Out of Mao's Shadow: The Struggle for the Soul of a New China (24 page)

The letter had an immediate impact. On the same day she sent the letter, Li forwarded it to his successor on the Politburo Standing Committee with a note, “Comrade Jia Qinglin, please examine and coordinate.” Three weeks later, Jia passed the letter on to the mayor of Beijing with an another instruction, “Comrade Qishan, please review and study.” The next day, the mayor, Wang Qishan, added his own note and sent the letter to a deputy mayor, “Zhihua, please review and handle.” The deputy mayor, Liu Zhihua—a man who would be arrested three years later on Olympics-related corruption charges—then forwarded the letter to another subordinate, “Comrade Jiasheng, please review and handle.” Little more than a month after Chen sent the letter, the land transfer was approved and construction began on yet another project that would reshape the city while making her an even wealthier woman.

B
EIJING WAS ONCE
a marvel of urban design. Positioned on the northern tip of the north China plains, it first served as the national capital nearly one thousand years ago during the Jin Dynasty. But it wasn’t until Mongol invaders razed the city in the thirteenth century and Kublai Khan rebuilt it as his capital that the distinctive
hutong
s first appeared. Then, during the Ming Dynasty, the city took its modern shape, with an immense wall surrounding a twenty-five-square-mile expanse of streets, lakes, parks, and temples. For a time it may have been the largest city in the world, with the emperor’s palace, the Forbidden City, at the very center. Power and status emanated from the palace along lanes laid out in a nearly symmetrical grid, with the aristocratic elite living closest to the palace, merchants and artisans occupying residences farther out, and most commoners consigned to neighborhoods outside the walls. The majestic design gave the city its form, but it was the
hutong
s that defined life in old Beijing. The quiet alleyways, no more than thirty feet wide and lined with walled courtyard residences, fostered a traditional sense of community, and they survived hundreds of years, outlasting the Ming emperors, their Qing successors, and the short-lived Republican government.

When the Communists seized power in 1949, a new era of urban planning began. The Soviets advised the government to abandon Beijing’s “feudal” past, and transform the city into a modern industrial capital, with grand boulevards and huge state factories. Some intellectuals objected, urging the party to preserve the city wall and the neighborhoods inside, but Mao had little use for the architectural legacies of imperial rule. The city wall was torn down in the 1950s, and in the 1960s all but a few of the city’s massive gates were destroyed, too. Hundreds of temples were closed, demolished, or converted into offices and factories. The plaza south of the Forbidden City was expanded and became Tiananmen Square, the largest city square in the world, flanked on both sides by imposing socialist edifices, the Great Hall of the People, and a museum of revolutionary history. Mao moved the party’s headquarters into an imperial compound nearby, and government agencies occupied many of the residences that had once been home to the elite. Over the decades, the city’s population mushroomed as outsiders were brought in to work in new factories, but because Mao’s production-obsessed economic planners gave housing short shrift, serious overcrowding resulted. Conditions deteriorated as courtyard houses originally built for one family were subdivided to accommodate as many as a dozen households. For the most part, however, the
hutong
s remained.

It was only after Mao’s death that old Beijing was destroyed and replaced with today’s congested sprawl of concrete, steel, and glass. Market reforms fueled the frenzy of destruction and construction, but what really made the city’s transformation possible was the party’s decision to strip homeowners of their property rights. In 1982, the state declared for the first time that it owned all urban land, but it quickly backtracked by letting people keep land-use rights. The distinction opened the door to a genuine real estate market, and because of the chronic housing shortages in Beijing and other cities, land values skyrocketed. Developers sensed a chance to strike it rich. If they could persuade party bureaucrats to sell them land-use rights at a steep discount instead of at market prices, they could make a killing.

More often than not, local officials found a reason to cooperate. Sometimes it was a hefty bribe. Sometimes it was a promise by the developer to build roads, or a municipal building, or apartments for city employees. Sometimes it was just a desire to expedite a project that would look good on their records and help them win promotions. But the most important reason the bureaucrats struck these deals with developers was the desire to privatize the difficult job of evicting and uprooting entire communities. In Beijing, the government held the rights to about two-thirds of the land in the city’s central districts. Private homeowners held the rights to the rest. Any major project would be complicated by two tasks—the payment of compensation to residents in public housing who were being evicted despite the socialist promise of an affordable home, and the acquisition of land rights from private homeowners. By inviting developers to step in, local officials passed these burdens on to them.

In the early years of the real estate boom, one industry insider told me, developers could buy land-use rights in central Beijing from the government for about 10 percent of the final value of the projects that they planned to build. The biggest budget outlay for these projects was not the cost of construction but the expense of evicting residents and demolishing their homes. Naturally, developers sought to boost profits by paying the residents they evicted as little as possible in compensation. Private homeowners presented the biggest problem, because they could demand a market price or even refuse to sell. In reality, though, local officials often approved projects and sold land-use rights to developers without going through the trouble of buying or seizing them from homeowners first. Officials then conspired with developers to pressure owners to give up their land. Developers often hired thugs to intimidate residents while police looked the other way, and local authorities sometimes cut off electricity, water, and heat to the holdouts. If necessary, the government intervened on behalf of developers and ordered a forced eviction on questionable legal grounds. Altogether, between 1991 and 2003, more than a half million families in Beijing were evicted by developers. One Chinese scholar estimated that during the 1990s, private homeowners in Beijing lost at least $4.5 billion in land, and tenants of public housing were cheated out of more than $7 billion in compensation that should have been paid them under government regulations. At the same time, if the city had auctioned off land at market prices instead of making sweetheart deals with developers, it could have made at least $5.5 billion more in revenue. Altogether, developers and local officials in Beijing fleeced the public of more than $17 billion in the 1990s—the equivalent of nearly all the city’s economic output in 1995.

Such brazen collusion between real estate companies and party officials to deprive homeowners of their property did not go unchallenged. Tens of thousands of residents filed lawsuits in Beijing against the city government and developers, and street protests over evictions became a common occurrence. But the party instructed the courts to dismiss the lawsuits and used police to contain and repress the demonstrations. Sometimes the property clashes had fatal consequences. In February 2006, five security guards employed by a developer beat to death a resident who refused to give up his home in a neighborhood slated to be torn down for a new apartment complex. The same month, another group of thugs attacked the owners of a courtyard house on a doomed
hutong
in western Beijing, killing an elderly woman.

Protests against mass evictions have taken place in almost every major city in China. In Xian, a group of nuns were beaten when they tried to stop developers from seizing a piece of church property. In Nanjing, a desperate homeowner poured gasoline over his body and lit himself on fire inside the eviction office that a developer had set up in his neighborhood. The more stunning the cityscape, the more likely that it was built by developers and party officials who ran roughshod over the rights of ordinary residents. This was the dirty little secret behind the glittering new office towers and apartment buildings that transformed China’s big cities. The evictions and demolitions in Beijing set the tone for the nation, but the worst violations occurred in Shanghai, where party leaders and developers built a new skyline that became the defining image of China’s booming economy. Shanghai likes to present itself as the most modern of China’s cities, but in fact, the authoritarian impulse among officials there is stronger than in much of the rest of the country. The newspapers are on a tighter leash, and the security apparatus is more menacing. More than a million families were evicted in the drive to remake the city, and when large numbers tried to resist, city officials crushed their campaign with little regard for legal niceties. Residents were jailed without charges or committed to mental hospitals. The lawyer who took up the cause of the residents, Zheng Enchong, was sentenced to three years in prison in 2003 for sharing information about the fight with a human rights group in New York. At the same time, party authorities tried to defuse public anger by arresting the city’s most prominent developer, Zhou Zhengyi, who ranked eleventh on the
Forbes
list of the nation’s richest people. In 2006, Zhou’s patron, the powerful Shanghai party chief Chen Liangyu, was toppled in a purge as well.

The Jinbao Avenue project was typical of the real estate deals in Beijing and other cities. Chen Lihua’s company obtained the land rights on the cheap from the government in 1998, paying about $250 per square meter. In return for the lower price, she agreed to build the new road and a government building for Dongcheng District, and to cover the cost of evicting four thousand to five thousand families, about a third of whom owned their homes. In total, she pledged to invest about $750 million in the project, which would demolish neighborhoods on fifty-five acres of land in the heart of old Beijing and replace them with office towers, a shopping mall, two hotels, a luxury apartment complex, schools, and other facilities. It was the biggest and most ambitious project Chen had ever undertaken. It was also a nearly risk-free venture. Her initial outlay was minimal, because once she obtained the rights to the land, she used it to secure a substantial loan from a state bank. Later, Chen also persuaded local officials to let her raise the height of several of the planned buildings, doubling the floor space of the project—and her potential profits.

In late 2002, two years after her company broke ground on Jinbao Avenue, the new boulevard opened to traffic. The buildings along the avenue were scheduled to be completed before the 2008 Olympic Games. Chen’s company still brags about how smoothly and quickly it was able to oust residents of the old neighborhoods and tear down their homes. “It took us twenty-eight days to demolish the houses of 2,100 families,” Wang Shouyuan, a former city official whom Chen hired as the general manager of the project, told me. “This was unprecedented at the time. We finished the demolition and relocation work on the street, and it caused a sensation in Beijing. There were no appeals, no negative reaction at all.”

I asked Wang how the company was able to persuade so many people to give up their homes so quickly. “For demolition to proceed quickly, it depends on a combination of strength and force,” he replied. “Strength means giving enough money. Force means the backing of the government. That’s the key.”

O
F COURSE,
W
ANG
was stretching the truth when he said there had been no negative reaction to the Jinbao Avenue project. Liu Shiru was one of several residents in the demolished neighborhoods who tried to fight back. Many others accepted relocation only reluctantly, because they concluded they couldn’t win against someone as wealthy and connected as Chen. The most prominent opponent of the project was Hua Xinmin, a well-known cultural preservationist in Beijing. Her grandfather had been the city’s chief engineer during the early years of Communist rule, and her father had served as a senior municipal architect and was among those who tried to persuade Mao to protect the old city. The family fled to France during the Cultural Revolution, but Hua returned to Beijing in the 1990s and took up her father’s cause, fighting to prevent developers from tearing down historic courtyard residences and other architectural gems. It was a difficult task, and she lost more battles than she won. Her opposition to the Jinbao Avenue project, however, was more personal: she grew up in a house on one of the
hutong
s that would be destroyed.

Hua had spoken eloquently about the importance of preserving Beijing’s cultural heritage, but when she began campaigning to save her family home, she made a different case: she complained that developers were violating the property rights of homeowners. It was a more powerful and politically sensitive argument, one that threatened the business model fueling the redevelopment of China’s cities and exposed the hypocrisy of the party’s pledge to protect private property rights, which it enshrined in the constitution in 2004. Hua’s argument also posed a subtle challenge to the party line that individual sacrifices were necessary for the good of society. She pointed out that ordinary people made the sacrifices in these development projects while people with money and power—people such as Chen Lihua—reaped the benefits.

Over the years, Hua had cultivated relationships at many state media outlets, and a magazine once named her one of the nation’s most influential intellectuals. But it was one thing for a journalist to write about cultural preservation, and quite another to question the government’s commitment to protecting private property rights. Despite Hua’s efforts, few in the state media were willing to take on Chen Lihua or the Jinbao Avenue project. Chen, on the other hand, had no problem finding reporters to file puff pieces. She was known to ply journalists with gifts and cash, and generally it was money well spent. The newspapers were full of stories explaining how Jinbao Avenue would ease traffic downtown and stimulate economic growth. As for the demolition of the old
hutong
s, only residents with the sunniest attitudes about having their homes torn down were ever quoted. “The party and the government are improving living conditions for ordinary people, putting the interests of ordinary people first,” one said. Meanwhile, Chen was presented as a patriotic, motherly figure who gave generously to residents so they could move out of “old and dilapidated neighborhoods” and find modern new housing. When she visited the demolition zone, one paper claimed, residents unfurled a banner thanking her and expressed “ecstatic” support for “the Olympics and the renovation of the capital.”