Guangzhou’s ‘last urban villagers’ fight for a fair shot

GUANGZHOU — In the shadow of high-rise offices and luxurious residential skyscrapers in downtown Guangzhou’s central business district is a neighbourhood of shabby apartment buildings and narrow alleys that predates China’s roaring urbanisation drive.

The neighbourhood is what is left of an old village called Xian (population 4,000). Ringed by skyscrapers, its dilapidated buildings cover about 200,000sqm in the heart of the busy southern metropolis.

Local officials have frequently tried to tear down what remains of Xian, which many see as the last “urban village” in Guangzhou. Most buildings in what used to be a community of peasants have already been razed and replaced by newer, taller buildings.

But a group of defiant villagers has stood in the way of a final demolition project, not out of love for run-down buildings but out of contempt for the officials and property developers they say have been cutting dirty deals and unfairly taking their land.

Since 2008, Xian villagers have worked hard to hold back demolition crews while, at the same time, petitioning for justice. That justice eventually came in the form of the arrests and convictions of about a dozen officials on corruption charges. Villagers also got what they wanted most: A fair deal for their land.

Communist Party officials started responding to the villagers’ pleas in July 2013. Initially, seven village officials were investigated for wrongdoing. The following December, central government investigators targeted Cao Jianliao, who was then deputy mayor of Guangzhou, for his role in Xian property deals. The party expelled the deputy mayor in mid-2014.

Cao’s case moved slowly through the justice system until last January, when he was charged in a Shenzhen court with accepting bribes from developers worth more than 76 million yuan (S$16 million) in exchange for favours linked to land deals.

Cao’s trial came 18 months after courts started processing cases against several lower-level officials. After being convicted on corruption charges, the seven Xian officials were sentenced to between 17 months and four years in prison.

Since the arrests and convictions of officials began, Xian’s remaining residents have agreed to let demolition crews level what remains of their village to make way for more skyscrapers. In March last year, China Poly Group started building new apartments just for villagers on half of the land. The other half will be used for a luxury hotel and office building that are likely to generate some 55 million yuan a year from rents, to be divided among the villagers.

Developers started chipping away at Xian in the 1990s, after Guangzhou’s government approved the construction of new office buildings in what became known as the Pearl River New District business area. Eventually, some 6.6sqkm of farms, homes and small factories were expropriated in Shahe County, which includes Xian.

Cao found himself at ground zero for property development. He had been working for the Shahe County government since the late 1970s and was named its governor in 1985.

In 1994, Cao was appointed to the party’s standing committee for Guangzhou’s Tianhe District, an area that encompasses Shahe and Xian. He was assigned to oversee the projects in the Pearl River New District. And in 1996, he was promoted to the position of Tianhe deputy governor.

Through the expropriation process, the Shahe government got permission to develop about 18 per cent of the land targeted for the business district. The county’s share had been collectively owned by local villagers before it was put under the control of Shahe (County) Economic Development.

Public complaints started popping up shortly after the development project got under way. Many people said they smelled corruption.

Some villagers accused their leaders of lying about demographics in order to qualify for expropriation compensation from the Guangzhou government. The whistleblowers also said it seemed that at least some of the bonus cash was spent on overseas vacations for Cao and other officials. Some 14 years after officials fudged population figures, Xian villagers turned up the heat by petitioning authorities to investigate local officials for allegedly cutting illegal deals with property developers.

Public attention to the issue rose a notch in late 2012 when Li Rongfang, the party head in Liede Village, reportedly fled to Canada.

The next year, Guangdong’s graft fighter started investigating land deals in Xian and Liede. That led to detention for the seven Xian officials, although Xian’s party head, Lu Huigeng, slipped away by fleeing overseas, reported state media.

According to property transaction documents viewed by Caixin, developers who dealt with Cao followed similar routines that allowed them to cooperate with village authorities in charge of land development.

Under a typical policy adopted by villages, a village government must own 30 per cent of any development built on collectively owned land that was used for commercial development for the Pearl River New District.

To follow that policy but keep full control of a development, a developer may build a new retail area in a nearby neighbourhood and give it to the village in exchange for the 30 per cent stake. The village can then make money by renting out retail space to developers.

Nevertheless, rent revenues are usually set at below market levels. For instance, at one site the property developer agreed in 2011 to pay Liede Village 30 yuan per sqm per month for 20 years. But the developer sublet shops for up to 180 yuan per sqm.

Xian villagers said that developers cheated them as well. Developers are paying as little as 11 yuan per sqm per month for a 350,000sqm retail area. Officials in Guangzhou have asked developers and villagers to renegotiate these contracts. CAIXIN ONLINE