Unrest Grows as Economy Booms

The Wall Street Journal gives an overview of the increasing social unrest throughout China, much of which, like this week’s protests in Guangdong, stems from conflicts over land:

In 2010, China was rocked by 180,000 protests, riots and other mass incidents—more than four times the tally from a decade earlier. That figure, reported by Sun Liping, a professor at Tsinghua University, rather than official sources, doesn’t tell the whole story on the turmoil in what is now the world’s second-largest economy.

But what is clear is that the level of social tension and number of protests against the government is rising. That is a sensitive subject as the ruling Communist Party prepares to mark the 62nd anniversary of the founding of the People’s Republic of China on Oct. 1.

As worrying to the Communist Party as the increase in protests is the fact that many of them stem from everyday economic injustice. Unrest isn’t confined to the ethnic minority areas of Tibet and Xinjiang. Most protests target land grabs by developers and abuses of power by local officials, or unpaid wages by construction firms.

[…] Yu Jianrong, an expert on civil unrest at the Chinese Academy of Social Sciences, wrote in 2010 that disputes over land were behind 65% of social disturbances in China’s countryside.

That number could climb. China’s local governments have spent the past three years amassing debt—10.7 trillion yuan according to a June estimate by the National Audit Office. Concerns are mounting about whether local governments can repay that debt. This month, local media reported that 85% of local-government borrowers in Liaoning, a province in North East China, didn’t have sufficient revenue to make interest payments.

Why did the banks make so many loans to projects with little hope of repayment? One word: land. According to the National Audit Office, 2.5 trillion yuan of loans to local government—23% of the total—depend on sales of land for repayment. Some analysts say the real percentage is much higher.

September 25, 2011 6:36 PM
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