The Development of Resettlement Policy in China: Two Case Studies in Sichuan and Hebei Provinces

Under praparation by John Bizer, Ph.D. and Tod Ragsdale, Ph.D.
May 1997

This page is under construction. We will include captioned photographs.

This is a brief overview of resettlement history, issues and policies in China, well-documented by studies conducted for the World Bank, the Asian Development Bank and other international lending institutions. Within this context, this page describes the elements of the resettlement planning processes for two major hydroelectric developments in China: one in Sichuan Province, which requires requiring relocation of approximately 30,000 persons, and another in Hebei Province, where 3,000 persons will be relocated.

The first project, for which China is receiving about US$1 billion in loans and which will have a total installed capacity of 3,300 MW, is located in the extreme southwest portion of Sichuan Province, impounding 140 km of the Yalong River, one of three major tributaries of the Yangtze (Changjiang). The valley where the project is located is V-shaped with only a narrow band of flood plain along is banks. There are numerous small tributaries that contribute to the Yalong, with the largest being the Ganyu River. The upper reaches of the Ganyu are relatively flat, which is in contrast to the generally rugged, mountainous terraine terrain of the remainder of the valley affected by the project. The region is sparsely populated, with the major population center, including approximately 50% of the affected population, located in the Ganyu River at a county town. Construction of the project began in 1991, with diversion of the river occurring in 1994. The project is expected to begin generation in 1998 with full capacity available in 1999.

The second project will consist of two reservoirs located in Jingxing County near the provincial boundary with Shanxi Province, approximately 100 km from Shijiazhuang City, the capital city of Hebei Province. The lower reservoir will be formed by the completing construction of a existing dam, originally designed as an irrigation water supply project. The existing dam was originally constructed in the 1970s. The construction was not completed because of a due to lack of funding. The upper reservoir will be constructed at the top of a relatively large mesa which is typical of the terraine terrain of this area. When completed, the project will provide 1,000 MW of peak energy demand generating capacity, which is currently derived from coal-fired, thermal generating stations. The rugged terraine terrain of the project area is not condusive conducive to intensive agriculture and, consequently, the population density in the area is relatively low, compared with other areas of Jingxing County. When the original dam was constructed, approximatley approximately 3,000 persons from four villages were relocated to other portions the north portion of the county. A consequence of this resettlement program was that the populations of two villages were separated.

History of Resettlement in China - Development of a Policy

During the forty years from 1950 to 1990, China carried out a massive capital investment program. Aside from railroads, roads, canals, airports, factories, and urban development, China has built over 86,000 new reservoirs, including 300 major reservoirs. (World Bank 1993. China: Involuntary Resettlement. Washington, DC). After building some 523 dams per year between 1951-1982, China has started construction on 150 dams per year in the early 1990s, about half of the dams started each year world-wide. Under its Seventh Five-Year Plan (1986-90), China planned to add 30,000 to 35,000 megawatts of capacity, a 55 to 80 percent increase over previous five-year plans.

As a result of this commitment to construct hydroelectric projects, China has had to resettle over 10 million people in the past 40 years. To date, the largest completed resettlement effort for a hydropower project was associated with the Danjiangkou project on the Yangtze River (Changjiang) where 383,000 persons were resettled. In addition to the resettlement efforts associated with hydropower development, major capital developments in China have resulted in the relocation of more than 30 million people since 1950. Through this period, the resettlement policies of China China's resettlement policies have gone through several phases associated with changing policies different approaches of the government has taken toward increasing the welfare of its population. The purpose of this paper is to describe how current resettlement policies in China and to suggest that these policies are applied uniformly throughout the country.

In 1952, China issued a set of resettlement regulations that, if followed, might have led to reasonably successful outcomes for some major projects of the time such as the Danjiangkou, Sanmenxia, Xinanjiang, Dongpinghu. Unfortunately, these regulations were abandoned during the Great Leap Forward and Cultural Revolution of 1958 and 1967. The 1952 resettlement regulations provided for:

Prior to 1980, resettlers typically sacrificed for, rather than benefited from, the projects that affected them. For reservoirs, careful planning and adequate funding of rural large-scale resettlement efforts of the early 1950s gave way to demands for self-sacrifice in the Great Leap Forward that began in 1958. This was followed by the Cultural Revolution and, until 1978, rural resettlers and their hosts were expected to rely primarily on their own labor and savings rather than on adequate compensation to recover lost income and assets. Of the populations affected by hydroelectric development during this era, only about one third of the people are judged by the Chinese government to have recreated sufficient and secure livelihoods for themselves.

In 1981, the government enacted the Reservoir Resettlement Law and Regulation, which established a "reservoir maintenance fund" to assist all reservoir resettlers from the 1950s onward who were still lagging behind average rural incomes. It required all hydropower stations to allocate RMB 0.001 yuan per kWh generated to fund activities designed to improve living conditions or the productive infrastructure of reservoir-affected communities.

Responding to a growing difficulty convincing rural people to yield land for low rates of compensation, a 1982 regulation on the acquisition of land for state construction projects and a 1986 Land Administration Law with its 1988 amendments: raised compensation rates; clarified and accelerated land titling; stipulated protection of incomes and assets during resettlement; required that affected localities be consulted during project design stage; and, for the first time, gave the right to resettlers to challenge government decisions in the courts.

In 1985, the Ministry of Water Resources (MWR) instituted a new set of reservoir resettlement design requirements. These regulations reaffirmed the policies of 1950 and expanded them to include:

Responsibilities for planning and implementing the resettlement programs are shared between the Design Institutes responsible for the technical design of the projects and the local governments. The latter are responsible for the detailed planning and for developing and managing the resettlement budgets estimates for local resettlement. Both regulations stressed the importance of incorporating economic development plans in resettlement strategies, rather than simply providing consumption subsidies to resettlers. Both laid great stress on making legitimate use of resettlement funds, including state audits (World Bank, 1993).

Resettlement impacts of hydroelectric projects development are much greater and more difficult to deal with than those for any other project type. Entire villages, indeed sometimes townships, are inundated by reservoirs. Whether moved as a whole or in parts, the villagers must be placed on land already used by others, often in a new political jurisdiction. When that happens, Chinese villagers do not escape the host-resettler tensions frequently observed in resettlement efforts in other countries. Income from all sources, whether field crops, animal husbandry, sideline enterprises or off-farm employment is threatened by the move to new locations. Fertile bottom lands are lost and, frequently, the new land has less dependable water supplies and more fragile soils. New cropping patterns must be mastered. Land scarcity forces many more people to look for non-agricultural employment. In these cases much more of the planning and implementation is, of necessity, done for, rather than by, the resettlers. (World Bank, 1993).

Components of Resettlement Planning in China

Pre-feasibility Planning and Resettlement

Comparison of the relative numbers of persons relocated by hydroelectric development. The first basic premise of resettlement planning for hydroelectric projects is to minimize the number of persons to be relocated. This is probably the most difficult task in selecting and promoting a hydroelectric project in China. This seems to be a parameter is frequently not considered in planning hydroelectric projects in many countries. However, in light of the population density in China, the relative number of persons that are relocated is surprisingly low relative to the number of kilowatts of installed capacity (Goodland, 1996).

During the initial, pre-feasibility planning for a project, a preliminary estimate of the number of persons living within the project area is generally obtained from the local government. Using these numbers, an estimate of the resettlement effort that will be required for development is developed and is used in the preparation of a preliminary cost estimate for the project. At the pre-feasibility level, such an estimate and a description of the scope of the resettlement program is a necessary component of acquiring State approval to proceed to the feasibility level evaluation of the project. The incorporation of preliminary resettlement planning at the pre-feasibility stage of planning for a hydroelectric project highlights a basic requirement for all hydroelectric developments in China: Resettlement plans are integral to the entire project planning process. A project cannot be approved for further consideration without commensurate plans for resettlement, and the government's requirement that resettlement costs be incorporated into the project's budget is an incentive to minimize resettlement.

Developing the Feasibility Resettlement Program

Once a project is approved for feasibility level evaluation, the resettlement planning process involves refining the estimate of the number of persons within the impoundment area that will require relocation. At the same time, a delineation of their assets is assembled to enable plannning planning for the compensation package for the relocated population. At this point in the planning process, the a resettlement planning organization is developed that will be responsible for planning and implementing the resettlement program. The primary attempt here is to involve, to the extent possible, the local governments and the affected population in the planning process. However, the degree of involvement of the local governments is somewhat dependent on the site-specific and regional conditions in the project area. The resettlement planning organization is overseen at the Central Government level. The Central Government, through the Ministries of Electric Power and of Water Resources for water resource projects, oversees the resettlement planning organization. Whatever the case the site-specific and regional conditions, at the local administrative level, the individuals affected by the project play a major role in the planning process.

Each Province in turn, has an established resettlement bureau that is responsible for the planning and implementation of resettlement programs within the Province. This Provincial Resettlement Bureau, in turn, coordinates resettlement planning at the City level. For example, Resettlement resettlement planning for the larger of the two projects considered here, in Sichuan Province, is being implemented primarily through the local town Resettlement Bureau and is coordinated and overseen by the Sichuan Provincial Resettlement Bureau in Chengdu. At the smaller of the two projects, in Hebei Province, the Hebei Resettlement Bureau, in Shijiazhuang is coordinating and overseeing the planning process of the Shijiazhuang City resettlement bureau. A major difference in these two projects is that the former project will involve relocation of residents between City administrative areas whereas the relocation program for the second and smaller project will involve only one City area. Consequently, the provincial resettlement bureau in Sichuan has assumed more responsibility for the planning process because coordination between City administrations is required. For the project in Hebei province, primary responsibility for coordinating the plannning planning process lies with the City Bureau. Further, resettlement for the project in Hebei Province can be accomplished entirely within Jingxing County, under the administrative jurisdiction of the City. Consequently, the actual plannning planning for the resettlement program rests with the County resettlement bureau.

Results of household surveys for Sichuan and Hebei projects' resettlement planning. At the feasibility level of planning for the project, the resettlement planners undertake a house-to-house survey of the residents within the impoundment zone. Once the maximum reservoir operating elevation is determined, based on the energy and economic analyses, the survey is conducted. The survey is conducted once the maximum reservoir operating elevation is determined, based on the energy and economic analyses. The survey team is assembled from the County and Township resettlement agencies. The detail and consistency of these surveys are illustrated in the results of the initial surveys conducted. The World Bank has rated the accuracy of these surveys far above that normally found in Third World resettlement planning (World Bank, 1993).

During this initial survey, the entire affected population is categorized in to two basic classes: (1) persons who derive their primary income from agricultural production and (2) those who derive their income from urban employment. In China, all persons are registered either as a rural resident or an urban resident. The relative proportions of the population falling into each category is an important factor in the resettlement planning effort. For agriculturally based families, a criterion for the resettlement program is that the families should be able to maintain their income from agriculture. For urban families, opportunities for employment in various enterprises is the primary planning criterion.

Once the results of the survey are tabulated, the scope of the planning for the resettlement plan can be defined. For Sichuan project, the basic survey indicated that approximately 24,000 persons were residing in the impoundment zone with approximately 50% of the population deriving their income and livelihood from rural, agricultural production. At the Hebei project, the number of persons affected by the project was approximately 2,500, of which nearly 90 percent are rural residents although a significant proportion of the population supplements their income from temporary work in various enterprises within the county. Because the duration of the planning process in China is generally quite long, the number of persons in the project area at the time of the survey is escalated to the anticipated schedule for start of construction. For the Sichuan project, the projected number of persons that will require relocation is approximately 30,000 whereas at the Hebei project, the projected number at the time of implementation of the project is approximately 3,000 persons. This escalation is based on the estimated population growth rate for the project area. Additionally, estimates of the compensation costs for the resettlement plan is based on the fair market value of the population's assets, including the market value of agricultural products. These market values are also escalated, based on the inflation rates, according to the construction schedule.

An important aspect of the initial survey is that it establishes several components of the resettlement planning and implementation process. These include:

A basic strategy of the resettlement planning process is to move the affected communities as a unit, if possible, within the same administrative area, either within the township or within the county. Within this framework, the first consideration is to provide for moving the resettlers out of the impoundment zones to adjacent areas. In Sichuan, approximately 9,000 residents of the impoundment zone will be relocated to new sites immediately adjacent to the reservoir. In Hebei, restricted land capability around the reservoir has restricted local resettlement to about 390 persons, within their original village boundaries.

In many areas, however, agricultural intensification attendant to this "move back" strategy offers little promise to replace lost income because of population densities, either due to lack of suitable agricultural areas, as at both project, or due to the intensity of agricultural development in the adjacent areas, also exhibited in the Hebei project area. In this case, the second consideration is to move the remainder of the affected population to other locations within the same township or county if possible.

For the Sichuan project, relocation to another area was required for approximately 8,000 rural persons residing along the Yalong River. Because of the number of persons involved in the relocation program, a number of sites were identified as potential host communities. Each of these sites was evaluated relative to their ability to support the relocated persons. As part of this evaluation, leaders of the affected communities were given the opportunity to visit the sites. Opinions and suggestions were elicited from these leaders and adjustments to the criteria for planning the host sites were incorporated. In one case, further evaluation of the site indicated that the available land was insufficient and the cost for providing the necessary infrastructure was not economic. As a consequence, a suggestion from the affected population involved a plan to maintain the community at a location near their current village by constructing dikes along the river to prevent flooding by the impoundment. This suggestion was evaluated by the resettlement designers who ultimately adopted the suggestion.

At the Hebei project, nearly all of the population will be relocated to other areas within Jingxing County, within which the entire project is located. Selection of sites for hosting the relocated population was accomplished in direct consultation with the appropriate administrative agencies. Because a portion of the population in about 800 persons from two villages in the project area was were relocated at the time the existing reservoir was constructed in 1977, a premise for the resettlement plan was to reunite the communities and villages that were separated by the previous resettlement program. Another facet of this plan is that the original relocation program was implemented in the 1970's, when the resettlement policies of the 1950's had been abandoned under the Cultural Revolution, lacked the compensation and assistance programs that now characterize resettlement in China. Although, because of better income-earning potential in the more accessible and urbanized northern Jingxing County, the original resettlers have by and large improved upon their previous standard of living, By reintegrating the separated communities offers an opportunity to remedy some of the remaining shortcomings of the original resettlement caused by the lack of supportive resettlement policies in the 1970s. The lack of support during the original relocation can be remedied.

The resettlement plan for the Hebei project illustrates an important facet of China's land policy that greatly facilitates the resettlement planning process. Chinese villagers jointly share title to all village land. Although overall production is monitored and administered at the township and county levels of government, each village is responsible for allocating land to individual families. As a consequence, compensation for land acquired for resettlement purposes is paid to the host villages which, in turn, may use the funds to upgrade their remaining holdings, or invest in non-farm enterprises. Also, the inability of individuals to buy or sell land allows all collective members, whatever their economic circumstances, to have an equal share in a key asset -- agricultural land -- when resettlement is carried out (World Bank, 1993).

In the Hebei project, host village land for resettlement is expropriated from a large number of villages. Each village loses a proportionately small amount of land, and they can easily redistribute their remaining land within the community. Host villages will then invest the land compensation in non-agricultural enterprises, for which the proximity of urban areas in Northern Jingxing County holds much promise, or in developing their remaining land.

In evaluating the amount of compensation given to the resettled families, a key consideration in determining the suitability of an area to host the resettled population is the production potential of the agricultural land. When the production potential of all land resources of an identified site falls short of the before-project production levels, the resettlement planning strategy calls for creation of off-farm jobs sufficient to replace lost income of the families. The significance of the production-potential of the land as a measure of compensation is inherent in the measures of agricultural land commonly used in agricultural areas. A "conventional mu", or agricultural land unit is defined as the amount of land required to raise 100 kg of grain. A "measured mu", on the other hand is one fifteenth of a hectare. Thus, a conventional mu may actually be more or less that than the measured mu depending upon the fertility of the soils.

This touches on an aspect of the Chinese resettlement policy that is quite different from policies elsewhere in the world, where the income from farms owned by others is frequently not adequately identified or compensated for:

"A common problem in resettlement internationally is that "losses" tend to be defined purely in terms of lost physical assets. Compensation strategies then value and compensate for those physical losses...Whether employment comes through sharecropping (rare in China but common elsewhere) or wage labor, resettlement plans often assume that incomes can be maintained through similar jobs found in the resettling community elsewhere. All too often, new jobs come only at lower wages or after extended unemployment." (World Bank, 1993).

In China, the resettlement plan is framed in terms of the number of jobs and other income sources that must be created to ensure employment of all displaced workers. The resettlement program, within the context of the project, must provide for continued income to the displaced workers such that the overall quality of life for the relocated families is improved. Although all expropriated physical assets are compensated directly, a major component of the planning process is the commitment to replacing jobs which often leads to additional compensation being given to the affected communities which increases the chances of achieving resettlement success.

Design Level Planning to Improve the Quality of Life

The details of the resettlement plan are developed At at the design level of planning. the details of the resettlement plan are developed. A standard for developing the design of the resettlement plan is that, overall, the quality of life of both the resettled communities and the host communities should be enhanced. This has the public relations benefit of gaining the support of the affected population. Throughout the design process, the local families and officials are fully integrated into the planning process. Site plans are prepared by the design institutes and are thoroughly reviewed by the individuals who are subject to the plans. Community meetings are convened and suggestions and comments are elicited. The close association between the planning organizations and the affected persons is illustrated through the familiarity of the resettlement officials with the affected residents, as witnessed repeatedly by the authors of this paper. At the Sichuan project, for example, where much of the planning is being conducted at the provincial level, members of the provincial resettlement bureau are acquainted with residents of the affected villages. Within each village, a memeber member of the community is identified as the resettlement coordinator for the village. This person receives specialized training and serves as a conduit for communication between the village and all levels of the resettlement agency administrative structure.

Elements of the resettlement design which provide for the enhancement of the quality of life of the affected communities include[:] design of appropriate infrastructure[,] including water supply facilities for domestic use and for irrigation use; extensive land development programs, including terracing and soil enrichment; wastewater treatment facilities; health care facilities; education facilities; and appropriate technical and social training programs. Designs of the new communities include planning of residential areas and delineation of agricultural or enterprises within the relocated communities. In cases, where new agricultural lands will be developed, plans for regrading of the hills and construction of the fields is included in the design of the host site.

A major component of the design level planning is to integrate integrating the social structures of the relocated and host communities. Among the programs that are considered is the integration and communication among between the resettled and host village administrative units and training programs necessary for the adaptation of the relocated communities to the agricultural requirements of the new lands. Often, the farmers must learn new agricultural techniques to enable them to grow crops specifically adapted to the local conditions. Additionally, opportunities for establishing new enterprises such as aquaculture or small manufacturing industries are developed. At the Sichuan project, a commercial fishery is being planned for implementation in the Ganyu arm of the reservoir. This includes planning for a hatchery and rearing ponds for fingerlings that will eventually be introduced either to the reservoir as a whole or to suspended fish pens.

Where national minorities are resettled, as in the case of Sichuan, the resettlement impacts are usually mitigated by these ethnic groups usually being the majority population within the region and also by liberal policies in China for self-governance among the country's national minorities. China's laws and regulations provide, in consonance with World Bank policies, not only for comprehensive 'development resettlement' planning, but also for:

The Hebei project resettlement involves no minorities, as both resettled and host villages are uniformly China's majority Han Chinese.

Implementation of the Plan and Continuing Support

When the design of the hydroelectric project is approved and construction begins, the resettlement plan is implemented. Where appropriate, new villages and towns are constructed[,] and residents are relocated to the new towns, in coordination with the construction of the project. Frequently, complete relocation of the affected population requires nearly as much time to implement as construction of the hydroelectric facilities. Therefore, scheduling of the resettlement program must be developed in close coordination with the scheduling of project construction. Often this means that residents are relocated well in advance of the actual completion of the dam and powerhouse facilities. At the Sichuan project, for example, a portion of the population was relocated prior to closure of the coffer dam to divert water from the construction site. This afforded the opportunity for conducting a test of the resettlement plan which in turn has led to some modification of the [relocation] plan to relocate for the remainder of the affected population.

Beyond the physical relocation, another facet of China’s comprehensive resettlement policies is manifested in the post-relocation phase of the project. That is, relocation of the residents to their new homes is not the end of the resettlement program. Within the framework of the resettlement program, the project must provide for more than the immediate needs of the relocated population. At implementation, agricultural areas are not likely to attain full productivity for a period of time after initial development, particularly where new agricultural lands are developed. Thus, the incomes of the relocated families are subsidized for a period of up to three years or until income from their land equals or exceeds the productivity of the land they lost. Similarly, incomes of urban families are subsidized until the laborers are retrained to enable employment in existing or new enterprises in the new communities.

As mentioned earlier, another feature of resettlement programs is the obligation of the project to contribute 0.001 yuan RMB per kilowatt-hour generated to the resettlement program. The money is allocated to the resettlement bureaus for distribution to the affected communities. These funds are administered directly for the benefit of the relocated and host communities. Programs funded by this fund include operating expenses for infrastructure facilities at the host resettlement sites. For example, the Hongge Resettlement area for the Sichuan project requires pumping of irrigation water from the Jinsha River which will be paid for from the assessed fee. Funding for education programs and health care facilities and staff within the resettled communities will also be financed by these funds.

At the Hebei project, some of the funds will be incorporated into a revolving fund which will be used by the affected communities as seed money to establish new enterprises. The funds will be loaned to new enterprises to finance capital costs and to provide revenues to the new enterprises until they become self-sustaining and profitable. Once established, the enterprises repay the loans at reduced interest rates. This revolving fund program is part of an evolving trend in the administration of resettlement plans designed to stimulate investments in industry and economic development. In accordance with Hebei Province’s policies, the funds will be used to support resettlers for a period of 5-10 years, depending on the degree of production recovery and development.

This illustrates that while the main outline of resettlement policies is determined by China’s Central Government, provincial governments have some latitude in determining local resettlement policies. At both Sichuan and Hebei projects, the Provincial government will also give preferential treatment, in the form of tax incentives and other advantages to establish new enterprises. While the use of tax incentives and the revolving funds will likely be more useful for the resettlers at the more urbanized Hebei project, these same advantages are available to the resettlement program for the Sichuan project.

Summary and Conclusions

Resettlement planning in China has undergone [a] dramatic evolution since its initial inception in the early 1950's. Although, as a consequence of policies implemented during the Great Leap Forward and the Cultural Revolution, China gained a reputation for not providing for the resettlement of persons affected by major capital projects, Current resettlement policies and programs are now recognized as a benchmark for the rest of the world. Major characteristics of the resettlement planning process in China include:

A salient feature of the Shichuan and Hebei project resettlement plans is the uniformity of application of resettlement policies, whether the involuntary resettlement is upwards of 30,000 or the relatively smaller 3,000 persons displaced by the Hebei project. A brief review of resettlement plans for other planned hydroelectric projects, such as the Hongjaidu Project in Guizhou Province (requiring relocation of 40,000 persons) and the Longtan Hydroelectric Project in Guangxi and Guizhou Provinces (requiring relocation of 75,000 persons) or the recently completed resettlement program for the Dengfeng Hydroelectric Project in Guizhou Province (relocation of 30,000 persons), confirm the uniformity of applying the resettlement policies throughout China and demonstrate that these programs will achieve success.

Citations

Goodland, R. L. 1996. "Distinguishing Better Dams From Worse". International Water Power and Dam Construction. September, pp 34-36.

World Bank. 1993. China: Involuntary Resettlement. Washington, DC: Office of the Director, China and Mongolia Department, East Asia and Pacific Regional Office. June 8.

Return to the main MESAS resources page, to the social resources page, to Resettlement Policy in India or to Checklist for Resettlement -- A Case Study from Nepal/India.