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A Chinese Burg Sells Itself Out

Fed up with failed Communist development plans, a village signs its fields, forests and farmers over to a businessman who promises riches.


TONGSHUI, China — It takes a village to raise a profit.

Or so thinks Zhang Jiacheng, a creative young entrepreneur who has embarked on a bold experiment here in southern China's poor, landlocked Guizhou province.

With a little research and a lot of moxie, Zhang, 35, persuaded local officials to sign over the entire village of Tongshui to his booming Chinese-medicine business. In March, this otherwise sleepy hamlet, home to 839 people and one telephone, suddenly assumed a surprising new identity: as a wholly owned subsidiary of Jasun Pharmaceuticals.

The village government was abolished. Farmers became employees. Fields and forests became assets.

And overnight, Zhang accomplished what the Communist revolution in China spent decades trying to prevent: He essentially privatized the entire village and, according to a simple three-page agreement, landed the rights to Tongshui's labor force and natural resources for the next 60 years.

It was an unprecedented move in China--and one of dubious legality in a land where, technically, communism still reigns.

But economic development is the mantra in China these days, and the people of Tongshui aren't interested in technicalities. "To get rich is glorious," the late Chinese leader Deng Xiaoping once proclaimed, and in the starry eyes of local Communist officials and villagers alike, Zhang promised plenty of glory: 100,000 yuan, or about $12,000, in every family's bank account within three years.

That's an astronomical sum in Guizhou, a province so rugged and depressed that "there aren't three days without rain, three miles without a mountain or three coins in anyone's pocket," as a famous aphorism puts it. Zhang's promised wealth amounts to nearly 75 times the annual per capita income in Guizhou's countryside--more than enough for this community to consent to being annexed, wholesale, by a private company.

"Everybody agreed to it," said farmer Yang Tonghai, 34, who enthusiastically signed himself, his wife, their two children and their little plot of land over to Zhang's firm. "He'll lead us to riches."

And to a possible confrontation with higher-level authorities, whose Marxist backgrounds still make many of them suspicious of China's rising private sector.

Although thousands of Chinese villages have started up businesses to earn more money, such enterprises are in effect government-run, overseen by local Communist Party cadres. Giving over an entire village to a private enterprise such as Jasun Pharmaceuticals could be deemed too threatening to party control, even though some cadres remain involved in administering Tongshui.

Tongshui's geography helps, since Beijing lies 1,100 miles away. With market reforms, central government control from Beijing has weakened enough that localized innovations such as the one in Tongshui can slip under the radar. "Heaven is high, and the emperor is far away," an ancient Chinese adage goes.

Zhang himself dismisses any suggestion that his venture oversteps the bounds of what's allowed.

"If you read [President] Jiang Zemin's 'Three Represents' and Deng Xiaoping's theories," Zhang said confidently, "you'll find that anything that develops the economy and benefits the people is good."

His plans, he says, will do both in Tongshui, as well as boost Jasun Pharmaceuticals' profit margins.

The key to the village's prosperity, Zhang says, lies in developing the area into a scenic tourist spot and turning its sun-kissed fields, which normally grow corn and tobacco, into producers of medicinal Chinese herbs for Jasun.

The company will pay the villagers for what they grow. Zhang says that every acre could yield an additional 30,000 to 40,000 yuan of income a year just by switching over to growing herbs for his factories.

His firm was established five years ago in nearby Zunyi, a city famous as the place where, in 1935, Mao Tse-tung consolidated his power within the Chinese Communist Party. Under Zhang's stewardship, Jasun rapidly blossomed into a successful, 1,000-employee company. It boasts 28 offices around the country--which hawk the company's treatments for arthritis, hepatitis and diabetes, among other ills--and Zhang is now a rich man by Chinese standards.

It's his turn, he says, to give something back to the community, a debt he wants to pay by helping a neglected place like Tongshui find a foothold in China's new go-go society.

"I was born into a poor peasant family, and I grew up in poverty," he said. "I always wanted to do something for my hometown after I became wealthy, but the conditions there aren't ripe yet. So I chose Tongshui."

Zhang became acquainted with the village through some of its residents, who had worked for him as day laborers during construction of one of his development projects.

The village is full of spectacular scenery. Dark green trees cascade down the hillsides. Stooping farmers with baskets on their backs still work the emerald fields by hand. Cicadas make the humid air buzz like a live wire.

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