event of a victory for the Taishi campaign, which would be an unthinkable scenario."(1)
Okay, let's get out our map of China and look for the Pearl River Delta. Perhaps casual observers of China have been focused on the other delta (Yangtze) which is home to Bling Bling City aka Shanghai. But to understand why Liang is not talking through his hat about the seriouness of the Taishi Village blowout, we need to know a little about the Pearl River Delta and its importance to China's global trade -- and to the foreign businesses setting up branches there.

The business is not limited to manufacturing. Shenzhen, in Guangdong, is competing with Shanghai to become China's financial hub. To do this, they have reached out to Hong Kong.

A 2003 People's Daily report is somewhat dated, but it's a clear window on China's two powerhouse delta regions, Yangtze and Pearl. A 2004 editorial in China Economic Review (Which Delta Reigns?) disputes the report's contention that Shenzhen City (Pearl River Delta) and Shanghai City (Yangtze River Delta) are in competition. However, the report is very helpful to understanding the forces at work against democracy in China at this time, so I've published it in its entirety at the end of this post.(3)

1) Radio Free Asia report: Chinese Authorities Arrest Rights Lawyer in Test Case Taishi Village

2) China's Ebola Virus reports...

"March 18, 2003
by People's Daily Online reporter Li Heng
Shenzhen Pits Shanghai for China's Financial Center
To consolidate Shenzhen's status as a regional financial center, the city recently published an 18-article regulation on supporting financial development. By pitting against Shanghai the city's intention to become China's only financial center is quite apparent, expert pointed out.

The new regulation is aimed at creating a more favorable environment to bring real benefits to financial institutions, finance official of Shenzhen government told reporter recently.

Despite that, facing the growth enterprise market (GEM), which has long been called for but reluctant to show up, Shenzhen in fact slowed down its paces towards a financial center in recent two years, economist Mao Yushi pointed out. But now the city's strategy to join hands with Hong Kong is very correct.

March forward with all might
Shenzhen's financial industry took 12 percent of the city's GDP and over one fourth of the tertiary industry, its position as one of the three pillar industries in the city was further strengthened, noted Yu Youjun, Shenzhen mayor in January 2003.

What's more important is that Shenzhen government pays great attention and offers full support to the reform and development of financial industry, and is now busily studying related policies and measures to create a favorable financial environment, Yu added.

Shenzhen needs indeed new strength to improve its investment environment, and most of the articles of the regulation are new policies, but some services have already been put into operation.

According to the regulation, a financial capital management office, a consultative committee on financial policy and a special fund will be set up. The office will soon be put into operation.

How to wrestle with Shanghai?
Stressing its position as a regional financial center, how is Shenzhen going to measure its strength with Shanghai?

Generally a country has only one national financial center, even the US, said Mao. Currently China doesn't have conditions to possess two financial centers, and it has not been decided yet which will become the financial center, Shanghai or Shenzhen, and competition between the two is unavoidable.

Yet Shanghai is generally favored as a domestic financial center, Mao said, as it has a good historical background and had in fact been the financial center of the whole far-east region even before liberation. What's more, Shanghai also has more favorable conditions on its culture and state policy.

So as pointed out in its regulation, Shenzhen is to actively push forward exchanges and cooperation between overseas and domestic banking, securities and insurance industries in information, technology, service and financial innovation, as well as to deepen long-term, stable cooperation between Shenzhen and Hong Kong and strengthen ties with Hong Kong financial industry."

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