Huaxi Village, known as the world’s first village in China, is located in Huashi Town, Jiangyin City, Wuxi City, Jiangsu Province, REUTERS
Huaxi Village, known as the world’s first village in mainland China, is located in Huashi Town, Jiangyin City, Wuxi City, Jiangsu Province.
Huaxi Village, known as the world’s first village in mainland China, is located in the western part of Huashi Town, Jiangyin City, Wuxi City, Jiangsu Province, with a total area of 35 square kilometers, and has been famous at Home and abroad for its “luxury cars and villas” since the late 1990s. Since its inception, “collectivism” has permeated all behavioral paradigms in Huaxi Village and is considered by the Chinese central government as a typical example of the “collectivist economic model”.
Wu Renbao, the first Party Secretary of Huaxi Village and the man who created the legend of Huaxi Village, was a delegate to the 10th and 11th National Congresses of the Communist Party of China, a deputy to the 6th, 7th and 8th National People’s Congresses, and was received by successive General Secretaries of the Communist Party of China, Jiang Zemin, Hu Jintao and Xi Jinping.
Several years prior to this, news of Huaxi Village’s bankruptcy, indebtedness and myth-busting had been quietly circulating among the people. With the death of Wu Renbao and his handing over of the reins of Huaxi Village to his fourth son Wu Xie’en (the current Party Secretary of Huaxi Village), the problems behind the “strongman model” that Huaxi Village has relied on for so many years were gradually revealed.
Several Chinese media outlets tried to cover the story, and observers looked forward to an opportunity to fully evaluate and rethink the possibility of a Communist-led socialist economic development model. However, due to its great sensitivity, the Chinese media coverage and public discussion of Huaxi Village was stopped by the Chinese Communist Party after a few days of circulation.
The “Strong Man” and Communism
Huaxi Village was founded in 1961. At that Time, Huaxi Village was no different from many other villages in China, with an annual per capita income of less than 20 yuan and villagers struggling to make ends meet.
However, due to the nationwide economic difficulties in the 1950s, the villagers were forced to divest themselves of their “state cadre” status as a member of the Finance and Food Committee of the People’s Government of Huashi Gourdai Township, Jiangyin County, Jiangsu Province. The emergence of Wu Renbao, who had to be transferred to Huaxi Village, made Huaxi Village a success, and after years of development, it became known as the “No. 1 village in the world” in China.
In the 1960s, when the whole country was developing a socialist economy, Wu Renbao, then secretary of the Party Committee of Huaxi Village, secretly set up a small mill and a small hardware factory, becoming the “first to get rich” in the village, according to the Chinese media “China Today”. In the 1980s, Wu Renbao did not follow the trend, but insisted on the road of making the collective economy bigger and stronger.
These actions were very risky at the time, but later Huaxi Village was affirmed by the top leaders of the central government, earning Wu Renbao a reputation for boldness and open-mindedness.
But behind the reputation Wu Renbao also has a relatively conservative and follow the traditional side. It is reported that his fourth son, Wu Xie’en, whom he valued most in his later years and successfully succeeded, had earlier been given up for adoption by Mr. and Mrs. Wu Renbao and joined the woman’s Family at a marriageable age.
In rural areas of China, having many sons means that the family is poor and has less land to share, and the youngest son will have a hard time getting a daughter-in-law, so the common practice is to give the youngest son to someone else and join a family without sons when he becomes an adult, and the family property of his own family is inherited jointly by the other sons. The custom has continued over the years, so that later, even if family conditions allow, the inkling of the rules, the family with many sons, will mostly choose to send the youngest son away. And before Wu Xieen, Wu Renbao had three sons.
Talking about Wu Renbao, compared to the praise and praise of the outside world, the older villagers of Huaxi Village said, “the old secretary in the village will always wear black cloth shoes, so many entrepreneurs and officials to Huaxi Village to give him gifts, but he usually do not even eat those mountains and seafood, on eating noodles and eggs, especially simple, and we are the same villagers.”
Combing the development history of Huaxi Village, it can be found that the real turnaround of Huaxi Village appeared on March 1, 1992, which coincided with the end of Deng Xiaoping’s southern tour. Also according to China Today, at 3 a.m. on March 1, the main village cadres of Huaxi Village were notified by the switchboard to attend an emergency meeting.
At the meeting, Wu Renbao announced his judgment on the current situation: “Deng Xiaoping has spoken, and the economy is going to develop greatly”. At that time, the content of Deng Xiaoping’s Southern Tour speech had not yet been conveyed to the grassroots, but eight commentary articles published in the Shenzhen Special Zone newspaper, located in Guangdong Province, caught Wu’s attention, and China Today reported that Wu was keenly aware that these articles conveyed Deng Xiaoping’s ideas.
Public information shows that encouraging the development and improvement of a socialist market economy, narrowing the gap between the rich and the poor and gradually achieving common prosperity, combating corruption among government officials and managing the moral decline of society are the issues that Deng Xiaoping proposed should be addressed in the reform during this southern tour speech. Among them, the most lengthy development of socialist market economy gives Wu Renbao hope.
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So, he further judged that economic development is bound to lead to an increase in the price of raw materials, so he met overnight and set a strategy of “borrowing money to eat enough”, borrowing more than 20 million yuan, and a loan of 60 million yuan from the bank to purchase a large number of raw materials such as steel billets. After Deng Xiaoping’s southern tour speech spread across mainland China, the price of raw materials rose in response. Therefore, the outside world is widely rumored that “Wu Renbao held a meeting, earned a billion.
This fortune became the first bucket of Gold for Huaxi Village to take off.
Image source, REUTERS
But unlike the China Today report, a source close to Wu Renbao said that compared to the rumored Deng Xiaoping’s southern tour speech, the raw steel material that helped Huaxi Village “get started” – scrap rail steel – relied on strong insider trading. “This is the root of the development of Huaxi Village, but the spread of steel is unlikely to last”, the person pointed out.
As the source of wealth of Huaxi Village, the steel industry in the past many years is the pillar industry of Huaxi Village. Even with the current downturn in China’s national steel industry, steel revenue is still a major component of Huaxi Village’s overall revenue.
The steel industry has been an important basic industry for China’s national economy since the national steel production called for by Mao Zedong, and some analysts say that China’s steel industry has strongly supported China’s rapid economic recovery with its strong and abundant production capacity.
With the large amount of wealth accumulated by steel, a socialist revolution was set off within Huaxi Village in the 1990s. For example, the villagers’ original house sites were pooled and villas were built for each household in a uniform style, and a free health care and Education system was established within the village. However, unlike the villagers’ original self-built houses, the villagers only had the right to use the villas, not to own them, which meant that the villas could not be traded in the market.
At the same time, after Huaxi Village expropriated farmers’ arable land, it liberated a large amount of labor, built a large number of factories including sock factories and textile factories on the original arable land, encouraged villagers to work in the factories, and established the Huaxi Group, which is controlled by the village committee, and the group will give villagers dividends at the end of each year, averaging about 100,000 yuan per person per year in recent years.
Public information shows that as early as 2004, the per capita salary of Huaxi villagers had reached 122,600 yuan, which is 41.76 times the average salary of farmers in mainland China and 13.01 times the average salary of urban residents.
As a result, Huaxi Village has been hailed as “an advanced model that grew up under the guidance of Mao Zedong Thought, Deng Xiaoping Theory and the important thought of ‘Three Represents’, and is a banner of rural development in mainland China”.
However, only 20% of the annual dividends paid by the group to the villagers will be paid in cash, and the rest will be deposited directly into the Huaxi Village Committee, and the villagers can only submit applications to the Village Committee to withdraw the required funds when they need to handle important events such as marriages, and the amount of payment will be reduced by the Village Committee on the grounds of strict economy. “For example, if you apply to withdraw 100,000 yuan, the village committee may only give 40,000 yuan in the end,” said a netizen whose ancestry is from Huaxi village through a private letter on Weibo.
Huaxi’s “secrets”
Wen Kejian, a young Chinese economist, made a special trip to Huaxi Village for research, and in a later article, he commented that “Huaxi Village is more like an artificial attraction, and it is difficult for outsiders to meet ordinary villagers”.
At the same time, he cited the feelings of a journalist who had conducted a squatting investigation in Huaxi Village, pointing out that Huaxi Village was very professional in dealing with the media and visitors, feeling that there was always an invisible net separating the visitors from the real world.
“Occasionally, I could meet some villagers, but the villagers’ answers were more like standard answers.”
In 2007, the forum Qiangguo Forum, run by the Communist Party newspaper People’s Daily, organized a visit to Huaxi Village for netizens, but the texts that were later disclosed were all talks between netizens and the party committee responsible for propaganda in Huaxi Village. From the beginning to the end, the villagers of Huaxi Village existed as a gray background, without their own faces and voices.
During this period, propaganda materials of Huaxi Village show that some villagers worshiped Wu Renbao, who was in his 70s, as a god. According to a report in China News Weekly, there is a legend in the village that one day when the village held an event, it was raining, but once the old secretary (Wu Renbao) arrived, the weather soon became breezy and beautiful.
The report also points out that even after Wu Xie’en took over the post of Party Secretary of Huaxi Village, Wu Renbao still played a key role in critical moments. One of them was in 2003, when Wu Xieen just took over as party secretary soon after the steel market winds changed, Wu Renbao immediately took action and commanded his old ministry to dump the inventory, and a month later, the steel prices really jumped. This has surprised many young people studying economics: “Can the old secretary foretell?”
However, in the era of the Internet becoming more convenient and fast, bringing people closer to each other, Huaxi Village all kinds of illusory image construction has stimulated the curiosity of some netizens, they can not help but ask in the network platform, “Huaxi Village has no mahjong house?” “Is there prostitution?” “Are there any neighbor disputes?” “Are there people speculating in stocks and buying lottery tickets?”” Is there any city administration?” “Are there any hair washing rooms?”
The answer is given in a propaganda film “The Road to Huaxi”, which is designed for people who visit Huaxi Village to watch and promote the main theme of Huaxi Village. The film, which is funded by Huaxi Village itself, says that Huaxi Village has achieved the new “three nos” – no gambling, no feudal superstitious activities, no major criminal offenses and the old “three nos “- no petitions, no lawsuits, no dark fights.
Still completely insulated from the dark side of society, it continues to show the outside world the flawlessness of the “ideal place”.
Another turning point in the fate of Huaxi Village occurred in 2013. On March 18 of that year, Wu Renbao passed away due to medical treatment. It is reported that the farewell Wu Renbao people from Huaxi Village has been lined up to the funeral hall.
The strong man passed away, Huaxi Village can continue to operate as usual to maintain the usual pattern has become the primary problem in front of the successor.
Public information shows that when Wu Renbao passed away, his fourth son Wu Xieen was the secretary of the Huaxi Village Party Committee, chairman and general manager of Huaxi Village Group Company; his eldest son, second son, third son, son-in-law, nephew, niece-in-law, grandson, grandson-in-law, niece, nephew-in-law and more than ten others were the deputy secretary of the Huaxi Village Party Committee, in charge of Huaxi Group logistics, education, tourism, construction, steel, financial investment, science and technology and other fields.
This indicates that, after Wu Renbao’s death, those holding key positions in Huaxi Village are the second and third generations of Wu Renbao’s family, and that the Wu family is in full control of Huaxi Village’s core assets. According to several Chinese media reports, Wu’s four sons control 90% of Huaxi Village’s assets.
The iron and steel industry has been an important basic industry for China’s national economy since the nationwide iron and steel production called for under Mao Zedong Image Source, REUTERS
Escape from Huaxicun
The above-mentioned netizen, whose ancestral hometown is Huaxicun, said he and his family had moved out of Huaxicun in 2015 and bought a house in Jiangyin City to settle, noting that roughly 70 percent of the villagers have left Huaxicun in recent years, leaving mostly people over 50 years old, and “young people are out to make a living.”
In his description, Huaxi Village is no longer the glory of the propaganda material “everyone is happy, the initial construction of the new socialist countryside”. For the reason of leaving, he said that the wealth of Huaxi Village has nothing to do with the villagers, “money and houses are not at our disposal, what is the point of staying?” He also cited the example that when he got married, his Parents wanted to apply to the village committee to withdraw 500,000 RMB for the purchase of a Mercedes-Benz car, but the village committee only paid 100,000 RMB and criticized them for not paying attention to practical value and wastefulness, “I finally had to buy a Hyundai Kia.”
In addition, the dividends not paid to the villagers will be the village committee’s homemade “bills” instead of cash, the bills are stored in the village committee, and the bills can only be circulated within Huaxi Village. Many villagers are forced to take the pressure of cash, they will take the bills on holidays to the internal Huaxi Village Longhi Hotel consumption, “the cost of living for one night against more than 12,000 yuan,” said a villager.
The money earned from Huaxi Village can only flow back into Huaxi Village, is a subterfuge familiar to villagers in Huaxi Village, as early as Wu Renbao period has been applied.
“Even if the villagers want to use their own money to buy property outside of Huaxi Village, they can only buy property developed by the Huaxi Group itself, otherwise once discovered, will be ‘removed’ by the village committee, you can not participate in the dividend”, said a person familiar with the situation in Huaxi Village. In addition, Huaxi Village’s own high school teaching quality is low, in Jiangyin City, the ranking of all higher secondary schools is relatively low, but Huaxi Village Committee by virtue of resources, manpower can only be circulated within the village of Huaxi “rules”, more strong words to persuade villagers to continue to study in their own high school children. This directly led to many villagers who wanted to send their children to better schools leaving Huaxi Village to find their own livelihoods.
Image source, EPA
In addition, another reason for the large number of villagers leaving Huaxi Village was the rapid economic development of the counties and cities surrounding Huaxi Village, while the collective benefits that Huaxi Village was able to provide to the villagers dropped significantly due to business problems.
In 2014, the year after Wu Renbao’s death, revenue from the steel industry, on which Huaxi Village had always relied, plummeted to just half of its 2007 income, at more than 12.5 billion RMB. In this regard, the above-mentioned person close to Wu Renbao’s analysis said, “Huaxi’s steel industry developed by virtue of preferential policies, plus easy loans in the early days. But after the end of the shortage economy, still expanding the steel industry, equivalent to seeking their own death. The old secretary can still hold up when he was alive, but now absolutely not”.
It is reported that the “second generation” of village officials who have absolute say in the transformation and development of Huaxi Village, Wu Xieen, is more inclined to financial investment and high-tech industries.
According to people familiar with Huaxi Village recalls, a few years ago Huaxi Village in the surrounding villages to put up posters, calling on villagers to deposit their money in the hands of Huaxi Jinta, and promised three years and more time deposits, interest rates of 10%-15% (banks for about 4%), individual and Huaxi Village Committee staff can get a good interest rate of even up to 30%. This move has attracted a large number of public in Jiangyin City and even Shanghai and Heilongjiang to Huaxi Village deposits.
In this regard, many analyses believe that the financial industry of Huaxicun involves illegal fund-raising.
State capital into the field?
According to a report in Caijing magazine, on February 25, 2021, several members of the public who had deposited their money in Huaxi Village posted messages through social media platforms that the interest previously promised by Huaxi Village was now difficult to be delivered. The report noted that someone who went to cash out funds before February 9 was told that they could only receive it on February 24, and his family only got the principal after queuing for a few hours on February 24. Another netizen said that only the investors who cashed in their funds before February 24 got the interest in addition to the principal, but the interest was only 0.05%, far from the 10% previously promised by Huaxi Village. And in the funds payment site, dozens of security personnel wearing “Huaxi United Defense” uniforms have been wandering in the crowd, the number once exceeded the number of villagers in the hall for payment business. Public opinion about Huaxi Group’s cash flow difficulties, imminent bankruptcy, and the failure of Huaxi Village has been fermenting on the Internet and among Chinese people since 2019.
On March 13, 2019, the Office of the People’s Government of Wuxi City, Jiangsu Province, issued a document called the 7th Mayor’s Office Meeting Notice 2019 (Xizheng Ban Tong [2019] No. 24), which showed that the topic of the meeting was “listening to the report on the situation of liquidity difficulties relief of Jiangyin Huaxi Group”, and the units present included Municipal Audit Bureau, Municipal State-owned Assets Supervision and Administration Commission, Local Financial Supervision Bureau, Municipal Guolian Group, Industrial Group, Municipal C&D Company. Among them is the Wuxi Municipal People’s Government funded the establishment of state-owned capital investment and operation and authorized operation of the pilot state-owned enterprise group.
A source close to the Wuxi municipal government said that the meeting was held in the conference hall on the third floor of the municipal government, and all office staff on the first to fifth floors of the municipal government office building on the day of the meeting were directly asked to leave work, which is equivalent to clearing the municipal government office building.
But then Huaxi Village Party Committee Secretary, Huaxi Group Chairman Wu Xieen said in a media interview that Huaxi Group does not have liquidity difficulties.
On July 10, 2020, Jiangsu Huaxi Village Co., Ltd (Huaxi, SZ.000936) announced that Huaxi intended to sign an investment and cooperation agreement with Wuxi Guolian Industry Investment Co. (Wuxi Guolian), which is a part of Wuxi Guolian Group.
According to the announcement, Wuxi Guolian will transfer 34.431% of the equity of Yicun Capital to Huaxi for RMB998 million.
Ltd. is a listed company established with Jiangsu Huaxi Group Company as the main sponsor, which is controlled by Huaxi Village Committee.
The source close to the Wuxi Municipal Government pointed out that in recent days Wuxi State Union has sent staff to Huaxicun to guide the work, and in the inventory of Huaxicun such as tourism, steel and other high-quality assets, while saying that “Huaxicun is the face of the country, three presidents have visited Huaxicun, the government will not ignore Huaxicun and let it go bankrupt, otherwise it will not be a slap on their own The government will not leave Huaxi Village to its own devices and allow it to go bankrupt, otherwise it will not be hitting its own face and the face of socialism.
The above-mentioned person close to Wu Renbao visited Huaxi Village after Wu Renbao’s death and said bluntly, “Huaxi Village is now filled with a strong feudal atmosphere, which is unbearable. I noticed a detail that the calligraphy carved on the seal on a landscape pavilion in Huaxi Village was ugly, and the person accompanying me told me that it was the work of Wu Xieen. From here you can see that some people have lost their minds”.
So far, this experiment of communism with Chinese characteristics, which was carried out by the efforts of all people, has delivered its results.
However, the aforementioned report by Caijing on the run on Huaxi Village has been deleted. Meanwhile, several mainstream media in mainland China have received instructions from the Propaganda Department of China’s Central Committee to ban negative news about Huaxi Village. Away from Huaxi Village, the “No. 1 Village in the World” is still a place of wealth and prosperity.
But countless questions remain unanswered.
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