The Edmond Sun

August 31, 2012

Modern China: A tale of luxury villas and displaced villagers

Tom Lasseter
McClatchy

BEIJING — As uniformed maids bustled about the yard of the villa, Zhu Xinxin ushered a guest across black and tan Italian marble floors to an elevator that rose with a hushed glide. In the master bathroom upstairs, Zhu paused to point out gold-plated swan sink faucets that cost $7,865 each.

With an inviting smile, Zhu, wearing a black suit and lavender blouse, led her visitor downstairs. There, she described the finer details of the walk-in cigar cabinet, home theater and tiled swimming pool decorated with a Roman-style relief of horses and chariot that bulged from the wall.

“The villa is like a castle,” said Zhu, a 23-year-old who works full time as the main attendant of the house.

The price of the home has been advertised at more than $47 million, one of 12 properties for sale at that amount at an opulent cloister in Beijing’s eastern suburbs. If they sell close to that sum, they’ll be among the most expensive real estate in the capital, the piece de resistance of a collection of 208 houses on a lush 82-acre estate.

The development, known in English as ThaiHot Mansion and Courtyards by the Canal, would stand out in most places. In China, it’s astounding. The cheapest of the 50 or so properties that are still available is on the market for more than $4.7 million, according to management. Last year, the per capita annual net income of the nation’s rural residents was about $1,100, by official figures. The per capita disposable income for urban dwellers was some $3,430.

The billowing crystal chandelier above the living room of Zhu’s villa cost roughly $23,500.

Faced with such signs of a deepening wealth gap, the Chinese Communist Party has repeatedly indicated the need for change. Economic inequalities in China stoke the impression among many here of an upper class bordering on lords and princes, either made affluent by proximity to the party or now beholden to its power.

The imbalance extends to the rule of law. For instance, former residents of Puxin Village, much of which was razed for ThaiHot Mansion, say that some who refused to move were beaten. People who’ve since tried applying to government offices for redress, they said, have been detained and harassed.

Perhaps informed by that sort of dynamic, a driving refrain of President Hu Jintao’s administration has been the call for “harmonious society.” His premier, Wen Jiabao, is known for explicit references to dissatisfaction among the masses and the necessity of addressing the situation.

Still, there’s been no sweeping reform, and Hu and Wen will leave office soon. Their replacements are to be announced at a Communist Party congress in the coming weeks or months, in a once-in-a-decade transfer of power on the Politburo Standing Committee. As is party practice, the specific date hasn’t been made public.

That will leave to the next set of leaders a nation whose rise stokes fear in the West but that’s also nervous about its own domestic tensions. The official Xinhua news wire reported in August that a study published by the state Chinese Academy of Social Sciences found that the income gap between China’s urban and rural residents — whose populations are close in size after years of city growth — is 26 percent higher than it was in 1997 and 68 percent above the levels of 1985.

At the beautifully sculpted grounds of ThaiHot Mansion, where bamboo groves are kept lush and the lawns cut short just 20 miles from the concrete of downtown Beijing, those statistics seem remote and of little consequence.

“In ancient times the emperor would sit and drink tea and listen to music,” said Qiao Dan, a 30-year-old man who, speaking in a low hush, recently referred to “the feeling of the royal court” that permeates a villa he tends down the road from Zhu. “People can sit there and imagine that.”

———

Guo Lu used to know every rise and bend in the land where ThaiHot Mansion now stands. Like many generations of his family before him, the 66-year-old farmer was born and raised in what was once Puxin Village. He owned three houses and grew corn, wheat and vegetables.

Then, in 2002, the Beijing Taihe Real Estate Development Co. received the government’s nod to buy and develop the land.

Guo didn’t want to move. In April 2003, a group of men with clubs stormed his home, Guo said. After the assault, his left leg was permanently crippled. He agreed to sign the contract and relocated the next year. Guo now carries a green booklet and certificate issued by the government in 2009 that certify he has a disabled limb.

According to the agreement between Taihe and local officials, a copy of which was reviewed by McClatchy Newspapers, the 430 villagers whose property was sold were supposed to receive new housing — and to have their residential status transferred from rural to nonrural. It’s a crucial distinction, with implications that stretch from employment opportunities to government benefits. That never happened.

The local government also agreed, in writing, to find jobs for 224 of those people, almost all of whom had been farmers before their land was taken; again, a condition that wasn’t met.

Both those stipulations were present in an approval of the deal issued by Beijing’s city government, a 2002 document bearing officials stamps that McClatchy also saw. Villagers say they didn’t know they were entitled to the help until a document surfaced during a lawsuit in 2007, five years after the land deal.

“By the time the town told us (about the pact with Taihe), the issue of the land had already been decided … the village didn’t know what was happening,” said Zhang Xiucheng, 59, who was the head of Puxin’s village committee during the demolition and served on the local body from 1975 to 2007. The agreement between Puxin Village and Taihe bore Zhang’s signature, a fact he came to regret.

“There was a transaction involving power and money, but we did not know what happened,” head said.

Like the rest of the villagers, Zhang said he didn’t receive the money he was owed for his house and, in his case, a small roadside shop. Instead, the residents were told how much it would cost them to move into the new apartments. That amount was then deducted from the total, according to Zhang and other former Puxin residents.

For instance, Zhang was owed about 350,000 yuan, about $55,000 at today’s rate, for his home and another 100,000 yuan for the loss of his business, about $15,725, he said. But from that 450,000 yuan, some 340,000 was deducted for the units he reserved, Zhang said.

So he’s received only 110,000 yuan in cash, about $17,300. Much of the money was used to outfit the apartments for his family members — behind a black metal gate with the words “Puxin New Village” on top — which Zhang said were handed over unfinished, with bare concrete-block walls.

After that series of transactions, the cost to Taihe for the land was low, Zhang said.

Every person interviewed at the “New Village” gave similar accounts, and listed one more problem: The residents said that ownership certificates weren’t issued when they moved in, meaning they can’t legally sell their new homes.

As a result, Zhang and the 400-plus people living in the apartments are marooned. Most moved there in 2004, and now they have almost no money and no practical way of leaving.

Two new construction projects began recently to either side of their homes. In Zhang’s living room during a recent visit, the sounds of drilling and clanging didn’t stop for a moment.

“The government is allowing this to happen,” Zhang said. “It’s allowing the common people to go into deep water and hot fire.”

———

With the tour of her villa drawing to a close in July, Zhu Xinxin stopped at a curiously small room, relative to the vast stretches of the house, filled with trophy cases. As she pushed a button, the middle two sections of a bookcase swiveled open to reveal a hiding space. Zhu tapped the wall and said, “This is bulletproof.”

Why is that necessary?

“The people who are able to buy this villa are people with status,” Zhu said. “These people pay more attention to their personal safety.”

Later, a gold-colored golf cart with a Mercedes-Benz hood ornament whisked a McClatchy reporter to the on-site private club. Along the way, grounds staffers stopped what they were doing to salute when they saw the vehicle humming toward them. The guide in the front seat said it was customary.

At the club, a group of slender women in red and gold silk dresses opened the doors. Tea was poured and Shen Linan, a chipper 46-year-old man in black jeans and a Tommy Hilfiger polo shirt, sat down to talk.

Shen is the assistant to the president of the Taihe Group, a company based in the coastal province of Fujian that has, through a series of subsidiaries, a majority stake in the Beijing Taihe firm that built the site. He rattled off a series of numbers about the size and cost of the project.

Was he worried at all that the villas flew in the face of concerns about economic disparities?

“The houses were not put here to compare with the nearby common people’s income. I think maybe it’s not meaningful to compare, because even if you put these houses by the side of Chang’an Avenue” — the road that cuts through the center of Beijing — “you also cannot compare them with the nearby people’s income,” Shen said. “Because this kind of house is not prepared for the surrounding people, it’s prepared for the most successful people in all of China.”

Later in the interview, Shen said that “in China, now there’s no emperor, but living in such residences, there’s a feeling of being emperors and nobles.”

About three weeks after that conversation, McClatchy submitted faxed and emailed questions to Shen asking for the company’s reaction to a series of allegations by former Puxin residents. He didn’t reply. Questions also were faxed to the township and district governments that signed off on ThaiHot Mansion. Neither responded with answers to the queries.

Given the Communist Party’s desires to tamp down exhibitions of the gilded classes and officials’ attempts to rein in property markets, Taihe’s initial eagerness to talk about expensive villas just before the party congress seemed strangely timed.

Taihe’s home province of Fujian was from 1985 to 2002 the setting of much of the political career of Xi Jinping, the man who’s expected to be China’s next president. Those on the firm’s board are influential in the area, including a member who served in Fujian’s provincial leadership with Xi. The chairman and president, Huang Qisen, is worth hundreds of millions of dollars, according to holdings listed in corporate documents, and Xi presumably would have at least been aware of him in Fujian.

But there’s no evidence that the company enjoys special treatment from Xi or his allies.

———

A group of former Puxin villagers has filed complaints at the township and district levels for the past few years, and has sent letters to Beijing seeking answers, but gotten nowhere.

“We went to the petitions office many times,” said a 61-year-old woman surnamed Wu, who asked that her full name not be used for fear of official retaliation. “When people petition at the county they’re detained; when people petition at the township they’re detained.”

From 2007 to 2010, Guo Lu and his 40-year-old son, Guo Yongshun, became embroiled in a series of lawsuits that involved Taihe and various government land bureaus. Their subsequent suits and appeals stretching to 2010 were unsuccessful.

“It cannot be said that I was surprised” by the failure, said the family’s lawyer, Liu Yajun, who’s been quoted about land-use controversies in the past by Chinese state media. “Why not? Because regarding illegal dealings like this with land and the attitude of the court … this is not the only case like this.”

During a recent conversation at the apartments, Guo Yongshun said it was made clear to him in 2010 that someone wanted the family to end the litigation. A passenger in the cab that Guo drives for a living directed him to a desolate spot in east Beijing, where three men with metal rods were waiting, he said. They beat out every window in the car. At the end of it, one of the men pointed a rod at him and said, “Sue again,” presumably meaning that Guo would see what happened if he did.

Guo Yongshun said he didn’t see much reason to talk about what had happened or why. All it has brought so far is trouble, he said.

As he spoke, his father got up occasionally to walk around. The step-slide of his crippled leg echoed through the room.

“They have the luxury villas there,” Guo Yongshun said. “And we are living in buildings that are like slums.”