In China communism brought widespread suffering and poverty; crony capitalism is only better for the urban elite, as officially communist China now boasts one of the most lopsided rates of income inequality in the world. A small number of politically connected urban elite are out shopping for Gucci bags while the huddled masses in the countryside get the short end on development deals.

In Chengdu, China Fu Liang spent years building his fish farm. In 2010 the local government decided it wanted the land redeveloped; Mr. Fu didn’t want to sell, but his property was vandalized and he was harassed, and eventually forced to sell for nine yuan per square meter. The local government then quickly resold his land to a local, connected developer for 640 yuan per meter, or over 70 times what they just paid for it. The developer has now built luxury villas on the spot, selling them for 6,900 yuan per square meter. These sorts of deals are the norm, not the exception, and the way that local Chinese governments get a huge portion of their operating revenue.

Mr. Fu has no plans to start a new business:”What’s the point if the government can just destroy it?” he says.

Read more at the Wall Street Journal on.wsj.com/XbIx5M

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