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Sunday, October 12, 2008

China's communists approve key land reforms

by Robert J. Saiget

BEIJING (AFP) - China's ruling Communist Party approved a major economic reform plan Sunday that will allow farmers to trade and mortgage their land rights and help bolster the nation's food security.

The move is part of a wider package of reforms aimed at reducing a gaping rural-urban income gap that has expanded during 30 years of capitalist market policies.

The package was approved at an annual meeting here chaired by President Hu Jintao of up to 500 members of the party's central and disciplinary committees and other key officials, according to a statement carried by Xinhua news agency.

The communique did not give specific details about the reforms. Beijing-based academic Russel Leigh Moses said policies approved by the party are traditionally placed before the National People's Congress, China's parliament, for approval at its annual session the following March.

"I don't think we will see anything specific until the NPC next year when they start to set out the legal framework and when we will be able to see more of the internal debate over the programme," Moses told AFP.

But in the final statement, meeting participants called for an end to rural poverty, improved food security, and the doubling of China's per capita rural income of 4,140 yuan (591 dollars) by 2020.

"The issues facing agriculture, rural areas and farmers are linked to the overall task of development facing our party and state," the communique said.

"We must solidify and strengthen the status of agriculture and place as top priorities the running of the nation and resolving once and for all the basic problem of food for hundreds of millions."

China must adopt a "cautious and flexible macro-economic policy" to address the ongoing international financial crisis, the communique said.

"We must depend on ourselves... add impetus to expanding domestic demand, especially consumer demand, and maintain a stable economy and stable financial and capital markets," it said.

Under the reforms, farmers would be able to trade, rent and mortgage their land use rights for profit in a land transaction market, Dang Guoying, a rural scholar at the Chinese Academy of Social Sciences, told the China Daily newspaper.

"The move will speed up the country's urbanisation by bringing more farmers to the cities with the big farm contractors promoting modern farming in rural areas," it quoted Dang as saying.

Building large-scale industrial farms is seen as key to China's long-held policy of remaining self-sufficient in grain production and being able to feed its population of 1.3 billion people, state press say.

Most of China's farm plots are small and held individually at a time when hundreds of millions of farmers are leaving the land to seek better lives in the nation's quickly developing urban centres.

According to China's constitution all land is owned by the state, so the reforms under discussion are not expected to result in private ownership of land.

Although farmers have been leasing their land rights for years in many places, the party communique clearly acknowledged that many rural dwellers have been left behind in China's economic boom.

The rural focus of the ruling party meeting is also a nod to this year's 30th anniversary of China's opening and reform policies, which began in 1978 with policies returning collectivised farmlands back to individual farmers.

The 1978 reforms ended decades of China's disastrous experimentation with Maoist-style collectivisation that left the nation impoverished and backward.

While the market reforms have led to spectacular economic growth in the world's most populous nation, the income gap between China's 800 million or so farmers and the increasingly prosperous urban areas has also become a huge headache for policymakers.

The communique said both the Communist party and government needed to find new policies capable of stimulating the economy in a way similar to that seen in 1978.

"Only when the party places priority on resolving problems facing agriculture, rural areas and farmers... can we continue to develop rural productivity and maintain the comprehensive development of the rural economy," it said.

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