A critical determinant of China's long-term economicgrowth and social stability will be whether thewealth of its economic boom can reach the majorityof its 700 million farmers, who make up approximately56 percent of the total population. The benefits that therural population has received from the economic reformsof the past two and a half decades, while significant, werelargely achieved in the 1980s, and now the countryside lagsbadly behind the urban sector. A survey we conducted in 17provinces, among 1,962 farmers and other respondents,confirms one fundamental cause of the widening rural-urbanincome gap: most Chinese farmers still lack secureand marketable land rights that would allow them to makelong-term investments in land, decisively improve productivity,and accumulate wealth.
Farmers in China face multiple threats to their landrights from local government and village officials. The mostprominent threat is land expropriation or acquisitionthrough eminent domain to satisfy demands of industrialgrowth or urban expansion. Despite a series of central lawsand policies, in practice, farmers who lose their land typicallyreceive little or no compensation. Closely related as anothersource of insecurity of land rights is the persistent "readjustment"or "reallocation" of farmers' landholdings that isadministratively conducted by village officials. Today, suchland-related problems are the number one cause for ruralgrievances and unrest in China, which reported 17,900 casesof "massive rural incidents" of farmers' protests in the firstnine months of 2006.
China adopted a Property Law in March 2007 that aims tostrengthen the security of farmers' land rights, and the nextkey step will be full implementation of the law. We calculatethat securing rural land rights would bring more than half atrillion dollars of value to farmers. Implementing the propertylaw requires major institutional and legal measures on severalfronts that China must tackle in the immediate future.