Twenty years of economic reforms, which started in the countryside, have transformed China, tripling its gross national product and bringing prosperity and unprecedented freedoms to many Chinese. But recently the boom has slowed. Township enterprises that brought wealth and jobs to millions of rural Chinese are faltering in many areas. Farm incomes in the countryside have remained flat for four straight years.

In a recent letter—addressed to China’s leaders and published in the state-run media in August—Li Changping, the 37-year-old party secretary in Qipan township (Hubei province) southwest of Beijing, describes in detail the poor state of the rural economy and farmers’ increasing burdens in the countryside. Li’s letter gives a long list of problems faced by farmers in his region. The main problem is taxes. The Chinese government has vowed for more than a year to reduce taxes in the countryside, but so far most of its efforts have actually led to tax increases, because local officials violate Beijing’s bans on excess levies. Around Qipan, Li said, a family of five working eight mu, or 1.3 acres of land, pays $365 a year—equal in many places to more than the annual farmer’s income—in poll and land taxes, not including the free labor they provide the state for flood prevention and irrigation works. They also must pay fees for having a house and farming a private plot. Random fees for education and livestock are common, although they have been banned by the central government.

Li noted that 80 percent of the farmers in his township are losing money. In 1995, 85 percent of the farmers had money saved; now, 85 percent are in debt. The average budget deficit of the villages in his township is $50,000. The average debt for each village is $75,000, on which the village must pay 2 percent interest each month. And, on average, village debt is increasing by 20 percent a year. The situation is just as bad in the other townships that make up Jianli County, where Qipan is located. Their average yearly deficit is $500,000, and their total debts are twice as high. "The burden on the farmer and the collective deficit in the villages and heavier each year, and the deficit in the townships is rising annually as well," Li wrote.

People are leaving the land. "Most of our farmers have already left," Li wrote. The township had 40,000 people; 25,000 have gone. This means that those remaining are now squeezed for more and more taxes. In some villages, the poll tax has risen to $60 a head a year—a whopping sum for many Chinese farmers.