The Chinese character for “palace” hints at the historical irresponsiveness of the state. Its lines trace inner courtyards sequestered behind perimeter walls, and although it was developed several thousand years ago, it still describes the aspect of central power. Although China’s rulers long ago vacated the Forbidden City in central Beijing (now a museum), the place they currently occupy is another forbidden compound just a few doors down the Avenue of Eternal Peace from the old palace. Like its predecessor, the compound presents vermilion walls to an unwelcome world and guards with machineguns stand at each entrance.
Every March, during the meeting of the National People’s Congress (the legislature), this architectural aloofness takes human form. “People’s delegates” in black Audis move anonymously behind darkened windows through the traffic, escorted by police cars. Sometimes it seems just as well that ordinary people cannot see what their leaders get up to in their privacy. For years now it has been customary for delegates to use the privilege of their police escorts to ferry Peking duck takeaways from Quan Ju De, a famous restaurant, back to their hotels.
In other respects too, Chinese officials are insulated, cut off. Foreign multinationals spend millions of dollars plotting routes through the bureaucracy to officials who can grant them business licences. Local chief executives similarly spend a large portion of their time on government relations. But for people who lack resources or connections or status, the pathways to power are blocked.
This was the predicament faced by Feng Bingxian, a petitioner from the impoverished northern province of Shaanxi whom I met in early July 2003. He had come to Beijing to complain of official injustice at the State Petitions Office, a bureaucratic relic from imperial times when people of conscience wrote memorials to a supposedly moral emperor. The memorials were elaborate and literary affairs, but under communism the act of petitioning has become much diminished. What remains of the old ritual is enacted in a few back alleys by those left behind by the country’s economic transformation. Mainly rural people with the land drawn in their faces, they stand clutching handwritten pieces of paper near their only hope of redress - a bare office where tired-looking officials sit at wooden desks. Then they wait, sometimes weeks, sometimes years for a response. Sometimes it never comes.
By the time I met Feng, he was already fed up with petitioning and had embarked on a strategy to gain the attention of China’s top leaders that was to occupy his energies for the next 18 months, cause him considerable personal suffering and eventually change him from a businessman motivated by self-interest into a campaigner for civil rights. I was to be the cause of some of his trouble.
We met on one of those rare Beijing days when the hills beyond the western suburbs are visible from Tiananmen Square beneath a fathomless blue sky. It was clear that Feng was unlike others in the procession of petitioners who telephone foreign journalists from time to time to suggest meeting in places public enough to offer a little privacy. He had told me to come to the VIP section of the Beijing Hotel, a place known since the massacre of anti-government demonstrators in 1989 to be bristling with police surveillance cameras.
I found him sitting in the coffee lounge next to the banquet hall where Mao Zedong once hosted Nikita Khrushchev. A thin, wiry man with a cheerful, animated face, he sat behind a glass of kiwi juice. Next to the juice was his Nokia mobile telephone and the key to a suite costing more than RMB 1,000 a night (£63).
Feng was the representative of about 10,000 private investors in about 6,000 small oil wells that had been confiscated without compensation by the authorities in 15 counties in Shaanxi. The investors were a varied bunch. Some were wealthy entrepreneurs but the majority were peasant farmers who coaxed a living out of the inhospitable Yellow Earth Plateau, a dusty, eroded buffer that protects the central plains from the advancing sands of the Gobi desert. Many of the farmer-investors had sold their land and furniture to raise money for prospecting. After losing their wells, their income had dried up and some had turned to loan sharks to fund their children’s schooling. Their ambition was simply to have their wells returned.
There are many disputes in China between individuals and local mandarins, but this case was different. It was almost certainly the biggest concerted challenge by private sector interests against their local authorities since private enterprise was first permitted in the early 1980s. To me, that made it an important story. Theorists have long predicted that China’s single-party communist politics would sooner or later bump up against its increasingly free-market economy. When that happened, the theory went, communism would have to soften and adapt. The Shaanxi oil well dispute seemed a manifestation of this crucial stage in the country’s political evolution.
Feng made no secret about where I fitted in to his plans. He had considered appealing to the law courts in Shaanxi but dropped the idea as hopeless - the judges were appointed and paid by the very officials that the oil well investors wanted to sue. He had tried petitioning, but not yet to any avail. The local media had found his story too risky to run. So, he said with a worn smile, that left us, the foreign press. There was a chance that our articles, translated, would make it into the “Big Reference”, a confidential digest of foreign reports that is circulated only to top cadres. If they saw it, they might be sympathetic, he said.
I said that to write the story I needed to quote him by name and to get the Shaanxi government’s version of events. He said I was welcome to call the Shaanxi government and agreed after some persuasion to let me use his name. A few days after the article was printed, he received an unexpected, late evening knock at his hotel door. Three men, all in black, told him that they were there to take him to a senior official who was interested to hear his case. The elevator was made of glass and ran down one side of the hotel’s cavernous atrium. One of the men stood by the door, the other two close to Feng, who could see the lobby-level coffee lounge coming to meet him. Waitresses were wiping down the tables and, along the far wall, a fountain made up of alabaster animal statues had fallen silent, turned off for the night.
But the elevator did not stop at the lobby. It went on to the basement car park, where Feng was bundled into the back of an official car and driven for more than 20 hours to Yulin city, northern Shaanxi. Without being charged, he was put in jail. At first his interrogators quizzed him about his contacts with the FT and then switched to investigating the tax returns from his oil well business. Shortly after his detention, his son called me and, scrupulously polite, asked if there was anything I could do to help. Sheepishly, I said there was not.
Almost a year later we met again in Beijing and, far from blaming me for the consequences of our first encounter, Feng punctuated his account of the abduction, detention and interrogation with bursts of laughter. He had been released after a month or so in jail on the condition that he would cease his oil well activism. Since then he had lived an itinerant life, sleeping in the apartments of friends or on the office sofas of colleagues, fearful that the police would find him. But there was no question of him giving up. “This used to be about oil wells. Now it is about our rights. This used to be a problem. Now it is a cause,” he said.
Feng’s new strategy was to lobby. He and a growing group of associates had decided to try to win the support of the central government in Beijing by moral suasion and behind-the-scenes activism. Achieving their aim would require turning Beijing against the local authorities in northern Shaanxi. It was an ambitious scheme that in essence amounted to asking the Communist party to endorse the interests of private entrepreneurs over the actions of the state or, at least, one branch of it.
The audacity of the plan was rendered necessary by the design of China’s political architecture. The Communist party was engineered along Soviet lines to be a single slab of authority. A key tenet, “democratic centralism”, decrees that although debate among members can be tolerated, loyalty and singularity of purpose is required once a policy is adopted. State television news, even after 26 years of economic reform, still shows rows of party cadres poring over documents to “unify their thoughts”. The idea of outside lobbyists inveigling their way into the inner sanctum and playing one arm of the communist hierarchy off against another is anathema.
Anathema, but nevertheless a possibility. In spite of the party’s insistence on unity, the rigours of managing a capitalist economy have carved schisms between competing interest groups. Ministries vie with other ministries for influence. Disagreements over policy and implementation abound. The cracks opening in the monolith have provided purchase for contending schools of thought, giving lobbyists their chance.
The notion, therefore, that a motley bunch of peasant farmers and entrepreneurs from a poor inland province could campaign against their local authority - and even prevail - was certainly far-fetched but perhaps not absurd. “They say that the arm is unable to twist the leg,” said Li Zhiying, an activist working with Feng. “That is true. But I ask you, who is the arm and who is the leg?”
Not all the odds were stacked against the investors. The facts of the case even seemed to favour them: in 1994 the oil ministry and the China National Petroleum Corporation (CNPC), the state-owned oil giant, agreed to turn over the prospecting and development rights for 1,080 sq km of territory in northern Shaanxi to the local authorities. This was an unusual step because oil was an asset over which the state had monopoly ownership. Nevertheless, the agreement was official and public and, in any case, CNPC had searched for oil fields in northern Shaanxi but found nothing tempting.
With little delay, local authorities put the prospecting rights up for sale at around RMB 80,000 (£5,000) for each sq km block. Initially investors were hesitant but after the first gushers spouted, the trickle of farmers trailing across the Loess plateau to buy drilling licences became a flow. “Nodding donkey” derricks appeared on barren hillsides, their rhythmic pumping exerting a hypnotic pull on would-be wildcatters.
Some lost everything. But around 10,000 struck lucky and more than 1,000 small oil companies were founded to operate about 6,000 wells. Soon, one of the poorest places in all China began to get rich. Some investors built new houses. Others sent their children off to the best local boarding schools. A few bought cars and Feng, who until then had done a series of dead-end jobs in state companies, developed the habit of staying in hotel suites.
But by 1999, their luck was turning. An order from the State Economic and Trade Commission, a ministry-level body in Beijing, instructed local authorities to renationalise the private wells, placing them under the control of the Shaanxi Yanchang Oil Industry Group, a new company to be run and owned by Shaanxi provincial authorities. The key provision of this order, however, was that the transference from private to state ownership should take place by “acquisition, merger or share purchases”, according to the document. It was here that the local authorities of Yulin and Yan’an in northern Shaanxi departed from their instructions. In the first place, they did not act on the order for four years, for reasons that remain unclear. Then, when they did act in early 2003, they simply seized the wells by force.
A few years earlier, they might have got away with it. But China in 2003 was changing in important ways. In March, the national legislature passed a landmark amendment to the constitution that for the first time gave private property a legal status equal to that long accorded to state property. In other words, private entrepreneurs for the first time enjoyed rights of ownership and legal action that were, on paper at least, not inferior to their cosseted cousins in state-owned enterprises.
Also around this time, Hu Jintao, the new general secretary of the Communist party, had upgraded the long-neglected constitution by ordering that the politburo - the pinnacle of Chinese power - should study it and govern according to its principles. The People’s Daily, mouthpiece of the party, reflected the emerging zeitgeist by running front page editorials lionising the inviolability of the country’s basic law.
This provided Feng and his associates with an opportunity. He formulated a plan to turn the Shaanxi oil issue into a case study, a litmus test of the party’s fealty to its own principles. To do this he tapped into what is perhaps the most economically liberal official body in China, the All-China Federation of Industry and Commerce, a party organisation with considerable clout.
At the federation, Feng found Bao Yujun, a former deputy editor of the People’s Daily who had also founded the All-China Society of Private Economy Research in 1993. Bao, one of the first officials to call for constitutional protection for private property, saw the Shaanxi case as a natural extension of his work. “This is a classic case of illegal administration and the misuse of administrative power,” Bao said.
He first aired the issue for public debate at a conference he was chairing a short time later in Taizhou, an eastern seaboard city famous as a crucible of private enterprise back in the 1980s. The issue attracted so much interest that Bao agreed to chair another meeting entirely devoted to the Shaanxi case in the Great Hall of the People in Beijing, the seat of China’s legislature.
The academics who attended that meeting in the summer of 2004 were a virtual who’s who of the country’s legal and economic thinkers. On a screen by the podium where Bao sat, they were shown video footage from the Shaanxi county of Ansai revealing evicted oil well investors being brutally treated at an open-air “public arrest meeting”. Their transgression, according to the local officials who appear on the smuggled video, was to resist the seizure of their wells.
The video over, the floor was opened to debate. One academic after another castigated the Shaanxi local authorities. “You are the people’s government. Your power is given to you by the people,” said Li Chengxun, a researcher at the Chinese Academy of Social Sciences, a top state think-tank. “The local governments of northern Shaanxi have trampled on the law. The [oil production] contracts they themselves granted to the peasants, they themselves have torn up.”
Li Yiping, professor at the People’s University in Beijing, saw a broader significance. “China’s democracy, future civilisation and future rule of law relies completely on us to rise up and struggle with law-breaking governments, including at this meeting today,” he said. “Democracy and the rule of law is a process. It is not something that the government bestows.”
For Feng, the Great Hall of the People meeting was a watershed. It had imparted moral legitimacy to his cause and cast the problem of the confiscated wells in the wider context of constitutional loyalty. Securing the backing of prominent academics was a considerable achievement - many of them were from state-run think-tanks and some were even policy advisers to the central government.
But there was another windfall, a video compact disc (VCD). The meeting’s proceedings were filmed and edited into a documentary narrated by a professional who had worked for China Central Television. This was then sent to government officials in Beijing and at all levels of the Shaanxi provincial administration. “When they got the VCD, the pressure on the Shaanxi officials was mounting,” said Li, the activist.
Encouraged by the Great Hall event, the investor activists decided the next step would be to deliver some heat to the Shaanxi county governments. Li assembled three Beijing economists and five lawyers to travel to Shaanxi for a grassroots investigation.
Some investors volunteered to go ahead to warn the authorities in Jingbian, one of the main oil-producing counties, that the “experts” were on their way. “When we got there we told them that this case is not over, that suppression does not equal conclusion,” said Li, a constantly active man with round spectacles.
They also notified the authorities that they would be suing them in court. And for this purpose, Feng and Li had brought with them to Jingbian a celebrated lawyer called Zhu Jiuhu. Zhu had a few months earlier won nationwide recognition by taking on the case of Sun Dawu, a farmer-entrepreneur who had also run up against his local authority. Sun was officially convicted for illegally accepting financial deposits to fund his rural enterprise, but many wondered whether his true transgression was his trenchant criticism of corrupt local governments, which he called “worse than feudal”. Although Zhu had not got Sun off free, the jail sentence he was given was suspended.
The lawsuit that Zhu announced he would be bringing against the Shaanxi authorities would be the largest litigation by the people against the state since the communist revolution in 1949. It would allege theft of up to RMB 7bn in property by 15 county governments, Zhu said later in his Beijing office. But the law, though useful, would not be an end in itself.
”The governments that we are suing control the courts. We do not expect to win in Shaanxi but each time we lose we will appeal to a higher court until finally we get to the supreme court in Beijing,” Zhu said. “The main advantage of the court cases is the social pressure they create [on the local governments].”
My attempts to get the Shaanxi government’s side of the story had been almost fruitless. Telephone calls to various offices in Xian, the provincial capital, had been met with blanket denials that any dispute existed. Eventually, in September last year, a director of the Shaanxi provincial news office, Zhang Lin, agreed to answer my questions. He said the wells had been recovered after state television broadcast negative news about the private oil investors.
What kind of negative news? “Various. I have forgotten,” he said. Asked if it was true that local officials were running the newly established oil companies in northern Shaanxi and benefitting materially from them, Zhang made a clear denial.
”It is impossible that officials are directly involved in business. There is a government policy to separate politics from business,” he said.
I decided to travel to the area in October to check his assertions, as well as those of Feng and his associates. The route to northern Shaanxi from Beijing goes via Yan’an, the revolutionary base of Mao Zedong during the most gruelling years of the communists’ guerrilla war against Chiang Kai-shek’s nationalists and the invading Japanese. That era is now bathed in nostalgia for many Chinese and the hillside caves that Mao and his generals once used have become tourist attractions.
Shops near the caves sold packets of coarse grain and other manifestations of the “Yan’an Spirit” that in Mao’s time had elevated “eating bitterness and enduring labour” into a lofty ideal. The few customers in the shops that Saturday in October were people from Beijing and Shanghai for whom deprivation was a distant memory. One middle-aged man swayed gently to a famous Yan’an song that was playing on the shop’s stereo.
”...there are crops everywhere, everywhere cattle and sheep. The Nanniwan of the past was all barren hills, with no wisp of humanity. But today’s Nanniwan is just not the same as the past. “
Six hours north of Yan’an by car is Jingbian, the county that Feng’s disputed oil wells are in. As my taxi climbed through the hills, passing “nodding donkey” derricks to the left and right, I sought insights into local concerns by reading the slogans on walls and signposts by the side of the road. “Having One Child Is Good,” said one. “Everybody Takes Care of Underground Cables,” read another. My driver said that to be understood, their meaning had to be inverted. People here wanted several children because that meant more labour, he said. Telecoms cables were often dug up and sold.
In Ansai county, the scene of violent confrontations between the local government and oil well investors, there was a large sign reading, “Put People First”, the Hu Jintao formulation for a kinder, gentler government.
In Jingbian I went to the office of Gao Zhongcheng, concurrently the deputy mayor and general manager of the Jingbian Oil Drilling Company. Metal plaques on the gate identified the company as both a government and Communist party concern. When I entered his office, Gao was not pleased to see me. “What the hell are you up to?” he shouted, breaking up a meeting.
I identified myself as a journalist and he said he was calling the police. I told him that I had come to get the Jingbian government’s side of the story but his irritation seemed to deepen. “These are illegal reporting activities. The police will settle this,” he said. I was escorted down the corridor to wait in a separate room, and left alone. Open on a desk in front of me were stacks of accounting documents detailing production from the confiscated wells. The revenue of Gao’s company, according to my hurried calculations, ran to millions of renminbi a day.
I was not sure what the police, when they turned up, would do with me. I tried to listen through the door to a conversation in the corridor for clues. After a while one of Gao’s assistants appeared with a cup of hot water. When the police arrived after another half hour, the water was replaced by tea. “Jasmine,” said the assistant as he put the cup down next to me. An hour of questions later, I was ordered to return to Yan’an by car immediately.
As the first snows of the winter fell in Beijing at the end of last year, the oil well lobbyists were counting the costs and assessing the progress of a unique campaign that had begun some 18 months earlier when I first met Feng in the Beijing Hotel.
In some respects, their efforts had clearly borne fruit. The Shaanxi authorities had agreed finally to offer compensation. However, this sign of progress was undermined by the fact that the amount being offered - 20 per cent of the wells’ value - was considered derisory by the lobbyists, said Feng, Zhu and Li. Worse still was that some investors had accepted the compensation offer, splintering the unity of the group that the lobbyists served and giving local governments a precedent to exploit, the lobbyists said.
Another development was similarly ambiguous. News emerged in December that Jia Zhibang, the Shaanxi provincial governor who had first ordered the confiscation of the wells, had been removed from his post and sent to a relatively lowly position in Beijing. Jia had been the lobbyists’ bete noir and his successor, Chen Deming, was the progressive former mayor of Suzhou, an east coast boomtown that owed its prominence to the dynamism of its private enterprises.
But although these changes seemed to favour the investors, there was no evidence that Jia’s removal or Chen’s appointment had anything to do with the oil well issue. Secrecy always obscures the reasons for top Communist party personnel shifts. It was not certain, therefore, that Chen wished - or would be able - to force county bosses in an area covering around half of his province to hand back the oil wells or provide full compensation for the investors’ losses.
The attitude of Beijing’s top leadership was also opaque. According to the lobbyists, one politburo member, Wu Bangguo, had been briefed on the dispute and had signed a secret memo saying the issue should be resolved with reference to the interests of the investors. But this could not be independently confirmed. Wu, in common with other politburo members, refrains from media contact and his office did not answer repeated requests for comment.
Elsewhere in the bureaucracy, the lobbyists detected more hopeful soundings. The National Development and Reform Commission (NDRC), the key economic policy ministry, was considering scrapping a monopoly held by state companies on the oil business. If that initiative materialises, it would almost certainly reinforce the investors’ claim on the wells they had owned, the lobbyists said.
But for every strand of hope, there were setbacks. A website that the lobbyists had set up partly to publish open letters to senior officials - including one to President Hu - was shut down without warning in October. Even though the activists soon resurrected it by slightly changing its address, the episode was proof that the Shaanxi authorities had allies in powerful places. Such an impression was reinforced by the articles that would appear from time to time in the People’s Daily criticising the private oil well investors for allegedly wasteful and environmentally unfriendly extraction techniques.
Overall though, it was beyond doubt that the activists had achieved something remarkable. They had conducted a lobbying campaign against powerful local governments and won support from some of the country’s top lawyers and academics. They had justified their claims under a newly amended constitution, testing President Hu’s pledge to govern according to its tenets. And they had kept up the pressure for more than a year and a half without being muzzled by the party’s propaganda department or shut down by the police.
In the longer run, however, their future remains uncertain. The battle for justice and recognition from the cold machinery of state was early this year running into an entirely new type of adversary - money. The funds that Feng and other investors had accumulated during the days when they pumped oil were dwindling. Lobbying is an expensive business. The lawyers need to be paid, the venues for conferences need to be hired, the travelling expenses of participants need to be reimbursed, the professionals who made the video discs have to be compensated for their time and expertise, and the website needs to be constantly updated.
Money was the thing that marked Feng and his associates apart from the rural petitioners waiting for a shot at justice. It was also the defining characteristic of the middle class, a segment of society that more than any other was driving China’s modernisation, paying its taxes, forming its opinions and starting in small ways to hold the Communist government accountable for its actions.
But the power of money to talk has made the lobbyists’ quest sensitive to the passage of time. They need to win a more emphatic victory before their activism ebbs into penury. As Li said, “Without money we will become just like the ordinary petitioners that wait forever for mercy by state petitions office.”
James Kynge is the former FT Beijing bureau chief.
