2009年5月10日星期日

China land protest turns deadly



One man has died and at least six people have been injured after violence broke out in southeastern China during a protest over a land dispute.
The clashes initially broke out on Tuesday between local residents and construction workers at a building site in the city of Liling in China's central province of Hunan, according to news reports.
The Xiaoxiang Morning Post, a provincial newspaper, said the villagers were trying to stop the workers from building on land they say they had not been properly compensated for.
According to the Hong-Kong based Information Center for Human Rights and Democracy, more than 1,000 villagers then marched on the city government offices, where they clashed with hundreds of police and overturned two police cars.
Video of the clashes secretly recorded by a villager later showed the body of a middle-aged man in a red shirt lying inside the lobby of a government office building.
The man's relatives had apparently taken his body to local officials in protest at their treatment.
Land disputes are common in China, where local governments often sell plots of land to construction companies with little compensation for local residents.
The clashes in Liling highlight concerns among China's leadership that the current economic downturn, and the subsequent loss of jobs, could lead to a spike in social unrest.

Beijing's capital ideas

While much of the world sinks in a welter of public and ­private debt, and stock ­markets ­continue to ­struggle, there is one place where the money is still looking good. China's £2 trillion of foreign currency reserves – accrued through two decades of strong exports and foreign investment – is ­casting a long shadow.
While the developed world has spent, China has been saving. This mountain of capital, in the hands of the world's last major one-party state, is the result partly of the non-convertibility of the Chinese currency, the yuan, and part of the hunger of the EU and the US in the last decade for cheap goods from China. And as the G20 in April made clear, ­having helped China build up this mountain of money, it now expects ­Beijing to contribute some of these riches towards solving the current ­global economic crisis. The question is how much will China play along with this.
Having this much money, as the ­Chinese premier, Wen Jiabao, admitted a year ago, is a mixed blessing. A weak dollar back then meant that billions were wiped off the value of these reserves (70% of the money is kept in dollars). The strengthening of the ­dollar has solved that problem, for the moment. But the challenge to Chinese policymakers of how to use this money remains – and using a universal ­currency, as one Chinese minister ­speculated earlier this year, only solves the problem of currency depreciation. It does nothing about what use to actually put this capital to.
There is one clear area where the ­Chinese can, and are, using their money: overseas investment. China now ranks as the world's sixth largest outward ­investor, according to the UN ­Conference on Trade and Development. Even this figure is almost certainly an underes-timate. Chinese financial institutions have significant minority shareholdings in US and European financial institutions. In 2008 the UK overtook Germany as the largest destination for outward-bound money. As one commentator has said, the era of Made in China is drawing to a close. The era of Owned by China is starting. And we had better be ready for a rapid transition.
The Chinese government encourages its large state-owned enterprises (SOEs) and some of its non-state companies to "go out". The aim is to expose Chinese companies to international markets and to show others that China is not only interested in selling but also in investing and building globally competitive ­companies and brands. Partly as a result of this, China's global integration has moved up several notches in the last two years. The current economic crisis has accelerated this.
Foreign governments ask two questions about Chinese investment. Will it be managed on a purely commercial, profit-driven basis? And will the Chinese government seek to use investments for political ends? The answers at present are mixed. China's investments last year in Costa Rica appear to have been made on condition that the country shifted its allegiance from Taiwan to the People's Republic of China. But the behaviour of Chinese SOEs has evolved considerably over the past decade. The government has made it clear that it expects them to generate a return and pay dividends to the state. The top managers of ­Chinese SOEs themselves have become a lobby group in their own right, seeking increasingly to maximise their own interests.
The west needs to overcome its doubts about Chinese outward investment and recognise that a more ­welcoming approach will bring not only immediate economic gain, especially welcome at the moment, but also longer-term strategic benefits. The ­benefits ought to be obvious. Western economies will receive much needed investment. The economic integration between China and the west will deepen. A powerful interest group within the Chinese elite will be drawn into fuller engagement with their western counterparts. And perhaps the west will find that the political influence of which it is most afraid works both ways.
One thing is certain: some time in the coming year, we have to expect a bold move from China. We had better make our minds up before then how we are going to respond to this. Otherwise it will look as if we've just allowed ourselves to be bought out. And that is in no one's interests.
Kerry Brown is senior fellow, Asia programme, Chatham House; Peter Wood is an independent China strategist based in Hong Kong