The government next door

28 October 2014

Urbanisation in China has created a new middle class with unprecedented opportunities to create their own wealth. But, that doesn’t mean the Communist regime has lost hold of its citizens. Belinda Cranston reports. 

In Joni Mitchell’s 1970s hit, Big Yellow Taxi, there’s a wistful line about a slice of utopia being paved and transformed into a parking lot.

Fast forward to 2002, a group of exasperated homeowners in northeastern Beijing reacted to a parking lot in their neighbourhood, by collectively pulling down a wall surrounding it with their own hands.

Promised a children’s playground in the compound’s master plan, they earlier vented anger at developers, painting “give us our green back” and “you cheated us” on the wall.

The homeowners eventually replaced the rubble with planted trees purchased from a fundraising campaign and, overtime, the area was transformed into a garden.

The incident is relayed in Australian Centre on China in the World associate director Dr Luigi Tomba’s new book, The Government Next Door.

Focusing on China’s property boom and the role of the Communist state in fuelling it, the author concludes that despite changes in neighbourhood politics and different government practices, Beijing remains very much in control.

In the book Tomba argues that rather than providing China’s citizens a refuge from the state, residential communities are often subject to a the goals of a distant authority.

The communities are also arenas of active political engagement between state and society.

Up until the early 1990s, a real estate market did not exist in China.

Then a push by the government to bolster domestic spending led to policies aimed at creating a bigger middle class.

In the space of a couple of decades, the proportion of those who owned their own home in most cities went from zero to more than 80 per cent.

Residents who had maintained employment in the public sector, working at places including industrial , hospitals, and ministries, were among the first to secure their own homes.

“That doesn’t mean that they have all become wealthy,” says Tomba.

As he explains, those who dedicated their working lives to the state already had houses allocated to them, enabling them and their families the security of a roof over their head.

“From the late 1980s and into the 1990s, the apartment that you had been living in was sold to you at a heavily discounted price, depending on how many years you had devoted to the public,” Tomba says.

These days, given the rise of gleaming new buildings in gated communities, the archaic apartments are no longer in high demand.

“But at the time, in the mid-1990s, they allowed people to own  property,” Tomba points out.

That enabled options like renting the property out, or using it as collateral to get a mortgage.

From there some people started up their own businesses. At the same time, government policies encouraged consumption and investment.

It was a sharp turnaround from the 1960s and 1970s, when citizens were asked to be frugal and consume as little as possible so that resources could be devoted to ‘productive activities’.

Some have argued the changes have brought about a slackening of the Communist regime’s hold on people. Tomba disagrees.

“It’s not that people are governed less, rather, there has been a change in the way in which people are governed,” he says.

In gated communities, for example, the needs of as many as 20,000 people are administered by private management companies.

Such companies perform roles normally reserved for government officials, like enforcing China’s one child policy. The private companies also take care of the removal of garbage and maintenance of buildings and surrounding grounds.

Homeowners in turn pay fees for the services.

If they are not happy with the result, they protest.

Mostly initiated from educated middle class groups, the protests rarely prompt police involvement.

 “The legitimacy of these protests start from the fact that they are not anti-government,” Tomba points out.

Interestingly, those taking part buy into the same type of language and political narratives used by the government.

As such, Tomba believes the property revolution in China has the potential to strengthen, rather than weaken the Communist regime’s legitimacy, and its ability to govern at the grass roots.

On the other hand, while urban China has been exposed to the vagaries of a housing market that has created significant wealth for the first generation of middle class owners, it has also pushed prices beyond the reach of younger generations.

“With so many citizens heavily invested in the urban property market, the government needs to handle very carefully, the possibility of a housing crisis,” Tomba says.

The Government Next Door is published by Cornell University Press

Read a review of the book at 
The Interpreter.


Updated:  24 April, 2017/Responsible Officer:  Dean, ANU College of Asia & the Pacific/Page Contact:  CAP Web Team