The Dark Side of the Boom: Chinese Fight Property Seizures by the State

By Wieland Wagner

Local authorities in China are using brutal means to expropriate ordinary people in a bid to profit from the country's construction boom. Some desperate citizens have commited suicide, while others vow to defend their properties with their lives.

Businessman Gu Kui is fighting to stop authorities from expropriating his property. Zoom
Wieland Wagner / DER SPIEGEL

Businessman Gu Kui is fighting to stop authorities from expropriating his property.

Businessman Gu Kui, 55, looks into the rearview mirror of his SUV. He is desperately trying to lose the blue car that's been following him for hours. Gu is so nervous that he almost rear-ends the car in front of him. He slams on the brakes and sharply turns the steering wheel. His vehicle makes a 180-degree turn and comes to a stop in the opposite direction on the highway.

Gu's near-accident in the western Chinese city of Chengdu ends without any injuries or damage to the vehicle. With his dangerous maneuver, Gu has managed to shake the people who have been tailing him -- for today, at least. The driver of the car that was following him, with its five thuggish passengers, has no choice but to remain in the flow of traffic and drive past Gu.

Gu has become accustomed to such chases and nerve-wracking encounters since he tangled with local officials in Chengdu, the capital of Sichuan province. A former owner of an auto parts market, Gu is part of a growing group of dissatisfied Chinese citizens. They are becoming increasingly bold in their opposition to the practices of Communist urban planners as they seek to effectively expropriate property and resell it to real estate sharks, in a bid to benefit from China's overheated construction boom.

'I Had to Look on as Bulldozers Demolished My Property'

Gu's former property is conveniently located near a highway access road. On the roughly five-hectare (12.3-acre) piece of land where he once operated a used-car and car parts business, construction cranes and crews are now hard at work erecting new apartment buildings. Red banners advertise the future apartments to potential buyers.

The district government had leased the property to him for 30 years. In the People's Republic, all land belongs to the state, which awards usage rights for fixed terms: up to 70 years for residential properties and 50 years for industrial operations. But other rules apply in rural areas, as in Gu's case. In any event, local officials decided that they could earn more money by driving Gu off the land and offering it to real estate developers instead.

Gu remembers the day they destroyed his livelihood. He says that hundreds of heavily armed police officers and thugs in civilian clothing appeared at the site, bringing along three ambulances as a precaution. "I had to look on as bulldozers demolished my property," he recalls.

As the pace of modernization in China's economy picks up, people are increasingly clinging to their property and standing up to the government's arbitrary practices. In the eastern Chinese city of Zhengzhou, a 45-year-old woman was killed in May when an excavator dragged her out of the upper floor of her restaurant, where she had barricaded herself in to protect her property.

Gu is now suing the Chengdu city government. The case -- which, bizarrely enough, is being funded by local functionaries, apparently in a bid to get rid of him -- has even attracted attention in faraway Beijing.

In the Public Interest

The reason Gu's case is garnering so much attention is because he isn't just suing for damages. In a petition to the central government and China's legislature, the National People's Congress, his attorney, Zhang Xinkui, is also fundamentally challenging the authority of local governments to heat up the real estate market through the arbitrary seizure and resale of properties.

The lawsuit calls the entire practice of Chinese state capitalism into question. For local governments and their often corrupt officials, buying and selling real estate has become a lucrative source of income to augment tight funds. Many of them, warns Liu Jiayi, the country's auditor general, face "heavy debt pressures."

But according to Zhang, China's municipalities are violating the national constitution with their real estate deals. Under the constitution, the authorities can only seize property if it is to be used in the public interest. Although "public interest" is an elastic term in Chinese communism, Zhang argues that the government, in its dual role as overseer and market player, is unnecessarily boosting speculation and exacerbating social injustices.

In 2007, China's National People's Congress enacted a law to protect private property -- with the exception of land. But in the course of rapid urbanization, planners, intent on promoting economic growth, often pay little attention to the rights of established residents and business owners. And contrary to the directives from Beijing, many local officials tend to promote the construction of luxury condominiums above everything else.

Suicides and Torture

Yang Youde, for example, comes from three generations of farmers. Until recently, he was growing melons and cotton, and raising fish, on the outskirts of Wuhan, a city of 9 million people. Today weeds run rampant on his fields, and almost all the fish in his large pond have starved to death. The 56-year-old spends almost all of his time defending his property against seizure by local authorities and speculators.

The facades of new luxury apartment buildings are getting closer to Yang's property, and most of his neighbors have already capitulated. Yang reports that one desperate man and his wife set themselves on fire, while others have drowned themselves in their ponds.

Yang's property, which consists of brick huts, looks like a fortress. He has built a perch above the shed where he keeps watch. He says that in August 2009, after he had submitted a petition against the planned seizure of his farm, the police came and dragged him away to one of China's notorious so-called "black jails," where he was held for 51 days. "They strung me up by my hands and put out cigarettes on my skin," he says.

Now he intends to defend his farm with the one thing he has left: his life.

Translated from the German by Christopher Sultan

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