Three Hebei Townships under State -Endorsed Rural Reform Pilot Projects : Conflicts of National and Local Interests

Abstract

In order to evaluate three state-endorsed projects of township reform, the author chose three representative townships-one from each type of project. The results of the study found that in realizing state guidelines, all three townships nevertheless contradicted state policies in terms of bureaucratic jurisdiction, finance, and land transference. This study is based on my fieldwork with Hebei Province`s C, B, and X townships (named by their Pinyin initials according to mainland Chinese ethnographic practice) from October to November of 1997. In order to finance its own collective enterprises, Township C has created its own quasi- bank which pays high interests to attract deposits—a clear violation of state regulations. Township B became rich for building ten marketplaces with stalls for lease in accordance with state regulations. Township protection for traders (even those selling pornography and other illegal items), however has caused trouble with several ministries in Beijing. Finally, Township X has used collective land to invest in a health club without bothering to first ”nationalize” the land for commercial use as required by law. By avoiding these central government regulations, the township has appropriated the share of land value-added tax that belongs to superior governments.This study concludes by arguing that three key variables are important in understanding local political economy: (1) interpretation of the property rights of agrarian land, (2) the portfolio of the economically influential locals, and (3) the distribution of profits resulting from land development.