Saturday, April 22, 2006

Mobocracy Update

Courtesy of Third Party Dreamer, who talked to a restaurant owner:

The restaurant owners (see ambiv’s post, below) are fighting back, but it’s clearly a losing battle. In front of each of the restaurants now hangs a protest banner, white with black characters: “High Honesty Supermarket, give back our blood-sweat money!” “You illegally cut off our electricity, and treat tax-paying people like convicts!”, and so on. Next time we go we’ll try to remember to take the camera so we can post some photos on the website.

Today, when I was ordering some take-out from our usual restaurant (and, just like the last two times we ate there, there were no other customers), I asked one of the owners who it was that wanted to tear down the buildings. The protest banners all accuse the High Honesty Supermarket, but that folded (or moved out, anyway) a few months ago, so I was confused. Well, it turns out that the land belongs to the railroad bureau, and is managed by a company (High Honesty) that is a subsidiary of the railroad department. When they signed the contract to rent the property all the business owners were told that that row would be torn down, but not before the end of 2008. There are about six restaurants on that row, plus a bunch of other small-scale shops clinging to the edges of the old warehouse that was the High Honesty Supermarket, now just an empty shell. Well, the business owners took that assurance in good faith and signed a contract, but apparently one that didn’t specify in writing that the buildings would be useable until the end of 2008. Something (perhaps the skyrocketing prices and, presumably, profits in the area) made the company change its mind and decide to develop the property into luxury apartments NOW rather than later.

Unforunately, in the contract there is no stipulation that matches what the business owners were promised orally, and “we didn’t tape-record what they said at the time; we trusted them,” the owner of our usual restaurant says. So the lawyer they’re consulting says they don’t have much of a legal leg to stand on.

The lawyer did inform them that there is nothing illegal about snipping the bailing wire that closed off the main gates to their compound, though, so they went ahead and did it, and now we can go through the gates nearest our apartment, just like before. Another of the railroad company’s underhanded tactics had been to shut off the electricity all over the compound; in response, the restaurant owners have banded together and bought a generator.

So far the situation has not brought out the most typical and dramatic feature of China’s mobocracy, namely stick-wielding thugs. But it may only be a matter of time. I have read plenty of newspaper articles that begin with a dispute such as this one– developers want a family or a small business to get off of profitable land so it can be made into housing for rich people– and end with a gang of stick-wielding thugs (sometimes in the hundreds) scaring the little people off if they prove insufficiently malleable.

When we first arrived in Beijing there was an article about a family-run pheasant farm outside of Beijing that developers desperately wanted to remake. They offered the family some paltry compensation, but not nearly enough to pay for them to move the entire farm to a new location. The family refused, and the developer refused to offer more compensation. Both sides dug in their heels. Then one October midnight, out of nowhere 100 guys with lead pipes showed up at the pheasant farm. They broke in to the yard, bludgeoned every last one of the pheasants to death, and left. No one claimed responsibility, and no one seemed to know where the thugs had come from or who they were, but conveniently, they family no longer had a pheasant farm that would require extra compensation.

Anyway, fortunately this hasn’t devolved to that level yet, but it certainly has the makings of an ugly and all-too-typical conflict between small business owners and big companies backed (or entirely owned) by the state. 

2 comments:

ChinaLawBlog said...

At the risk of sounding cold and unfeeling, and overly legalistic, I cannot help but wonder how different this all would have been had the small business owners retained a lawyer to review their lease. Any decent lawyer would hvae put in the contract that the tenants would have full and unimpeded usage until the date promised by the landlord. I cannot help but see this post as further evidence of the need for written contracts in China (and everywhere else) and not evidence of the power of the state.

China, like most civil law contracts, places less value on oral contracts than, let's say, the United States. Even in the United States, however (and I am not a real estate lawyer so I may be out of bounds here), real estate contracts generally need to be in writing.



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Wulingren said...

Any more discoveries about this?