VZCZCXRO0002
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