For those who dream of “absolute equality and common prosperity for all,” Huaxi Village in China has approached its utopian dream. The only problem is that Huaxi Village is now facing bankruptcy after decades of becoming world-famous as “the richest village in China”.
In late February Short video Hundreds of people lined up in the rain in front of the Huaxi Village building circulated on the Internet. It looked like a bank run by worried villagers trying to withdraw their savings.
Chinese media confirmed that the Chinese Communist Party (CCP) branch of Huaxi Village said the video was genuine, but the village claimed that it had no problems paying its debts and had sufficient funds.
However, one villager Lee, who was lined up in the rain, told local media that the reason the villagers panicked was that the Huaxi Group’s stock dividend plummeted from 30% to 0.5% from February 24th. It was. There is no explanation from the company. Those who made withdrawals after February 24th received only a 0.5% dividend instead of the 30% promised when they purchased the shares of the Huaxi Group.
According to Chinese media Tencent, Huaxi Village has already gone bankrupt and has a total debt of over 40 billion yuan ($ 6.1 billion). All the villagers’ villas are mortgaged, but no one dares to take over them.
Loans and Steel: The First Gold Bucket
How did Huaxi Village go bankrupt from “the best village in the world”?
Huaxi Village is located in Jiangyin City, Jiangsu Province and was founded in 1962.
Like many other villages in China at the time, its per capita annual income was less than 20 yuan ($ 3.03). And the villagers had a hard time making a living.
But there was another CCP secretary. Wu Lembao, who once worked as a “national executive” in the government, was assigned to the village to serve as party secretary.
Unlike other village officials, Wu Jinbao had a very keen political and business sense and contact with government agencies.
Immediately after Deng Xiaoping, the leader of the Chinese Communist Party at the time, completed his famous southern tour and strengthened the “reform and openness” policy in 1992, Wu Renbao could soon get the Chinese economy on track. I noticed.
He called an emergency meeting with major village executives and announced his judgment that economic development would inevitably lead to higher prices for raw materials.
So he decided on a strategy of “borrowing money to get the most out of the situation.”
The village borrowed more than 80 million yuan ($ 12.2 million) and purchased large quantities of raw materials such as steel.
After Deng Xiaoping’s speech spread throughout China, the price of raw materials rose sharply, and Huaxi Village was able to win the “first bucket of gold” for further development.
However, a person near Wu Renbao recently told the BBC that it was not Deng Xiaoping’s South Tour, but “insider trading of steel raw materials” that helped Huaxi Village “get off the ground.”
The fact that Wu Jinbao was able to borrow 80 million yuan ($ 12.2 million) from banks, including 60 million yuan ($ 9.1 million), also has a very good relationship with both the government and banks. Showed that it was. I’m waiting.
Socialist Revolution and the perfect “dream place”
With the enormous wealth accumulated from steel, Wu Renbao started the socialist revolution in Huaxi Village in the 1990s.
He pooled the villagers’ lands, built villas in a uniform style for each household, and established a free medical and educational system in the village. So everyone seemed to live in a beautiful house, drive a luxury car, enjoy the dream lifestyle of free meals, medical insurance and education.
However, the villagers only have the right to use the villa and do not own it, so they cannot sell the villa.
Wu Jinbao also confiscated the farmer’s land and built a number of factories, including socks and textile factories. He encouraged villagers to work in factories and founded the Huaxi Group. The Huaxi Group is managed by the Village Committee and pays dividends to the villagers at the end of each year.
According to public relations, the annual wage per capita of Huaxi villagers reached 122,600 yuan ($ 18,691) in 2004, which was 41.76 times the average wage of Chinese farmers and 13.01 times the average wage of urban residents.
However, only 20% of the group’s annual dividend to the villagers will be paid in cash and the rest will be deposited directly with the Huaxi Village Committee. Villagers can only submit an application to the village committee to receive the necessary funds if they need to deal with important events such as marriage, and will be paid by the village committee for “austerity” reasons. The amount may be reduced.
Under the control of Wu Renbao’s iron fist for more than 40 years, Huaxi Village developed its economy in a “totalitarian” mode of “building fields in the 1970s, factories in the 1980s, and cities in the 1990s.” I did.
By 1996, he lived in a unified villa throughout the village.
The promotional movie “The Road to Huaxi” for visitors to Huaxi Village claims that the village has achieved perfect status with many “nos”. There are no gambling, superstitions, serious criminal offenses, petitions, complaints or betrayals. ,Such.
In the film, Huaxi Village is completely separated from the dark side of society and depicted as a perfect “dream place”.
As a result, Huaxi Village has been regarded as “an advanced model that grew up under the guidance of Maoism, Deng Xiaoping theory, and the important ideas of Jiang Zemin’s” three representatives “” and “the flag of rural development.” In China. “
As responsible for all the results, Wu participated in many national and Party Congress, Jiang Zemin, Hu Jintao, was accepted to all of the CCP Secretary-General, including Xi Jinping.
Wu was featured on the cover of Time Magazine in 2005, and in August 2011 Huaxi Village purchased the right to broadcast an ad on Times Square in New York for $ 1 million and advertised it as a “world-famous village.” did.
“Common prosperity” becomes a family kingdom
However, in 2008 Huaxi Village reached the limit of development and began to decline. The major industries that Huaxi Village depended on, such as textiles and steel, began to go downhill.
Another big problem is that while Wu Jinbao created the miracle of Huaxi, his family also became the only ruler of the village. All important posts are made by Wu’s family.
According to a 2004 study by Zhou YiThe four sons of Wu Renbao, a professor of sociology at Fudan University, accounted for 90.7% of the total amount of Huaxi Village, but ordinary villagers were given only about 1000 yuan a month.
In addition, it became clear that the gorgeous appearance of Huaxi Village is by no means genuine. Huaxi villagers are called “the wealthiest farmers”, but they are centrally monitored and controlled, and contact with outsiders is strictly prohibited, so they can actually meet the standards of ordinary people. not. If they want to leave the village, they have to even ask for permission.
In addition, villagers have limited pocket money at their disposal. All other costs must be approved by the village.
If the villagers choose to leave the village, they must leave all their wealth and wealth.
In the meantime, the villagers can only use the goods, not own the luxury goods such as Mercedes-Benz cars, but they are actually the actors and advertisers of the village. Visitors see them driving a Mercedes-Benz car.
In other words, Huaxi Village claims that “common prosperity” is its ultimate mission, but in reality it is a kingdom only for the Wu family.
Symbol of the decline of socialism and collectivism
The news that Huaxi Village has a debt of nearly 40 billion yuan ($ 6.1 billion) was announced as early as 2019. However, Huaxi Village has never admitted it.
Recently, a document from Gosai City Hall was released online, and the issue discussed at the 9th Mayor’s House Meeting in 2019 was “I heard a report on the liquidity difficulty relief situation of the Huaxi Group in Jiangyin City.” Is shown.
According to public financial reports, as of the third quarter of 2018, Huaxi Group’s debt was 36.93 billion yuan ($ 5.63 billion), which was 67.4% of total assets.
According to Chinese scholar Wen Kezian, Huaxi Village has become a symbol of the decline of socialism and collectivism.
He wrote, “The existence of Huaxi Village was originally a comfort of an old soul with illusions, but now this symbol of comfort is no longer reliable and people have to choose about the future.” I am.
another Chinese financial analyst Caijinglengyan He said it wouldn’t be surprising if Huaxi Village was crushed by debt and went bankrupt completely. This fake, man-made miracle of the collective economy will one day have to collapse, along with the ideology once advertised by the Chinese Communist Party.
“This day is getting closer and closer,” he said.