The Hu-Wen Legacy Is In Rural China

Leaning Bridge Village is less than 150km from Beijing, but might as well be light-years removed from the capital's glittering towers. Nestled below rugged hills topped by China's ancient Great Wall, Leaning Bridge is a cluster of one-story stone-and-brick farmhouses where farmers raise corn and cash crops such as chestnuts or apricots, much as their ancestors did. And it is in places like this where the success or failure of the policies of Chinese President Hu Jintao and Prime Minister Wen Jiabao will be measured. Wen himself has visited the village three times since 2000, and points to it as a concrete reminder that the cities' bright lights don't represent the real China.

The two leaders came to power six years ago vowing to improve the lot of the farmers. Since then they have done much for the impoverished rural west, trimming agricultural taxes, pouring in subsidies, launching health-care cooperatives, and allowing farmers to rent out land and buildings. But their work is not done. Though Wen recently called farmers the "lifeline" of the economy, state-run media acknowledged in March that rural per capita net income, $758 a year, was less than a third of its urban equivalent—the worst showing since China's market reforms began in 1978. The 225 million rural-born migrant workers—one fifth of China's population—work in urban areas but are denied benefits enjoyed by city dwellers. Result: a metastasizing underclass of rural migrants living as -second-class citizens in China's cities.

The divide has sparked anger among the rural poor. Antigovernment unrest is a growing concern. Many protests are by farmers victimized by corrupt local cadres or real-estate barons. Internal debate over the dangers of China's growing rural-urban divide came to a head in early March, on the eve of the annual National People's Congress, when 13 media outlets published an unusually blunt editorial calling for reform of the household registration (or hukou) system, which denies rural-born migrant workers in urban areas the same rights that city dwellers enjoy, such as cheaper schooling and permission to live legally in cities where they work. "We hope that decades of Chinese government maladministration can end with this generation," the authors wrote. Almost immediately, Beijing censors halted further discussion of the editorial. The chief author was fired by the Beijing-based Economic Observer's Web site, and others were disciplined.

Wen and Hu know the well-being of China's rural population is crucial to the world's economic future. For years, China was the low-cost supplier of goods to buyers in the West, particularly in the U.S. Now with American consumers battered by the global financial crisis, China can no longer sustain its growth rate as an export factory to the world. So rather than encouraging more unskilled migrant workers to leave the farm to produce low-cost trinkets for American shoppers, China wants its poor farmers, who currently save virtually all their cash in case of illness, to become confident consumers so the country can rely more on domestic consumption and less on exports. Beijing needs to unleash the spending power of China's rural population, still more than 50 percent of its 1.3 -billion–plus people. To get there, leaders have channeled the lion's share of the $600 billion economic stimulus into largely rural areas in the west, rather than the export--manufacturing centers on the east coast. They gave manufacturers special incentives to offer farmers rebates on items such as refrigerators, air conditioners, and computers. Farmers say a rural -medical-insurance scheme, launched several years ago, is expanding and lessening farmers' paranoia about hospital bills.

But the window of opportunity may be closing. In 2012 the Hu-Wen leadership is slated to transfer power to a new team. Expected to replace Hu as the top leader: Xi Jinping, who is linked to the Shanghai-faction officials who reflect fast-growth, export-oriented, urban priorities—a sharp contrast to the Hu-Wen focus on social justice. What's more, the rural-urban gap continues to widen, and Beijing's stimulus package has unleashed the specter of inflation, prompting Wen to warn that inflation, unfair income distribution, and corruption could be a formula potent enough "to affect social stability and even the stability of state power." With this in mind, during his most recent visit to Leaning Bridge, in January, Wen promised villagers even greater subsidies, and assured them he would visit again after he retired to see how things have improved. Until then, China's leaders will be scrambling to deliver the goods.

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