Cablegate: Sw China: Self-Immolation Case in Chengdu Highlights

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PP RUEHGH RUEHVC
DE RUEHCN #0313/01 3520917
ZNR UUUUU ZZH
P 180917Z DEC 09
FM AMCONSUL CHENGDU
TO RUEHC/SECSTATE WASHDC PRIORITY 3648
INFO RUCPDOC/USDOC WASHDC PRIORITY 0040
RUEHOO/CHINA POSTS COLLECTIVE
RUEHCN/AMCONSUL CHENGDU 4364

UNCLAS SECTION 01 OF 03 CHENGDU 000313

SENSITIVE
SIPDIS

DEPT FOR EAP/CM

E.O. 12958: N/A
TAGS: PHUM PGOV KJUS ECON EFIN CH
SUBJECT: SW CHINA: SELF-IMMOLATION CASE IN CHENGDU HIGHLIGHTS
PROBLEMATIC LAND USE SYSTEM

CHENGDU 00000313 001.2 OF 003

1. (U) This message is sensitive but unclassified. Not for
Internet distribution.

2. (SBU) Summary. Three recent cases in southwest China --
including a high-profile case where a Chengdu citizen set fire
to herself to protest a demolition of a property -- illustrate
how Chinese citizens here have been reacting with anger to a
lack of limits on the government's ability to expropriate and
resell land for the "public interest." Often, the compensation
is only a fraction of what they would have received by selling
the land themselves. Netizens reactions to the Chengdu
self-immolation case were so strong that the government was
forced to join in a public debate about clarifying contradictory
laws and regulations on land use rights. Two other recent SW
China land use cases also highlight the often corrupt nexus
between local governments and real estate developers, as well as
how citizens -- in the absence of a democratic system and strong
rule of law -- end up protesting in the streets instead of, e.g.
participating in zoning meetings or suing the government, as
occurs in the United States. End Summary.

Introduction: Some Whys and Problems

with Below-Market-Price Sale of Land in China

---------------------------------------------

3. (U) In theory, all land in China today is owned by the state
in towns, and by farmers' collectives in the countryside. In
practice, however, the sale of land-use rights in China has
allowed land to be, in effect, privatized, a November 24
analysis by UK bank Standard Chartered states. The bank
analysis suggests that local governments in China often sell
land-use rights at less than market value for three reasons: 1)
corruption, with local officials being bribed with, e.g. free
apartments; 2) lack of limits on the government's ability to
expropriate land, including no system for judicial review to
help define what is "public interest" (gonggong liyi); and 3)
local officials tend, at least for industrial land, to be less
interested in the proceeds of the sale of land-use rights than
the employment and increased tax base derived from new
industries.

4. (U) Beyond the issue of taxpayers, collectively, suffering
losses when the government sells land at below-market prices, is
the issue of governments re-selling land expropriated from
existing land-use rights holders. All too often, these existing
rights-holders often receive only a fraction of the actual
revenues earned by the government in the sale. These former
land-use rights holders become disgruntled because the
"compensation" that they received from the government is
perceived to be unfair and inadequate to purchase an equivalent
property in another location.

Chengdu Firestorm:

Self-Immolation to Protest Demolition of Personal Property

--------------------------------------------- -------------

5. (U) This problem of inadequate compensation of "land owners"
gained national attention on November 13 in Chengdu when a
47-year old woman, Tang Fuzhen, set herself on fire (and died 16
days later) in protest against the demolition of her former
husband's garment factory. The family reportedly had spent more
than seven million RMB on the property, but the district
government, after several rounds of negotiation and one earlier,
failed demolition attempt (in which Tang had threatened to
commit suicide), had only offered to pay 2.17 million RMB for
the site. To carry out its second demolition attempt, the
government labeled the building illegal on the grounds that
Tang's husband did not possess a construction permit -- even
though there was no such requirement at the time the factory was
built.

CHENGDU 00000313 002.2 OF 003

Internet's Firepower: Netizens,

Mobile Phone Video Meant Government Could Not Ignore This Case

--------------------------------------------- -----------------

6. (U) This Chengdu case might have gone largely unnoticed
except that angry netizens joined in, strongly criticizing the
local authorities for the violent way that in which the law was
"enforced." Despite attempts by Sichuan authorities to suppress
initial reports of the incident, a mobile-phone video of the
self-immolation spread on the internet, inflaming public
sentiment. Citizens have continued to express their views on
the case by leaving comments on the website of the State Council
Legislative Affairs Office, press reports indicated.

Firemen Saving the Party: Lawmakers, Officials, Academics React

--------------------------------------------- ------------------

7. (SBU) Once the case gained national prominence, lawmakers,
officials, and academics -- in reaction to public anger against
the government -- joined the debate on how to correct
ambiguities and contradictions in China's current laws and
regulations on eminent domain and forced demolitions. Liang
Huixing, a member of the Law Committee of the National People's
Congress (NPC), asserted in the official press that the urban
housing demolition regulation under which Chengdu authorities
acted should have been taken off the books after the passage in
2007 of a new property law. Contradicting Liang, the State
Council Legislative Affairs Office, which issued the regulation
in 2001, insisted to the press that the rule was still in
effect. Meanwhile, on December 7, five Beijing University
professors wrote to the NPC to suggest that the legislature
force the Office to revise or abolish the regulation, which they
claimed violated the constitution and property law. Then, on
December 9, the press reported that the Ministry of Land and
Resources and the Ministry of Housing and Urban-Rural
Development had begun research on an amendment.

8. (SBU) According to the 2007 property law, the government must
compensate a citizen for expropriated property before they
relocate, press reports indicate. In most cases, however, local
governments give developers permission to begin work and leave
the companies to negotiate with residents. Developers, eager to
profit from China's housing boom, have often offered inadequate
compensation and used underhanded methods -- such as paying off
more vocal citizens -- to combat land-right holders, including
so-called nail households (dingzihu), who tenaciously refuse to
move. Shen Kui, one of the five academics, is quoted as saying
that changing the regulation will be very difficult because
local governments, which rely on "almost half of their revenues
from land trading," will resist them.

Similar Incident in Guizhou Province

------------------------------------

9. (U) A similar incident took place on November 27 in Guiyang,
Guizhou Province, according to press reports. In a bid to
dismantle nine houses and eight shops, a real estate development
company entrusted security guards of another company to evacuate
the residents by force. In the wee hours of the morning, the
guards arrived in 10 minivans, smashed the doors, and forced 13
inhabitants to other parts of the city until the demolitions
were complete. In protest, nearly 30 inhabitants used nearly 40
liquefied gas containers to block intersections for two hours --
creating huge traffic jams.

Two Protests Next to ConGen Chengdu Over Property Development

--------------------------------------------- ----------------

CHENGDU 00000313 003.2 OF 003

10. (SBU) On both December 11 and 16, not more than 100 yards
from the U.S. Consulate General in Chengdu, protesters blocked
the street in front of the consulate to protest the construction
of a huge office and residential complex adjacent to the
consulate. (Both times, police limited traffic entering the
street at the closest intersections while the protests were
on-going.) On the evening of December 11, Consul General,
accompanied by RSO and the Marine Detachment Commander,
approached a small number of protesters and several dozen local
residents milling around them. Also in the perimeter were
several dozen police and their vehicles. An agitated elderly
woman, one of the two most vocal protestors along with an
elderly gentleman with a loudspeaker, told Consul General that
the protesters were backed by 500 families, about 2000 citizens
total, living in an apartment complex behind the Consulate.
The citizens, which the woman claimed were not seeking monetary
compensation, were protesting the closure of a road by the
developer that the woman claimed was essential as an evacuation
route should there be another natural disaster, such as the (May
2008) earthquake.

11. (SBU) Around noon on December 16, another group of 1-2 dozen
protestors were observed by ConGenOff seated in chairs blocking
traffic, and also holding a half torn sign that appeared to be a
notice from the property developer. That day, the police were
also compelled to close the major road in front of the
Consulate, and observe the protest before cajoling its
participants to peacefully disperse.

Comment: Eminent Domain and What Its Use in

U.S. and China Says About the Rule of Law, Democracy

--------------------------------------------- -------

12. (U) The use by the government of its power of eminent domain
is also controversial in the United States, with the fundamental
difference that in America citizen enjoy a strong system of rule
of law, including a process by which city councils hold public
meetings or hearings to allow a public debate on infrastructure
or major development/zoning decisions. There is also a clear
system for appraising the value of expropriated property, and a
judicial appeal process. The most famous recent eminent domain
case in the United State occurred in 2005, when the U.S. Supreme
Court rule in "Kelo versus New London" that a Connecticut city
had lawfully used eminent domain to transfer land from one
private owner to another to further economic development because
this was a permissible "public use" under the Takings Clause of
the U.S. Constitution's Fifth Amendment.

13. (SBU) By contrast, China's rule of law is weak, and its
legal and regulatory system underdeveloped and contradictory.
Its authoritarian government is both intolerant of an open,
defined, and fair system for airing of citizen grievances, as
well as undermined by the connivances between corrupt officials
and greedy developers. As a consequence, we have seen cases in
SW China where citizens perceive that they must take to the
streets or, tragically, set fire to themselves, to make their
voices heard.
BROWN

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