This case study on village co-governance in China reveals a very interesting opposite co-governance typology by different village leaders concerning the management of village land use. Management of village land is one of the old if not the oldest practice of co-governance at the village level which was done through the use of social norms before the promulgation of legal rules. Conflict arises when long-term social practices are inconsistent with the laws which oftentimes results in tension between the two systems of control.
Based on the Chinese land reform regime, urban lands are said to be state-owned while rural lands are collectively owned. The development of rural lands and transfer even though collectively or privately owned needs approval from the government. This legal reform received widespread protest and condemnation, especially from Chinese farmers who considered the system as a government land grab or monopoly. As such, Chinese farmers began to construct illegal housing for rent to show their deviance from the system.
According to the Chinese Ministry of Land and Resources, by 2007, Chinese farmers had built over 6.6 billion square meters of houses in evasion of the legal prohibition on private rural land development and transfer, resulting in a huge market of illegal houses. The construction of these illegal houses in China later became known as the “small property houses” business which was very profitable at the time and became very popular among villagers. The management of the collectively owned rural lands is carried out by the village co-op members who are selected by the villagers to run the affairs of the villages and in particular manage the village land. These village co-op members serve as the middlemen between the central government and the villagers.
In essence, the case study talks about the village co-op members (W village) that use mafia-style leadership to manage the village land while the other village co-op (Z village) follows the law to manage the village land. A detailed discussion of these two village co-op management is given below with a concluding remark on the case study.
W village: The mafia-style small property business
W village used to be an example of a very good co-governance or commons system that paved the way for the establishment of village co-ops in other villages in Shenzhen. The village co-op board is a form of collective economic organization responsible for the management of collectively owned lands that are not allocated to individual households and for issuing dividends to villagers each year based on the profits generated from the management of the lands. They used this collectively owned land to build factories and rent them to outsider investors.
The small property business became booming and very profitable within a very short period hence it gave rise to the establishment of a mafia organization in W village and Shajing sub-district in general. This mafia organization became a partnership between corrupt government officials, village co-op leaders, and the mafia. The mafia organization was illegally buying the collectively owned lands from the village co-ops at low prices and reselling them at more expensive prices. The co-op boards in return relied on the mafia to deal with corrupt government officials and guarantee their re-election after every three-year mandate in office thus the mafia influences village elections and grassroots government operations.
As a consequence of the village co-op leadership style in W village, the payment of dividends to villagers came to a halt since the village co-op was no longer making a profit. Again, the village co-op would use the mafia to silence villagers from making any noise for failure to pay dividends through violence. Sadly, W village ended up in a chaotic situation and lost the opportunity for the village redevelopment project from the government because of too many squatters.
Z village: In the name of law
Just like the case in W village, Z village is also into the small property business in which villagers were building houses on their privately owned lands and renting to migrant workers. Before the government’s full prohibition, the village co-op also built several factories on the collectively owned lands and rented them to investors. However, the difference between the two is that W village was disobedient to the established laws for the management and transfer of collectively owned lands while Z village was obedient to the established laws by challenging the meaning and the interpretation of these laws to develop their land.
There is a lot of conflict among the laws in China for the management and development of lands, for instance, the Chinese Land Administration Law “Prohibits rural land transfer and development”, while the Chinese Constitution and Land Administration Law on land ownership states that “urban land is state-owned; rural land is collective-owned”. These conflicts between the laws coupled with the high cost and hefty procedures to follow to acquire approval from the government make it difficult for some village co-ops to follow the laws for the management and development of rural lands in China.
Fortunately, Z Village later came under the leadership of an ex-real estate guru who was committed to stopping the chaotic housing construction by his villagers and began to apply for legal rights from the government to redevelop Z Village. The first thing done by the new leadership was to build a park of 40,000 square meters. The village co-ops began to redirect their focus on the village environment rather than building more buildings following which house rents were increased and the annual dividends due to the villagers rose to an average yearly increment of 10%. Based on the foregoing, the new leadership was able to persuade villagers to give up on their illegally constructed houses and apply for a village redevelopment project from the government which was successful and villagers held legal rights on their individual properties.
In conclusion, this case study tells a story of co-governance or management of commons at the village level which as a matter of fact can also be extended to the cities and urban settlements. Co-governance requires not focusing on short-term economic benefits driven by the resources of the commons but rather should be focused on sustainable practices to maintain and manage the resources accordingly.
In the first case, short-term economic benefit superseded the collective future interest of the village and as a result, ended up in a chaotic situation and the village became ungovernable. The second case focuses on the long-term interest of all the villagers and maximizes the immediate economic benefit to create profit in the future for the village. Co-governance although considered as self-governance cannot be successful without the involvement of legal rules. It must follow established laid-down laws to achieve the goals of the common good and interest of all.