Tensions Mount as China Snatches Farms for Homes

The Wall Street Journal explores land ownership in China, and the economic and political factors which lead to farmers being pushed off their land and often into lives of poverty:

The root of the problem is an economic system that allows local government and developers to make vast profits from one-sided land deals with farmers who have little legal ability to resist.

That situation, in turn, accounts in part for a gaping chasm in income distribution in China, contributing to unbalanced economic growth. The issue pits urban elites, who have been swept along by one of the greatest economic booms in history, against a 650 million-strong rural underclass that is falling further behind.

Rapid urbanization has underpinned a decade of supercharged growth. From 2001 to 2012, China’s gross domestic product notched average gains close to 10% a year. But with little constraint on urban expansion, and land artificially cheap, total investment in factories, real estate and infrastructure has surged out of control, rising to more than 48% of gross domestic product in 2011 from 36.5% in 2001.

For China’s farmers, precarious land rights mean little incentive to invest in improving agricultural output, and no asset that can be sold to fund a move to the city. Low compensation for the millions ousted from their land—coupled with ineligibility for social benefits because they aren’t registered as urban residents—means for many a life of poverty on the edges of the cities.