Zhu Rongji Play Fool on Land Enclosure
In recent years, social conflicts and violence
arising from forced demolition in China
have been worsening. Scholars said it had
a lot to do with the regime’s Tax System Reform
in 1994 when Zhu Rongji was the prime minster.
However, in his recent speech in Tsinghua Univ.’s
100th anniversary celebration,
Zhu intentionally covered up the truth.
China’s well-known economist Cheng Xiaonong
Said in an interview with NTDTV, land enclosure
had been a main reason for mass uprising events
happening across China. The reason for forcible
demolition is that local government sell
people’s land to developer for huge profit.
Cheng Xiaonong: “Now local government
highly rely on the income of land sale.
Even in large cities like Beijing and Shanghai,
land sales make up over half of their total revenue.
Without it, local government could not survive.”
In recent years, conflicts from forced demolition
became more and more outstanding. It is believed
the Tax Reform policy by the previous administration
weakened the local revenue, which caused
local governments to rely too much on land revenue,
resulting in housing price soar and social problems.
Former Premier Zhu Rongji refuted the criticism
in his speech at Tsinghua University, saying that
the Tax System Reform was not wrong, and
local governments are not short of money.
Cheng Xiaonong said, Zhu’s speech at Tsinghua
was far from being true, covering up many facts.
He said local revenue composed of three parts:
The 1st part was Income Within Budget, the 2nd
was Income Outside Budget, the 3rd was
land revenue – also extra income outside budget.
Cheng: Zhu Rongji avoided talking about the 2nd and
3rd parts by pretending not knowing that, and
focused on the 1st part – the income from taxes.
Actually, the tax income alone could not expand city
construction in its current scale, neither could it
afford the luxury expenditure of so many officials.
In 1994, the central government started to implement
Tax System Reform and kept lucrative taxes with it.
Local governments had insufficient tax income to survive
and must rely on central appropriations. Cheng said,
it was an instrument of the central government to control
local governments for a high degree of centralization.
However, local government tried all means to amass
money from people. Before 2000, local government
focused on getting money from farmers by imposing
various kinds of local taxes or fees in rural areas,
which resulted in the so-called “Three rural issues”
that imposed a direct threat to the CCP regime.
In 2006, the regime dropped the “agriculture taxes.”
Local governments turned to land enclosure movement:
demolish private housing, sell the land for big money.
That was the so-called “Land Revenue.”
Cheng: “In fact, central government left a back door for
local governments by allowing them to acquire the land
and keeping a full amount of land sale income.
They knew clearly that if they didn’t give out some
sweet treats, local governments wouldn’t listen to them.
So, the central government pretended that they did not
know local governments made big fortune from
demolition and created many social conflicts from that.
In his Tsinghua speech, Zhu refuted the criticism in
the book of “Survey of Chinese Peasants”,
saying that he was not only defending himself,
but the third generation of the CCP leadership.
Cheng said, Zhu played fool on the issue of Land Enclosure
and Tax System Reform, although he knew that clearly.
NTD reporters Chang Chun, Li Qian and Xiao Yu