The politics of land use conversion in china case study of a guangdong county 6

Chapter Six
The Predatory State in Land Use Conversion
6
The Predatory State in Land Use Conversion
In examining officials’ motivations and incentives to convert agricultural land to non-
agricultural uses, the preceding chapters have sporadically touched on the
consequences of indiscriminate land use conversion, which extend beyond the loss
of agricultural and arable land. This chapter juxtaposes local officials’ benefits against
the social costs or externalities of land use conversion to highlight the repercussions
of their self-serving and opportunistic behaviour.
The following case study of Sihui’s Xiamao town shows how land use conversion and
the promotion of industrialization translate into direct gains for local cadres. The
importance of economic targets in the evaluation of cadres’ performance and the
provision of cash rewards for fulfilling the goals induced local cadres to actively draw
industries and capital to the town, even at the expense of converting land illegally to
bypass land use quotas.

While the conversion of agricultural land in the name of industrialization appears to
have benefited local officials, the process of using land as an instrument to drive
urbanization had given rise to various externalities – rural disputes over land issues,
environmental degradation, and idle land. The health hazards posed by heavy
pollution industries relocating to Sihui and the questionable sustainability of this path
of industrialization are adverse to the long-term development of the society. An
analysis of the local government’s expenditures further reveals that little had been
spent on collective goods despite the substantial revenues from land described in the
last chapter. This, together with local accounts and evidence of poor governance,
Yew Chiew Ping
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Chapter Six
The Predatory State in Land Use Conversion
suggests that the Sihui government had been predatory in manipulating land

resources to its advantage and to the detriment of the society.
About Xiamao Town
Xiamao town is located in the hilly region of central Sihui. In 2005, it has a total
population of 31,748 and an agricultural population of 30,154 spread over 13 villages
and two neighbourhoods.
1
This population composition is reflected in Xiamao’s land
use distribution. Over 90 percent of Xiamao’s total land area is agricultural land, of
which arable land makes up 23.5 percent and forests 51.6 percent. Capital farmland
constitutes 28,800 mu or more than 80 percent of the total arable land. Construction
land represents 5.7 percent of Xiamao’s land area while unused land, which
comprises of grassland, ridges between fields and tidal land, makes up another 2.8
percent.
2

There are three industrial parks in Xiamao town, which has a total land area of
160,470 mu after its merger with the adjacent Longwan town in 2003. The 1,010 mu
Fulong industrial park and the 500 mu Xiamao industrial park were set up in 2002.
3
Till date, both had drawn a number of non-ferrous metal, metal processing, and
electroplating plants.
4
Construction of the 10,000 mu Longwan ceramic industrial
park, part of the Longwan new construction materials industrial zone, began in 2003
as a key project of the Xiamao town government.
5
In 2003, the town government
claimed to have drawn ten enterprises and leased over 4,000 mu of land to
1
“Sihuishi Xiamaozhen jiben gaikuang” (“General situation in Xiamao town of Sihui”), available at http://

www.xiamao.gdsihui.gov.cn, accessed 6 June 2005.
2
Sihuishi Xiamaozhen renmin zhengfu (Sihui city Xiamao town government), “Sihuishi Xiamaozhen tudi
liyong zongti guihua (1997-2010)” (“Land use master plan of Sihui city’s Xiamao Town, 1997-2010”),
March 2006.
3
Sihui nianjian 2004, pp. 213-15.
4
“2005 nian Xiamaozhen zhaoshang yinzi luoshi qingkuang rending biao” (“Confirmation of the
fulfilment of investments drawn to Xiamao town in 2005”); “2006 nian Xiamaozhen yinjin xiangmu luoshi
qingkuang queren biao” (“Confirmation of the fulfilment of investment items drawn to Xiamao town in
2006”).
5
Sihui nianjian 2004, pp. 213; “Sihuishi (shengji) minying kejiyuan” (“Sihui (provincial level) non-state
scientific technology zone”), available at , accessed 2 September 2005.
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investors.
6
As with the other industrial zones in Sihui, the Longwan ceramic industrial
park had attracted industries relocating from nearby regions such as Foshan, which
is renowned for its ceramic industry as well as the pollution caused by the ceramic
manufacturing plants.
7
Promoting Industrialization in Xiamao Town
As part of its industrialization drive in response to upper level governments, Xiamao
town meted out additional rewards for the offices and Villagers’ Committees (VCs)
under its supervision in 2005: two percent of land proceeds would be allotted to each

individual who successfully brought in an investor to set up a factory in the town’s
industrial zone; for attracting an investor to set up a factory in other areas within
Xiamao town, individuals would receive a one-time payment amounting to ten
percent of the town’s economic gains (excluding taxes) arising from the investment in
that year; individuals who secured investments ranging from below 500,000 yuan to
above one million yuan would be awarded a percentage of the government’s
economic gains, ranging from four to ten percent. To further entice local cadres and
officials, cash rewards are meted out promptly within three days upon the receipt of
payment for land and other expenses.
8

Economic development as the top priority of the Sihui government, specifically the
drawing of investments and businesses, had been built into its cadre target
responsibility system and tasked to subordinate departments since 2003.
9
Table 6.1
and Table 6.2 show the targets and how they are weighted in the evaluation of
Xiamao’s departments and VCs. Although only 20 points were allotted to the target of
6
Sihui nianjian 2004, pp. 213.
7
“Foshan taoci yaolu wuran Zhusanjiao jushou” (“Pollution from Foshan ceramic kilns is the worst in
Pearl River Delta”), Nanfang dushibao (Southern City News), 25 April 2007.
8
Xiafu document no. 8 (2005), “Guanyu yinfa Xiamaozhen zhaoshang yinzi jiangli banfa de tongzhi”
(“Regarding the notice to promulgate Xiamao town’s measures for rewarding the attraction of business
and investment”).
9
Zeng Guohuan (Sihui city mayor), “Sihuishi 2004 nian zhengfu gongzuo baogao” (“Sihui city
government work report 2004”), speech at the third meeting of Sihui city’s 13

th
People’s Congress, 3
March 2004.
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Chapter Six
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drawing investments, the 30 points allotted to fulfiling the remittance target hinged on
the department’s revenue too. While specific departments were tasked with bringing
in investments, this did not preclude other departments from doing the. In Xiamao, a
manufacturer of clothes-hangers with an investment of three million yuan was
brought in by the bureau of classified documents (baomiju) and the bureau of
archives (dang’anju).
10
Table 6.1 Evaluation System for Xiamao Town’s Departments
Target Points Evaluation Criteria
Economic Department
1. Meet the required sum of remittance to
the town
30 5 points deducted for failing to fulfil the
town’s requirement every half-yearly
2. Fulfil the task of drawing 180 million
yuan of investments; proper follow-up of
the execution of the investment items of
the previous year and this year
20 2 points deducted for incompletion of task; 2
points deducted when brought-in businesses
fail to invest within the same year; 5 points
added for every 10% increase in sum of
investment with a cap at 10 points

3. No occurrence of major safety incidents 20 5 points deducted for every major safety
incident
4. Improve the management of Xiamao
development zone and its enterprises,
ensure the timely resolution of labour
disputes and collective incidents
20 5 points deducted for every case of
compensation, labour dispute or collective
appeal to upper levels
5. Expand the taking out of social labour
insurance by enterprises
10 3 points deducted for incompletion of task
Fulong/ Longwan Industrial Zones
1. Meet the required sum of remittance to
the town
20 5 points deducted for failing to fulfil the
town’s requirement every half-yearly
2. Fulfil the task of drawing 180 million
yuan of investments; proper follow-up of
the execution of the investment items of
the previous year and this year
30 2 points deducted for incompletion of task; 2
points deducted when brought-in businesses
fail to invest within the same year; 5 points
added for every 10% increase in sum of
investment with a cap at 10 points
3. No occurrence of major safety incidents 20 5 points deducted for every major safety
incident
4. Improve the management of the
development zones and their enterprises,

ensure the timely resolution of labour
disputes and collective incidents
20 5 points deducted for every case of
compensation, labour dispute or collective
appeal to upper levels
5. Expand the taking out of social labour
insurance by enterprises
10 3 points deducted for incompletion of task
Source: “2007 nian xianban kaohe shishi xijie” (“Evaluation details of departments, 2007”).
10
“2006 nian Xiamaozhen yinjin xiangmu luoshi qingkuang queren biao” (“Confirmation of the fulfilment
of investment items drawn to Xiamao town in 2006”). This is not an isolated case. Economic targets had
been assigned to various non-related departments such as the meteorological bureau, statistical
bureau, civil affairs bureau, central organization bureau etc. See Liu Zhihua and Huang Xinjian,
“Qiantan difang zhengfu zai zhaoshang yinzi zhong de juese dingwei” (“On the role of the local
government in attracting businesses and investment”), Zhengfu yu jingji (Government and Economy),
No. 8 (2004), pp. 36.
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Table 6.2 Evaluation Criteria for Village Level Cadres of Xiamao Town
Target Points Evaluation Criteria
1 Birth control 15 0.1 point deducted for each percentage short of the town’s
target
2 Attracting businesses
and investments
10 5 points deducted for incompletion of task; no additional points
for bringing in agricultural items, 3 points given for each
additional industrial item

3 Social order and
governance
10 2 points deducted for every collective incident (5 persons and
above) that bypasses the village; 1 point deducted if incident
reaches town-level; 2 points deducted for deteriorating public
order
4 Medical co-operative 10 1 point given/deducted for achieving 5 percent above/ below
target; no ceiling for adding points
5 Military work 10 3 points deducted for incompletion of task; 3 points given for
every additional enrolment
6 Progressive increase
in village fixed
revenue
7 3 points deducted for failing to reach target; 3 points given for
each additional base amount; 3 points deducted for failing to
hand over the village’s accounts on time
7 Party building 5 2 points deducted for failing to fulfil the town’s requirement
8 Village hygiene 5 2.5 points given for completion of task, beyond which 2 extra
points are given; 2 additional points for winning the title of the
city’s exemplary village or the province’s hygienic village
9 Party newspaper and
journal
5 3 points deducted for incompletion of task
10 Agricultural irrigation 5 3 points deducted for failing to fulfil the town’s requirement
11 Building of
grassroots
organization
5 1 point deducted for failing to fulfil each of the town’s
requirement
12 Production safety

and forest fire
prevention
5 2 points deducted for each case of production safety lapse; 2
points deducted for each case of serious mountain fire
13 Civil affairs 5 2 points deducted for failing to fulfil each of the town’s
requirement
14 Blood donation 3 1 point deducted for incompletion of task, 1 point given for
each additional name
Source: “2007 nian cunji kaohe shishi xize” (“Year 2007 implementation details of village-level
evaluation”).
The 13 VCs of Xiamao were ranked according to their performance and scores in
various arenas as shown in Table 6.2. At the village level, ten and seven points were
allotted respectively to the drawing of businesses, investments and growth in village
revenue. That all VCs outperformed themselves by scoring 15 points in drawing
investments, beyond the ten points allotted for this task, attests to the effort and
attention given to attracting businesses and investors to Xiamao.
11
Although scholars
have suggested that certain targets such as birth control have veto power (yipiao
11
“Xiamao zhen 2005 nian cunji kaohe xiangxi biao” (“Detailed table of Xiamao town village-level
evaluation in 2005”). On the predominance of economic targets in the cadre target responsibility system,
refer to Wu Xun, “Tudi jiage,” pp. 12-13; Li Hongbin and Zhou Li-An, “Political Turnover and Economic
Performance: The Incentive Role of Personnel Control in China,” Journal of Public Economics, No. 89
(2005), pp. 1743-62. See also O'Brien and Li Lianjiang, “Selective Policy Implementation,” pp. 172;
Edin, “Local State Corporatism,” pp. 278-95; Tsui Kai-yuen and Wang Youqiang, “Between Separate
Stoves and a Single Menu,” pp. 71-90; Wang Jun, “Zhongzubu shixing,” pp. 7-8, 26; Susan H. Whiting,
Power and Wealth in Rural China: The Political Economy of Institutional Change (Cambridge, U.K.:
Cambridge University Press, 2001), pp. 101-19.
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Chapter Six
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foujue) over the rest, rendering a cadre’s other accomplishments futile, lapses in birth
control appeared to be of no consequence for Xiamao’s VCs.
12
Of the four villages
that were granted additional three merit points for overall performance, three had
underperformed in birth control, registering the lowest scores ranging from 7.9 to
12.1 among all 13 villages.
13

There are also further awards and accolades for the danwei which excelled in
drawing investments, as specified in a document released by the Sihui’s Party
committee and government in 2006:
14
In accordance with the regulations in “The 2005 Target Responsibility System
for Towns (Street Offices), Departments under the City’s Direct Jurisdiction
and Vertical Departments,”. . . the Party committee and city government have
decided to commend and reward the danwei that have received following
awards in 2005: the target responsibility system appraisal award; award of
outstanding contribution to national and local taxes of towns (street offices);
special award for being in the country’s top one thousand towns in small town
integrated development; award for attracting foreign capital; award for
exceeding the quota in attracting businesses and investment.
15
Xiamao town was one of the few danwei that received a total of four awards, a
testament to the town officials’ priority and zest in promoting economic development.
In 2005, the Party secretary of Xiamao town single-handedly procured more than 300
million yuan of investment while other local leaders such as the town mayor and vice

mayors attracted a combined investment sum of 22 million yuan.
16
Both the town’s
Party secretary and assistant Party secretary scored the full ten points for drawing
investments to Xiamao in the appraisal of their work performance.
17

12
Han Qiang, “Dui jianli he wanshan,” pp. 41.
13
“Xiamao zhen 2005 nian cunji kaohe xiangxi biao.”
14
Zeng Guohuan (Sihui city mayor), “Sihuishi 2007 nian zhengfu gongzuo baogao” (“Sihui city
government work report 2007”), speech at the second meeting of Sihui city’s 14
th
People’s Congress, 23
March 2007.
15
Siweiban document no. 3 (2006), “Guanyu 2005 niandu gongzuo mubiao zerenshi kaohe jiangli de
jueding” (“Regarding the decision on the 2005 target responsibility system and rewards”).
16
“2005 nian Xiamaozhen banzi chengyuan, xianban zhaoshang yinzi huizongbiao” (“Year 2005
summary of Xiamao town teams’ and departments’ results in the attraction of business and
investment”).
17
“2006 nian xianban, banzi, ganbu wancheng zhaoshang yinzi qingkuangbiao” (“Completion of the
drawing investments by teams, departments and cadres in 2006”).
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The Predatory State in Land Use Conversion
As with many other towns and townships, the tax-sharing system between Sihui city
and Xiamao town is a hybrid of “dividing taxes, contracting at different levels.”
According to a town official, most of the township revenues are remitted upwards to
the county, which then allocates funds for township expenditures. While the town
manages its own surpluses and deficits, it may request for additional funds from the
city government in times of emergencies. Town cadres have the incentive to collect
more tax revenue than the target set by the upper level government as the town is
entitled to a 20 percent tax return for the revenue collected in excess. This helped to
ease the town’s finances.
18
From 2005 to 2006, the town attracted a total of 1.36
billion yuan in investments, with an annual output of 1.22 billion yuan.
19
The town’s
tax contributions were equally impressive. In both 2005 and 2006, it exceeded its tax
quota by more than 75 percent, collecting 11.2 million yuan and 21.2 million yuan
respectively.
20

Excessive Land Use Conversion
The frenzy to industrialize in Xiamao comes at a cost: the excessive conversion of
agricultural land. This section verifies the actual area of land converted for industrial
use in Xiamao against the planned land area for industrial sites as drawn up in its
land use plan. It suggests that the extent of land use conversion undertaken by the
town government belies the land use quotas laid down on paper in Xiamao’s land
use plan.
18
Fieldwork in Xiamao town, Sihui, October 2007.
19

“2005 nian Xiamaozhen zhaoshang yinzi luoshi qingkuang rending biao” (“Confirmation of the
fulfilment of investments drawn to Xiamao town in 2005”); “2006 nian Xiamaozhen yinjin xiangmu luoshi
qingkuang queren biao” (“Confirmation of the fulfilment of investment items drawn to Xiamao town in
2006”).
20
“Xiamaozhen gecunwei 05-06 nian gexiang zhibiao tongjibiao” (“Statistical table of performance
indicators of VCs in Xiamao town”).
Yew Chiew Ping
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Table 6.3 Land Use in Xiamao Town, Sihui (mu)
1996 2000 2010 Difference
between 1996
and 2010
Total land area 160470 160470 160470 0
Land for agriculture 146921 147104 148451 +1530
Arable land 34514 34401 34544.2 +30.2
Orchards 10117 10828 10927.9 +810.9
Forest land 75781 75618 77171.7 +1390.7
Grassland 32 29 29 -3
Water surfaces 26477 26228 25778.2 -698.8
Land for construction 9128 9164 8438 -690
Residential, industrial & mining 6900 6899 6127 -773
1. City 0 0 0 0
2. Towns 348 348 616 268
3. Villages 6157 6162 5066 -1091
4. Industrial, mining and
others
395 389 445 50

Transport 1235 1272 1318 +83
1. Railroads 0 0 0 0
2. Roads 556.8 586 632 75.2
3. Village roads 678.2 686.2 686 7.8
Water conservancy 993 993 993 -9.94
Unused land 4421 4202 3581 -840
Source: Sihuishi Xiamaozhen renmin zhengfu, “Sihuishi Xiamaozhen tudi liyong zongti guihua
(1997-2010).”
According to Xiamao’s land use plan, agricultural land area in the town registers an
increase of 1,530 mu from 1996 to 2010 with a corresponding reduction in the area of
land for construction and unused land. The reduction in construction land area is
mainly due to a fall in the area taken up by rural settlements in villages. Arable land
even witnesses a slight gain of 30.2 mu during the period though the increase is
attributed to the reorganizing and tidying up of wasted grassland, water surfaces,
river, forsaken orchards and even a brick kiln as substitutes for arable land, casting
doubt over the suitability of these land parcels for cultivation.
21
Of the area of land for
residential, industrial and mining sites, only 395 mu was devoted to industrial and
mining sites in 1996. This area expands by only 50 mu to a modest 445 mu in 2010
(see Table 6.3).
In actuality, however, the town government had expropriated 2,756 mu of land to
make way for 29 industrial enterprises from 2005 to 2006 (see Table 6.4). Moreover,
the extent of land expropriation in Xiamao has defied its claim that the increase in
21
Sihuishi Xiamaozhen renmin zhengfu, “Sihuishi Xiamaozhen tudi liyong zongti guihua (1997-2010).”
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industrial land shall be derived mostly from existing idle land in the town and villages,
as well as from a planned reduction of residential land by 80 mu.
22
For instance, the
4,000 mu of land requisitioned from villagers for the construction of the Longwan
ceramic industrial park includes orchards, fish ponds and arable land in eight of
Xiamao’s natural villages.
23
Moreover, the total area of the three industrial parks in
Xiamao is 11,510 mu, which has exceeded the town’s 2010 quota of construction
land of 8,438 mu.
Local informants disclosed that out of the 4,000 mu of land expropriated for the
Longwan ceramic industrial park, only 1,000 mu were legal. The town government
had leased the rest of the land from villagers instead of going through proper state
requisition (yizu daizheng). A total of 900 mu of land in the Xiamao and Fulong
industrial parks were also illegally leased from villagers in this manner.
24

22
Sihuishi Xiamaozhen renmin zhengfu, “Sihuishi Xiamaozhen tudi liyong zongti guihua, 1997-2010.”
23
Interviews with villagers in Xiamao, October 2007.
24
Fieldwork in Xiamao town, Sihui, October 2007.
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Table 6.4 Industrial Enterprises Drawn to Xiamao Town, 2005-2006
Item Total sum of

investment
(10,000
yuan)
Investment
in place
(10,000
yuan)
Annual
output value
(10,000
yuan)
Area of land
requisitioned
(mu)
Longwan Ceramics Industrial
Park
Jinpeng Copper Limited Company 30,000 20,000 45,000 250
Loulan Brick Factory 1 4,000 100 8,000 200
Loulan Brick Factory 2 5,000 100 10,000 200
Loulan Brick Accessory Factory 1,000 30 2,000 55
Water Plant 100 100 500 15
Changkuan Copper Limited
Company
8,000 120 9,000 250
Lejie Ceramic Sanitary Ware Limited
Company
60,000 8,000 20,000 1,000
Jinyonglong Ceramic Limited
Company
8,000 285 6,000 200

Xingtai Ceramic Limited Company 5,000 1,500 3,000 120
Fulong Industrial Park
Beihai Metal Products Plant 700 500 1,000 6
Xi Tile Factory 300 100 300 10
Jianxing Electroplating Plant 2,000 2,000 2,000 30
Fire-Resistant Brick Factory 200 20 200 15
Yangxing Chemical Plant 1,000 1,000 800 10
Gaoshu Textile Fibre Limited
Company
500 100 1,000 8
Xiamao Industrial Park
Henghe Finished Products Plant 300 300 500 13
Yunxin Non-Ferrous Metal Limited
Company
200 200 500 15
Zhongnan Resources 3,500 1,800 2,600 70
Zhongshan Footwear Factory 200 100 150 3
Hualian Plastic Limited Company 150 150 100 6
Huali Metal Limited Company 1,300 1,300 1,000 33
Shangshou Industrial Metal Limited
Company
1,300 700 500 20
Glassed Steel Plant 100 80 100 7
Non-Ferrous Metal Limited
Company
100 100 500 8
Fengge Clothes-Hanger Limited
Company
300 300 500 13
Other Locations

Senyu Furniture Manufacturing 100 60 300 6
Guangdong Recycling Company 1,000 100 3,000 150
Sihui Ciji Recycling Limited
Company
1,500 300 3,000 38
Jade Processing Plant 200 100 500 5
Sources: “2005 nian Xiamaozhen zhaoshang yinzi luoshi qingkuang rending biao” (“Confirmation of the
fulfilment of investments drawn to Xiamao town in 2005”); “2006 nian Xiamaozhen yinjin xiangmu luoshi
qingkuang queren biao” (“Confirmation of the fulfilment of investment items drawn to Xiamao town in
2006”).
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Figure 6.1 Satellite Map of Longwan Ceramic Industrial Zone
Source: Available at accessed 14 May 2009.
In seeking to maximize careers and other self-interests, therefore, local officials were
not averse to violating laws. The next section probes into a case of land expropriation
and illegal land use conversion in Xiamao town and traces how it had become a
contentious issue for villagers and the town government, eventually resulting in the
demotion of the town’s Party secretary in 2007.
Land Expropriation in Village S
Village S is a natural village in Xiamao town of Sihui. As with most other villages in
the town, village S relies on fish rearing for a livelihood. More than 100 villagers, or
one-third of its population, have jobs outside the village. According to the VC
governing village S and seventeen others, the average annual income of a villager is
5,362 yuan, which is higher than the average annual income at both the town and
county levels.
25

25
Interview with Nantang VC, October 2007, Sihui. See also Sihui nianjian 2005, pp. 26.
Yew Chiew Ping
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In 2002, Xiamao town government commenced to expropriate land for the
construction of the Longwan ceramic industrial park. To erect the industrial park, the
town government requisitioned 4,000 mu of land from eight natural villages including
village S. At that time, there were no village group leaders representing village S. The
town government took advantage of this and forced villagers to consent to
unreasonable terms. In giving up their rights to use the land over the next 50 years,
villagers were supposed to receive, through the village collective, land compensation,
resettlement subsidies, and compensation for young crops and attachments on the
requisitioned land. The amount of compensation was as follows: 400 yuan per mu for
fish ponds and cultivated land; 130 yuan per mu for hilly land; 120 yuan per mu for
each fruit tree and an annual compensation of 400 yuan for the next 50 years.
A town official said that a villagers’ meeting was held to announce the requisition and
compensation scheme, which was attended by 80 percent of the villagers, out of
which the majority agreed to the compensation amount. Despite the meeting,
villagers said they had no idea of how the compensation amounts were derived. They
also had not seen any official notice on the requisition.
26
However, villagers later
learned that factory owners paid 80,000 yuan for every mu of land. This price alone
was already higher than the 20,000 yuan which each dispossessed villager was
supposed to receive in instalments over 50 years.
27

26

A survey conducted in 2006 and spanning 30 provinces and 1,538 landless farmers shows that more
than 95 percent of the villagers had not seen any government documents and notices on the requisition
of land; over 85 percent had not participated in any meeting pertaining to land expropriation whereas
more than 70 percent were unclear about the exact sum of compensation offered by the government. Li
Yanqiong and Jia Rongmei, “Chengshihua guocheng zhong tudi zhengyong yu guanli wenti de lixing
fansi” (“A rational reflection on land expropriation and management issues in the urbanization process”),
Jingji xuejia (The Economist), No.5 (2006), pp. 84-90.
27
The payment of compensation by instalment is not rare in China. Despite the relatively low
compensation price as compared to land appreciation value and the high returns accruing to the local
government, dispossessed peasants are often deprived of their deserved compensation. According to
China’s Land Administration Law, “the total land compensation and resettlement subsidies shall not
exceed 30 times the average annual output value of the requisitioned land for the three years preceding
such requisition.” Based on this, if a farmer owned one mu of land with an average annual output value
of 1,000 yuan, the highest compensation he or she may get is but a mere 30,000 yuan. See Zhang
Hong, “Tudi zhengyong guocheng,” pp. 67. A nationwide survey conducted by Renmin University and
the Rural Development Institute (RDI) in 2005 also reveals that among villagers who received
compensation in 70 percent or 353 out of 507 instances of land expropriation, 272 received one-time
payment, 65 received payment in instalments, and 16 received both one-time payment and instalments.
See Ye Jianping et al, “2005 nian zhongguo nongcun tudi shiyongquan diaocha yanjiu” (A survey and
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Villagers’ grievances over land and compensation terms were heightened by
pollution from factories built on expropriated land. Those who did not sign the land
expropriation agreement were gradually coerced into doing so. The authorities
forcibly detained villagers who refused to comply on the pretext that the latter had
“hampered their work.” Thus reluctant as they were, villagers had no choice but to
give in and sign the agreement. From the past experience of nearby villages,

villagers were concerned that the factories in the industrial park might pollute the
underground water they consumed. For instance, in 2005, a metal processing factory
polluted villagers’ fish ponds resulting in the death of fishes while others caused
severe air pollution. Years ago, there was a “cancer village” in which many villagers
contracted cancer, supposedly due to pollution from a nearby factory.
28

To placate the villagers, Xiamao town government agreed to supply running water to
every household in the village. Predictably, this promise did not materialize even
when the first factory began operating in 2007. Villagers soon found that their well
water had turned darkish in colour. Alarmed, they sought assistance from the VC,
town mayor and other officials, who pushed the responsibility to other authorities.
After three months of having to draw water from a distant well a few kilometres away,
frustrated villagers blocked the only road to the industrial park with rocks, denying
factory operators and workers access to the sole operating factory in the park.
For over 20 days from July to August 2007, tens of villagers took turns to guard over
the road block. The town Party secretary’s “offer” to make each household pay 1,000
yuan for the supply of running water was rejected by the villagers, who also
demanded the return of some expropriated land. After villagers repeatedly replaced
road blocks that were removed by police authorities, the town government
study of land use rights in China’s villages in 2005”), Guanli shijie (Management World), No. 7 (2006),
pp. 79. The survey spans 17 provinces, 1,773 villages and 1,962 rural households.
28
Interview with Nantang villager, July 2007, Sihui.
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dispatched over a hundred police to surround village S and disperse resistors by
force. Around ten villagers were detained for around two weeks at the local police

post.
The incident accrued huge losses for the ceramic-glaze manufacturer whose factory
stopped running for close to one month. After talking to the villagers, the factory
operator pinned the blame on the town Party secretary, whom he suspected had
failed to execute proper land expropriation procedures.
29
He then lodged a complaint
to the central authorities who, through satellite surveillance, discovered that the
industrial park was an illegal development that proceeded without the approval of the
land bureau. The town Party secretary was subsequently suspended of his duties
and transferred to a local government department, effectively a demotion. However,
disputes over village land remained unresolved.
This incident shows that local officials have to tread carefully when maximizing
careers through converting agricultural land to spur industrialization as the tables
may be turned on them. As Hsing observes,
Because development projects are financed by bank loans, township officials
are often under great pressure to remove the peasants and clear the sites for
the construction to start as fast as possible. They also have to be skilful
enough not to trigger conflicts that will lead to villagers’ shangfang (personal
visits to lodge complaints to higher-level governments) or xinfang (letter visits)
. . . [which] could not only delay development projects seriously, but also have
negative effects on cadres’ performance evaluation.
30

In other words, officials have to weigh the pros and cons when seeking to maximize
their careers. It may be argued that Xiamao town officials had little room to
manoeuvre since the quota for construction land was low and vast expanse of the
land was agricultural. In order to provide developable land for industries, which bring
in tax revenues for the town, town Party secretary had to take calculated risks to
29

Villagers of village S, for example, alleged that town cadres received from factory owners a rebate of
300 yuan for each mu of land sold to factories.
30
Hsing, “Brokering Power and Property,” pp. 108-109.
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convert land illegally.
31
The strategy of leasing agricultural land from villagers without
state requisition and then converting it to industrial use had been largely rewarding
for the town government, considering the awards accorded to it by the pro-
industrialization county-level government. Ensuing events, however, led to the
downfall of the Xiamao town Party secretary. Villagers’ unhappiness over the sum of
land compensation could have been quelled if it was not subsequently aggravated by
the pollution of their drinking water. By dismissing the villagers’ pressing concerns,
town officials triggered their collective resistance, which hindered the operation of the
ceramic plant and incurred the wrath of the investor. The county government could
not suppress the matter because it was brought to the attention of the central
government.
32
The demotion of the town Party secretary appeared to be a temporary
measure to answer to the central authorities and appease all other parties involved in
the conflict.
33

The Predatory State?
Some states may extract such large amounts of otherwise investable surplus
and provide so little in the way of “collective goods” in return that they do

indeed impede economic transformation. It seems reasonable to call these
states “predatory” . . . Those who control the state apparatus seems to
plunder without any more regard for the welfare of the citizenry than a
predator has for its prey.
34
To what extent does Evans’ description of the predatory state describe Sihui’s
officials’ behaviour in expropriating collectively-owned land for industrialization and
urbanization? The following sections analyze government expenditures in Sihui, its
history of governance, and the externalities created in the process of land
31
It has been suggested that the handing down of economic targets or quotas from upper levels induces
lower rank officials to seek investments through extensive land use conversion even if it entails the
violation of land use regulations. See Yang You-Ren Daniel and Wang Hung-Kai, “Dilemmas of Local
Governance,” pp. 1049.
32
It is hard to believe that the county government was unaware of the illegal nature of the land
conversion as land quotas are clearly specific in the land use plans of the county and the town.
33
According to a local informant, the town Party secretary was later transferred to a county-level
department to take charge of drawing investments. Other town cadres were also implicated. The chief of
the town economic office, for instance, was also relegated to oversee the town’s hygiene instead.
34
Peter B. Evans, “Predatory, Developmental, and Other Apparatuses: A Comparative Political
Economy Perspective on the Third World State,” Sociological Forum, Vol. 4, No. 4 (1989), pp. 562.
Yew Chiew Ping
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development to assess if local government behaviour had been detrimental to the
society.

Government Expenditures and Collective Goods
Sihui had a history of high crime rates, murders and serious crimes. Despite frequent
crackdowns on crimes, incidence of criminal cases remained high and public security
poorly enforced. Sihui, together with Duanzhou and Huaiji in the Zhaoqing prefecture,
had been permeated with problems of drugs, prostitution, gambling, thefts, and
robberies. In a crackdown on crimes from 2001 to 2003, Zhaoqing prefecture
arrested 33,325 suspects, seized numerous guns, bullets, bombs and other
weapons, heroine and other drugs, and dealt with 623 cases of severe crimes
including murder, assault, arson, rape, kidnap, and bombing.
35

Local residents of Sihui affirmed that public security left much to be desired.
36
Their
accounts are corroborated by remarks of residents and visitors in media reports: a
grassroots leader said that break-ins and robberies were common occurrences in her
neighbourhood; a practicing doctor observed that violent crimes, petty thefts and
robberies took place frequently in the five years on the street where he run his
medical clinic; jade traders from other regions spoke of the necessity of arming
themselves for protection against robbers when they were in Sihui.
37
35
“Lishi liangnian, quanmin canzhan, defang bingju, quebao anning” (“The entire society participated in
the crackdown on crimes for two years to ensure security”), 28 April 2003, available at
, accessed 2 April 2009.
36
Fieldwork in Xiamao town, Sihui, October 2007.
37
“Sihuishi san da zhanlüe pojie gongan fazhan san da nanti” (“Sihui employs three key strategies to
resolve three key problems in the development of public security”), Renmin gonganbao (People’s Police

News), 7 November 2008, pp. 08.
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Another point raised by interviewees is the poor quality of governance.
38
When asked
to explain the county’s relative backwardness, a local resident remarked,
Although Sihui is located on the fringe of the Pearl River Delta, it is little-
known so investors do not know what it has that is worth investing. Sihui
actually has rich resources but the government does not know how to make
the most out of them. In the past few years, the oranges and tangerines
festival created some reputation for Sihui but this specialty of Sihui has not
claimed a large market share. This is a pity. And yet the government is only
passionate about “face projects” that waste both labour and money. In terms
of governance, the government operates with low transparency and is weak
in legal enforcement, failing to fulfil its responsibilities very well.
39
Another local resident, a tangerine farmer, lamented that two short stretches of roads
leading to the tangerine market were poorly constructed and very bumpy. Residents
in most of the towns commute to the city district via these roads, especially during the
harvest season when farmers transport their tangerines to the market for sale. “After
five or six years, the government still has not repaired these roads. How can they
claim to care about us farmers?” Considering that tangerines are a specialty of Sihui
and the local farmers’ main source of income, these poignant remarks are rather
revealing on what the government’s priorities are.
40
A breakdown of Sihui’s government expenditures from 1997 to 2004 shows that
government administrative expenses and operating expenses of government

departments ranged from 58 to 62 percent of total expenditure every year (see Table
6.5). Among these expenses, an annual average of 77 percent was spent on
administrative expenses, retirement funds, operating expenses of the education,
38
For other incidents in Sihui’s history of governance that do not reflect well on its government, refer to
Zhao Donghui, “‘Ranguanban’ chengle ‘shouqianban’” (“’Fuel management office’ turns into a ‘money-
collecting office’”), Xinhua meiri dianxun (Xinhua Daily News Bulletin), 25 April 2002, pp. 001; Zhao
Donghui, “Sihui shifu jinji kaihui zhenggai ‘ranguanban’” (“Sihui government calls for emergency meeting
to reform ‘fuel management office’”), Xinhua meiri dianxun (Xinhua Daily News Bulletin), 30 April 2002,
pp. 006; “Hei’e shili zenyang qinshi jiceng zhengqquan” (“How dark forces invade and erode grassroots
political power”), Liaowang xinwen zhoukan (New Watch Weekly), 21 November 2005, pp. 22-24; Sun
Xing, “Weihe heishehui hengxing wunian wuren guan” (“Why secret society run amuck for five years”),
Falü yu shenghuo (Law and Life), No. 11 (2005), pp. 32-34.
39
Interview with Sihui resident, Sihui, October 2007.
40
Interview with Sihui resident, Sihui, October 2007.
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taxation and other departments. Little, however, was spent on the armed police force
and police force (0.5 percent annually) despite the high crime rates in Sihui. Although
the lack of funds might also have impaired the capacity of the local police in law
enforcement, the crux of the matter is the government’s lack of discernment or
nonchalance over the state of public security in Sihui.
Government expenses on collective goods and support for agriculture were also
insignificant compared to the annual average of 53 percent taken up by government
bodies. An average of 7.6 percent was spent on city maintenance and sewage
discharge every year. Social welfare and security, subsidy to less developed regions

within Sihui only constituted an average of 4.3 percent every year. Support for
agricultural production and operating expenses of agricultural departments only took
up an average of 12.5 percent annually, despite Sihui’s predominantly agricultural
population. Together, capital construction, enterprise innovation and promotion of
science and technology took up another 8.7 percent of the total expenses annually.
Furthermore, in contrast to the large amount of land proceeds outlined in the
previous chapter, government expenditure on paid land use (tudi youchang
shiyongfei zhichu) for developing and organizing agricultural land to replace newly
added construction land was only 4.71 million yuan from 2000 to 2004.
41
41
Sihui nianjian 2001, pp. 529 ; Sihui nianjian 2002, pp. 247 ; Sihui nianjian 2003, pp. 239 ; Sihui
nianjian 2004 pp. 251-52; Sihui nianjian 2005, pp. 266-67.
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Table 6.5 Some Expenditures of Sihui’s Government (10,000 yuan)
Item 1997 1998 1999 2000 2001 2002 2003 2004
Support for agricultural production and operating expenses
of agricultural department
1526 1768 2076 2817 4012 3716 4183 4958.5
Percentage of total expenditure 10.7 11.5 10.8 13.2 14.9 12.1 12.3 13.1
Pension and relief funds for social welfare 295 296 304 530 700 784 904 903.2
Social security 0 22 141 326 274 313 571 589.9
Support for less developed regions 14 5 14 9 1055 24 373 301
SUBTOTAL 309 323 459 865 2029 1121 1848 1794.1
Percentage of total expenditure 2.2 2.1 2.4 4.0 7.5 3.6 5.4 4.8
City maintenance 450 493 523 500 501 647 786 568.8
Sewage discharge 217 230 261 300 300 300 230 217

SUBTOTAL 976 1046 1243 1665 2830 2068 2864 2579.9
Percentage of total expenditure 6.9 6.8 6.5 7.8 10.5 6.7 8.4 6.8
Government administrative expenses 2120 2127 2220 2271 2683 3097 3201 3784.1
Government departments retirement funds 0 0 1131 1713 2015 2488 2649 3069
Operating expenses of education department 3555 3785 4078 4544 6325 7211 7331 7639.3
Operating expenses of public health department 561 611 705 667 705 916 839 1532.3
Operating expenses of industrial, transport, commercial
departments
234 225 269 138 95 296 658 382.7
Operating expenses of circulation departments 0 0 0 58 54 57 53 72.3
Operating expenses of culture, sports and broadcasting 374 413 1443 520 525 638 625 790.5
Operating expenses of police force 39 28 33 58 90 52 45 75.6
Expenditure of armed police force 31 20 28 18 25 27 20 26.6
Expenditure of public security organs 907 1224 1025 1168 1666 1456 2060 2378.5
Operating expenses of taxation and other departments 1008 1000 719 655 1238 2674 2386 2417.1
SUBTOTAL 8829 9433 11651 11810 15421 18912 19867 22168
Percentage of total expenditure 62.1 61.2 60.5 55.3 57.3 61.4 58.3 58.8
Capital construction 140 109 1067 958 907 1610 2248 1969.5
Enterprise innovation funds 415 548 565 403 533 460 785 1110
Science and technology promotion 40 0 720 653 414 513 635 508
SUBTOTAL 595 657 2352 2014 1854 2583 3668 3587.5
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Percentage of total expenditure 4.2 4.3 12.2 9.4 6.9 8.4 10.8 9.5
TOTAL EXPENDITURE 14225 15422 19265 21368 26899 30806 34054 37727.3
Sources: Sihui nianjian 1998, pp. 220 ; Sihui nianjian 1999, pp. 256 ; Sihui nianjian 2000, pp. 233 ; Sihui nianjian 2001, pp. 529 ; Sihui nianjian 2002, pp. 247 ; Sihui nianjian
2003, pp. 239 ; Sihui nianjian 2004 pp. 251-52; Sihui nianjian 2005, pp. 266-67.
Yew Chiew Ping

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EXTERNALITIES
Idle Land and Wastage of Resources
Land use conversion carried out with the aim of reaping short term gains has often
resulted in the wastage and underutilization of land resources. For instance, the
proliferation of development zones, often championed by local cadres as the answer
to industrialization, has resulted in large areas of idle land that was expropriated from
rural peasants and left in a desolate state due to a lack of investors, funds or other
reasons.
42
In Sihui, the total area of idle land was 163.6 hectares or 2454.4 mu in
1997.
43
In 2000, under the regulations and guidelines in newly promulgated
government documents such as the “Temporary Regulations on the Handling of Sihui
City’s Idle Land,” Sihui Land Bureau dealt with 108 cases of idle land. Construction
on 242 mu of land was expedited and put into use; the land use rights of 1,045 mu of
land were retracted; 2,216 mu of idle land were assigned to other usage and the
deadline for construction on 34 mu of land was extended.
44
Yet in 2007, Sihui still
had 22 cases or 1120.67 mu of idle land. The culprits that left large areas of
undeveloped land for the longest period were mainly manufacturing and metal
processing plants located in development zones.
45
In addition, 3,000 mu of land in
the Longwan Ceramic Industrial Zone located in Xiamao, which was found to be
acquired illegally – the town authorities had leased land from villagers instead of

going through proper requisition – was also in limbo. According to a town official, part
of this tract of land was converted back into arable land for the cultivation of corn but
42
He Shujin and Su Guangquan, “Kaifaqu xianzhi tudi chengyin jizhi jileixing huafen” (“The casual
mechanism and types of idle land in development zones”), Ziyuan kexue (Resources Science), Vol. 23,
No. 5 (2001), pp. 17-19; Wang Jun, “Zengzhang quxiang,” pp. 57. Compared to other countries, the
percentage of land for industrial use in China is much higher at over 20 percent. See Cao Jianhai, “Lun
woguo tudi guanli zhidu yu chongfu jianshe zhi guanlian” (“On the relationship between China’s land
management system and duplicate construction”), Zhongguo tudi (China Land), No. 11 (2004), pp.
12-13.
43
Guangdong dizheng dichan nianjian 1998 (Yearbook of Guangdong Land Governance and Land
Resources 1998), Yuan Zheng et al. (eds.), (Guangdongsheng ditu chubanshe, 1998), pp. 286.
44
Guangdong guotu ziyuan nianjian 2001 (Guangdong Land Resources Yearbook 2001), Jiang Donghai
et al. (eds.), (Guangdongsheng ditu chubanshe, 2002), pp. 267.
45
Ou Xing, “Sihui panhuo shangqian mu xianzhi tudi” (“Sihui revitalizes over one thousand mu of idle
land”), Xijiang ribao (Xinjiang Daily), 8 June 2007, , accessed 11 June 2008;
“Gonggao” (“Announcement”), Sihuishi guotu ziyuanju (Sihui Land Bureau),
, 6 June 2007, accessed 11 June 2008.
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most was still lying idle as the construction of factories had halted and investments
were rescinded.
46
It may be argued that idle land is a result of the indiscriminate use
of land as an instrument to promote industrialization.

Pollution and Unsustainable Development
According to an official in the environmental protection bureau, heavy pollution
industrial enterprises constituted a substantial part of Sihui’s GDP.
47
Statistics from
1990 to 2001 show that electroplating, bleaching and dyeing, leather,
pharmaceutical, biochemical contributed more than 40 percent to Sihui’s gross
industrial output value each year.
48

Incidentally, Sihui had been one of south China’s regions with the highest incidence
of nasopharyngeal cancer since the 1970s.
49
Although there has been no conclusive
findings on what caused the high incidence of cancer in Sihui, a study spanning 1989
to 1998 finds that Sihui residents whose source of drinking water was the Longjiang
river – one of Sihui’s rivers polluted by the discharge of industrial waste – were more
likely to contract nasopharyngeal cancer than those consuming other sources of
water in Sihui.
50
Apart from the health hazards, Sihui’s over-reliance on heavy pollution industries has
other political repercussions that undermine the sustainability of its development. In
46
Interview with town official in Xiamao, October 2007.
47
Zhong Qizhen and Fu Yongkang, “Tanmi ‘Du shui he’” (“Investigating the Dushui river”), Huanjing
(Environment), No. 1 (2008), pp. 34-35.
48
Sihui tongji nianjian 1990-2001, pp. 154-55.
49

Huang Qihong, Li Yanhua, Wen Falin, Xu Yiwei, Ling Wei and Lin Xiao, “Sihuishi 1971-2000 nian
biyanai fabing dongtai fenxi” (“Analysis of the incidence of nasopharyngeal carcinoma in Sihui from
1971 to 2000”), Quanguo zhongliu liuxing bingxue he zhongliu bingyinxue xueshu huiyi (National
conference on cancer and its causes), 2007.
50
Guo Yin, Luo Futian, Jiang Wenqi, Liu Guohui and Zheng Yingdong, “Yingying xiaodiyu fenxi moxing
yanjiu Sihuishi biyanai de fabing yinsu” (“Study on the incidence factors of nasopharyngeal carcinoma in
Sihui using small area analysis model”), Aizheng (Cancer), Vol. 20, No. 11 (2001), pp. 1272-75. In
November 2006, large numbers of dead fish surfaced on Longjiang river in Sihui city district.
Investigation reveals that this is likely to be a result of water pollution – electroplating plants discharging
waste water into the river. See Huang Yonghong and Xie Haibin, “Yi qi Longjianghe qunyu siwanshijian
de diaocha” (“Investigation of a case of fish death in Longjiang river”), Zhiye yu Jiankang (Occupation
and Health), Vol. 24, No. 24 (2008), pp. 2667-68.
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March 1999, the Nanjiang Industrial Park, which took up more than 7,000 mu of land,
was set up within the Mafang Development Zone at the southern tip of Sihui adjacent
to Sanshui district of Foshan. Among the industries in the Industrial Park were 18
electroplating plants that relocated from the then Nanhai city of Foshan. The perils of
water pollution soon captured the attention of Foshan Deputies to the People’s
Congress as the industrial park was located at the confluence of three rivers –
Beijiang, River Sui and Xijiang – which flow downwards to Foshan. The deputies
alleged that seven of the eight electroplating plants already in operation had
discharged unprocessed waste water directly into Beijiang, which is the source of
drinking water to Foshan and other cities in the Pearl River Delta.
On 25 January 2000, the Guangdong Provincial Environmental Protection Bureau
was subject to the interrogation of the Foshan deputies, which ended with the former
sending a notice to Sihui Nanjiang Industrial Park to put a stop to the construction of

electroplating plants. Yet because Sihui government was unable to pay the huge
compensation of 200 million yuan required for their relocation, nine remaining plants
continued their operation in the industrial park till the end of 2007, after which five
moved to Sihui Longfu Industrial Park while the rest moved out of Sihui.
51

The problem of water pollution, however, had not been eradicated after the industries
moved from Nanjiang to Longfu. There were more than 30 heavy pollution industries,
including over 20 electroplating plants and 15 bleaching and dyeing mills in Longfu,
scattered around the 21 kilometres long Dushui river, whose water eventually flows
into Beijiang too.
52
In 2007, the Guangdong Provincial Environmental Protection
Bureau imposed stringent rules to limit the approval for the setting up of industries
around Dushui river. Zhaoqing prefecture government also vowed to relocate
51
Yan Huaiqiang, “Huanbao menkan jiangdi de daijia” (“The price of lowering the standard for
environmental protection”), Huanjing jingji (Environmental Economy), No. 55 (2007), pp. 60-61.
52
Zhong Qizhen and Fu Yongkang, “Tanmi Dushuihe,” pp. 34-35.
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electroplating plants and heavy pollution industries like leather processing, bleaching
and dyeing mills, from the Dushui river region to other industrial parks before 2010
and upgrade the waste water processing capacity of 14 other electroplating plants by
2010.
53
According to a manager of the Nanjiang Industrial Park, the Industrial Park

contributed 20 percent to the city’s tax revenues. As Sihui’s economic development
had lagged behind other counties of the Pearl River Delta, it had taken a reckless
approach to the drawing of businesses and capital and neglected the sustainability of
development.
54
This seems to be typical of less developed counties in Zhaoqing (see
Table 6.6). However, with the Nanjiang Industrial Park coming under the close
scrutiny of the provincial government and the limitations imposed on industries
around Dushui river, it is doubtful if Sihui can continue to rely on its strategy of
achieving industrialization through the accommodation of heavy pollution industries.
Table 6.6 Heavy Pollution Industries and GDP in Zhaoqing’s Counties
Source: Zhaoqing tongji nianjian 2006, pp. 229-30.
53
Ibid.
54
“Beijiang tiewan zhiwu, jiu da diandu qiye jiti banqian,” (“Beijiang eliminates pollution with an iron-
hand, nine main electroplating enterprises moved collectively”), Diyi caijing ribao (Top Financial and
Economic News), 12 December 2006, pp. A04.
Yew Chiew Ping
Gaoyao Sihui Deqing Fengkai Guangning Huaiji
GDP per capita (yuan) 13935 12891 8555 8124 7344 6581
Gross industrial output value
(thousand yuan)
6196335 4821089 1656533 1278536 1515877 1254193
Textile 468639 264610 51887 0 0 21171
Leather, furs, down and related
products
582094 340485 0 0 103929 0
Papermaking and paper products 92579 20323 43171 67439 836346 0
Raw chemical materials and

chemical products
425151 146242 526143 276602 108383 241660
Medical and pharmaceutical
products
0 58959 0 0 102611 0
Nonmetal mineral products 752484 688508 132140 269804 8904 26265
Smelting and pressing of ferrous
metal
0 5050 0 0 0 74900
Smelting and pressing of nonferrous
metal
136953 419478 84118 0 0 5369
Metal products 999783 1565163 0 0 0 0
Percentage of gross industrial
output value
39.7 40.3 50.6 48.0 76.5 29.5
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Conclusion
Pursuing urbanization and industrialization through instrumental land use had been a
strategy of the Sihui government in the past decade. In face of regional competition
from neighbouring counties in the drawing of enterprises and capital, local officials
had leased land use rights at low cost and diverted part of the land proceeds as
monetary incentives for cadres who met these objectives.
55
Responding to the calls
of upper echelons to promote industrialization, some local officials had even resorted
to illegal land use conversion to circumvent restrictions in the form of quotas for
construction land imposed from top-down, at the risk of jeopardizing their careers.

On one hand, the lack of resources had impeded local officials’ efforts in driving
urbanization and industrialization in Sihui. First and foremost, developable land for
construction is scarce given the large areas of mountainous and hilly terrain within its
territory. Secondly, development may also be hampered by a lack of funds as Sihui’s
expenditures had always exceeded its revenue. This may have impaired local
government’s capacity in providing infrastructure to improve accessibility and
enhance its competitiveness. Finally, the county’s reliance on heavy pollution
industries is also partly path-dependent as it is unable to afford the high costs of
reversing that path.
56
In other words, it may be argued that Sihui does not have many
options in its path of industrialization unlike the highly developed regions in the Pearl
River Delta.
55
Other counties in the region also offered land at low cost and tax returns to attract investments. See,
for instance, Ningfu document no. 98 (2007), “Guanyu yinfa Guangningxian gongye xiangmu touzi
youhui banfa de tongzhi” (“A notice on the promulgation of preferential measures for the investment of
industrial items in Guangning county”).
56
Broadly, path-dependence refers to “the causal relevance of preceding stages in a temporal
sequence.” Levi offers an alternative conception: “Path dependence has to mean . . . that once a
country or region has started down a track, the costs of reversal are very high. There will be other
choice points, but the entrenchments of certain institutional arrangements obstruct an easy reversal of
the initial choice.” See Paul Pierson, “Increasing Returns, Path Dependence, and the Study of Politics,”
American Political Science Review, Vol. 94, No.2 (2000), pp. 254; Levi, “A Model, a Method, and a
Map,” pp. 28.
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