It Takes a Family… To Live in a Chinese Village

Part III: Not Much Owned – Not Much Needed

Since it is hard to generalize about village life, I will try to give the reader a feeling about incomes and living standards through a few examples:

Village #1

The first village we visited, on the way from Beijing to Shijiazhuang, was probably the poorest, which is why we mention it. Otherwise, since we lacked practice in asking questions, the information is sketchy.
At the entrance were a number of rectangular, shabby greenhouses (maybe 3000 square feet each) made up of brick walls on two sides and covered with coarse translucent sheets of plastic.

In one of those, a middle-aged lady was growing vegetables (tomatoes, zucchini, etc.) and some fruits. Her income this year from this greenhouse was depressed because of some disease affecting her vegetables: she expected to make less than the equivalent of $400, whereas, in a very good year, she would make about $2,500. The order of magnitude was confirmed by an old man working two similar greenhouses a little farther. From those, he expected to earn about $1,200 this year.

However, each farmer also owned a plot of land away from the village, where they grew wheat and corn (this is not rice-growing country). We were told that Hebei province allotted less land per head than nearby Shanxi province, where farmers have the right to exploit about two Mus per head. One Mu equals about 6,700 square feet, so that an eight-person family is entitled to about 2.5 acres.

These farmers’ total annual income thus was probably two-to-three times higher than the figures they quoted us for the greenhouses alone. This is more than the official per capita statistics, but several family members do not generate any income (grand-parents, children). On the other hand, some revenue probably came from members of the family working outside the village.

For example, we visited a somewhat big but typical family compound inside the village, comprising one small courtyard surrounded by “houses” (big rooms, really). One of the “houses” was 20 years old and decrepit, but another was still under construction. The family consisted of nine persons -- two sons (one working in the city and probably coming home only a few times a year) and their wives, three small children and the grandparents. This family also grew wheat and corn on their land, but had no greenhouse. On the other hand, they owned some pigs.

Village # 2

In Li Lian Pu, a 1000-person village (300 families) near Shijiazhuang, we were invited into the home of a very young 73-year old lady. Widowed 30 years ago (toward the end of the Cultural Revolution), her four children have by now all moved away. One son works in the city and, of her three daughters, one works in the nearby county town and two are married to village farmers. Under the local allocation system, the lady still has the use of a 3000 square-foot plot of land, on which she grows fruits and vegetables, and a small lot in the village on which she built seven or eight small rooms. Presumably because she had served as village leader for a number of years, that village space was never re-allocated, even after her children left, and she was allowed to keep the rooms.

In the largest of these rooms, to which is juxtaposed a small storage/kitchen area, she lives with one bed, one table, two chairs and a small wash basin for her ablutions. There is running, cold water in the courtyard: in the summer, water is saved in large plastic, open bags and warmed up in the sun; in the winter, she probably takes an occasional shower at a public bath in a nearby, larger village for 30 cents or so. Some photographs on the wall (a rare effort at decoration) illustrate trips she took to other towns while a village “official”.

The other six small rooms (with one cot and wash basin each) are rented out to workers and students from the nearest county town (20 minutes away by bus), for about 60 RMB per month (about $90 a year). So, her total annual income, including the proceeds from the fruits and vegetables she does not eat herself, must be little over $1000 a year, plus any (small) pension to which she might be entitled. However, her annual expense for taxes, electricity plus some food and occasional clothes (and showers) probably leaves some savings in addition to what she may have put aside while she acted as village leader. My guess is that she has helped her children more often than the other way around.

Village #3

Dong Pu is a more prosperous village of 2,000 people. Some farmers grow crops; others grow vegetables in apparently well-kept greenhouses. But still others are involved in services such as transportation. There is a large outdoor warehouse for timber at the village entrance: the timber is received by truck from forests some distance away and then used by neighboring villages for construction and other purposes.

One man owned some machines (sowers, small harvesting combines, etc.) which he rents to other farmers for 3 RMB per Mu (about $2.30 per acre). His annual income, from rentals and his own crop (his four-person family was allotted seven Mus) is about $3,600 per year. He told us that in this province (Hebei), a number of people have set up small, local factories (probably more like workshops) and are “even richer”.

My (local) guide explained that it is very cheap to operate a small factory in Hebei province. A friend of hers, who works in a textile factory, gets paid $1.20 per day but often works ten hours without overtime pay. That friend gets practically no holidays, which is now illegal. But she and her co-workers don’t know their rights (they should receive triple pay for working on any of the three annual compulsory one-week holidays). Instead, they were ecstatic because their boss recently took everyone out to a local restaurant, in lieu of vacation or bonus, for working on a holiday. Some migrant construction workers in smaller cities earn $145 per month but work 10-12 hour days … and often have trouble getting paid by their employers. This is in sharp contrast to the companies owned by friends of mine in Shanghai or Nanjing, who strictly comply with the much-improved social laws. In fact, they often exceed the laws’ requirements -- especially when they have Western customers such as Wal-Mart or Carrefour, which routinely send inspectors to perform social and environmental compliance audits.

Village #4

One of the executives at a Nanjing (private) company of 3,000 employees arranged for his Ayi to take me to her village. (Ayi, literally “auntie”, is the name given housekeepers). Even though there are frequent buses from Nanjing to her village (theoretically about an hour away), she only goes back a few times a year and had some trouble finding the way. The road, under repair but with no construction work in sight, was in poor condition and uncomfortable, with only one lane open.

We were invited into the ayi’s family house and soon joined by eight to ten people, including the village leader. This ten-room, two-story house (a rare occurrence) was built last year on the plot of the family’s old house. In it live the grandfather (72), one son (45), who works the farm lot, two ladies and a grandson that still goes to school. The village is now inhabited mostly by a few middle-aged people who still work the small farm lots (mainly fruits and vegetables), as well as grandparents who keep the whole family’s children. However, when two sons, one daughter, one granddaughter and the ayi, who all work in the city, come back for the holidays, the house is full.

The farm lot allocated to the family is small (less than one-fifth of an acre) and the fruits and vegetables grown on it certainly do not suffice to sustain the members of the family living here. The village is too far from town to allow rental of rooms to city workers, and nearby plants employ local people, who do not need rooms so that, in spite of an apparent ample supply of rooms, there is no income from rentals. Only a few villagers own farming machines, and they get a small income from renting them to the others. Yet, the sparsely populated village is more prosperous than most of those I visited, as many young men and women work in the city (Nanjing is a great pole of urbanization) and they presumably contribute some of their income, as well as occasional gifts, to the family.

Not surprisingly, the rooms are mostly bare, or furnished with a simple cot. Some look like they are mostly used to store spare items. In the main bedroom, one antique-looking bed was passed from generation to generation and received by one of the couples for their wedding. Otherwise, there is very little furniture, mostly in the entrance/living room: one table and very low, tiny stools that look (and feel) like old children’s furniture. Yet, that room also has a big ceiling fan and, adjoining it, a real bathroom with bath and sit-down toilet.

The paradox continues at the local stores of a nearby small town (ten minutes by car). They are very basic and the outdoor food market (scheduled to soon be covered) is also very tentative. Yet, some stores carry washing machines and even some large air conditioners (more likely for commercial use). As usual, luxuries are a matter of priorities: questioning the villagers about the scarcity of TV antennas, we were told: “the village has cable”. Asked what they would buy if this year’s crop was particularly good, several answered: “a washing machine.” However, a Singaporean friend asked the same question of a younger man while visiting a village in another province and was answered: “an M.B.A.” Education, at various levels, remains the main way to escape the condition of farmer and figures prominently in rural families’ budget priorities.

This house, and our hosts, crystallized for me the strange combination of low incomes, with nevertheless some discretionary spending power, and equally low but sometimes surprising needs or desires. The low needs derive from poor and sporadic, though growing, information about the outside world and what is available out there – despite the occasional visits from the family’s city dwellers. In addition, there seems to be little curiosity about the outside world. It occurred to me that, while the villagers we met on this trip were willing, almost eager to speak about themselves, no one asked us any questions about our lives or our countries (a French friend who lives in China was accompanying me on this visit).

We asked them how they felt about China sending an astronaut into space. They did not seem to care very much and, we found out, no one knew about America sending a man to the moon more than thirty years ago. When asked what they thought about America, almost all the villagers we met on this trip answered: “A very rich and powerful country”. But one elder added: “We are not afraid. We already confronted them in Korea.” Contrary to the young professionals in big cities, villagers do not seem to know a lot about contemporary America.

In the same vein, notions of village democracy and the potential for farm capitalism arising from new property rights, often touted in the Western media, seemed very distant from this village reality. The village leader is named by the regional leader and, aside from arbitrating minor village disputes, “what the regional leader says, I do”. There aren’t even many discussions about communal expenditures: villagers pay about $12 per head in annual tax to the regional government ($1.20 for the old and the unemployed), and some minor part of this tax comes back to the village – apparently seldom and at the regional leader’s will. Villagers complained that the tax is a big burden, although they apparently were glad to pay $17 a year for cable TV. We got confirmation that (probably as a result of the central government’s policy toward farmers) taxes had been cut this year. They said “by 40%”, though no one knew what a percent is. But our friend’s ayi later confirmed that her family’s taxes had been cut almost in half.

* * *

Finally, I got a glimpse of how the propensity to spend will, eventually, spread to the villages. After visiting the old, illiterate woman in another village, I entered a kindergarten where children were playing. No one in that village had ever seen a foreigner, so that I elicited some interest among the children, who followed me everywhere. On my way out, an older kid (maybe ten years old) shouted in English: “Hello! Howayou?” Children are taught a few phrases of English as early as primary school, and there are regular programs on TV teaching English to children. The young generation will know much more about the outside world and will certainly be more curious as well.

More immediately, in another village, a relatively well-to-do elder said, pointing to a young woman: “If you want to know someone really rich, you should talk to her.” So, we did. This young woman’s family had the biggest house in the village (18-20 rooms on two floors), where only nine persons lived (two grand-parents, two sons and their wives, and three children). The sons owned two small factories making preserved eggs and chicken legs. In addition, the family bred dogs (six big black dogs were housed in the courtyard).

The (pretty) young woman was clearly more elegant and fashion-conscious than most of those we had seen before (including wearing high heels in the mud). I asked where she bought her clothes and, whereas most village women would dress in the nearby small town, she shopped in a farther, larger city with department stores. And she probably read fashion and women’s magazines where she was made aware of things she should own as a modern Chinese woman. It occurred to me that she was an opinion leader. Since time was pressing, we had to decline her invitation to tea, but I bet the house was equipped with more machines and conveniences than we had seen thus far. Other young, perhaps less-rich, housewives in the village must have felt strong pressure to follow her lead in purchasing discretionary items: here, the engine of change had already been set in motion.

The remaining question is how, and at what pace, farmers’ incomes are likely to grow to match the emerging desire to acquire new “luxuries” and modern conveniences. We will try to answer this in part IV of this series.

François Sicart

June 19, 2004

The information contained herein has been obtained from sources believed to be reliable and to the best of our knowledge is complete. The validity and completeness however cannot be guaranteed by Tocqueville Asset Management. Nothing herein constitutes investment or any other advice and should not be relied upon as such. This document has been prepared solely for information purposes and does not constitute an offer or an invitation to buy or sell securities. Any reference to past performance is not necessarily a guide to the future. Tocqueville Asset Management L.P., their affiliates and their officers, directors, employees, advisors or members of their families as well as the clients for whom they manage portfolios; 1) May have positions in securities or options of issuers mentioned herein and may make purchases or sales of the securities or options while this publication is in circulation; 2) May hold directorships in corporations discussed in this publication. The opinions expressed in this document are those of Tocqueville Asset Management as of the date of the writing and are subject to change.