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For my research on Wuxi during the last three decades, I owe an
enormous debt to many institutions and scholars in India and China. I
am especially grateul to the Indian Council or Social Science Research,
the Chinese Academy o Social Sciences, the authorities o Wuxi city and
Hela township and above all to my colleagues at the Institute o Chinese
Studies, Centre or the Study o Developing Societies, Delhi, or
supporting my study. I am, however, responsible or all the statements
made in this paper.
Manoranjan Mohanty ([email protected]) was at the University
o Delhi, and is now co-chairperson, Institute o Chinese Studies and
Durgabai Deshmukh Proessor at the Council or Social Development,
New Delhi.
chna refom: the Wux soy
Manoranjan Mohanty
Based on a 30-year micro-study of economic reforms in
Wuxi city and Hela township, this paper points out that
development through political urbanisation the Wuxi
way may achieve fast economic growth but has its
social, environmental and political costs. It traces the
three phases of reforms the region has passed through,
attaining a spectacular rise in gross domestic product
and household incomes. But later developments have
negated some of the achievements of the earlier stages
of reform. It proposes that the authorities initiate
genuine grass roots democracy so that local people will
have the power to decide on matters that affect them.
This article is based on a micro-study I carried out over a
30-year period, which gives a picture o the nature o
reorms that have taken place in the economy, society and
polity o China. The area is Wuxi, located between Shanghai and
Nanjing, which happens to be a relatively developed region o
coastal China that has experienced rapid economic growth and
urban construction. This was a typical success story o Chinas
reorms with visible prosperity both in the urban and rural areas
and with conspicuous inrastructural development. Yet here too
several socio-economic, environmental and political problems
have cropped up during the past decade. Thus the story o Wuxi
and the history o its erstwhile Hela commune may be a good
window to look at the course o Chinas reorms and draw some
lessons or development theory.
My objective in this essay is not so much to assess in a compre-
hensive way the economic growth prole o the area as to under-
stand the steps that were taken at dierent points o time to re-
organise the administrative structure, reormulate economic poli-
cies and intervene in managing the problems which arose. China
being a vast country with great diversity, this micro-study
certainly does not claim to be a representative one.Moreover, themethodology used in this work is mostly based on eld-level dis-cussions with villagers and ocials at various local levels.1 Inter-
view-based inormation has been put together with published sta-
tistical data and both have been interpreted with reerence to the
national policy documents o the Communist Party o China (CPC)
and the Chinese government, and a ew relevant studies con-
ducted within or outside China.
Besides being a tourist attraction because o its location by the
side o the Taihu lake and its proximity to the Yangtze river with the
historic Grand Canal passing through it, this middle-size city o 4.5
million people (2007) has been rising in the recent years as one o
Chinas global ino-cities. Wuxi had also been well known in aca-
demic circles because o surveys conducted by Chinas most amous
sociologist the late Fei Xiaotong in the 1930s and 1950s, which
showed how sharp disparities in land relations documented earlier
had been transormed through land reorms and cooperatives in the
1950s. Fei pointed out that in traditional China the production o
silk and its marketing had supplemented grain production in a
major way, contributing substantially to poverty alleviation on the
one hand and development o light industry on the other. He wel-
comed the reorms in the early 1980s, which revived rural indus-
tries.2 In this process, the role played by the state was signicant,
both historically and in the post-liberation period. Thus, Wuxi rep-
resented a model o development combining agriculture with ruralindustry, with state policy energising local households through land
reorms and economic incentives and linking the rural economy
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with the urban economy or mutual benet.3 The new rural eco-
nomy in the rst decade o reorms during 1979-89 not only sub-
stantially increased peasant income but also nanced much o the
acilities or health and education. This development experience
created socio-economic conditions that paved the way or grass
roots democracy while shaping a new countryside where the peas-
ants had rapidly increasing purchasing power. This new rural
market became the springboard or Chinas industrialisation and at-tracted oreign investment. That model o reorm and open door,
crystallised in the 1980s, looked promising until the early 1990s,
when export-oriented production and the ocus on achieving a
higher growth rate became the main preoccupation o the leader-
ship and created an altogether dierent milieu. At the end o 30
years o reorms, Wuxi looked prosperous with high-rise buildings,
new real estate colonies or people working in Shanghai, multi-lane
highways linking Shanghai with Nanjing and Hangzhou, and many
new hi-tech industries set up by the worlds top corporations. But its
pride, the Taihu lake, was so polluted with algae that in 2007 supply
o water rom it to the surrounding cities was suspended or two
weeks.4 Hela and many ormer villages disappeared with high-rise
buildings taking their place. Silk production went urther inland
with more chemical treatment o the abric. With many rural indus-
tries closing down and growing unemployment in cities, peasants
who had migrated to Shanghai and other towns in the past decade
had to head back to their villages or ormer villages to all back on
land (i available) and other local resources in 2008-09. The three
rural problems ( sannong wenti: low productivity in agriculture,
low rural income, and underdeveloped inrastructure, especially in
health, education and agriculture), which were openly discussed all
over China since 2000, were very much evident in this otherwise
prosperous area as well. It should be pointed out that the rate o
growth not only o gross domestic product (GDP) but also average
wages in Wuxi over the 30-year period was substantial (Table 1).
Peoples liestyles, in many ways, resembled those o advanced west-
ern cities. Well integrated with the world economy, the city benetedgreatly but it also caused some suering with the onset o the global
economic crisis. The Wuxi story is the story o contemporary China,
which has been an economic success but with serious social, politi-
cal and environmental problems. Stories such as Wuxis may indeed
have prompted the Hu Jintao leadership to announce the concept o
scientic development to reorient policies at the 17th Congress o
the CPC in 2007, which included the launch o new initiatives such
as building a new socialist countryside.5
1 Wux and Hela: the plae and he peoleThe place o our case study is Hela (in Pinyin, using the Beijing
dialect, it is written as Helie but in the Wuxi dialect pronounced as
Hela, which we use here). The Hela Peoples Commune was re-
named the Hela Xiang in 1983 (axiang, translated as a township in
English, was the traditional rural unit below the county till 1958).
It was one o the 10 xiang o the suburban district (jiaoqu) o Wuxi
in Jiangsu province o China. It has been subject to urther
reorganisation as a part o the urbanisation process during the
reorm period. Ater Wuxi was declared a ully open city by a
State Council decision in 1985, it took steps to set up special de-
velopment zones that provided advanced inrastructure acilities
to oreign capital.6 The inrastructure acilities have developed
rapidly to cope with the demand generated by the growth o the
Shanghai-Pudong area since the late 1990s. The Shanghai-Nanjing
Expressway, which passes through Wuxi, was constructed in
record time in the 1990s, considerably reducing the travel time to
Shanghais Hongqiao International Airport and subsequently to
the new Pudong International Airport. Several new bridges and
waterways have also been constructed. The utilisation o all kinds
o waterways small and big canals, rivulets and rivers and lakes
is an important part o the modern communication system in
Wuxi as it was in the past.
In 1983, Jiangsu like several other provinces underwent an ad-ministrative reorganisation and was divided into preecture-level
cities (shi) each city having both urban and rural areas. The
guiding principle or this was the idea that cities must serve the
countryside and that the countryside must serve the cities. To inte-
grate rural development with urban development, the city leader-
ship was given a key role. Hence the jurisdiction o cities was ex-
panded to include rural counties. This new ramework represented
a major change over the commune system where the rural entity
had maintained a distinct character as an integrated unit o the
political economy. The new system entailed an institutional initia-
tive in rural-urban integration. In the 1980s, it maintained a bal-
anced strategy, trying to ull both rural and urban demands. In
the 1990s and later, however, it moved in the direction o what we
may call political urbanisation under which the entire economic
and social process was oriented towards ullling targets o urban
growth under the leadership o the party and the state.
Ater this reorganisation at the provincial level, Wuxi Shi con-
sisted o its metropolitan districts and three counties (xian). The
counties were Wuxi county, Jiangyin county and Yixing county.
Subsequently two o these counties became county-level cities
(shi) and Wuxi county ceased to exist as such with most o its units
merging with the metropolitan districts and other areas o the two
other counties. Thus Wuxi shi is the greater urban-rural area cov-ering 4,650 square kilometres. It should be noted that rural county
governments aspire to become cities so that they have greater
tb 1:annu avg r of Gowh of sd indo dungFv-Y pn n Wux (%)Five-Year Population GDP Gross Gross Light Heavy Grain Average
Plan (FYP) Output Output Industr y Industr y Produc- AnnualValue of Value of tion Wages of
Agriculture Industry Staff andWorkers
First FYP 1952-56 1.9 4.6 0.4 8.1 6. 8 32.2 0.8 0.6
Second FYP 1957-60 0.9 0.5 -1.7 2.1 -0.4 18.9 8.2 1.6
Readjustment
period 1961-1965* 2.2 16.1 16.8 19.0 15.0 30.1 17.4 -2.5
Third FYP 1968-72 1.5 5.0 -1.5 12.7 7.8 23.1 -1.2 0.1
Four th FYP 1972-76 1.2 9.7 5.0 12.0 10.6 13.2 6.6 0.7
Fifth FYP 1976-80 1.4 14.2 0.2 15.5 14.3 13.2 3.4 6.0
Sixth FYP 1981-85 0.7 16.6 6.2 19.5 14.1 18.6 3.4 9.7
Seventh FYP 1986-90 1.3 10.6 5.9 15.3 12.1 14.3 1.7 17.1
Eighth FYP 1991-95 0.5 24.6 9.7 36.2 28.3 28.2 -0.1 24.0Ninth FYP
1996-2000 0.3 11.8 2.9 9.4 22.9 21.1 -3.7 8.8
Tenth FYP 2001-05 0.7 14.3 0.6 18.8 16.7 32.3 -10.6 16.8
* Readjustment policies worked until 1965 after which the Cultural Revolution campaign waslaunched in 1966 and continued officially until 1976.
Source : Constructed on the basis of data in Wuxi Statistical Yearbook, 2005.
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acilities or industrialisation and the building o inrastructure
besides new construction or residences, commerce and produc-
tion. This does not mean that a city will not have any rural areas
within it. Actually there are many rural administrative units or
xiangwithin the jurisdiction o a county-level city. But it is equally
true that a xiang aspires or the status o a town
orzhen or similar urban privileges. (See Ap-
pendix (p 319) on the administrative structurein China and India.) In many rural counties,
there may be both xiang and zhen. Xishan city
was merged mainly with urban districts in
2001 (Table 8). As o 2004 Jiangsu province
consisted o 13 cities at the preecture level, 106
entities at the county level, o which 27 were
county level-cities two o them, Jiangyin and
Yixing, in Wuxi and 54 urban districts, o
which our were in Wuxi. In Jiangsu province, out o 1,410 town-
ship (xiang)-level entities, 1,019 were already designated as towns
(zhen) and 281 had become street communities or sub-districts
(jiedao), o which Hela was one.7
2 rng GDp, Gowng Unemloymen and Day
The early 1990s are a good dividing line or the history o Chinas
reorms and it holds good or Wuxis story as well. During the
1980s, the ocus was on rural reorms and in Wuxi the catalytic
role in this was played by township and village enterprises (TVEs).
The commune system had been replaced by the Household Re-
sponsibility System (HRS) under which land was contracted to
households on a long-term basis or cultivation. The amount o
land depended on the number o members in a household. The
total cultivable land was thus equitably distributed among house-holds. The amily now engaged only a part o its labour in agri-
culture and the vast surplus labour was deployed in TVEs. This
development not only increased household incomes but also al-
lowed the collectives, which owned the enterprises, to invest part
o their prots in health, education and in improving agriculture
itsel. This pattern was radically changed
ater 1992 when the orientation o Chinas
reorms was xed on export-led growth. This
is when strict administrative steps were taken
to promote political urbanisation.
In 1995, Wuxis population was 4.3 million
with 1.06 million living in the metropolitan
districts. Wuxi was designated by the central
government as one o the 15 key economic
centres in China and one o the 13 relatively
large cities, besides being one o the 10 major
tourist centres. Its industries during the 1980s
and early 1990s included textiles, machinery,
electronics, light industry, metallurgy, petro-
chemicals, building materials, ood process-
ing and pharmaceuticals. In 1995, the GDP o
the whole city was 78.1 billion yuan.8 In the
decade o the 1980s, the average annual rateo growth o industrial output in Wuxi was as
high as 15%. The ratio o heavy industry to
light industry also changed radically to 51.6: 48.4. Large and
medium-size enterprises were 32% o the total with 48% small
enterprises and the remaining raw material processing units.9
Rural enterprises contributed two-thirds o the total output value
o the whole city. During the period 1981-91, TVEs registered a
yearly 22% rise in their output value and the
Wuxi region acquired a special reputation or
their success. Wuxi has trade relations with123 countries and regions. The Wuxi Munici-
pality and each county-level city have their
own import-export corporations which auton-
omously engage in oreign trade as per the
stipulations o the central oreign trade regu-
lations. During the 1980s, a large number o
quality products in textiles, silk, light indus-
try, machinery, electronics, agricultural and
sideline products (shery, animal products, processed oods and
so on) were exported to many countries. During the 1990s, how-
ever, the Wuxi leadership decided to reocus its strategy on ex-
ports and launched a vigorous plan to attract oreign investment.
It succeeded in getting as many as 73 o the Fortune 500 compa-
nies to invest in 138 projects as o 2007.10
The ownership system o enterprises underwent a steady pro-
cess o change during the reorm period with the rise o private
enterprises leading to changes in the structure o employment
(Table 4). Collective units, which provided jobs to 2,11,800 per-
sons, nearly a third o the total number employed in 1980, pro-
vided employment only to 42,300 in 2004. In the case o the
state-owned units too there was a decline in employment o
workers rom 3,80,300 to 2,09,000, but they were still a substan-
tial source o employment. On the other hand, the private owner-ship system in the economy had grown substantially with non-
public units employing 2,76,000, which was more than the state
and collective units put together. This sector had employed only
22,500 in 1985 and experienced rapid expansion ater 1992 when
Deng Xiaoping called or expanding the market economy during
tb 2: Wux: chngng comoon ofemoyd Wokfo (1980-2004)
Selected Employed Primary Secondary TertiaryYears Workforce Industry Industry Industry
(Total in % % %
Million)
1980 2.056 49.6 38.3 12.1
1985 2.367 25.8 56.3 17.9
1990 2.449 22.2 58.6 19.2
1995 2.379 16.5 57.2 26.3
2000 2.210 22.7 48.1 29.2
2004 2.674 12.8 54.8 32.4
Source:Compiled from Wuxi Statistical Yearbook, 2005, p 47.
tb 3: Wux: Dmogh nd eonom tnd
1952 1970 1980 1990 1997 2000 2004 Remarks
Population (million) 4.32 4.34 4.47 Growth rate of non-agricultural
Of which Non-agricultur al 1.83 2.79 population is high
Employment (workforce) 2.32 2.21 2.74
GDP (billion yuan) 96.00 120.02 235.00 Fast growth
Primary Industry 4.55 4.8 5.18 Agriculture not growing muchSecondary Industry 56.3 68.31 135.35 Industry growing rapidly
Tertiary Industry 35.0 46.89 94.47 Also growing fast
Gross output value
of light industry 66.46 72.60 134.49 Growing fast
Gross output value
of heavy industry 75.68 105.30 323.01 Growing faster
Grain output
(million tonnes) 0.85 1.23 1.46 1.53 1.57 1.27 0.81 Declining substantially
Oil bearing crop
(thousand tonnes) 2.40 13.73 18.5 41.7 39.3 59.1 36.7 Clearly not encouraged
Aquatic Products 8.18 10.7 19.18 66.59 81.6 102.5 113.9 Slow progress of a traditional
(thousand tonnes) strength
Silkworm cocoons (tonnes) 5,465 6,124 5,658 2,304 1,139 1,115 603 Disappearing fast
Tea ( tonnes) 327 1,010 2,023 5,870 4,992 4,898 4,680 Continues to be an important
produce
Source : Wuxi Statistical Yearbook, 2005, pp 10-11.
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his southern tour to Shenzhen and other Special Economic Zones
(SEZs). Table 4 shows the major expansion o sel-employed urban
labour. Their number was minuscule in 1980, only 1,300, which
grew to 5,98,800 in 2004, again recording a sharp rise ater 1992.
But what remained constant was the massive proportion o rural
labourers to urban ones. It was 14,66,500 rural to 5,14,900 urban
in 1978 and was still
15,64,100 to 5,27,400 in
2004. In other words, rural
labourers were acing a
new situation o having to
nd work when employ-
ment in the collective en-
terprises shrank substan-
tially in the 1990s. Some
o them ound jobs in the
private sector while many
went in or sel-employ-
ment. But a large number
remained unemployed or
were in search o jobs.Thus whereas the eco-
nomy recorded impressive growth in GDP, the rural population,
including many in the city, aced an employment crisis.
Several important trends in incomes are noticeable i we look at
them over a 50-year span (Table 5). First, there was near stagna-
tion o wages rom 1952 to 1977, which was as low as around 500
yuan but grew 40 times to 20,442 yuan in 2004.11 O course, the
prices o commodities were low and collective social services were
available to all. And there was an egalitarian environment. There-
ore, to characterise this situation as collective poverty and de-
ride the achievements o the rst three decades is not air. But the
amenities o living were indeed minimal and the inrastructure was
poor. Second, the 1980s witnessed a massive growth o income
rom 550 yuan in 1978 to 2,449 yuan in 1990. This was the period
o rural reorms, especially collectively owned rural industries.
Thereater progress was remarkable, crossing the 10,000-yuan
mark in 2000. Thus Wuxi accomplished much more than Dengs
stipulation o a ourold increase the target being $1,000 that he
had set or Chinas per capita income in 1980. Third, incomes in the
relatively rural areas o Jiangyin and Yixing were not too ar be-
hind those in the urban districts until the late 1990s when dispari-
ties began to widen aster. I we look at the annual average wages
o sta and workers in 2004 in terms o where they were employed,those who worked in state-owned units got 23,879 yuan, almost
double that earned by collective units (12,674 yuan), and those
who worked in the private sector got 18,725 yuan, about one and a
hal times the wages o the collective workers. That was the aver-
age picture while some in oreign-owned companies or the joint
sector earned much more than workers in the state-owned units.
But the average annual earning o government employees in Wuxi
was 31,525 yuan higher than those working in enterprises (17,955
yuan) and in other institutions (25,538 yuan).12
Living standards improved rapidly during the reorms periodas was evident rom rising incomes as well as expanding savings
(Table 5). At the same time, the urban-rural gap sharply widened
during the 1990s even though incomes in both areas grew
steadily. Per capita savings deposits, which were substantial rom
1985 onwards, exceeded per capita earnings in 2000 and
remained so thereater.
Wuxis pattern o development has been to urbanise its village
communities. Thereore the townships (xiang) were allowed to be-
come towns (zhen). Even the ones that remained ater 1999 ceased
to exist by 2004. But villagers committees continued within the
towns even though their number declined when many o them be-
came street (jiedao) committees or village (cun)-level towns. Table 8
points out that villagers groups corresponding to the production
teams o the commune period continued to exist and perorm a cru-
cial role at the village level such as undertaking collective produc-
tion contracts. They were more unctional units than substantive
units o sel-governance.
We get a picture o the
state o income inequality
in Wuxi rom Table 6.
Nearly a quarter o the
population earned below
4,000 yuan while almostthe same proportion was in
the above 10,000-yuan
level. More than 40% were
in the middle-income group
o 4,000 to 8,000 yuan.
There were rich people in all the districts and cities and inequality
was pervasive. Table 7 shows disparate incomes in the rural areas.
The suburban district where Hela is located refected many o the
eatures o Wuxi city as a whole but as a critical decision-making unit
just as a district in India at the grass roots level, reveals some
aspects o the reorms story not captured at the large city level.
3 the D: Ubanaon of he rual
The process o political urbanisation meant reorganisation o units
both at the upper level oxian (county) and qu (districts) as well as
the lower levels o xiang and cun. As mentioned earlier, Jiangsu
province was divided into 13 shi in 1983. The Chinese charactershi
is used or cities at every level, so one has to nd out each time at
which level that city is located. For example, Beijing and Shanghai
are provincial-level cities. Wuxi, Nanjing, Hangzhou are preecture-
level cities. Then there are county-level cities such as Yixing and
Jiangyin within Wuxi. A metropolitan or urban area can also be a
shi or city. For rural China, the entity above the xiang level is thexian (county). In olden days the whole o Wuxi city was the Wuxi
Xian (County). From 1983 to the early 1990s Wuxi had our
tb 4: chngng Ownh sym nd emoymn p n (Million persons)
Year Employment Staff and In In Urban In Other Urban Rural
Workers State-owned Collective Forms of Self- Labourer s
(Total) Units Units Ownershi p employed
1980 2.056 0.592 0.380 0.211 0.0013 1.463
1985 2.367 0.740 0.452 0.265 0.022 0.0097 1.618
1990 2.449 0.798 0.480 0.269 0.048 0.016 1.639
1995 2.379 0.783 0.444 0.205 0.133 0.044 1.551
2000 2.210 0.593 0.320 0.086 0.186 0.108 1.509
2004 2.746 0.527 0.209 0.0423 0.276 0.598 1.564
Source: Compiled from Wuxi Statistical Yearbook, 2005, pp 47-48.
tb 5: tnd n avg annu Wg ofWok nd sff(1952-2004 , Yuan)
Year Total Wuxi Urban Jiangyin Yixing
Districts City City
1952 507 529 401 355
1957 508 568 420 429
1962 5515 580 466 451
1970 504 523 478 463
1978 550 574 512 493
1980 699 724 656 639
1985 1,113 1,137 1,086 987
1990 2,449 2,550 2,335 2,119
1995 7,192 7,488 6,998 6,153
2000 10,966 11,988 9,685 8,835
2004 20,442 21,295 20,252 15,956
From 1952 to 2000, areas which became a part ofXishan city and then merged with urban districts
were included in the total for Wuxi.Source:Compiled from Wuxi Statistical Yearbook, 2005, p 51.
tb 6: lvng sndd of Ubn nd ru rdn (1978-2004 , Yuan/per capita)
Year Disposable Net Income Per Capita
Income of Urban of Rural SavingsResidents Residents Deposits of
Residents
1978 340 181 39
1980 456 239 65
1985 958 698 302
1990 1,833 1,496 1,337
1995 5,763 3,976 4,708
2000 8,603 5,256 12,763
2004 13,588 7,115 25,943
Source: Wuxi Statistical Yearbook, 2005, p 74.
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divisions: Wuxi metropolitan area along with a suburban district,
Wuxi county and two cities the county-level cities o Jiangyin Shi
and Yixing Shi . In 2004, Wuxi county ceased to exist and was inte-
grated with the metropolitan area with many districts (qu). Again
there were two kinds o
districts in the metropoli-
tan area shi qu (urban
districts) and qu which were at the level o the
zhen (town) located in the
xian or the rural county.
Just as a shi (city) can
exist at dierent levels, so
can a zhen. There are
xiang-level towns called
zhen and there are cun
(village) towns also called
zhen. There may be small
urban centres which may not have the legal status o a xiangor
cunbut may be also called a zhen or a town. In a xian or rural
county there can be both xiang (township, which is a rural entity)
and zhen. Within a xiang (township) there may be cun as well as
cun-level zhen. Similarly within azhen (town at the xiang level)
there can be rural areas or cun and urban areas or zhen(towns at
the cun level).
A metropolitan areas urban districts are divided into streets or
neighbourhoods (jiedao), now designated as urban sub-district
oce (jiedao banshichu), and neighbourhoods are urther divided
into residents committees ( zhumin weiyuanhui). But the otherdistricts in the metropolitan area may have both jiedao (sub-
districts) as well as zhen.
The reason behind such complex intermixing o rural and
urban entities is the reality that the urbanisation process has
proceeded at a ast pace in contemporary China. The declara-
tion o an area as urban changes the nature o land ownership.
The economic planning acquires industrial direction. Land use
is subject to commercial and other regulations. The history o
Helas changing status rom a grain-producing, mulberry-
planting, silkworm-raising commune across the Liangxi riverrom Wuxi town to an industrial and commercial hub with a
modern residential neighbourhood integrated with the new
Wuxi city refects the corresponding administrative change. It
is important to note that the same process has taken place even
in remote areas o rural China. Whenever I asked local leaders
about their development plans, they said that they looked
orward to obtaining an urban status rom the higher authorities
so that their land value would increase and they could set
up industries.
Hela as a xiang was part o the suburban district when I rst
visited Wuxi in 1979. So we start with the development process in
the suburban district and then turn to the unolding o the reorm
process in Binhu district, where Hela was relocated rst as a zhen
and then as a jiedao (street or sub-district).
The main objective with which the subur-
ban district started its reorms was that it
should serve the city and benet by it. There-
ore, producing vegetables and oodgrains to
supply the city besides producing a certain
amount o grains or its own consumption was
a component o its economy. At the same time,
development o rural enterprises was encour-
aged as part o the national policy to contrib-ute to economic development. The district
government devised its strategy in such a way
that industry and commerce develop rapidly,
and agriculture be supported out o the collec-
tives prot rom this development. One o the
considerations underlying this strategy was
that every year more and more agricultural
land was taken over or the construction o in-
dustrial and commercial enterprises. Since the
district enjoyed autonomy in its economic
decision-making, it could utilise its resources,
including land, or the most protable pur-
poses. So in the 1980s much land was diverted
rom agriculture to industrial construction.
Because o collective ownership o land, such
diversions were easy. According to Chinese law, land in desig-
nated urban areas belongs to the state and land in rural areas
belongs to the collectives.
The ollowing gures indicate the high rate o growth achieved
by the suburban district during the period o high growth.13
1978 1986 1994
Total Output Value (million yuan) 220 1,600 13,239
GNP (million yuan) 110 3,890
GNP per capita (yuan) 12,727 24,072
tb 7: pooon of p c annu Ninom of ru Houhod (2004)
Income Level Wuxi Urban Jiangyin Yixing
Yuan ( Total) Districts City City
Below 2,000 5.50 4.00 6.00 8.00
2,000-3,000 6.50 6.00 8.00 6.00
3,000-4,000 11.00 10.50 6.00 17.00
4,000-5,000 10.25 12.00 6.00 11.00
5,000-6,000 11.00 10.50 8.00 15.00
6,000-7,000 11.75 10.50 11.00 15.00
7,000-8,000 8.75 8.00 11.00 8.00
8,000-9,000 8.50 10.50 10.00 3.00
9,000-10,000 5.25 4.50 9.00 3.00
Over 10,000 21.50 23.50 25.00 14.00
Source: Wuxi Statistical Yearbook, 2005, p 91.
tb 8: Wux: admnv Dvon (2004)
Di Qu/Distric t Zhen/Town Jiedao Ban Zhumin Cunmin Area Sq Km Land Area
shichu/Urban Weiyuanhui/ Weiyuan hui/ Out of theSub-dis trict Neighbour- Villagers Total Area
Office hood CommitteeCommittee
Wuxi city 59 24 453 1,061 4,787.61 1,502.08
Total (Rest being water)
Shi Qu/
Urban districts 22 24 298 337 1,622.64 510.44
Chongan district (metropolitan area) 6 34 8 17.59
Nanchang district (metropolitan area) 6 60 No villages 22.43
Beitang district (metropolitan area) 5 60 Do 31.02
Xishan district 8 Relatively 33 117 454.36
rural area
So no jiedao
Huishan District 6 Do 16 134 327.12
Binhu District 5 4 78 72 631.50
New District 3 3 17 6 138.63
Shi
(County Level city) 37 Relatively
rural area,
formerly Xian 155 724 3,164.96 991.63
Jiangyin city 16 Relatively
rural area,
formerly Xian 64 312 987.53 194.87
Yixing city 21 Relatively
rural area,
formerly Xian 91 412 2,177.43 796.76
Source: Wuxi Statistical Yearbook, 2005, pp 6-7.
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The story o the development process in the suburban district
was typical o the areas in eastern China which took ull advan-
tage o the national policy on reorms. Beore 1978, the main
ocus was on grain production. During the Cultural Revolution
period, those who paid greater attention to industry, commerce
and household production were criticised as capitalist-roaders.
The state had xed quotas or grain production by each level.
This resulted in an inadequate supply o vegetables to city. Therewas a large labour orce engaged in agricultural production. The
production cost remained high while the variety o products was
limited. Many such problems are pointed out by post-reorm
leaders while reerring to the commune period. But it should be
mentioned that while stress on grain production was undoubt-
edly there, diversication and development o appropriate rural
industries were denitely encouraged in the early 1960s and
were part o the overall commune policy.
With the reorms ater 1978, the countryside was asked to de-
velop on its own and supply vegetables and other arm products
to the city. Operating under the HRP, the suburbs diversied their
economies and developed agriculture, industry and commerce.
During the rst phase o the reorms, 1979-84, rural enter-
prises experienced rapid growth. The suburbs took advantage o
a cheap labour orce, both rom local sources as well as romacross the Yangtze river the area in southern Zhejiang which
was relatively less developed. To their advantage, enterprises
hired retired technicians rom the industries o Shanghai and Su-
zhou. As mentioned earlier, Wuxi had a tradition o industry and
commerce. Being the home o the Rong amily, the suburban dis-
trict was already connected with national and international
trade. It also acquired a lot o second-hand machines to launch
its enterprises. Once rural industries sprang up, members rom
practically every peasant household went to work in them. Every
xiang and every cun tried to set up new enterprises in the
early 1980s.
The second phase o reorms in the suburban district started in
1985 and lasted until 1991. Now, the eort was in upgrading the
quality o production. The cadres had already accumulated some
experience in running enterprises; managers
were trained and workers developed skills on
the job. Hence a good oundation had already
been laid. Farmers had acquired technical skills
in a variety o economic activities. Their experi-
ence o managing rural collective enterprises
was compared with that o state-run enterprises
and many lessons were learnt so that these
could be managed better. The availability ocheap labour and land now needed to be inte-
grated with the use o modern technology,
securing capital rom the national and international market.
Thus during the second hal o the 1980s, as district party leaders
proudly proclaimed, the suburban economy changedrom simple
processes and technology to large-scale and modern production.
During this period many joint ventures with oreign investment
came up in dierent xiang, including Meilido Hotel, Helas three-
star hotel with Australian collaboration.
The third phase was one o rapid market development aterDengs speeches during his southern tour in early 1992. Initiative,
investment and competition were the new creed. Rural enter-
prises diversied and vastly increased their production in the
wake o erce competition in the market. In the suburban district
o Wuxi, there had been greater demand than supply o various
kinds o goods in the initial year o reorms. Now the situation
was reversed. The market had more o all kinds o goods than
there was demand; the result was the various enterprises aced
more competition. The competition involved collective enter-
prises owned by the xiang and cun, state-owned enterprises and
an increasing number o private enterprises. By now indications
o an emerging crisis were visible. The collectively owned rural
enterprises ound it dicult to compete in the new environment.
The 1990s saw signicant changes in the orms o ownership
o enterprises. The suburban district encouraged the organisa-
tion o shareholding companies. Unlike in Guangdong Province
where private ownership grew very ast, in the Su Nan (south o
the Yangtze river) region, collective enterprises still continued to
be the main orm o ownership. But they too opened themselves
to shareholders. Shares could be theoretically bought by their
own workers and the members o the xiang, but soon it was more
prosperous enterprises, companies and entrepreneurs rom out-
side the township and even outside the country who took overownership. O 1,200 enterprises, 680 units possessing more than
three million yuan in assets were ready or a change in owner-
ship in 1996.
Opening to the national and the world market was the policy
ater the Fourteenth Party Congress in 1992. In this process,
many enterprises went bankrupt because their products were o
a low quality and they ailed to compete in the market. Some
loss-making companies were sold to private individuals or to
other collectives and companies. When the Fiteenth Party Con-
gress ocused on the reorm o state-owned enterprises in 1997,
the policy on the transormation o collective enterprises was al-
ready in operation and thousands o rural enterprises had been
sold to private entrepreneurs. Thus, the reorm and open door
policy continued into a new stage o market-oriented development
tb 9: Govnmn Ognon n ru a (1999-2004)
Level of Organisation 1999 2000 2001 2002 2003 2004
Township (Xiang) government 10 1 1 1 1 0
Town (Zhen) government 107 101 93 91 84 59
Villagers committee Cunmin
Weiyuanhui 2,080 1,821 1,540 1,355 1,272 1,185
Villagers group 25,198 25,183 24,834 24,392 24,122 23,561
Source: Wuxi Statistical Yearbook, 2005, p 165.
tb 10: pof of town n Bnhu D (2004)
Zhen/Town Total Employed Land Cultivated Financial Grain Remarks
Population Persons Area Area Revenue Output
(2004) (Hectare) (Hectare) (Million (Tonne)
yuan)
Hela 43,911 23,514 4,700 760 27.78 3,490 Small area for crops
Huazhuang 89,046 43,518 5,329 1,933 43.51 10,693 Larger town, More crops
Taihu 58,036 34,804 4,212 779 47.01 5,458 Less crops, more income
Mashan 30,402 19,885 4,788 842 120.21 3,294 Less crops, high level industrialisation,
high income
Hudai 34,404 18,224 5,509 818 13.74 5,870 Less crops, more land used for non-
agricultural purposes, still less income
Source: Jiangsu Statistical Yearbook, 2005, pp 614-615.
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in the 1990s in the suburban district and Wuxis urbanisation
process proceeded with a urther reorganisation o the district. A
substantial part o the suburban district, including Hela, was merged
with Binhu district and was later made into urban districts.
4 Hela: Fom rual commune and townh o Uban
Neghbouhood
In 1978, the suburban district had 15 communes. When the reormsbegan, the Meiyuan commune was merged with Hela in 1979 so
that the entire western suburban area would become an integrated
unit. By 1983, the commune structure was ully replaced by the
xiang administrative structure. From 1983 to 1999, Hela was one
o the 10 xiang (rural townships) o the suburban district o Wuxi,
ater which it acquired the status o a zhen (town). In the next step
in the process o urbanisation, it became an urban neighbourhood
or jiedao (street or sub-district) in 200414 (Table 12).
A closer look at the situation in Hela township in 1996 gives us
an idea about the eects o the rst 15 years o reorms, ater
which the process o political urbanisation was accelerated to
meet export-oriented growth targets. In 1996, Hela had an area
o 36 square kilometres with a population o 33,000 in 11,500
households. The township consisted o 13 cun or administrative
villages (ormerly production brigades) and 97 zeran cun or
natural villages/hamlets (ormerly production teams). With the
serpentine Liangxi river on its south, the Huiquan Hill on its east
and the Li Yuan (Peach Garden) and the Taihu lake on its west,
many o Wuxis beautiul spots were in Hela.
Waterways, hills, residences, actories and elds are what com-
prise Hela township.15 The waterways linked the Taihu lake with
the Grand Canal and were used both or navigation and shing.
Long rows o ully loaded boats are strung together and driven by
a single motor. The sh brigade it was still called a brigade with
the status o the cun is on the western bank o the Linagxi river.
The Xi Mei road, which links the Mei Yuan park with the Xihupark, runs parallel to the Jiangxi river. The Helakou (or Hela
gate) near the eastern end o the xiang was earlier the entrance
to the rural township rom the city. It has become a constantly
growing business area o the city. What was a quiet area in 1979
had in 2008 become a bustling activity centre signalling the
steady expansion o the metropolis.
The villages around the Helakou have naturally lost land to
the city and have opted or aster industrialisation and com-
merce. For obvious reasons, the adjoining villages are relatively
more prosperous compared to the ones that are arther rom thecity centre. Hela Xiangs richest villages are Liqiao, Xiemin and
Sunjiang. They not only set up plants to provide ancillaries or
city industries and the larger market, but also shops, restaurants
and hotels early in the reorm years. Thereater, many modern
industrial units have come up in this area.16
The western part o Hela is an expanse o hills, the largest
among them being the Longshan (Dragon Hill) range with Heng-
shan (Straight Hill) and Xishan (Copper Hill) on its south and
north respectively, besides a number o smaller hills. In the late
1970s, the hills were ull o pine trees and tea plantations. Some
slopes were also covered with mulberry trees or raising silk-
worms. The picture since the late 1990s is very dierent. The
hills have been cleared or quarries, thus presenting a sight o
bare slopes. Much o the mulberry land, which sustained silk pro-
duction, was rst used or orchards or later cleared or new in-
dustrial plants. It was argued that mulberry could be planted in
more interior villages rather than in the suburbs, which could be
used or more protable purposes.
A concrete road laid in the mid-1980s goes through the Heng-
shan pass by the side o Dong Hengshan village or hamlet to the
crematorium o the xiang. Further down this road, across the
hills, lies Qingxing village, the arthest rom the metropolitan
area. This is the only village where oodgrains, that is, rice andwheat, continued to be the major products till the late 1990s. Like
other villages, Qingxing launched projects or industrialisation
and commerce in the late 1980s and achieved rapid growth. But
throughout the 30-year period, the per capita income o this vil-
lage has remained the lowest in the xiang. It has its agricultural
elds, hills and quarries on which rural enterprises have come
up, and vegetable arming. But in the same time, other villages
have made even urther progress with their export-oriented in-
dustries and this western-most cun continues to lag behind in per
capita GDP terms. The leaders o the township always pointed to
this case as an example o an agriculture-based economy being
the cause o backwardness.
The southern border o Hela on the coastline o the Taihu lake
was ull o orchards, o tangerine, peaches and pears, and nu-
merous sh ponds in the 1980s and 1990s. This began to change
in the late 1990s. In 1996, green hills slopes occupied 16,000 mu
(1,066 hectares), sh ponds 3,000 mu, only 1,360 mu was used
or growing vegetables and 800 mu as orchards. The landscape
changed dramatically during the third decade o reorms and acto-
ries, hotels, residential colonies and commercial buildings have
come up on agricultural elds, the hill slopes and even lled ponds.
During the rst 15 years o reorms, the phenomenal rise in
amily incomes resulted in two waves o house construction inthe villages. The rst wave took place in the early 1980s soon
ater the reorms began and the communes restriction on house
tb 11: eonomy nd h Wokfo of town (Zhn) n Bnhu D (2004)
Hela Huazhuang Taihu Mashan Hudai
Town Town Town Town Town
Total households (hu) 12,698 23,925 17,978 9,015 11,967
Total population 43,911 89,046 58,036 30,402 34,404
Workforce 23,514 43,518 34,804 19,885 18,224
Persons employed in primary industry 2,334 8,577 2,383 686 2,791
Employed in secondary industry 16,093 26,734 27,192 13,833 10,573
Employed in tertiar y industry 5,087 8,207 5,229 5,336 4,860
GDP (million yuan) 2,021 2,920 3,962 2,700 1,051
Out of which
Primary industry 32.84 96.1 51.02 60 51.12
Secondary industry 896 2,174 2,172.96 1,680 810.59
Tertiary industry 1,092.16 650 1,198.6 960 190.06
Total financial revenue (million yuan) 277.85 435.18 470.14 1,202.17 137.42
Average net income per farmer (yuan) 6,855 7,342 8,060 7,337 6,861
Arable land (ha) 760 1,933 779 842 818
Total output of grain (tonne) 3,490 10,693 5,458 3,294 5,870
Total power of farming machinery (Kw) 5,728 12,060 7,071 5,510 8,749
Total Elec tric ity consumed (million Kwh) 111.37 191.12 487.57 2,065 9,708
Source: Compiled from Wuxi Statistical Yearbook, 2005, pp 186-192.
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building was withdrawn. Most o the households quickly built
new houses to provide reasonable accommodation to the second-
generation members o the amily.17 During my visits to the vil-
lages in Hela between 1980 and 1993, I ound most amilies
steadily improving their housing conditions and increasingly liv-
ing in newer houses tted with modern acilities. Whereas the
kitchens earlier mainly used coal, now they had gas and electric
cooking systems. Earlier they carried the night soil rom latrinesto the eld to use as manure. Now they had fush latrines. Wash-
ing machines and colour televisions were very common in the
early 1980s and more and more amilies acquired rerigerators
and air-conditioners by the end o the decade. Earlier having a
bicycle was a luxury, now more and more amilies had bought
light motorcycles, and later, some even owned cars.
Ater 2003 the situation started changing
very ast. Multi-storeyed apartment com-
plexes gradually came up once a village be-
came an urban neighbourhood. The restric-
tions on using agricultural land no longer
applied in the new situation. In 2008, when
I looked or my old contacts, they were hard
to nd.18
There were strict environmental regula-
tions to prevent pollution o the Taihu lake
and the rivers. As per the regulation o the
State Council o China, the construction o
certain kinds o industries within ve kilo-
metres o the lakeside was prohibited.19 Still
there has been alarming evidence o pollution o the Taihu. As
mentioned earlier, the algae pollution increased year ater year
until it assumed scandalous proportions during the summer o2007. Certain kinds o sh were not breeding the way they used
to because toxic levels continued to rise. The water management
system seems to have been upset in the past two decades and
every one or two years there are severe foods in this area.
peole and the Wok
Beore we look at the population gures a clarication is called
or. Because o the hukou (residency permit)system, during the
xiangperiod, Helas population gure did not include residents in
the quarters provided by the city government which were in the
territory o Hela. They worked in city-run actories and oces
though they lived in houses in the suburban area. Nor did it
include members o rural amilies who worked in the city and
had acquired a city residency registration. Though they had
houses in the village, they were enumerated as city workers. This
presents serious problems or statistical calculations. For exam-
ple, take the case o a amily where the husband is a worker in a
city-run enterprise and the wie in a xiang or cun-run actory; the
husband would be counted as a part o the urban population and
the wie, as a part o the rural population. Because o having a
house in the village, their household would be counted as a rural
household, actually peasant household. With the introduction o
the HRP, their land can be contracted and subcontracted whilethey may not work on it. Yet maintaining a piece o land in the
village continues to be a much-desired asset or most people even
i they work in urban enterprises. For certain purposes, the am-
ily is regarded as a rural household with some o its members as
urban workers. It gets highly complicated when one tries to work
out per capita output or per capita income. I this is complicated
or the suburban area, it is not so easy in a rural county (xian)
either. This is because there are zhen and urban enterprises in
the rural county as well. Even in the case o responsibilities and
privileges, an urban-rural dierentiation may be dicult. Forsecurity purposes, all citizens, irrespective o where they work,
are covered by internal security zones. For health and educa-
tional acilities, some items are common wherever they be, but
or some purposes such as paying ees or availing themselves o
social services the practice may vary rom place to place. Migrant
labourers rom Wuxis rural areas working in Shanghai are not
eligible or health and education acilities
there because they still carry the hukou
rom Wuxi. When migrants rom north o
the Yangtze river come to Wuxi to work,
they ace the same problem. Thus, the
hukou system and the urban-rural identity
problem complicate the characterisation o
the population. One has to see the context
in which a quantitative description o a
group is presented. Above all, one has to
careully check whether the per capita
gure is per capita labour in an enterprise
or a territorial unit or per capita in terms o
population o an area. We have to keep all
these in mind while examining the statistical data on Chinas
rural situation.
The population o Hela Xiang declined in the 1980s rom morethan 21,000 in 1979 to more than 18,000 in 1985 and urther by
the end o the decade. This was not due to a negative rate o pop-
ulation growth but because the status o members changed rom
rural to urban workers. In the 1990s, with the expansion o eco-
nomic activities in the township, the number continued to rise.
When Hela became a town (zhen) more land was allotted or in-
dustrial, commercial and residential purposes. Finally when it
was incorporated as a city street ( jiedao), urban housing in Hela
was not restricted any more. In 2006, Hela had a new prole with
many new modern housing colonies and more and more people
living in them.
Women workers constituted 52% o the workorce in the
1980s. In the 1990s, it was reported to be 50%. This change
refected a changing trend in employment. Initially more and
more women joined rural enterprises while men were either
engaged in agriculture and shing or in city enterprises. In my
interviews with local leaders they admitted that as technical
competence became more essential, male workers were
preerred by enterprises.
The decline in the xiang population was initially because o
the city absorbing more and more peasants rom it into urban
jobs. This was partly because o an agreement between the xiang
and the city that whenever the city acquired any xiang land, thenew enterprise had to provide employment or at least one per-
son or each mu o acquired land. Oten the job was given to the
tb 12: admnv su of H
Peoples commune (Renmin Gongshe) 1958-1983
Township (Xiang) 1983-1999
Town (Zhen) 1999-2003
Street/subdis trict (Jiedao) since 2004
tb 13: pouon of H
Population Households Workforce
1979 (Xiang) 21,236 6,778 11,042
1980 19,672 6,607 9,337
1985 18,400 5,000 8,436
1993 33,000 11,500
2001 (Zhen) 36,000
2004 (Jiedao) 43,911 12,698 23,514
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aected amily or the village unit. Besides, some city workers
had moved to the government apartments, thus reducing the
population registered with the xiang. No doubt a strict adherence
to amily planning norms, especially the policy o one-child ami-
lies as well as late marriage, had their impact on the population
gures. Employment opportunities, however, rose dramatically
in the late 1980s and early 1990s with the launching o many new
enterprises and urther diversication o the suburban economy.Rural income continued to rise substantially. So migration to the
city was not on a massive scale. The xiang gave a number o
acilities to its members which the city enterprises could not
aord until the early 1990s. The idea o living in a spacious
personal house, close to ones relatives in ones ancestral place,
while earning a good income was still attractive. That, however,
changed in the late 1990s.
Over these years there was a dramatic change in the occupa-
tions o the villagers. In 1979, as many as 80% o the workorce
was engaged in agriculture, sheries and other sidelines while
only 20% were engaged in small industries in the commune.
Besides grain production, the villagers also grew vegetables and
mulberry while being engaged in silk-worm culture, pig-raising,
and the poultry, dairy, horticulture and tea businesses. At that
time, as many as seven production brigades (later cun) were
mainly engaged in producing oodgrains. This drastically
changed with the coming o the new economic strategy. The
suburban areas were now encouraged to switch to industries
and cash crops to benet rom their proximity to the city. In
1985, the composition o the workorce was very dierent
6,400 workers or 75.9% in rural industries, 1,500 or 17.8% in
sheries, 250 or 2.9% in vegetable growing and the remaining
286 or 3.04% in grain production. It should be noted that manymembers while working in the actories also looked ater their
land in their spare time. The picture urther changed in the
1990s with less and less people engaged in agriculture. In 2004,
a little less than 10% o the workorce was engaged in primary
industries (arming, shing and animal husbandry) while
68.44% were engaged in secondary industries and 21.63% in the
tertiary sector. Since the late 1980s, commerce has emerged as a
major sector o the economy. The expanding sector o develop-
ment in this area has been what is called the third industry
(di san ye), reerring to tourism, travel, hotels, restaurants, and
entertainment. In Wuxis scenic environment, this sector has
expanded very ast, attracting oreign investment and the
deployment o modern technology.20
the poduon tend
The rst spurt in production in Hela township took place during
1979-84 when the value o industrial output reached 100 million
yuan. It rose to 270 million yuan in 1987 and more than 600 mil-
lion yuan in 1995. Meanwhile, the composition o the economy
changed signicantly. In 1995, rural industries accounted or
63%, commerce 35% and agriculture and sideline production 2%
o the total output value. Ater the announcement o the Ninth
Five-Year Plan in 1995, Hela decided to raise the proportion o thetertiary sector to 49% and reduce rural industry to 49%, while
agriculture and sideline production remained at 2%.
In 1996, Hela had 185 TVEs, o which 20 were owned by the
township and the rest by villages. In addition, there were 16
specialised enterprises that were autonomous and proessionally
managed. Together they possessed xed assets o 750 million
yuan. The Hela leadership described the townships new path o
development as a three-in-one policy, Taking agriculture as the
gold medal enterprise, taking industry as the backbone o the
economy and building the third industry (tertiary sector) as thesuperior enterprises (youshi qiye). The local conditions war-
ranted that line o thought. The rural industries o Hela were
described as standing on six pillars electronics, machinery, light
industry, textiles and garments, chemicals and metallurgy. The
authorities were never tired o mentioning the quality o their
products 50 products having won quality awards at the provin-
cial and national level, 20 o them such as electronic components,
printing machines, kitchen devices, centriugal pumps, umbrellas
and gloves being exported to Hong Kong, south-east Asia and
western Europe. Besides these, the 280 items manuactured in
Hela included electric cells, elevators both or passengers and
goods, bearings, cast iron tubes, water pumps, woollens and
toothpaste.21
As indicated earlier, the tertiary industry has developed very
ast. In 1996, there were 285 commercial units and ve market
complexes. Mention must also be made o Entertainment City,
Wuxi Roast Duck Restaurant, Tang Dynasty Food Street and
Unique Wuxi Taihu Pets Centre beside the Meilido Hotel. There
were ve joint ventures in Hela involving oreign investment. The
township has also gone abroad and set up two hotel resorts on
the Australian coast.
On the agriculture and sideline ront, Hela township produced
1,25,800 tonnes o vegetables in 1996. In horticulture, it pro-duced, among other things, honey peach in 800 mu. It achieved
the status o a sparkling project under which one tonne o sh
was produced or each mu o sh pond while maintaining ponds
on 3,000 mu. The township also has a dairy arm with 100 milch
cows and 1,000 pigs and a duck arm with an annual production
o 500 million birds. In all, 12 components o sideline production
were managed in the xiang.
The annual per member income in Hela Xiang grew threeold
to 1,100 yuan between 1979 and 1983 and rose urther to 1,592
yuan in 1986. Ten years later, the gure was not available, but it
was not less than 4,000 yuan. In other words, the average real
income o a member o the township rose nearly 10 times in less
than 20 years o rural reorms. The xiangauthorities explained
that now amilies had diverse sources o income: agriculture,
sideline production, and private commerce, besides wages rom
village, township and state enterprises.
It is also clear that income disparities are large. In 1996, some
members o the township were getting as low as 600 yuan per
year and some as high as 600,000 yuan. This trend widened ur-
ther in the next decade. However, there is unmistakable evidence
o a dramatic rise in peoples living standards as also o economic
growth in the township as a whole. Hela, which was a suburban
commune, has grown into a xiang with a prosperous economyand a new landscape, and is ast developing into an urban neigh-
bourhood. Starting primarily as an agricultural suburb with
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scenic beauty, it has become the hub o modern industry and
commerce in 30 years.
5 the Wux soy: imlaon fo Develomen theoy
The 3,000-year-old town on the Taihu Lake has transormed
itsel over 30 years rom one which had a rural silk industry base
into a medium-size global city o electronics and services. Broadly
speaking, it went through three phases o development. Duringthe rst phase, rom 1978 to the early 1990s, diversiying the
rural economy by promoting TVEs, modernising the textile indus-
try and expanding acilities to attract oreign investment were
the main trends. That was a period that witnessed the ast rise o
rural incomes.
The second phase, rom the early 1990s to 2001, was a period
o accelerated opening up to oreign capital and major invest-
ment by oreign companies. This was the time numerous Japa-
nese companies, including all the top ones, lined up to locate
their enterprises in Wuxi in a variety o industries ranging rom
electronics to entertainment and service industries. This period
also saw expanding linkages between Wuxis economy and that
o Shanghai and Pudong. The third phase began with Chinas
entry to the World Trade Organisation (WTO) in 2001 and saw
urther expansion o oreign capital investment in Wuxi. Ater
Hu initiated a scientic outlook on development and called or
a balanced and proportionate strategy aimed at ensuring envi-
ronmental sustainability and social justice, Wuxi decided on a
new set o priorities during the Eleventh Five-Year Plan begin-
ning in 2006. The new emphasis was on quality rather than
quantity in growth, and the deepening o reorms rather than
their widening or adding more and more private and oreign-
unded enterprises. An emphasis on innovation and more atten-tion to science and technology, and a greater stress on improving
the environment and saving energy in the production process
were the new thrust areas. Building Wuxi into a new ino-city
and an eco-city was the new mantra o development. In the
1990s, an open economy or oreign direct investment and trade
had become the engines o development o Wuxi as indeed the
whole Chinese economy. In the post-2002 period too that trend
continued until the world economic crisis hit all countries,
including China, in 2008.22
But during this period there was a clear attempt to address
specic social and environmental issues. The phenomenon o call
centres has grown very ast in recent years and many kinds o
outsourcing o services are located in this city. The per capitaGDP
o Wuxi, which had reached $3,000 in 2003, had risen to $7,000
in 2007 and was poised to reach $10,000 in 2010. However, Wuxis
Eleventh Plan acknowledged that
the problems o employment, income distribution, social security,
public service, social saety and disaster relie that concern peoples
economic, political and cultural rights very much, have gradually be-
come the major concerns o government ocials who intend to make
all citizens benet rom social development.23
There were three aspects to Wuxis reorms strategy, (1)political
urbanisation as the method o rural-urban development, (2) a lead-ing role played by the state and the collective economyin spear-
heading the overall process o development, and (3) controlled
integration with the global economy as a major actor in
development. In each case there were economic gains with some
socio-political and ecological costs.
First, political urbanisation as a principle o the territorial
reorganisation o Jiangsu province was a continuous process. The
province was divided into preecture-level cities, o which Wuxi
was one. Rural counties such as Wuxi county, Jiangyin county
and Yixing county became county-level cities. Then townships orxiang like Hela rst became urban towns or zhen and then sub-
districts o the urban district. The urban status allowed the
enorcement o dierent rules to take over land or real estate
development and commercial and industrial units. This brought
economic gains. But the villagers rights over their land no longer
existed. The democratic process o multi-candidate elections at
the village level under the Grass-roots Government Law o 1998
ceased to apply.24 The village-level unit was no longer in charge
o the local environment. The district-level and city-level organi-
sations had taken over these responsibilities. They also had to
ull nationally set goals o production declared by the central
government and pursued at each level by the CPC unit.
The element o democratisation that was indicated by the
emergence o the village (cun) as the basic unit o peoples sel-
development, which was urther enhanced by the introduction o
multi-candidate competitive elections ater 1998, now suered a
reverse. Towards the end o the 1980s it was hoped that the town-
ship and village would emerge as active units o grass roots
democracy and development. But that process was stalled with
the new preoccupation with growth. In the 1980s, Hela township
had its own autonomous corporations managing agriculture, in-
dustry, sheries and sideline production. Twenty years later, their
economic activities were under the control o big corporationswith Wuxi city or higher authorities playing a supervisory role.
Village-centred politics had important implications or women in
village enterprises. In most o the villages, at least 25% o the
members o the representative conerence were women. In a vil-
lage party branch at least two o the ve members were women.25
Ater the township became a street committee and the village
became a neighbourhood committee, the unctions o these bod-
ies were reduced mainly to overseeing civic peace, law and order
and health and amily planning.
Second, Wuxi was an example oten discussed at the national
level o the su-nan modelor the model to the south o the Yangtze
river, where the collective economy played a decisive role in
integrating agriculture with rural industries, the rural economy
with the urban economy, the local economy with the national
and global economies, and the public sector with the private
sector. Fei had enthusiastically commended this model. The
township and village governments and their collective enter-
prises led this process. The result was that during the 1980s there
was an extraordinary rise in peasant income, an expansion o
acilities or health and education, and vast opportunities or the
employment or women. From the 1990s onwards, the political
leadership o the state and collective units continued but with the
changed political line o export-oriented growth. The administra-tive structure o political urbanisation now enorced a top-down
leadership to direct local units in production and management.
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june 27, 2009 vol xliv nos 26 & 27 EPW Economic & Political Weekly318
Earlier it had been a general political direction rom the upper
level to the lower levels. The su-nan model was now overturned
or all practical purposes. The local collectives at the township and
village levels became mechanical agencies o the higher level.
Even i the local units wished to continue with rural industries,
they could not do so or they could not ull the standards set by
the centre. Thus the urban-rural terms o trade, which were or a
short period avourable to the countryside, were once again turnedagainst the rural population to promote urban growth.26
During the high point oTVEs in the 1980s, women were major
beneciaries because even as middle-school graduates they got
employment in local enterprises. In many actories o Wuxi,
women constituted over 50% o the workers.27 However, the
wages were not equal or men and women as it was said that they
were linked to quantity o production. This phenomenon contin-
ued in most enterprises throughout the reorm period and has
been raised requently by the All-China Womens Federation
(ACWF) with the leadership. The retirement age also diered or
men and women with women retiring ve years beore men, who
retired at the age o 55 in most enterprises. Womens employment
opportunities shrank considerably in the 1990s and theACWF o
Wuxi started new training programmes in 2001. These were
mostly in sectors such as restaurants, tourism, domestic services
and accounting.28 At the village level, the new emphasis in the
work o theACWF was on promoting education among women
and on health and amily planning, the latter being a continuing
point o attention. The positive trend o progress towards equal
opportunity, access to diverse spheres o employment and politi-
cal participation that was noticeable in the 1980s seems to have
slowed down in the 1990s. A growing number o discussions on
these issues at the national level took place ater the Fourth WorldCongress o Women in Beijing in 1995.29TVEs in particular and
the diversied rural economies in general had unleashed orces
o democratisation and social development. Rural health and
education had got a boost with nearly universal access to social
services because o the allocation o collective income to these
sectors. But 30 years later, citizens complain about medical treat-
ment having become too expensive and the education system
being too disparate in quality.30 The consequences o this have
been particularly adverse to women.
Third, the open door was no doubt an important strategy or
Chinas successul emergence as a global economic power.
Indeed, that was a principal component o Dengs basic line o
Reorm and Open Door adopted by the Third Plenum o the
Eleventh Central Committee o the CPC in December 1978. Wuxis
geographical location between the Taihu lake and the Yangtze
river and its proximity to Shanghai had made it a well-connected
city with the outer world throughout Chinas modern history. Silk
production and the silk trade had complemented agricultural
production beore 1949. During the 1980s, the expansion o rural
industries was the key to the regions rapid development. To pro-
duce goods or export, these enterprises invited oreign capital,
which initially maintained the momentum o rising income o the
local population. In the 1990s, the transition took place to amainly export-oriented economy as a part o the new growth
strategy. The vision o Wuxi as a modern service industry centre
acilitated by oreign capital excited the citys leadership and tted
well with the growth strategy o the Jiang Zemin era. The
Japanese, who had a special ascination or Wuxi rom the days o
their occupation o the region during the Sino-Japanese War in the
1930s, poured in huge amounts o capital. The light industry city
was now at a new stage o technological development and integra-
tion with the global economy was a positive actor that helped it.
But the terms o the integration o the local economy with theglobal economy were governed by the new elites o the area and
the country as a whole and not by the common people. The choice
o industries did not take into account its eects on the environ-
ment until crises acquired serious proportions. Whether employ-
ment opportunities or local people grew adequately to absorb
them was not a consideration. The gains made by women in the
1980s when job opportunities had expanded were not preserved
and there were increasing retrenchment o both men and women
oten women were the rst to be red. The combination o agri-
culture, rural industry, light industry and modern service indus-
tries was now replaced by a new economy where the leading role
was played by service industries. When China ormulated poli-
cies to respond to the world economic crisis ater its exports ell
signicantly in 2008-09, the Wuxi leadership launched an exer-
cise in April 2009 to reorient its production plans. The plan was
to produce or the local market and Chinas domestic market
rather than rely excessively on the world market. Even in the case
o exports, there was a new thinking to reduce dependence on
the European and North American markets.31
The Wuxi story, which may be an important window to Chinas
reorms, tells us a ew important things about contemporary de-
velopment theory. First, development through political urbanisa-
tion the Wuxi way may achieve ast economic growth but has itssocial, environmental and political costs. The alternative may be
politically integrating rural and urban areas, each having its dis-
tinct characteristics, combining democratic sel-governance with
sustainable socio-economic development. Second, in terms o the
role o the state and collectives, there is the need to actively
encourage a combination o public, private and cooperative orms
o ownership but with a clear leadership role played by the public
sector. The danger o an authoritarian leadership wielding state
power to sometimes promote state and collective ownership and
sometimes private ownership or the market economy has been
exposed. Thereore, there is simultaneously the need or demo-
cratic institutions at the grass roots level to ormulate develop-
ment strategies so that appropriate orms o production and
management can be designed to achieve economic, social and
environmental objectives at the same time. The ramework o a
socialist market economy as practised during the last two dec-
ades did not ensure that. It was so elastic that it was used to jus-
tiy the development o prot-making enterprises, mainly to
achieve high growth rates rather than ull socialist objectives.
Third, the globalisation process that integrates local production
with the global market has to be critically monitored to empower
local institutions and groups to decide the terms o their integra-
tion with the world market. Only then can there be a air balancebetween autonomy and integration o the local and regional
political economies with the global economy.
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Notes
1 In 1979, I was hosted by the Minist ry o Educationand the PRC and in 1985, 1987, 1993 and 1996 bythe Chinese Academy o Social Sciences. In subse-quent years, whenever I had some conerence inChina, I extended my trip to Wuxi or a ew daysby directly approaching the Wuxi Foreign AairsBureau. I had an interpreter on most occasionsthough sometimes I managed on my own. Duringthe 1980s and 1990s, I was always accompanied by
a local ocial or a scholar rom the host Institute.2 Fei Xiaotong, Peasant Life in China (1939, 1945),
Kegan Paul, London. He describes the study as adescriptive account o the system o consumption,production, distribution and exchange o wealthamong Chinese peasants as observed in a villageand stresses the equal importance o the traditionaland the new orces in explaining the process ochange, 1. See also Feis Chinese Village Close-Up(1983), New World Press, Beijing, which containsthe abridged version o the 1936 study and reportson Feis visits in 1946, 1957 and 1980 in addition toa research groups ndings in a 1980 survey o the
village by his colleagues at the CASS.
3 Lynda S Bell, OneIndustry, Two Chinas: Silk Fila-tures and Peasant-Family Production in WuxiCounty, 1865-1937 (2001), Stanord UniversityPress, Stanord, Caliornia. She argues that
local elites continued to ally with the state orassistance, protection, and legitimacy wheneverpossible, 11.
4 Wuxi Water Back to Normal ater Pollution Cri-sis,Peoples Daily online (15 June 2007).
5 For a discuss ion o the 17th Party Congress line,see Manoranjan Mohanty, Grappling with theSuccess Trap in China, Economic & PoliticalWeekly (3 November 2007).
6 They include the Jiangsu Yixing Economic Devel-opment Zone, Yixing Environment TechnologyIndustrial Park, Liyuan Hi-Tech Industrial Devel-opment Zone, Wuxi Hi-Tech Industrial Develop-ment Zone, the Wuxi-Singapore Park and the WuxiTaihu National Tourist Resort Zone, and also theHuishan Economic Development Zone and XishanEconomic Development Zone.
7 China Statistical Yearbook, 2006 (2006), ChinaStatistics Press, Beijing, 3.
8 $1= 6.83 yuan; Rs 49.67 in April 2009.
9 Data rom interviews with city cadres.
10 Wuxi: A General Introduction by the Wuxi CPCCommittee (30 December 2008) http://xcb.chinawuxi.gov.cn
11 Even during the commune period, township en-terprises had sprung up, making considerableprot or the collectives. The prot was said to be10 million yuan in 1958, and it rose to 109 million
yuan in 1970. Robert Terrel (2001), The Jiangsu Miracle: Modernising Chinas Most Economically Developed Province, New World Press, Beijing,164.
12 Wuxi Statistical Yearbook, 2005 (2005), ChinaStatistics Press, Beijing, 56.
13 Data collected rom interv iews with district cad-res. Annual Report o the Hela Xiang Director tothe Xiang Peoples Congress (1996). While the1986 data was collected in the course o an inter-
view with Jiang Hanling, Deputy Director o theSuburban District on 12 October 1986, the 1996data was procured through discussions withZhang Weinan, Deputy Director o the District inOctober 1996.
14 Interestingly, a 1985 publicity brochure o Heladescribed itsel as Hela Gongsi in Chinese andHela Corporation in English. This indicateschanging the terms o discourse radically romthe commune o Marxist ideology to a moderncorporation in a capitalist market economy.
15 We will reer to Hela as a township (xiang) as itwas still reerred to as such by the people in 2008.Only ocials describe it now as jiedao or street.
16 In 2001, the ollowing major enterprises werelisted in the Hela Xiang brochure as invitingoreign investments:
Wuxi Baotong Electronics Co, a Sino-Japanesejoint venture that had achieved a sales volume o14 million yuan in 1999 and exported products toHong Kong, Taiwan, south-east Asia and westernEurope.
Wuxi Lutong Electronics Technology Co Ltd, aprivately owned enterprise.
Wuxi Taihu Machinery Factory, set up in 1966 itsassets were worth 12.5 million yuan and its prod-ucts had a nationwide market and in south-east
Asia. A actory designated by the Ministry o Rail-ways or purchases, it had 152 workers in 1999.
Wuxi Jiangnan Printing Machine Plant, launchedin 1980, manuacturing printing and packagingmachines.
Wuxi Dajishan Industrial Instrument Factory, col-lectively owned by the xiang, producing kitchenappliances, stainless steel measuring instru-ments, and medical instruments. It had a marketin China and south-east Asia.
Wuxi Xingdi, a leatherwear company owned by aTaiwan merchant since 1993, producing ticket
wallets and the like or export to Europe andsouth-east Asia.
17 In the middle o 1980, I lived in one such house inDa Ding village in Hela, as a guest o Lao Mo(Madam Mo) o the Ding household.
18 The old village Da Ding Cun had ceased to exist.My old contacts Ding Maoshen and his wie LaoMo were living in an apartment o a multi-storeybuilding while their two sons had been allottedapartments in other buildings and their grandson
was waiting or his allotment. All this was in ex-change or the amily house they had owned intheir village until it was demolished or the con-struction o new buildings.
19 Because o the threat o pollution caused bychemical and other manuacturing industries,there was a conscious emphasis on commerce andtourism rom the late 1990s onwards. Thirty Yearsof Reforms and Opening Up, http://chinawuxi.gov.cn (30 December 2008).
20 Report on the Work o Government by Mayor MaoXiaoping at the th Plenary Session o the 13thMunicipal Peoples Congress, http://chinawuxi.
gov.cn (29 December 2008).21 Interview with Hela Party Secretary in Septem-
ber 1997.
22 Wuxis employment situation suered setbacks inthe wake o the global economic crisis. Wuxi PartySecretary Yang Weize Discusses Plans with Leaderso Twelve Enterprises Severely Aected by theGlobal Economic Crisis, Wuxi Daily online(17 April 2009).
See also Our City Makes Great Eorts to Stabi-lise and Promote Employment, Wuxi Daily online(13 April 2009).
23 Wuxi Embarks on the Formulation o the 11thFive-Year Plan or Development in the Year 2020,Wuxi government press release, Wuxi Dailyonline (17 December 2008).
24 See George Mathew, Loca l Government Systemin India and China: Learning rom Each Otherin Manoranjan Mohanty et al (eds.), Grass-roots
Democracy in India and China: The Right toParticipate(2007), Sage, New Delh i.25 In the villages o Hela and Lihong I ound that this
was the case in 1980, 1985 and 1987.
26 An expert on Wuxi had hoped in the early 1980sthat the city would now on contribute to rural de-
velopment and had said, Ater more than 30 years dependence on the rural area, which istotally disproportionate to its repayment, the citymust move along a path o development whichallows it to make a contribution to the rural area.Chi-hsien Tuan (1987) , Wuxi City and WuxiCounty An Analysis of a Pilot Census, New WorldPress, Beijing, 128.
27 In the Wuxi Silk Factory, or example, I noticedthat o the total 1,570 workers, as many as 81%
were women in 1980 to 1985.
28 Interv iews with Wuxi Women Federation leaders
in September 2001.
29 Political leaders in Wuxi, however, took a dier-ent view o this. During interviews in 2001 and2005, they said that the new prosperity o theamilies gave women the choice o staying athome and leading a comortable lie. WomenFederation leaders, however, agreed that womenaced new diculties in the new environment.
30 Individuals had to pay at least 50% o their healthcare expenses in 2005. With only 2.7% o GDPdevoted to healthcare and on other idices takeninto account, China ranked 188th in providingair healthcare among the countries o the world.I G Cook, TJB Dummer, Changing Health inChina,Health Policy, 67 (2004), 329-43.
UNDP, Human Development Report 2007/2008(2007), Palgrave Macmi llan, New York, 262. Mor-
tality under the age o ve declined sharply inChina rom 120 per 1,000 in 1970 to 27 per 1,000in 2005. In 2005, maternal mortality was 45 per1,00,000 live births in China against 450 inIndia, 263.
31 Wuxi Party Secretary Yang Weize DiscussesPlans With Leaders o Twelve Enterprises Severe-ly Aected by the Global Economic Crisis, Wuxi
Daily online(17 April 2009).
andx: lo suu n conmo y chn nd ind
India China
States 28, Union Territories 7 Provinces 22, Autonomous Regions 5, Central Municipalities 4, Special
Administrative Regions 2
Divisions Prefectures (Shi)Regions 333, Cities 283
Districts 625 Rural: Counties (Xian) 2,862 Urban: County-level cities (Shi) 374
Zilla Parishad County representative CongressMandatory elections since 1993 County party committee
Sub-divisions Urban district s (Qu) 852 Street/Subdistrict committees (Jiedao weiyuanhui)
5,904 Residents committees (Zhumin weiyuanhui)
Blocks/ Taluks Townships (Xiang): Rural 43,258 Towns (Zhen): Urban 19,883
Mandatory electio ns since 1993 (Peoples Commune until 1979-83)
(Panchayat Samitis) Xiang representative congress
(About 6,000) Xiang party committee, lowest level of government
Gram Panchayats Villages (cun), Village-level towns (Zhen)
(About 2,65,000) Villagers committees (Cunmin weiyuanhui)
Lowest level government (Cluster of villages/hamlets)
(Cluster of villages/hamlet s) (About 6,20,000)
Mandatory elect ions Competitive elect ions
at all levels since 1993 only at village level since 1998
Gram Sabhas Village representative conference
Guiding role of the village part y branch (Production brigade until 1979-83)
Pallis/hamlets Work groups (production teams until 1979-83) at hamlet level