The changing foundations of Chinese development: From low-cost labor to land dispossession

What are the foundations of China’s rise? This dissertation argues that two central mechanisms are foundational to the Chinese economy. First, enterprises suppress labor prices to low levels through the employment of rural migrant laborers who hold generalized rights to rural village land, an arrangement which outsources the full social cost of labor reproduction to villages. Second, rural governments, bankrupted from absorbing these costs, raise revenues by expropriating village land for urban construction. These two mechanisms – one labor-based and the other land-centered, both driving discrete mechanisms of capital accumulation in China today – are interdependent but mutually antagonistic. The migrant labor system has bankrupted the rural governments that absorb labor reproduction costs, thus necessitating their turn to profitable land redevelopment for fiscal recovery. Yet rural-urban land conversions are gradually undermining mechanisms for the reproduction of the Chinese labor force. Based on two years of long-term and intensive ethnographic fieldwork, conducted from 2007 to 2011 in Beijing and in two villages in Sichuan Province, this dissertation traces a subcontracting chain of labor recruitment in the construction industry, a prototypical but overlooked sector where profitable revaluations of rural land are paired with a persistent need to delay labor costs to keep up with a speculation-rife real estate market. In “Fa-ming village,” labor recruitment is regulated by brokers who leverage village networks of surveillance to minimize changeover among laborers, subject to poaching by outside brokers. Many of these outside brokers originate in “Lan-ding village,” 500 km away. There, village land is expropriated for urban construction by a rural county government seeking a cut of real estate revenues as well as administrative promotion to district-level status. As rural-urban land conversions destroy the subsistence farming economy in Lan-ding, creating landless laborers unable to withstand delayed wage payment, labor brokers divert recruitment to Fa-ming. The incompatibility of maintaining China’s low-cost labor force during the emergence of a locally-competitive, speculatively-financed urbanization, now responsible for 77. 7% of local government revenues nation-wide, pushes labor recruitment channels further into the hinterland.