The Hunnan Market is located in Sujiatun District, Shenyang of Liaoning Province. With five gigantic halls, its No.2 Hall as big as a stadium, it was designed as a wholesale market similar to Metro Cash & Carry. Despite high hopes, the 2.3 billion yuan project (US$310 million) soon sank into depression and has been deserted for eight years.

 

The local government was able to pay for the unsuccessful investment due to rising land prices this year. A market liquidation group was set up by the municipal government in spring, which brought hope for the farmers losing land to development and business owners suffering losses as a result of poor market management.

 

Many believe the doom of the Hunnan Market should be directly attributed to Mu Suixin, the former mayor of Shenyang, who was removed because of corruption. Mu advocated developing the Hunnan area. The new mayor, however, has focused on the northern areas of Shenyang and the Hunnan area is no longer a top priority for development.

 

Justice for farmers

 

The government of Sujiatun District promised they would work hard to settle disputes over land compensation fees by the end of this year. The farmers from Qijiatun Village were more confident about receiving their fees after they heard about the establishment of the liquidation group, but many say they will not feel relaxed until the compensation is completely paid to them.

 

In 1997, meetings were held by the local governments at the village to discuss land requisition for building a trading market. The governments declared that the villagers could become shareholders through their contribution of land, so the farmers of Qijiatun were excited at the prospect of receiving a bonus in the future.

 

All projects in connection with the market were finished in the two and half years following those meetings, but the farmers had yet to receive their land compensation fees.

 

Qijiatun Village made the largest land contribution, totaling 1429 mu (15 mu = 1 hectare). The compensation for each mu should be 105,300 yuan (US$14,200) putting the final amount owed at over 150 million yuan (US$20.232 million), according to the agreement between the farmers and the local government. "But for two years, each villager only received 280 yuan from the government each year," a villager named Hu Qiuling told China Newsweek.

 

The villagers had appealed to higher authorities for help many times, and in 2003 each farmer received 34,800 yuan in compensation, which totaled 45 million yuan based on the population of 1,300 in the village, a sum less than one third of the total agreed land compensations.

 

The villagers did not resort to legal means in the past decade because they attributed their bad luck to the former corrupt mayor.

 

Market failure 

Chen Hui is a business owner who sympathizes with the farmers. She spent more than 80,000 yuan to buy a booth at the Hunnan Market, but she could not start her business because of the market's depression. Chen had to sell her booth in another market to pay the debt she borrowed for the investment in the Hunnan Market, and she then was forced to work for another local company.

 

Some business owners united in an appeal to the municipal government for help, but they were told that their investment was a voluntary commercial practice and they should bear responsibility for their own losses.

 

"If the government had better organized the market operation, business owners would be responsible for all their losses; the problem is that the government's actions led to the failure, so it should be blamed for what happened," said a senior manager of a consulting firm.

 

Wu Xuri, Director of the Development and Reform Bureau of Sujiatun District, is the only representative of the liquidation group from this district. Wu said that the amount of compensation would be decided based on the agreement between the government and business owners.

 

The liquidation group is inclined to pay back the entire investment, according to the China Newsweek report on November 9.

 

Political struggle

 

The development of the Hunnan Market was directly influenced by political struggle, an insider told China Newsweek. The struggle involved Mu Suixin and Zhang Guoguang, the former Party chief of Shenyang, which then developed into the "competition" between the Hunnan Market and the market in the Zhangshi Development Zone.

 

Zhang was also sentenced to 11 years in prison for corruption.

 

Searching for space

 

Aside from the Hunnan area, the post-Mu government also looked to Tiexi District, the Huishan area, and the northern area of the city for development.

 

A newly developed area was established in northern Shenyang at the end of last year. The new area was designed to focus on high-tech agriculture to serve as a platform for intensive and deep processing of agricultural commodities for the surrounding areas.

 

The new development schedule of the government is still focused on the land, two insiders told China Newsweek.

 

The market economic system was established 15 years ago and the power spectrum of local governments has become smaller. The main core resource for them to regulate and control is the land, because only the land can attract investment and then lead to rapid growth of the GDP, according to the insiders.

 

(China.org.cn by Yang Xi, December 16, 2007)