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Zhejiang Commercial New City – A Golden Palace Build on Ashes?

At a time, when economic slowdown has hit the global business and there is speculation over decline in Chinese economy as well, a new wave of business culture is in full swing at the heart of Chinese province Hebei. The “Zhejiang Commercial New City” is in construction to provide a new style of comprehensive business platform. As the name suggests, it is the establishment of an entire city like infrastructure with the investment of 30 billion yuan, funding that mainly comes from local governments in PRC and Taiwan. The most interesting part of the project is the label “Zhejiang” attached to it.

Zhejiang province, well known across China for its “Wenzhou model”, the independent style private entrepreneurship that boosted the economic development of Zhejiang after the reform and opening-up policy of China. Besides, Yiwu, a city in Central Zhejiang Province has become a vibrant small commodity trade market. Most of the Indian traders are well aware of this hub, as a small India town has gradually shaped itself in its peripheries.

Zhejiang is also famous for its traders, who are skilled, daring, bold and fearless. Probably, it is this unique bold nature of the Zhejiang traders that they have been able to make their own world in the very centre of China-Beijing. In Fengtai district, southern part of Beijing, a whole community of Zhejiang migrants has made their presence felt rather starkly. The place was once famous as “Zhejiang Village”, literally juxtaposing Zhejiang culture on the fringes of Beijing city. The place was the worst, in terms of law and order and the residents of Beijing scared to enter the lanes of “Zhejiang Village”. The fear these ‘outsiders’ (waidiren, referring to Zhejiang migrants) created in this region for the locals needs no imagination as the newspapers were flooded with their daily unlawful acts in the early 90s. Yet, it captured the whole cloth market of Beijing and nearby areas. Today, Zhejiang migrants are the owners of residential and commercial buildings in this region. Demolitions and rehabilitations have given a facelift to the area.

With Zhejiang migrants’ domination in the market, from early to mid-1990s, there was amplified tussle between Beijing local government and Zhejiang local governments. The issues related to urban management, urban residency (hukou), local employment, local economic development, local poverty etc. While it is one of those urbanization related contradictions, where the receiving city is unhappy over the extra burden caused by mobile population and the sending areas want to maximize benefits human resources bring back to the development of their hometown; the issue of Zhejiang Village unfolded Central-local divergent opinions under a unified Party. Of special significance was the involvement of other local governments’ to invite Zhejiang migrants offering preferential packages, which included urban hukou for migrants, education for their children, waving off county level administrative fees for three years etc. The result of this as visible is the sprouting of Zhejiang Commercial New City in Hebei, a province neighbouring south Beijing.

The project located in Yongqing county of Langfang city in Hebei province is only 50 kms from south Beijing and covers an area of 20,000 mu (1 mu = 1/15 hectare). By 2015, the project will have a garment wholesale market, trading center, ideal residential society, and swimming and entertainment complex. The garment wholesale market, covering an area of 5000 mu with an investment of 7 billion yuan, is set to become Asia’s largest wholesale market.

As the project runs in full-scale, no one questions about the resettlement and compensation of local villagers. Lihuangzhuang village in Liuqiying Town of Yongqing County under Langfang city of Hebei province, now a part of the project, was a village of 200 people. According to some sources, in 2010, Liuqiying People’s Government signed a 30-year contract with the villagers to lease more than 900 mu of land. The land requisition was of agriculture land, which according to Chinese law is a temporary act for urgent needs and the land must be returned to the villagers ‘as is where is’ along with due compensation. However, the local government, as in many other such cases, converted the land from agriculture to construction purposes and paid 640 yuan for every mu of land every year to every household. Now after the completion of such large-scale project, what will the villagers get after the expiry of 30-year contract? The answer was visible in the eyes of Hancun villagers.

Hancun is a village near the site of the project. As I enter into the village, a fear and anguish among village residents engulf me. People look at me with great interest, but none of them is happy over my visit with a camera in hand. One of them finds courage to question me in loud voice, “you are also coming to grab our land? We will not give our land, go away”. The sound leaves me dumbstruck, but sends a clear message. The villagers, who were very happy with their land as a guarantee, have suddenly become scared of land snatching. A great game played between real estate players and local governments has left villagers as a major loser. The winners, in this case, are Taiwanese investors, local entrepreneurs of Yongjia County of Zhejiang province (also a major investor), and Hebei local governments. If these games continue to have such winners and such losers for long, the trust over Chinese Communist Party will vanish within no time. Can a paradise built on the ashes of many dreams, bring harmony to China?

(The writer, Dr. Geeta Kochhar, is Assistant Professor in the Centre for Chinese & South East Asian Studies, Jawaharlal Nehru University, New Delhi. Opinions expressed are her own.

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