China’s Unique Cooperative Model: A Deviation from International Standards
In a recent article, Li Changping, a prominent Chinese economist and rural development expert, questioned the distinct nature of China’s cooperatives compared to those in other countries. Li, who has previously served as the vice governor of Hubei Province and is known for his advocacy of rural reform, highlighted several key differences that set China’s cooperatives apart, raising concerns about their effectiveness and adherence to international cooperative principles.
According to Li, one of the most significant differences is the legal framework governing cooperatives in China. Unlike many other countries, China has a specific law for professional cooperatives but lacks a comprehensive cooperative law. This legal distinction has led to a unique cooperative landscape, where professional cooperatives, focusing on specific agricultural activities such as mushroom farming or cattle breeding, dominate the scene. In contrast, international cooperatives are typically more diverse and include a range of activities, such as production, credit, and marketing.
Another stark difference is the composition of cooperative members. Internationally, cooperatives are primarily made up of ordinary farmers, while in China, they are often dominated by large agricultural enterprises or wealthy individuals. This disparity in membership has implications for the democratic governance of cooperatives. While cooperatives worldwide are governed by the principle of one member, one vote, Chinese professional cooperatives are often controlled by major shareholders, such as companies or private bosses, leading to a concentration of power that undermines the cooperative spirit of mutual aid and democracy.
Li also criticized the proliferation of what he termed fake cooperatives in China. With over three million registered cooperatives, China boasts an unprecedented number, far exceeding the total of cooperatives worldwide. However, many of these are not genuine cooperatives but rather shareholding cooperatives where a single individual or entity holds the majority of shares, effectively making decisions unilaterally. This structure is akin to private corporations and often serves as a means to secure government subsidies for personal gain.
Furthermore, Li pointed out that China’s rural basic operating system, which is based on the dual-level management system of family contract operation within collective economic organizations, is at odds with the proliferation of professional cooperatives. He argued that these cooperatives could potentially undermine the collective economic system and the dual-level management system, which are foundational to China’s rural economy.
Li raised a crucial question: why does China deviate from international cooperative principles and adopt a unique, controversial model? This deviation, he suggests, is not only detrimental to the cooperative movement in China but also raises questions about the government’s commitment to upholding the rights of ordinary farmers. For instance, while the Chinese Constitution guarantees the right of farmers to engage in credit cooperation, this right is often disregarded by local officials and financial institutions, which label such activities as illegal fundraising. This contradiction between legal rights and practical enforcement undermines the rule of law and the protection of farmers’ interests.
In conclusion, Li Changping’s critique sheds light on the distinctive characteristics of China’s cooperatives and the challenges they face in adhering to international standards. His analysis prompts a broader conversation about the role of cooperatives in China’s rural development and the need for reforms that align with the cooperative principles of democracy, equality, and mutual aid. As China continues to evolve its agricultural sector, it is imperative to ensure that cooperatives serve their intended purpose of empowering farmers and promoting sustainable rural development, rather than becoming vehicles for the enrichment of a few at the expense of many.
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