Regional Environmental Technical Assistance 5771
Poverty Reduction & Environmental Management in Remote Greater Mekong Subregion (GMS) Watersheds Project (Phase I)

A REVIEW OF PROVINCIAL SOCIAL POLICIES

Yunnan, China

By

John V. Dennis, Ph.D

Social Anthropologist

TABLE OF CONTENTS

1. Introduction

This paper provides a review of policies for forests, poverty alleviation, health, education and ethnic minorities in Yunnan Province in the Southwest of the People’s Republic of China (PRC). The focus is primarily on policies formulated in Kunming, the capital of Yunnan Province. While major policy directives are determined in Beijing, detailed policymaking and planning are done at the provincial level. Following this pattern, the central government in Beijing initiated the period of economic reform in the late 1970s, beginning the transition from a command economy to what is now called in China a "socialist market economy." This paper will trace the way these national policies were elaborated and implemented in Yunnan Province, and how those policies have affected land use, forests, watershed management, social services, and ethnic minority groups in Yunnan.

The period of economic reforms in China marked a transition in rural areas from communal land management for subsistence production to household management of agricultural land for market production. The famed increases in national grain production, largely realized between 1979 and 1984, were accompanied by dramatic increases in China’s industrial output and the beginning of a service sector. By the late 1980s, however, it was clear to policy makers in Beijing that the benefits derived from moving toward a market-oriented economy were flowing disproportionately to the eastern half of China, and the eastern seaboard in particular. Members of the State Council, the highest policy-making body in China, feared that increasing disparities in income between the eastern and western halves of the country would lead to entrenched pockets of poverty, environmental degradation, and possibly political unrest. The State Council established a Leading Group for the Alleviation of Poverty and established offices in each of the provinces with significant areas of poverty, the majority of which fell in western China.

Yunnan Province is located in the southwest of China, sharing long international borders with Burma, Laos, and Vietnam. Yunnan is traversed by the southward-bending western edge of the Himalayan Range, and is corrugated by steep valleys through which flow several of Asia’s major rivers. For a stretch in northwestern Yunnan, the upper reaches of the Yangtze, the Salween, and the Mekong Rivers are barely 40 kilometers apart. The Mekong River flows from the western Himalayas through Yunnan and out of China to the south to form the boundary between Burma and Laos. Thus several parts of Yunnan constitute important upper watersheds and sub-watersheds of the Mekong River. The ruggedness of the terrain is underscored by the fact that 94% of the total land area is hilly. The geographic or topographic range extends from snow mountains at 6000 m to low elevation tropical rain forests. Yunnan contains 390,000 square kilometers of land, as well as members of 24 of the 55 official minority nationalities of China (Guo and Padoch, 1995; Cao and Zhang, n.d.). Total population in 1990 was 36,970,000 (Cao and Zhang,n.d.), with ethnic minority peoples constituting about 11,000,000, or nearly one-third of that total (Xu, 1995b). Given the diversity of terrain and ethnic groups, it is not surprising that Yunnan holds a high concentration of China’s poor counties.

The Office for Poverty Alleviation in Kunming, which links together staff from numerous research institutes and line agencies in Yunnan, engaged in projects to alleviate rural poverty, as well as projects to reforest the upper watersheds of the Yangtze River in Yunnan. This report covers the policy history for forests, poverty alleviation, and ethnic minorities (minority nationalities), as well as some aspects of provincial involvement in watershed protection. While these various policies and projects can be separated for explanatory purposes, in practice, as will be shown below, their aims and methods have often overlapped.

2. GOC Policy on Forests

Following the revolution in 1949, all land in China was claimed by the state. In the early 1950s a Ministry of Forestry (MOF) was formed, and large tracts of forest, mainly in the northeast and southwest, were designated as state forests, to be managed by the MOF as sources of raw materials for state construction projects. Timber was treated as a free good, since no human labor was invested in the production of trees (Harkness, 1998). At the same time, however, about two-thirds of all wooded areas were allocated to households and villages for subsistence use (China Forest Yearbook, 1992; Zou, 1994).

Beginning in 1956, policies of socialist reconstruction reorganized rural villages into communes as self-contained, subsistence production units that were required to transfer surplus grain to the state (Oi, 1989). Wooded areas that had been allocated to households were subsumed under commune management.

Chinese foresters today acknowledge that overall forest quantity and quality declined during the collective period (1958-82), pointing to three moments of particular forest loss (sandafa). The first was the Great Leap Forward (1959), when households all over China cut trees to fuel backyard blast furnaces for steel. The second episode of massive cutting occurred in the late 1960s and early 1970s, when national policies emphasizing local self-sufficiency in grain forced farmers to open wooded hillsides for wet-rice terraces and upland rain-fed rice and corn. The third period of felling occurred in the early 1980s, following the introduction of policies allocating forested areas to households and villages. As a result of frequent policy changes in the past, villagers feared that their access to wooded areas would not last. Consequently many households cut trees to build houses or store in their homes, ensuring that they would benefit before the policy changed again (Harkness, 1998; Zuo, 1997; Cao and Zhang, n.d.).

2.1 Policies for Forests in the Economic Reform Period (1979 - present)

The economic reforms in rural areas began in the late 1970s with the introduction of the household responsibility system for agriculture. Communes were dismantled, and agricultural land distributed to households. The main purpose for the adoption of the household responsibility system was to increase agricultural production, especially in grain.

With the rapid success of the household responsibility system in increasing grain output, the central government decided to implement a similar system for the forest land that had been under commune management. In the early 1980s, two policies were promulgated to increase both forest production and protection. The first was the Liangshan Daohu policy announced in Beijing in 1980. In the same year in Kunming, the provincial Liangshan Daohu policy specified that forest areas were to be allocated to households in two modes: as freehold forest land (ziliushan) for a household’s own subsistence use; and as contracted forest land (zerenshan), under which households would protect forested areas in return for a share in future timber sales.

The second major forest policy was Linye Sanding, a follow-up to Liangshan Daohu to ensure the proper implementation of the two kinds of forest management. Linye Sanding, as implemented in Kunming, stipulated that 1) the boundaries between state forests, collective forests, and nature reserves needed to be clarified; 2) freehold forest land (ziliushan) needed to be allocated and secured to farmers; and 3) the responsibilities, rights, and benefits from forestry for both households and villages needed to be spelled out (Zou, 1995).

In Yunnan Province, Liangshan Daohu also covered upland areas where ethnic minority communities practice shifting cultivation. Shifting cultivation lands were allocated to households in 1982-3 based on the number of household members at the time and the land available. This policy is sometimes called Liangshan Yidi, reflecting two kinds of forest land and shifting cultivation land (Zou, 1995).

Within two or three years of implementation in Yunnan, problems with Liangshan Daohu began to surface. As mentioned above, the allocation of forested land to households and villagers initially resulted in massive cutting of trees. Farmers were not sure of their security of tenure in forest land, since policies in the past had frequently changed management levels and use rights for forests. With respect to contracted land (zerenshan), farmers worried that their efforts to protect and reforest land would be unrewarded. They feared that when the time came, the state would not permit them to cut and sell mature trees (Zou, 1995). Underboth ziliushan and zerenshan, the two modes allocating forest land to households, there were problems with over-cutting and lack of reforestation.

To control unauthorized cutting, a new policy was implemented to set a logging quota or timber cut for each area. The annual timber cut is set in Beijing for the whole country, to ensure that cutting each year does not exceed total forest growth. Then the cut is divided among provinces, which in turn allocate the cut to prefectures and countries throughout China (Sturgeon, n.d.). While the timber cut may have reduced forest loss, it has also caused difficulties for local communities. In some areas of Yunnan, villages are all allocated an identical timber cut, even though the size of village forests and village populations vary considerably. As a result, some villagers find the timber cut adequate for their needs and even for timber sales, while residents in other cannot obtain the wood needed for household subsistence (Menzies and Peluso, 1992). Another problem in upland communities is that farmers cutting timber trees to open swiddens may not be able to sell the trees as a result of the timber cut. Without a sales permit, farmers are forced to burn the trees (Xu, 1995b).

A second policy designed to increase reforestation in Yunnan is the Sihuang Paimai, or Wasteland Auction Policy, adopted in 1994. Wasteland Auctions were designed to introduce market efficiency into reforestation. Some policy makers in Kunming judged that farmers thought the tenure arrangement for forest areas was insecure since these lands had originally been allocated to households without payment. Planners decided that selling degraded village land at auction, with the stipulation that the buyer had to reforest within two years or lose the land, would result in much faster and extensive reforestation than allocating forest land to households had done. In general there are two forms of Wasteland Auction. In the first form, a village can arrange a wasteland auction to sell degraded land to the highest bidder from within the village, a practice that concentrates land in the hands of richer villagers. In the second form, a village can open auctions to outside individuals or corporations, in which case the land auctioned is unavailable for any village use for a period of from 30 to 70 years (Xu, 1995a).

In the years since Wasteland Auctions were authorized, many villages in Yunnan have availed themselves of this opportunity. Problems emerging from wasteland auctions have included: (1) although it works reasonably well in lowland areas where households are well engaged in the market and have capital to invest in buying degraded land, auctions cause hardships in upland villages where most villagers have little money; (2) villages lose collective grazing areas, as well as land for future development; and (3) auctioned areas may include lands that had previously been allocated to households by Liangshan Daohu. This outcome undercuts the credibility among rural people of the legal system for land tenure, a system that is only gradually taking hold in China (Zou, 1997). Studies have shown that government agents decide land is "degraded" or "wasteland" based on tree cover, without considering that local people use the area to collect fuelwood, plant cash crops, or graze livestock (Zou, 1997; Xu, 1995b). Often it is poorer villagers and women who lose use of a collective subsistence resource, a loss that does not show up on most surveys of village property allocations.

Other factors affecting village forest management include frequent changes in the tax rate and the timber price, lack of credit for long-term investment, lack of insurance, and the multiplicity of fees that must be paid to cut and sell timber. In Yunnan, these fees comprise a timber tax, an afforestation fund, a business tax, a forestry administration fee, a market administration fee, and a forest area construction fee (Zou, 1997). Some farmers respond to the complexity of the fee structure, as well as the expense, by simply stealing trees (Menzies and Peluso, 1992).

In spite of all the problems recounted above, numerous Chinese researchers judge the Liangshan Daohu policy to be fundamentally on the right path (Zou, 1995; Lu, 1996). While adjustments to the overall policy may be needed, moreover, some warn that every change in forest policy has resulted in forest loss (Zou, 1995). The Liangshan Daohu policy, together with the household responsibility system for agricultural land, forms the basis for rural land management in Yunnan. In the long run, benefits from Liangshan Daohu include:

1. Decision-making about land use has devolved to the household, allowing farmers to make integrated decisions for use of agricultural, shifting cultivation, and forest land.
2. Household decision-making has resulted in increasing diversification in land use, even within single villages. Households may differ by available labor, income, farming practices, and current expenses. They can now plan their land use according to household circumstances.
3. Forest tenure has stabilized. In spite of initial over-cutting and lack of reforestation, over time farmers have come to trust their legal contracts to land, and have been increasingly willing to invest in forest production and reforestation.
4. Some wasteland auctions have resulted in transfers of land from farmers who were not interested in the land to other farmers or outsiders who are willing to invest in planting trees (Zou, 1997).

Researchers in Kunming recommend increased flexibility and adaptability in state policies for forests and land use. They point out the extreme diversity in topography in Yunnan, as well as to the plethora of ethnic minorities with different land use histories. Many communities are increasing their incomes and continuing to diversify their land use. But sensitive application of policy, based on local conditions and prospects, could protect the future of rural communities as well as the forests upon which they depend (Zou, 1997; Xu, 1995b).

3. GOC Policies for Poverty Alleviation

Following the surge in national economic growth in the 1980s resulting from the transition to an economy increasingly oriented to markets, policy makers in the State Council in Beijing recognized that the benefits of growth were dramatically skewed toward those in the eastern half of China, while much of western China showed limited or no growth. Additionally, western China holds most of China’s ethnic minorities. To address this imbalance in development, the State Council set up a Leading Group on Poverty Alleviation in Beijing, with counterpart offices in provinces with high numbers of "poor areas" or "poor counties". The criterion for poverty at that time was limited to average household income.

3.1 The Fupin Ban and the Pilot Projects in Poverty Alleviation

In Yunnan Province, beginning in 1989, the work of the Office for Poverty Alleviation (Fupin Ban) was supported by funding and program advice from the Ford Foundation in Beijing. A working group was formed to identify four pilot sites for poverty alleviation. The working group comprised staff from the provincial forestry department, the agriculture department, the land use planning department, the Institute of Ecology, the Institute of Geography, the Institute of Botany, the Southwest Forestry University, the Southwest Agricultural College, the Yunnan Academy of Social Sciences, the Academy of Forest Sciences, and other relevant agencies in Kunming. The purpose of the pilot sites was to enable research by members of the working group to determine the causes of poverty and to devise an array of options in each case for overcoming entrenched poverty. The researchers carried out both rapid assessments and long-term studies in each site.

Each of the pilot sites continues to be monitored ten years later to assess the usefulness of various activities. Perhaps the most lasting benefit of the project has been the increased awareness among line agency staff and researchers from numerous research institutes in Kunming of the complexity of poverty. Researchers and administrators have become aware of the need to design program approaches at the local level, and to engage planners and policy makers from the beginning in considerations of how to make policies more flexible, how to devolve decision-making, and how to engage villagers in the design of solutions. Since staff from many provincial agencies and educational institutions were involved in the program, Yunnan Province probably has the best-trained government administrators and researchers in China for addressing problems of poverty.

3.2 Social Forestry as Poverty Alleviation and Watershed Management

Concurrent with the program specifically targeting poverty alleviation, the Forestry Department and the Yunnan Academy of Social Sciences were involved in a separate but related program to introduce social forestry into the Yangtze River Shelter Belt project. The Chinese government had designated the upper reaches of the Yangtze River as a sensitive and endangered watershed, and was investing significant amounts of money in Sichuan and Yunnan Provinces for massive reforestation. The social forestry program in Yunnan sought to redirect the attention of the Yangtze River Shelterbelt Project away from areas of trees planted (a common indicator of progress in China) and toward local communities. Arguing that local farmers were not likely to plant or protect trees if they did not share in the benefits of harvesting them, the social forestry program initiated several project sites along the Jinshajiang, or Golden Sands River, as the upper stretch of the Yangtze is known in Yunnan.

The social forestry project attempted to link reforestation with poverty alleviation in ways that would make sense to local communities. As in the poverty alleviation pilot sites, the success of the program has been gradual but steady, as staff from the forestry department and the Yunnan Academy of Social Sciences have struggled to adapt policies for local needs. The challenge will be to extend social forestry to other sites and communities in the Yangtze Shelterbelt, while maintaining the kind of attention to local conditions that has prevailed in the early project sites.

3.3 The Kaifa Ban and Economic Development in Rural Areas

Although the Poverty Alleviation Office still exists in Kunming, staff there now describe their work as how to develop (kai fa) rural areas rather than how to alleviate poverty (fupin). While the distinction may be subtle, offices throughout Yunnan have been set up to develop local areas by introducing cash crops, opening local businesses, and generally encouraging people to become more involved in the market. Staff in these offices do not study what caused these areas to become poor in the first place.

In Xishuangbanna Dai Autonomous Prefecture in the south of Yunnan, agricultural extension agents have encouraged planting cash crops in both lowland and upland areas. Farmers have been urged to plant a wide variety of vegetables and tropical fruits, such as pomelo and passion fruit, new varieties of which have been developed at the Tropical Botanic Garden in Xishuangbanna. In the uplands, farmers have been encouraged to plant sugarcane in their shifting cultivation fields, thus transferring these fields to permanent cultivation of a cash crop. Trucks come up to villages to collect the sugarcane and transport it to one of several processing plants in the prefecture. In higherelevation sites in Xishuangbanna, farmers complain that extension agents do not have appropriate species for a cooler climate. Farmers would like to plant apples, pears, peaches, and other temperate fruit trees if the varieties were suited to the elevation.

In Jinghong County, one of three counties in Xishuangbanna, households in hilly areas are required to limit swiddens to two mu per person (15 mu = 1 ha) by the year 2000. The stated objective of this policy is to encourage planting of either wet rice or cash crops in order to raise household income. Another objective is to end shifting cultivation, a practice that Chinese foresters, under the influence of international advisors, have come to view as damaging to the environment. For some villages, this transition has already been accomplished. In other villages, where land suitable for either wet rice or cash crops is not available, the reduction in shifting cultivation will be difficult to achieve (Sturgeon, 1997).

Xishuangbanna Prefecture announced in 1997 a plan to open 40,000 more mu (2666 ha) of tea in the prefecture. While tea grows well in many parts of Xishuangbanna, and Pu’er tea is famous throughout China, the price of tea in Xishuangbanna is so low that farmers only tend their tea if no other cash crops are available. In Menghai County, the price of tea is set by the tea processing company. In Jinghong County, by contrast, the price of tea is determined by the market. In either case, the price is very low. This plan to increase area in tea points to the lingering effects of a command economy. Planners in Jinghong, the capital of Xishuangbanna Prefecture, expect to have 2666 ha of tea planted based on their directive, even though farmers are already responding to a better market for alternative cash crops.

3.4 State Farms in Xishuangbanna in Relation to Watershed Management

State farms are an issue related to watershed management and access to land by local people in Xishuangbanna because they dominate the landscape in the prefecture. The earliest state farms were initiated in the late 1950s, after the split between China and the Soviet Union. National policies to become self-sufficient in strategic materials prompted the opening of state rubber farms in Xishuangbanna, one of two tropical areas in China suitable for rubber (Hevea brasiliensis). Tens of thousands of Han Chinese were moved from Hunan Province to Xishuangbanna in the 1960s to staff the state rubber farms. Protracted experimentation in planting and managing rubber was needed to ensure the survival of the trees, since Xishuangbanna is on the ecological margin of climate and topography suitable for rubber (Chapman, 1991).

As of 1988, there were 11 state farms with 64,000 ha of rubber planted in Xishuangbanna, Simao, and Lincang Prefectures along the Mekong River, making Yunnan Province the producer of one-sixth of China’s natural rubber (Chapman, 1991). By 1997, the area under rubber plantation in Xishuangbanna alone had risen to 120,000 ha (Xu et al., 1999). Up until recently, China subsidised the price of rubber to ensure domestic production. With China’s incipient accession into the World Trade Organization (WTO), the price of rubber in China has recently dropped to world price levels, undoubtedly causing hardship in the rubber industry.

Researchers from the Kunming Institute of Botany, in collaboration with staff from the Tropical Botanic Garden in Xishuangbanna, point out that the growth of the state rubber farms and the plantation of large tracts of monoculture rubber have caused the bulk of deforestation in Xishuangbanna. Although, as they note, areas in rubber qualify as "tree cover" in the forest department’s terminology, monocrop rubber plantations do not provide the hydrological or biodiversity benefits of a natural forest (Xu, 1995a). This is a serious consideration since Xishuangbanna forms one of the key watersheds of the upper Mekong River.

As of 1988, the government in Jinghong announced that individual households could also plant rubber, as long as the plantations were below 1000 m. In the ensuing ten years, many hundreds of hectares of rubber have been planted on household land, in some instances in ecologically unsuitable areas. In 1996-97, the price of rubber was high enough that farmers made a good living from rubber, which only required tapping every other day during the seven-month growing season.

In the second half of the 1990s, other crops that had originally been cultivated on state farms in Xishuangbanna have also spread to individual household land. These crops include pineapple and other fruit trees. The case of pineapple is particularly troublesome, since farmers tend to plant pineapple on steep slopes, causing significant erosion. Although agricultural extension agents have discouraged this practice, farmers are also under serious pressure to produce for the market.

The most enduring policies for watershed management, however, continue to be the same policies that allocated areas of forest to villages and to households. These areas of household freehold forest, contract forest, and village collective forest must all be kept in trees. Wooded areas can be used for a variety of purposes, carefully spelled out in the policies, but regulations strictly prohibit clearing the areas of trees. Other forms of watershed management are difficult to achieve in Xishuangbanna as elsewhere in Yunnan, since proper management of watersheds all along their course would require coordination among agriculture, forestry, land use planning, and water management departments. In Xishuangbanna, however, microclimates and community land use practices are extremely diverse. In devising broader land use strategies that would pay more attention to watersheds, planning needs to take into account the local conditions from one village to the next.

3.5 General Background: Poverty Alleviation 1978-1989

Poverty is largely a rural phenomenon in China (although urban poverty is on the rise and may be as high as 5-10 percent [World Bank, 1992]). Minorities, largely resident in rural areas, represent a disproportionately large share of the poor. In 1978, approximately one third of China’s rural population was classified as poor; by 1985, only one in ten rural residents was officially poor. In large part, this drop in poverty rates can be attributed to rural economic reform—rural per capita income in real terms grew at a dramatic 15 percent annually between 1978 and 1984. However, after 1984 and for the rest of the 1980s, rural development stagnated, and the number in poverty held steady. In the past, absolute poverty in China was the condition of large numbers of people spread throughout all rural areas; by the mid-1980s, poverty was regarded largely as a spatial phenomenon. There are 592 counties officially designated poor at the national level, and they are characterized by resource-poor conditions. The spatial/development approach suggests that poverty is a chronic rather than transient phenomenon, and indeed the World Bank (1992) notes that absolute poverty is largely determined by location.

The effects of poverty are many. Although the government claims that all age-relevant children attended primary school nation-wide in 1993, it is thought that as many as half of rural boys in extremely poor towns and villages do not attend school and possibly none of the girls. Nationally, girls made up 44 percent of the primary school students in 1993 (World Bank, 1997). In some poverty areas, the children are enrolled but do not attend. These children may never achieve literacy, increasing the likelihood of continued poverty. (See the discussion of Education below.)

Health, too is affected by poverty. Maternal and child mortality in poverty areas is 50-100 percent higher than the national average, and higher still in poor minority areas. Malnutrition and micro nutrient deficiencies are common in these areas, as are several infectious and endemic diseases rare in other parts of the country. About 90 percent of poor children in China suffer chronic helminthic infection (World Bank, 1992). (See the discussion of Health below.)

Poverty as a development issue only became identified as such in the late 1970s, and recognition of its extent may have been a motivation for extending pilot rural reforms in Anhui and Sichuan to the rest of the country. Both the national and provincial governments have shown a strong commitment to reducing poverty, and several government agencies are involved. In 1984 the Central Committee of the Chinese Communist Party issued a joint declaration with the State Council on "speeding up the transformation of poor areas." This was a tacit acknowledgment of the importance of rural development.

In the period 1978-1984, rural incomes grew at a real rate of 15% per year; after 1984, productivity gains had largely been captured, and rural growth stagnated. In recognition of this, the Seventh Five-Year Plan (1986-90) included a strong emphasis on economic development in poor areas. Using 1985 as a baseline, a poverty line of Y300, Y200, or Y150 per person per year (depending on locational and political factors) was established. This was an extremely low figure, providing for subsistence only and assuming some production for subsistence. Average per capita grain production of less than 200 kg per capita was used as a second indicator. The Leading Group on Economic Development in Poor Areas (LGEDPA) was established in 1986 under the direct leadership of the State Council to coordinate national and local poverty alleviation efforts. By the mid-1990s, the LGEDPA oversaw a budget of more than Y4 billion (US$483 million).

Several government agencies at the national and provincial levels are involved in poverty alleviation efforts. The Ministry for Civil Affairs provides disaster relief and income subsidies in poverty areas. Together with the Grain Bureau of the Ministry of Commerce, it coordinates distribution of food relief. Both the State Education Commission (formerly the Ministry of Education) and the Ministry of Public Health run special programmes targeted at the poor. Several banks, including the Agricultural Development Bank, subsidize loans for development through their lower-level offices. The State Planning Commission’s Regional Office administers a Food-for-Work programme that constructs physical infrastructure and public works in poor areas. Further, each of China’s 27 central ministries and agencies has its own special programmes, as do all provincial governments (World Bank, 1992).

3.6 Poverty Alleviation in the Early 1990s

The significant investments of capital and effort reduced the number of China’s rural poor from 260 million in 1978 to about 50 million in 1992 (and 42 million in 1998 [White Paper, 1999]). The remaining rural poor are largely concentrated in western China, in areas characterized by high altitudes and mountainous topography, in particular, the karst zone, the loess plateau, and the Himalaya. All these areas are dominated by ethnic minorities. Taking this into account, the Eighth Five-Year Plan focused on increasing assistance to the poorest poor in the worst physical environments. Minorities and remote communities are specifically targeted. The national designation of "poor county" is to be applied to an additional 200 counties and an additional Y500 million (US$60.4 million) per year added for this purpose.

The Food-for-Work Program is to concentrate on terracing for agriculture. Agricultural extension work and market improvements will also be expanded. The second major poverty alleviation component of the Eighth Five Year Plan is the integration of formerly separate production, education, health, family planning, and transport projects into comprehensive local interventions (World Bank, 1992). Such comprehensive interventions are also being used by international agencies; an example of this approach can be seen in the ADB’s Lancang River Basin Project (Asian Development Bank, 1998b).

A second major intervention is the Eight-Seven Project for Fulfilling the Arduous Task of Helping the Poor (1993 to 2000), which has as its goal lifting 8 million people out of poverty. Specific targets have been set--Y500 per capita net income (US$60) (in 1990 prices) and 300 kg per capita consumption of grain. In conjunction with the 8-7 Poverty Reduction Plan, the ADB is providing technical assistance and loans to develop and implement small-scale infrastructural projects (ADB, 1998a). Government attention has also been directed toward the creation of a social safety net, some form of social insurance to replace the guarantees formerly provided by communes and brigades. In urban areas, approximately 95% of the population receive various forms of social insurance (e.g. subsidized health care, workmen’s compensation, retirement benefits) from their employers. In the countryside, however, with the devolution of production to individual families, only about 2.7 percent of the people are covered in any way. The GOC accepts that some form of rural social insurance is necessary.

In early 1995, the State Council held a national conference on poverty reduction, pointing out some major problems in its efforts. These included:

• funds for helping the poor were not available as scheduled;
• some local governments invested the poverty alleviation funds in large-scale projects in order to increase local revenue, but poor households received no direct benefit;
• the rate of return on loans for poverty alleviation projects was very low; and
• some funds never reached their targets at all.

All these concerns represented both structural and practical problems. Much of the funding at this time was devoted to infrastructure construction and improvement, certainly a necessary component of a development programme, but not a sufficient to create a well-rounded approach to poverty alleviation. Little funding accrued directly to poor households.

3.7 Post-1995 Changes in Poverty-Alleviation Methods

A critical question has been whether micro-interventions could be targeted at the household level to deal with wide-ranging, deeply entrenched poverty. Consider Yunnan. In 1995, 77 of the 127 administrative units were designated poverty areas at the provincial level. Fifty-one of these were minority counties, all of them located in mountainous or semi-mountainous areas. It was reported that the needy and poor population totaled more than 7 million people. The provincial government identified 506 priority projects and planned to allocate Y 0.75 million each year for infrastructure improvement, water conservation, provision of safe drinking water, and direct household aid. With the exception of household aid, these were structural projects.

Beginning in the 1990s, a number of international organizations were involved in the implementation of development projects in Yunnan. These included the World Bank, the Ford Foundation (US), Oxfam Hong Kong, and several foreign governments. Their projects have been quite similar to those of the Chinese national and provincial governments. However, in some cases project implementation has involved something quite different. For instance, Malipo county of Wenshan prefecture and Jinping county of Honghe prefecture (both largely inhabited by ethnic minority groups) ran successful pilot projects on micro-credit based on the Grameen Bank model introduced from Bangladesh.

Following up on the success of these pilot projects, in early 1996, a government official in charge of agriculture in Yunnan went to Bangladesh for an on-the-spot inspection. It was believed that micro-credit approaches would also apply to Yunnan's rural areas, with their low level of economic and social development. As a result, tests began in 23 impoverished townships selected throughout the province. Today, the micro-credit project has spread to over 401 townships in 113 counties of the province through two years of trial implementation. In 1999, Yunnan Provincial government will invest another Y100 million(US$12.1 million) in 506 impoverished townships to popularize the use of micro-credit in helping the poor . In this way, poverty alleviation in Yunnan has made the transition from target area to target household, which reflects the government's understanding of effective ways to help the poor.

Despite the achievements of micro-credit in helping Yunnan’s poor, there is still a world of difference between the impoverished rural communities of Yunnan and communities in other parts of China in terms of economic and social development. Using seven indicators to determine the overall levels of social security, the Chinese Academy of Social Sciences (CASS) ranked Yunnan Province 23rd (out of 30) in the country. The province’s low ranking reflects the fact that only 6 percent of grassroots communities are covered by any social insurance or self-help network, compared to more than 80 percent in the two provinces of Shandong and Heilongjiang. Given this lack, poverty alleviation and relief depend exclusively on outside aid, with the result that a large number of people are apt to revert to poverty. Therefore, the phase two team of RETA 5771 may want not only to evaluate individual households in the extension of micro-credit, but also to consider the extent to which the provision of micro-credit fosters sustainable development and prevents reversion to poverty. This requires assessment of community features.

Evaluation of rural credit projects in Yunnan to date raises a number of questions:

1. Is there a cooperative or community organization that is able to assist members or through which members can assist one another? Should there be teams or centers for the purpose of building up a mechanism for mutual assistance among families in the community organization, so as to improve every family's skills in production?
2. Is there a way to link poor households to the market that minimizes the risk to individual households?
3. What organizational and cooperative forms enable loan-related risk to be spread equitably among households?
4. Is there a way to assist those in temporary need that allows them to continue to participate in community projects? What is needed is a network for social relief and prevention of poverty reversion at the bottom levels of family and community, which targets family and is based on community.
5. Is the network or organization that is established able to plan for the future and build on its successes? How can organizations and networks be efficiently guided to serve as grassroots community organizations for farmers' self-management and self-development?

Experience in working with micro-credit and the poor suggests that their own experience and knowledge of local conditions and family characteristics play a major role in success. Broad-based participation is necessary, as is a knowledge of the constraints imposed by both local conditions and family factors. When projects are based on a realistic assessment of community capacities and comparative advantage, they have a high probability of success. Since China’s economy is now in transition from plan to market, poor households in impoverished rural areas may have lost the self-sufficient traditional mode of production of the past without yet gaining the market linkages and benefits that the new prosperity is based on.

While the market is becoming increasingly important in regulating the flow of goods and services, poor family producers are extremely vulnerable to fluctuations in supply, demand, and prices. The critical question becomes how to organise poor households and establish a risk-protection mechanism that utilises mutual assistance. That is, how can a community-based poverty alleviation scheme that focuses on households be developed? Such a scheme, integrating households into the community, is necessary for micro-credit to serve a development goal. Collecting information on local experience is vital in this regard. Capacity for mutual assistance among the families should be added to collection of data on the standard economic indicators for micro-credit.

If micro-credit is to serve as the mechanism through which aid is disbursed at the household level, such a social indicator can help assess the capacity of both community and household. Micro-credit can work in an additional way, serving as a risk-prevention mechanism. In this capacity, micro-credit can serve as a hedge against reversion to poverty and as a sort of bottom-line social relief. Thus the micro-credit mechanism for financial risk prevention develops into a mechanism for social risk prevention. Using this approach, the Sociology Institute of the Yunnan Academy of Social Sciences has conducted a research project on poverty alleviation based on more than 500 local households. Data collected by the Gala office in Huangnihe township of Fuyuan county attempted to measure a community's self-assistance network. The social data were added to economic performance data. After nearly one year of trials, the importance of using both social and economic indicators has been demonstrated. The following are the conclusions from these field trials.

1. Both needy and poor households came to understand the ways in which the mutual guarantee process at the group (family and community) level was a safety mechanism for reducing risk deriving from farming and marketing conditions Rather than taking a passive role, as was often the case when aid was regarded as a joint debt that had to be repaid, groups using micro-credit took a more proactive approach to risk assessment and management, considering several factors. The fundamental difference lies in the fact that the relations among poor families were not passive or inactive, but rather characterized by comprehensive, active involvement.
2. Needy families were strongly motivated to engage in mutual assistance efforts. This inter-family cooperation laid a promising foundation for larger-scale cooperation—a self-assistance network at the community level, which was emerging by the end of the study.
3. The ways in which families actually provided mutual assistance proved to be an ordered system of behaviors that could be predicted, rather than merely spontaneous, unpredictable behavior. This suggests that local residents know what is needed to solve many of their problems.
4. Certain impoverished households began to emerge as leaders in community development, linking the development of each family with that of the community.

Micro-credit funds not only provided the basis for the functional operations of a community's self-assistance network, but experience in micro-credit administration increased the organizational capacity of local communities. Micro-credit served as a dynamic mechanism in community empowerment.

These lessons suggest that the implementation of household-targeted community-based micro-credit schemes have development benefits beyond the merely economic.

4. China's Policy toward Ethnic Minorities

As of the revolution in 1949, all ethnic groups within the national boundaries were automatically citizens of China. In the 1950s, the central government identified 56 ethnic groups in China, including the Han Chinese. Plans were then made to develop each group, in conformity with policies that guaranteed legal and social equality for all ethnic groups in China. The long-term policy goal, however, was for ethnic minorities to be assimilated into Chinese socialist society.

In spite of efforts during the Cultural Revolution to effect immediate assimilation of ethnic minorities into Chinese society, policies over the past twenty years have acknowledged the importance of having a multi-ethnic nation (duominzu guojia). Increased efforts have been made to develop a writing system for all minority languages in China, and more recently, to offer elementary school students in some minority areas a choice of either Chinese or their minority language as the medium of instruction (Postiglione, 1997).

4.1 Policies in Yunnan for Ethnic Minorities and Land Use

In Yunnan, ethnic minority villages were organized into communes during the collective period (1958-1982), consistent with collectivization elsewhere in China. In upland areas, villagers continued to use shifting cultivation to produce grain, as they had in the past. The difference during the collective period was that teams of people opened swiddens on a vast scale (250-300 mu or 16.6 to 20 ha), larger than any swiddens villagers had seen in the past. The policies emphasizing grain production, especially in the late 1960s and the late 1970s, forced villagers to cut forests, in some cases primary forest that they had protected for generations (Sturgeon, 1997). In spite of the huge swiddens, however, farmers often lacked sufficient grain for consumption because of taxes paid in grain as well as state grain procurement.

With the economic reforms and switch to the household responsibility system, ethnic minority households in upland areas were allocated areas for wet rice as well as for shifting cultivation. Allocation of land was based on the number of household members at the time. Under Liangshan Daohu, villages were allocated collective or community forest land, and each household was allocated freehold forest land. In some areas, ethnic minority farmers also got contracts to reforest degraded land (zerenshan). Liangshan Daohu basically provided forest land to communities and households for subsistence use. Regulations prohibited forested areas from being cleared for other uses, and farmers were forbidden to sell fuelwood. With permission from the forestry department, farmers could cut timber on contract forest land, provided they paid all the fees and taxes necessary for sale of timber.

On agricultural land, however, agricultural extension agents have encouraged ethnic minority farmers to plant either wet rice or cash crops. Farmers in the hills are urged to market their crops either locally or in major markets in the lowlands. In Xishuangbanna, where there are numerous hill ethnic groups, many ethnic minority farmers have planted sugar cane or rubber trees in their shifting cultivation fields. At altitudes too high for rubber, ethnic minority farmers have cut wet rice terraces in the shifting cultivation land allocated to them. The push to become involved in cash crops or other businesses forces farmers to engage in wet rice production, where labour is concentrated at certain peak times of the year. In comparison with upland rice in swiddens, which requires frequent tending during much of the year, wet rice allows farmers more time to spend on other income-earning activities.

Policies for ethnic minorities in Yunnan regarding land allocation and land use have generally paralleled policies for rural farmers elsewhere in China. The one exception, in Liangshan Daohu, is that shifting cultivation land was allocated to upland farmers, in addition to freehold forest land and contract forest land. Policies emphasizing cash crops and participation in markets, however, have pushed many upland farmers into using their shifting cultivation lands for wet rice or cash crops such as sugar cane.

While policies for ethnic minorities in the 1950s guaranteed legal and social equality for all groups, in practice many Han Chinese, including policy makers, believe that hill ethnic groups are "lacking in culture" and "low in quality."

As a result of this commonly-held belief, some researchers in Kunming fear that not enough attention has been paid to the indigenous knowledge of upland ethnic minorities, including indigenous institutions for land allocation, land use, and forest protection (e.g., Xu, 1995b). Also, the strict regulations on forest land use prevents farmers from practicing traditional agroforestry systems in their freehold forest land and contract forest land. Researchers point out that the biodiversity produced in swidden/fallow systems will be lost as farmers switch to monoculture cash crops. The knowledge that accompanies swidden agriculture will also be lost, in all likelihood before policy makers realize that shifting cultivation contributes to rather than detracting from biodiversity (Xu, 1995b; Long et al., 1993; Xu et al., 1993). As research in Xishuangbanna has also shown, composite swiddening systems have not necessarily reduced forest cover over the past 35 years. Forest policies, as noted above, have reduced forest cover in several instances, but indigenous land use practices tend to maintain forest cover (Xu et al., 1992).

Policy makers in Kunming face tough problems. By including ethnic minority groups in development projects and state efforts to promote markets, villages in many areas have experienced an increase in household income. Since households must now pay for their children’s education, in addition to paying for family health care, the rise in income is a household necessity. But the loss of traditional knowledge, particularly in forest management and shifting cultivation, represents a serious loss for land management in Yunnan. Many ethnic groups have been regenerating forests and cultivating swiddens for centuries in places such as Xishuangbanna. The forests remaining there, one could argue, have been produced and protected by past generations of farmers, whose knowledge about the micro-sites needed by various species, and the stages of forest succession, is enormous. Clearly, planners and policy makers who consider adjustments to forest policy and better means of protecting watersheds should consult with upland farmers and forest managers, many of whom are ethnic minorities. For planners to consult with ethnic minority farmers, however, they will first have to understand that minority culture is rich and valuable, encompassing profound knowledge about forests and their regeneration. This kind of knowledge is particularly useful in considering plans for watershed management.

Part of the political arrangement between the central government and the many "autonomous areas" has been the willingness of the GOC to relax its "one family, one child" rule to "one family, two children" in many rural areas. Informal observation suggests that birth rates in some minority villages remain high. When the RETA survey team visited a prosperous Hani village in Xishuangbanna in November 1998, they found that the village doctor had eight children, the youngest being the only boy. The doctor explained that he had paid a fine for each additional child using "income from sugarcane sales." Rising income levels may even be leading to larger family size in minority rural areas, which is the opposite of the traditional "demographic transition."

4.2 Historical Background

Although numerous changes in China's policy toward ethnic minorities have taken place since 1949, the policy still plays a significant role in China's national integration and stabilization. The basic idea of the principle of Regional Autonomy of Minorities is that under the leadership of the national government regional autonomy is implemented in the areas where ethnic groups live in distinct communities. In such locales, whether on the scale of province, prefecture, or county, autonomous governments are set up and the rights of autonomy are conferred. ; the national government shows full respect for and provides guarantees to the rights of self-management within each ethnic group. A higher level of government is likely to assume responsibility for training minority cadres to manage political, economic, and social affairs in their respective areas. The administrative head of a minority area (region, prefecture, or county/banner) must be a citizen of the nationality (or one of them) exercising control of the area. Groups are allowed, within limits, to adapt policies and their implementation to local conditions.

The minority policy of the Chinese Communist Party (CCP) took the policy of the Soviet Union as a model, but made changes. In the USSR, minorities formed republics and could, in theory, secede from the Union. In China, minorities have a less autonomous standing, reflecting the fact that minorities make up roughly 10 percent of China's total population, but occupy 50% to 60% of the territory. The Han Chinese, on the other hand, have a very large population, while the minorities inhabit vast territory with abundant resources (Selected Documents on Minority Policy, 1985). National policy makers have taken into consideration the fact that many minorities live close to China’s national borders and in some cases maintain close relationships with peoples of the same ethnic group living outside the national boundaries. Early CCP policies in Yunnan were undoubtedly developed with this in mind. There was, for example, the threat posed by former Guomindang troops who had regrouped and settled in areas of northern Burma and Thailand at the end of World War II. The CCP had to adopt a prudent, step-by-step policy in order to win the trust of all ethnic groups living within the country. Consolidation of consistent national authority in border areas was a policy priority in the early years.

In Xishuangbanna, as in other minority regions of Yunnan, Communist cadres, organized into "nationalities work teams," were assigned to villages, initially to "do good and make friendships." Grain and goods were generously distributed by the local people's governments among minority peoples. Meanwhile, the hereditary Tai Lue nobles were persuaded (although many of them remained unreconciled) to reduce their land rents. A mission representing the Central People's Government was dispatched to Xishuangbanna in February 1951, whose task was to conduct social surveys, to propagandize the Communist minority policy, and to smooth relationships between the Han Chinese and minorities.

In 1951, with the participation of native elites, the mission of the Central Government organized a conference at the county seat of Fuhai to discuss the implementation of Regional Autonomy in Xishuangbanna. Two years later, the Xishuangbanna Dai (Tai) Autonomous Region was created.

The core of the CCP's minority policy is the policy of "Regional Autonomy of Minorities," which has been in practice since 1941 and is a part of the Constitution of the PRC. It proclaims the equality of all nationalities in China, gives minority peoples the right to manage their internal affairs, and guarantees minorities the freedom to practice their customs, speak their language and follow their particular religious beliefs. On the other hand, under the policy any actual exercise of autonomy must be approved by higher authorities.

Economically, CCP policy provides some preferential treatment with respect to tax revenue, budgets, and loans in autonomous areas, and provides autonomous governments with annual special funds and financial subsidies. However, such aid is less than the profits the state gains from its enterprises in autonomous areas. The average financial subsidy the Xishuangbanna Dai Autonomous Prefecture received from the state in the years 1953-1983 was approximately Y8 million, while the state gained tens of millions from the state farms in Xishuangbanna every single year (for example, about Y41 million in 1983). The state had invested Y544 million in its farms by 1983, while the financial aid given to the rest of Xishuangbanna from 1953 to 1983 totaled only Y233.8 million.

4.3 Contemporary Policy

China's policy toward ethnic minorities plays a very important role in contemporary Chinese political life. Although numerous changes in the policy have taken place since 1949, the policy still plays a significant role in China's national integration and stabilisation. The basic idea of the principle of Regional Autonomy of Minorities is that under the leadership of the national government regional autonomy is implemented in the areas where one or more ethnic groups live in clusters of communities such that they make up a significant portion of the population of that county, prefecture, or province. In such locales, whether on the scale of province, prefecture, or county, the units of government are granted partial autonomy. As long as there are no conflicts with key national government policies, the national government guarantees the rights of these local governments to manage their own affairs at that level of government. Some supervision of autonomous government is typically provided by the local Party Secretary, who is almost always Han Chinese.

The law on minority autonomy stipulates that the position of chairman or vice chairman of the People's Congress in each autonomous area be held by local residents of the regions; the positions of governor of the autonomous regions, commissioner of the autonomous prefectures, and magistrates of the autonomous counties are all to be held by members of the ethnic groups for whom the autonomy is executed; some of the other positions in the governmental agencies and other attached departments in the autonomous areas are also held by the ethnic groups for whom the autonomy is executed, as well as by members of the other ethnic groups.

The national government assumes the responsibility for training minority cadres to manage political, economic, and social affairs in their respective areas, and the administrative head of a minority area (region, prefecture, or county/banner) must be a citizen of the nationality (or one of them) exercising control of the area. Groups are allowed, within limits, to adapt policies and their implementation, to local conditions.

In the political system of China, the People's Political Consultative Conference (PPCC), the People's Congress, the Government, and the Party Committee are supposed to have equal political status in theory. Nevertheless their actual arrangement in the political power hierarchy is, in descending order, the Party Committee, the Government, the People's Congress, and the PPCC. To some extent, the leading minority cadre in autonomous areas serves a decorative function; while this cadre can be the governor, the director of the Congress, or the chairman of the PPCC, few have served as the first secretary of the CCP Committee. The Party Secretary of the Xishuangbanna Dai Autonomous Prefecture, for example, has never been a Dai. Former Governor Chao Cunxin, who has been a Party member since 1957, is not even a member of the Party's standing committee. The authorities of the prefecture seem to have issued only two autonomous decrees with marked local characteristics: "Ousting phi po among the Tai Lue people prohibited" and "Killing twins and malformed infants among Hani (Akha) prohibited."

In 1984 the Chinese government revised the Law Regarding the Regional Autonomy of Minority Nationalities. The revision was an attempt to systematically define the rights and responsibilities of autonomy and autonomous organs. The major provisions of the law follow.

• These autonomous areas are empowered to formulate the autonomous and specific regulations in connection with the political, economic and cultural features of each area.
• Autonomous areas are authorized to make special policies and take flexible countermeasures which are in line with the constitution and the laws based on the specific situations of each area.
• Upon approval of the higher authoritative governmental agencies after submission, the resolutions, decisions, orders and instructions, if not in correspondence with the practical situation of the autonomous ethnic regions, should be appropriately accommodated or ceased in their implementation.
• Autonomous areas arrange and manage the cause of regional economic development under the guidance of the national plan.
• They are authorized to manage their own financial affairs.
• They independently manage the areas of education, science, culture, public health and sports, etc.
• The regional police forces can be organized to maintain social order upon approval of the State Council in line with the national military system and the practical demands of the local areas.
• Local ethnic language(s) should be used in carrying out official functions.
• Various other regulations exist in the fields of economic construction, finance, education, and culture.

Significant progress has been made in formulating general regulations for autonomous areas, as well as specific regulations for each national autonomous area. By April, 1992, more than 113 regulations had been approved for implementation at the provincial/ regional level by the Standing Committee of the National People's Congress. In addition, 71 specific regulations and/or adaptations of higher decrees to local conditions have been promulgated, covering the fields of culture; education; language and writing systems; marriage; inheritance; family planning; drug-control; and the management of land, forestry, and grasslands. Various specific regulations have also been made for the implementation of the Regional Autonomy of Minorities in the nine provinces of Sichuan, Qinghai, Gansu, Yunnan, Hubei, Guangdong, Liaoning, Hunan, and Hebei, all of which contain autonomous areas at the prefectural and/or county level. Two examples of laws that are administered flexibly are the Marriage Law and the Election Law. The Marriage Law of China stipulates that men and women below the ages of 22 and 20 respectively may not be registered for marriage. However, considering the fact that early marriage is widely practiced in the ethnic regions, the age at marriage there is lowered to the ages of 20 (men) and 18 (women). The flexible application of the Election Law in minority areas usually affects both the number of candidates and the way in which the candidate list is ultimately determined.

At present, even given the flexibility noted above, there are problems in the execution of the law on autonomy in minority areas. First, with the ongoing reform of the economic system, the articles in which the autonomous areas are preferentially treated are gradually losing their significance or exist in name only. The rights by which autonomous areas independently purchase (non-allocated) industrial and agricultural products and local specialties are rights that also now accrue to non-autonomous areas. The original preferential treatment to the autonomous areas no longer occurs in practice.

Second, although the three preferential trade policies that have been long implemented for ethnic groups are ensured in the law of autonomy, they now provide only nominal advantages, due to changes in the administration of the circulating fund for national trade enterprises "from allocation into loans." These legal documents and articles once played an enormously supportive role in autonomous areas. However, in the process of the reform, they have gradually lost their original functions and no longer prioritise the autonomous regions.

Third, there has been no differentiation between the autonomous and non-autonomous regions in the revenues collected by the national government in recent years. On the one hand, the autonomous regions are financially subsidised; on the other, large sums of their fiscal revenues are collected through many diverse channels, and in many cases eventually outweigh the subsidies. For instance, the fiscal subsidies the Dali Bai Autonomous Prefecture of Yunnan Province received from the national government were Y34.76 million in 1987, but the total sum of fiscal revenues it handed in reached Y50.39 million. A review of the balance of payments seems in order.

Fourth, the exploitation of natural resources within autonomous areas poses a further challenge to the concept of preferential treatment for autonomous regions. For example, 94 percent of the zinc and 41 percent of the coal resources of Honghe Hani Autonomous Prefecture and all of the manganese resources in Jianshui County are managed by enterprises under the jurisdiction of the central and provincial governments; virtually no revenues from these enterprises are shared with local government. The locality suffers twice—not only must it bear the sometimes poorly-mediated pollution associated with the mining operations, but it also does not benefit from the export of resources from the area other than some employment generation. Similar situations are known to exist in some other national autonomous regions. This situation could be remedied in part if local government or other local institutions were granted equity and director positions in the enterprises.

Finally, there is a tendency within the central government to view ethnic minority culture as "backward" and therefore in need of various kinds of assistance. The resultant help and instruction has in the past not been delivered in a sufficiently participatory manner with adequate consultation with the affected communities. The center has tended to view "regional autonomy" as a tactical approach to the ultimate goal of socialisation and national integration.

4.4 Demography of Ethnic Minorities in Yunnan

Yunnan is home to numerous "official" nationalities including Achang, Bai, Benglong, Bulang (Blang), Dulong, Hani, Hui, Jingpo, Jinuo, Lahu, Lisu, Miao, Naxi, Nu, Pumi, Tibetan (Zang), Wa (Va), Yao, Yi, and Zhuang. Some 13 of these are found only in this province. The 1982 Census of China reported a minority population of more than 67.2 million. By 1988, that number had grown substantially, not only as a result of natural increase, but also from an increased willingness of people to identify themselves as belonging to a minority. One incentive for doing so was the availability of various benefits to those with minority status.

There were also some changes in the guidelines for registering children of mixed marriages. The 1990 Census reported 91.3 million with minority status, an increase of over 2 percent of population share. The annual population growth rate between the census events was 3.8 percent compared with 1.3 percent for Han people (Yusuf and Byrnes, 1994). In 1992 Yunnan reported a minority population of 12.67 million (YNTJNJ, 1993; Yusuf and Byrnes, 1994). The age structure of minority nationalities differs from that of the Han and the country as a whole. In general, ethnic minority groups tend to be younger. For China as a whole, those aged 15 and under made up about 37.9 percent of the population in 1990; for minority groups, the corresponding figure was 44.2 percent (Yusuf and Byrnes,1994). Comparing those 25 and older, the pattern reverses, and there is a larger percentage of this older population among the Han Chinese. Minority fertility is higher than the national average (Table 2). The crude birth rate (CBR) for the Han was about 20 per thousand per year, whereas for ethnic minorities, it averaged 24 (range: 19-34). The total fertility rate was 2.16 for China as a whole, 2.10 for Han, and 2.81 for ethnic minorities as a group (Yusuf and Byrnes, 1994). Higher minority fertility derives from earlier age at first marriage, less access to contraception, government policy, pro-natalist norms, higher remarriage rates, and other factors.

Table 4.1. Yunnan’s Population by Ethnic Group, 1992.

Source: Table 4-3, YNTJNJ 1993.

Mortality patterns among ethnic minorities differ from those of the Han and from China’s, and rates are generally much higher. Using 1990 Census data, Yusuf and Byrnes estimated the crude death rate (CDR) per thousand per year, as well as age-adjusted rates standardized on China as a whole (Table 2). Age-adjusted rates tended to be higher than those for the country as a whole, reflecting age-sex differences between ethnic groups and the national pattern. Mortality was greatest among the Zang and Buyi, with age-adjusted rates of 9.44 and 10.10, respectively, and lowest among the Man (5.55). In general, female mortality among ethnic groups is comparatively high (except for the Man, Zang, and Menggu), most likely reflecting high maternal mortality. The infant mortality rate (IMR) for China as a whole in 1990 was reported to be 28.7 per thousand live births (a figure likely to be underestimated). With the exception of the Man, Hui, and Menggu, the IMR for Yunnan’s minorities was substantially higher; for the Buyi, Yi, and Miao, the rates were nearly double those of the Han.

Table 4.2. Selected Fertility and Mortality Indices for Ethnic Groups (1990)

4.5 Some Recommendations

The ADB might work with provincial government in Yunnan to further various objectives:

• The law on regional autonomy might be reviewed to explore whether the autonomous areas concept could be utilised as an appropriate means for targeting poverty alleviation and environment projects.
• The terms of "trade" between autonomous areas (counties and prefectures) and provincial level enterprises and government should be examined at a holistic level to determine mechanisms for pro-active job creation within the autonomous areas and equitable revenue sharing between the autonomous areas and the provincial government. The granting of equity in enterprises and the payment of a percentage on the value of resources and products exported from the autonomous areas would be a broad-based approach that benefits all stakeholders in a fair manner.
• State-owned enterprises of the national and provincial governments and the various relevant departments in the national autonomous regions should recruit ample numbers of ethnic peoples, the proportion of which should be mutually determined. Perhaps the social services provided by state-owned enterprises should be handed over to local government administration but continue to be funded by the enterprises.
• Value-added processing of primary products, whether agricultural or mineral, should be encouraged at the local level, along with investments in the development of local skills.
• Consideration should be given to handing over enterprises which can be managed and operated by the local areas to the governments of the autonomous areas or privatising these enterprises in a way that ensures that local stakeholders gain a dominant share of the ownership. In cases where it is not feasible to transfer enterprises to local ownership, local people should be appointed to boards of directors.
• Additional means should be sought to give local communities more control over the activities of these firms and of the revenues produced. For example, the proportion of taxes retained in the local minority areas should be higher than for the non-autonomous regions.

5. Education Policy

Education policy in China has gone through several phases. In 1949, an education policy emulating the Soviet model was adopted in what is sometimes referred to as the Great Education Revolution of the 1950s. The Cultural Revolution brought a more radical approach to education during the decade 1968-1978. This was followed by the present period of reform which was ushered in as part of Deng Xiaoping’s Open Door Policy.

The main policy document that put the present policy in place is summarized in Box 5.1 below.

5.1 Implementation of National Policy in Ethnic Minority Areas

In 1995, there were are about 55 minority nationalities in China with a population of about 108 million people or about 9 percent of the national population. Of the 600 autonomous counties in the country, about one third had implemented nine years of compulsory education, with the remainder still requiring only six years (1996 People’s Republic of China Year Book). Table 1 below shows the proportion of schools in minority areas and the proportion accepting only minority students.

Table 5.1. Educational Institutions Only Accepting Minorities in 1995

*Not including vocational/professional high schools

Textbooks have been prepared in many minority languages. As of 1995, 21 nationalities in 13 provinces were reportedly using 29 kinds of languages. More than 3000 textbooks exist in minority languages for use at the primary and secondary school levels. Ten of 30 provinces have publication institutes to translate and publish minority textbooks. There are altogether some 60 million students attending bilingual schools.

A number of "model counties" have been selected in poor areas of China to implement the "liaoyuan" or "prairie fire" project. Comprehensive reform of educational services is implemented in order to make education more responsive to the needs of the poor. Quite a few of these model counties are in minority areas as these areas tend to be poorer than average. It is a priority to upgrade compulsory education in all poor areas from six years to nine years. The upgrading of vocational schools is a priority in secondary schools throughout the country. At the tertiary level, government subsidies are now giving poor students better access to college educations. Strengthening educational services to minority communities has long been a priority in Yunnan.

Of Yunnan Province’s seven prefectures, four are autonomous prefectures; the other three are also occupied by a significant number of minority people. Altogether, minority people constituted 53 percent of the population of the province in 1989. There were 25 recognized ethnic minorities with populations greater than 4000 people.

5.2 Constraints on Policy Implementation in Yunnan

In 34-40 counties, it is likely that it will not be possible to establish nine years of compulsory education by 2000. These counties are concentrated in Nujiang, Diqing, Lincang and Simao prefectures along the Jinsha River watershed and the Honghe River watershed.

Most of the schools with only one teacher are in the poverty-stricken areas, with very poor buildings and teaching facilities. The low quality of teaching and high text book fees for secondary and primary school students appear to have contributed to the high dropout rates in these areas. In 1998, the enrollment rate of ethnic students in various types of schooling dropped from [data missing?] slightly over the course of the year. Despite the large amount of investment, it is sometimes difficult to keep students in school. For example, the rate of completion of six-year schooling in the primary schools in six border counties of Honghe Prefecture was only 38 percent. The dropout rate reached 20 percent in the primary schools in Funing County of Wenshan Prefecture. There were 307 senior high school students in the No. 1 Middle School of Lanping County of Nujiang Prefecture at the beginning of the year, but only 190 completed the term; the dropout rate was 36.9 percent within half a year. According to the local education departments, 80 percent of the dropouts in primary and secondary schools were from poverty-stricken families. In 1998, the average rural income was Y1,374, while that in poor counties was only Y556 (the lowest was Y324 in Ximeng County). The primary school enrollment rate for the province as a whole was 98.7 percent, but only 77.75 percent for Deqin County, and only 54 percent in Yangla Township of this county.

The case of Ximeng County, the county with the lowest per capita income, is illustrative of implementation problems. Of Ximeng’s 80,700 people, 72 percent belong to the Wa (Va) nationality. The first primary school was set up in 1954, the first secondary school in 1959, and a senior high school was set up in 1972. The average amount of schooling per capita is only 1.7 years. In 1996, the dropout rate for the whole county was 10 percent, and 8 percent in 1997. At present, 5,023 students are thought to be in danger of leaving school. The County Education Bureau notes that 69 county students currently attend universities and polytechnic schools within the province and are strongly dependent on subsidies to finish their schooling.

Agricultural vocational training is also a problem. The county’s only agricultural vocational school was set up in September 1984, with an enrollment of 75 students each year. There is not a single professional vocational teacher in the technical schools in the county. According to the director of the Nationalities Affairs Committee of Simao Prefecture, there are a few ethnic students who do quite well in their schooling in the local area, but they are unwilling to go to study in the nationality high schools because of the high living and textbook expenses. Some students are accepted by universities and polytechnic schools, but they can not afford the expenses and so do not attend.

5.3 Schools and Enrollment

In both the 1982 and 1990 Census, Yunnan ranked 28th of 29 provinces in terms of average per capita schooling (Zhao and Tong, 1997). In 1998, there were 23, 400 primary schools in the whole province (among which 15, 668 were complete primary schools, covering all grades). In addition, there were 26,593 instruction locations (20,549 locations had only one teacher). Student enrolment was 4,805,500; this included 1,745,900 ethnic minority students, making up 36 percent of the total. Minority enrollment in 1998 was 87.3 times higher than that of 1950. In 1998, there were 2, 245 secondary schools in Yunnan (including 419 senior high schools and 1,826 junior high schools). In all, 1,521,500 students were enrolled in secondary schools school, of whom 31 percent (471,400) were from ethnic minorities. This enrollment is 785.6 times higher than the 600-plus students in 1949. By 1998, six years of compulsory education was the norm in 105 counties in the province, including 62 (59 percent) minority counties. In 47 counties, nine years of compulsory education has been achieved, among which 21 (44.7 percent) are minority counties. The 1998 enrolment rate of ethnic students in Yunnan was 97 percent.

Many types of schools serve ethnic minorities. There are boarding schools at the elementary, high school, and college levels and semi-boarding schools at the elementary and high school level. In addition, there are nationality normal, polytechnic, and vocational schools. Within regular schools, polytechnic and vocational classes offer training for ethnic peoples. Nationality preparatory courses have been set up in the colleges and universities. A special Nationality Division has been established in the No. 1 Middle School in poverty-stricken counties, and key nationality classes have been started in some prefectures.

5.4. Funding and Investment

China as a whole spends a smaller proportion of its GDP/GNP on education that do most countries. Whereas many nations mandate a specific percentage (usually around 5 percent) of GNP for education, under even the most recent Education Law (1995), China does not (Zhao and Tong, 1997). China’s tremendous economic development over the last two decades has translated into little measurable gains in overall levels of schooling. For every new TV University student, there’s a rural elementary school dropout.

Officially, elementary and secondary school fees are set by provincial Education Commissions, the General Bureau of Price Control, and provincial Bureaus of Finance. However, in response to rising costs, schools have also added their own fees. Coupled with the opportunity costs of child labor in agricultural production, rising school costs have resulted in a rising dropout rate. Financial problems also affect teaching. With respect to monthly salary, teachers are in the lowest third of the 12 professions in the national economy and earn (in terms of indexed salary) about one quarter the rate of most developing countries. Those starting out in the profession, particularly at the elementary and middle school level, tend to leave when better work opportunities arise —an estimated 50 percent of teachers hired by provincial education commissions have left their jobs (Zhao and Tong, 1997). An assessment of teaching quality at the primary and secondary level carried out in 1993 reported that "30 percent of teachers were qualified for their jobs, 30 percent were marginally qualified, 30 percent were incompetent, and … 10 percent were totally unsuitable" (Zhao and Tong, 1997, p.22).

Central and western China receive more than their share of state investment in education. To some extent, this offsets the state investment in commercial and industrial infrastructure development in the east. Since the private sector is less developed in the inland areas, it cannot do much for education. In addition, there are significant minority populations in the west. Furthermore, the west contains important natural resources, and local populations must have a certain amount of education to facilitate the economic exploitation of these endowments. Yunnan benefits from its strategically-important endowment of natural resources.

The students in nationality colleges, schools and classes enjoy different degrees of tuition reduction, and receive subsidies from the national government to cover part of their living costs. For example, the students in the nationality high schools and primary schools run by the provincial government receive a monthly subsidy of Y150. Students in the 33 Nationality Divisions in the poverty-stricken counties each receive Y120 annually from the Nationality Flexible Fund. Students in the Provincial Nationality Secondary School and the Nationality Division of the Normal University are subsidised at a rate of Y1200 each year. The students in the 15 agricultural/vocational schools in the prefectures are provided an annual subsidy of Y120. Those in the key classes in the senior high schools in the prefectures are offered Y800 per capita per year. Ethnic students in the universities and polytechnic schools receive needs-based subsidies.

National Compulsory Education Projects are implemented in poverty-stricken areas. Five counties were selected as pilots for this project in 1996, which was extended over the whole province in 1998. The 73 poverty-stricken counties receive accelerated funding from the national government, and schooling conditions there are likely to improve further there. Already, Y800 million (approximately US$96.4 million) has been invested in these counties; the funding has been used for construction, improvement of teaching facilities, and library expansion. An additional Y70 million (approximately US$8.4 million) has been invested to establish a vocational/agriculture school in each county. Another Y160 million (US$19.3 million) has been used to construct six-year primary schools in all 506 poverty-stricken townships. From 1996 to 1998, Y30.85 million (US$3.7 million) was used for the construction of 59 schools at border posts. Between 1995 and 1997, Y40.15 million (US$4.8 million) was invested in building 219 six-year and three-year boarding primary schools. In 1997, Y96 million (US$11.8 million) was used for the reconstruction of 1200 "thatched-roof schools" in natural (as opposed to administrative) villages, and the provision of 1200 teaching positions.

Some poor people have trouble meeting the costs of schooling. In 1996, Y5.3 million (US$638,000) was allocated from the provincial government to set up the Secondary and Primary School Grant-in-Aid Fund for 31 poverty-stricken townships in 12 border counties. In 1997 and 1998, Y2.55 million (US$301,000) was allocated to expand the Grant-in-Aid Fund to 26 border counties. In 1998, the province established two special funds of Y100 million (US$12.0 million) to support students in primary/secondary schools and those in colleges and universities.

5.5 Special Considerations

Post-secondary education is the channel through which leadership for minority areas is developed. To increase minority enrollment in polytechnics, colleges, and universities, minority students are accepted with entrance examination scores 10-30 points lower than the standard level. To expand opportunities further, especially for students from remote and economically underdeveloped areas, preparatory courses are offered in the Nationalities Institute and some other universities. Students entering these courses are permitted entrance examination scores 40-60 points lower than the standard. About 1000 such students are enrolled each year. Recently, ethnic students who sat for the entrance examinations for universities made up about 24 percent of the total, and those who passed the examinations made up 21 percent. The number of ethnic students in universities in the province is 20.9 percent and includes members of all ethnic groups.

A serious effort is made to recruit teachers for minority areas. Those who have taught for over 30 years can retire on full salary. The salaries of teachers in remote and mountainous areas are raised one or two grades to make them more attractive, and the children of these teachers receive preferential treatment on applications to secondary and higher institutions of learning.

5.6 Recommendations

Focus on enrolment figures misses the real story: enrolled children do not necessarily attend school. Whether the causes are the direct costs of education or the opportunity costs, many children simply are not there on a regular basis. Clearly this affects basic literacy and numeracy skills. It also weakens the use of schools as vehicles for disseminating public health and nutrition information or for providing immunization and nutrition programmes. Low quality of teachers is also a problem. Traditional schools may not be the short-term answer. Recommendations include:

• Consider adjusting school terms to make allowance for peak labour requirements in local agricultural calendars. Several shorter-term sessions may be more fruitful than a standard academic year.
• Teach first what people need to know, even if it is not part of the standard curriculum.
• Use minority languages in minority primary schools as a matter of principle when one minority language is common to all the students and especially when they do not yet have a good grasp of Chinese. Literacy in the mother tongue is a good stepping stone to literacy in Chinese.
• Provide books, paper, writing instruments, and other teaching materials. Whenever possible, books should include primers and other texts in the minority language(s) used in the area.
• Reduce travel time to schools as much as possible, especially in the early years.
• Consider rotating teachers associated with particular content modules among locations within a geographic region. Provide financial incentives for this.
• Raise teacher salaries.

6. Health Policy

6.1 Overview of Rural Health Care

Since the 1950s, health care in rural China has been distributed through a three-tier system of (administrative) village, township, and county. Health providers were widely distributed throughout the country, and costs were underwritten by collective units. The three-tiered structure remains today, but access is largely on a fee-for-service (FFS) basis. As a result, the cooperation among the units has deteriorated, and the technical assistance and supervision provided by higher-level units to lower levels has dropped sharply; in fact, units compete for patients in order to raise revenues (Liu et al., 1996). At its peak in the mid-1970s, the commune system provided cooperative health insurance and care to about 90 percent of rural residents. After the collective system was disbanded, the coverage collapsed; in 1996, only 8 percent of rural residents had any form of health insurance (Bogg et al., 1996).

At the village level, health care is provided at the village health station (usually one room) by a village doctor with three to six months of training after junior middle school and two-three weeks of continuing education per year (Hsiao, 1996). This is not a full-time position, and the village doctor receives no payment from the government. Fee-for-service finances the position, as does profit from drug sales. Service is primarily on an out-patient basis. Townships have larger health centers and more staff. They are headed by a doctor who has three years of medical education after senior middle school, and are staffed both by assistant doctors with two years of medical training after junior middle school and village doctors (Hsaio, 1996). Staff at this level are assigned by the government or recruited locally. These facilities provide both in-patient and out-patient care. At the tertiary level are the county hospitals staffed by doctors with four to five years of medical school, nurses, and a variety of technicians. These positions are government assigned and funded at about 25 percent of the wage bill (Hsaio, 1996). Public funds are used for capital investment at both the township and county level. Township and county positions can be hard to keep filled, due to retirement of current staff and the unwillingness of recent medical graduates to work in rural areas.

Many central government ministries are involved in health-related matters; power is diffused and policies may conflict. For example, with respect to maternal and child health issues, the Family Planning Commission, the Ministry of Public Health, the Ministry of Finance, the Ministry of Labour and Personnel, and the Central Price Commission all have some input. Rural health facilities are planned and staffed based on decisions made from above that generally fail to consider the local needs of individual facilities.

6.2 Financing

Falling government revenues at all levels have severely limited expenditure on health care at a time when health-care costs are rising. Government income dropped from more than 34 percent of GNP in 1978 to less than 20 percent in 1992. In 1990, government expenditure on health was 2.1 percent of GNP (WHO web site). Not only has central government spending on health decreased, but so has provincial spending. For example, in 1987-88 provincial expenditure on health care was cut 18 percent. What spending occurs is biased in favor of urban areas. In 1993, per-capita health spending averaged Y110; however, the urban average was Y235 per capita in contrast with Y60 per capita in rural areas (World Bank, 1997). Most public funds (about 60 percent) are allocated at the county level although most curative work takes place at the village level, which receives less than 1 percent of public funds. Most preventive work (about 65 percent) is carried out at the township level, which gets about 40 percent of public funding. The limited government funds at the township level are generally for facility improvement and require matching local funds, or they are designated for salaries, which also must be supplemented locally. Local funds are generated from user fees, leading to excessive and/or inappropriate services and tests as well as over-prescription of drugs . In fact, a large proportion of local money is generated through the prescription and sale of pharmaceuticals.

6.3 Health Services in Rural Yunnan

Health services in rural areas, especially in those outlying poverty-stricken areas and those areas inhabited by ethnic minority groups, have two characteristics. On the one hand, a stagnant economy in these areas has resulted in poor health services at the grassroots level in terms of medical facilities and techniques. On the other hand, high illiteracy rates, hostile living environments, and ignorance of health problems among farmers have prevented them from making full use of the existing health services.

Problems abound at the village level. First, some villages lack any facility at all; second, some villages lack the most basic equipment; and third, village doctors lack supervision and on-the-job training. A 10-county survey of rural Yunnan in 1997 revealed the following:

• 9.33 percent of the villages investigated had no clinics.
• The majority of doctors had not even completed senior secondary school.
• Basic equipment was in short supply. Averaging across villages, clinics had less than two stethoscopes, only one blood-pressure cuff, an O.B. pad for every two clinics, and a scale for every 10.

For problems beyond the competence of a village doctor, referral is made to township health centers. In addition, these centers are the institutions most favored by farmers for economic and geographic reasons. However, because of the migration of medical workers, especially experienced medical workers, from township health centers to county hospitals, those who remain are inexperienced and incapable of shouldering their job responsibilities. Again, take the 10-county investigation for example:

• <5 years’ experience: 40.8 percent
• 5-15 years: 34.3 percent
• 15-30 years: 19.6 percent
• >30 years: 5.3 percent

Village doctors and township health workers not only lack professional training and clinical experience when they begin work, but also lack the necessary resources to finance their training after they take up their posts. Even when on-the-job training is carried out with minimum funding, it is most likely ineffective because of inappropriate subject selection, lack of experience on the part of the trainer and inadequate communication between the trainer and the trainee.

Because of the way that funds for village and township health workers are generated (FFS), medical workers tend to regard the diagnosis and treatment of disease as the only priorities of their job, while neglecting two other equally important functions of medicine, that is, prevention and health care. For example, they are ill-prepared to offer basic health education and to disseminate knowledge about diseases among patients. Few have any training in providing advising and counseling services to patients. In addition, they lack communication skills and community-based work experience.

Health education is not available to farmers. For instance, there are no training courses of this kind, nor are there easy-to-understand pamphlets custom-designed for farmers. When farmers have questions about their health conditions, they have nobody to turn to for advice.

Public health departments alone cannot hope to achieve much in health service provision. For example, in the situation where a pregnant woman in a remote mountainous area needs medical help, co-operation and co-ordination are required from telecommunication, transportation and even civil affairs departments to ensure the safety of mother and child. However, many areas in Yunnan Province still lack such inter-departmental co-operation and co-ordination.

6.4 Current strategies for improvement of health services in rural Yunnan

• Popularize health education among farmers
• Improve living conditions for farmers
• Improve nutrition and water supply
• Promote maternal and child care as well as family planning
• Promote inoculation for common contagious diseases
• Prevent and control local epidemics
• Improve treatment for common diseases and injuries
• Provide basic medication
• Introduce an intensive AIDS awareness programme.

In addition, there is a plan to strengthen the three-level health service delivery system in rural areas. This would be done by raising the salaries of village doctors to be comparable to those of village teachers (here salaries refer to government allowances) so as to discourage their migration from village clinics to township health centers.

Another objective is to reduce maternal mortality and infant mortality through promotion of improved maternal and child care services, including new birth delivery techniques and hospital births.

Strengthening of the three-level health service delivery system in rural areas requires additional funding, and this is difficult to achieve in transitional economies. More training courses for township and village health workers are planned. Traditional training methods do not yet incorporate a means for evaluation by the participants. Unlike traditional publicity campaigns, effective health education needs to place more emphasis on the cultivation of healthy habits than on the mere number of people being educated.

7. Recommendations and Conclusion

In Yunnan Province, with its highly variegated topography and ethnically diverse population, the period of economic reforms beginning in the early 1980s has brought dramatic changes with mixed results. People in many parts of Yunnan have experienced rising household incomes, although there are still pockets of entrenched and even increasing poverty. Education is now available to more children than at any time in China’s history, but the recent requirement that households pay school fees is beginning to undercut that gain, especially for students from poorer ethnic minority households. In the past ten years there have been several projects to develop writing systems for ethnic minority languages, as well as scattered attempts to teach early grades in the minority language. But Chinese is the language of the mainstream education system, the government, the media, and the rapidly expanding arena of commerce. If anything, the need to know Chinese is more critical than ever. In the delivery of health care, while more small communities have health workers than previously, the workers are poorly trained and the health stations often lacking equipment. Nonetheless, the presence of "modern" medicine in remote areas sometimes causes local people to abandon traditional systems of medicine that could supplement the health care available.

Policies for ethnic minorities have included minority peoples in transformations of tenure rights in agricultural and forest lands, as well as in agricultural extension efforts to encourage production for the market. While these changes have initiated economic development, they have also resulted in diminished cultivation and protection of the abundant flora and fauna in a province renowned for some of the richest biodiversity in the world. At the same time, the many systems of managing forests and swiddens prevalent in upland areas in Yunnan are often being discarded in favor of "modern" forestry and agriculture, approaches that are not always well adapted to diverse micro-sites. In Xishuangbanna, one of the few tropical areas in China, plantations of monoculture rubber, as well as rapidly increasing areas in tropical fruits and nuts, have endangered the soil and water in this prefecture, an important watershed of the Mekong River.

The economic reforms have wrought both good and bad results. Both progress and new problems can be seen in the realms of economic development, education, health care, and provision for ethnic minorities. How can the Greater Mekong Watershed Project engage in this set of complex issues in ways that benefit highly diverse populations and land areas along the Mekong River in Yunnan?

This report offers recommendations in the areas of education, health care, and natural resources management. There is no separate section on ethnic minorities, since recommendations related to ethnic minorities are interspersed throughout each section.

7.1 Education

As of 1998 there were a total of 23,400 primary schools and 2,245 secondary schools in Yunnan Province. Of a total population of 4,805,500 students, 1,745,900 were ethnic minorities, constituting 36 percent of total students enrolled. Compulsory education through the sixth grade has been achieved in 105 counties, among which 62 were minority autonomous counties. Forty-seven counties require education through the ninth grade, and of these 47, 21 are minority autonomous counties. While these figures do not amount to universal access to education throughout the province, they represent important landmarks in providing schooling, including to areas where ethnic minorities predominate.

Throughout Yunnan there are boarding schools for ethnic minorities at the elementary, middle school, and high school levels. There are also normal (education) schools, polytechnic schools, and vocational schools dedicated to ethnic minority students. Students in these minority colleges and schools receive varying degrees of remittance of tuition, as well as subsidies from the national government to cover part of their living expenses. As a result of these schools, in Xishuangbanna, for example, there are not only Dai, but also Hani and Jinuo staff in all government offices, banks, factories, and in many teaching institutions.

Ethnic minority students who attend mainstream universities and polytechnic schools can be admitted with lower scores than Han Chinese students. Additionally, the Nationalities Institute in Kunming offers special preparatory courses for minority students seeking to apply to mainstream universities.

In spite of these special provisions, and advances in overall provision of education, there are still problems, especially in remote areas where ethnic minorities predominate. Often there is only one teacher per school in remote areas. Additionally, although there are subsidies for university education, minority students at elementary and secondary levels must now pay tuition and text book fees--fees that did not exist before the economic reforms. While wealthier ethnic minority households can still send their children to boarding school for middle school and high school, poorer households simply withdraw their children from school. As a result, statistics in 1998 showed a slight drop in the percentage of ethnic minority students in primary and secondary schools.

Recommendations:

1. Primary and middle schools need to be provided in ethnic minority areas, so that parents do not have to pay for boarding. Where students must live away from home to attend middle school and high school, fee remissions and subsidies for living expenses should be provided for students from poorer households.
2. Ethnic minority students in elementary school should be taught in early years in their own language while they learn Chinese. Since there are now many ethnic minority teachers, offering first and second grade in the minority language should be possible.
3. More books should be translated into ethnic minority languages.
4. Adults in ethnic minority areas should be offered literacy training in their own languages. While adult literacy courses are offered in a few ethnic minority communities, they should be available in all communities for which there is a written language.
5. School curricula should include segments on the indigenous knowledge and culture of each of the ethnic minority groups in Yunnan. Students now learn in school that ethnic minorities are backward and environmentally destructive. They should instead learn about the contributions ethnic minority peoples can make, and have made, to solving Yunnan’s problems.

7.3 Poverty Alleviation

The Mekong River Valley can be divided into three regions: the north, the middle, and the south. The northern region, averaging 3000 m in elevation, is sparsely inhabited by Tibetan peoples who practice farming, herding, and trading in precious non-timber forest products (NTFPs). The middle region, averaging 2000 m in height, is cut by steep gorges. The uplands is densely populated by numerous ethnic groups, including Yi, Lisu, Bai, Dai, Lahu, Hui, and Han Chinese. Economic activities other than farming have been seriously limited, and with increasing populations, land degradation is common in this region. The southern region, extending from southern Simao through Xishuangbanna, has moderately sloping lands with an average elevation of 1000 m. This region is characterized by tropical and sub-tropical micro-climates. The dominant ethnic groups are Dai, Bulang, Hani, Jinuo, Lahu, Yao, and Miao, although Han Chinese now constitute one-third of the population of Xishuangbanna (Chapman, 1991).

The three regions along the Mekong River in Yunnan clearly demonstrate the need for different approaches to poverty alleviation depending on local conditions. In the northern region, poverty alleviation should address problems in marketing, including ensuring that local people receive adequate prices for products, such as matsutake mushrooms that sell for high prices in Japan. Insurance for these high value, perishable products needs to be available for collectors, middle men, and sellers to foreign markets.

In the middle region of the Mekong, poverty alleviation should seek to diversify sources of livelihood and income for rural communities, based on local people’s interests and capabilities.

The southern region of the Mekong includes both tropical and subtropical sites. While this region is the most economically developed of the three, the benefits of that development have accrued disproportionately to state rubber plantations and newer, commercial agro-industries. Poverty alleviation needs to address particular communities, especially in upland areas, many of which have ethnic minorities with diverse, highly-developed systems of managing forests and producing food. The problem is how to increase the marketing of valuable products, such as cash crops and non-timber forest products, without displacing the land use systems that produced these forests and biodiversity.

Recommendations:

1. The diversity of landscapes, peoples, and histories of land use in Yunnan requires many different approaches to poverty alleviation. Efforts to increase incomes, diversify livelihoods, and develop products for the market should all be designed in consultation with local communities, among whom there are undoubtedly households with different needs and abilities. The project should come up with an array of possibilities for communities, so that households and individuals can adopt those activities that are most appropriate.
2. Project workers should be attuned to the indigenous knowledge of ethnic minority peoples. Solutions to problems should accord with local values and build on local experience. As an example, local villagers may be able to suggest cash crops or non-timber forest products that they marketed in the past, and could easily add to current production systems.
3. Rural households need better access to credit. A survey in Shuangjiang Lahu, Wa, Bulang and Dai Nationalities Autonomous County in early 1999 found that only 7 percent of rural household had access rural credit and that the average value per loan was about US$120 (Fan, 1999).

7.4 Health Care

Delivery of health care in Yunnan is based on a three-tier system. A network of county, township, and village health service providers offers health care for rural communities. Village health workers receive training in common ailments; they refer people with more serious problems to doctors and hospitals in urban areas. While this system has indeed increased the reach of health care delivery, problems have surfaced as a result of the inadequate training of village health care workers, as well as the lack of equipment and medicines at their disposal.

In many rural areas, moreover, there is a traditional healing system based on herbs and other products available in the local environment. In Xishuangbanna, for example, Hani villagers have medicinal uses for all but three among the hundreds of endemic plant species surrounding them. Herbal health practitioners know how to combine various plants to cure most commonly occurring diseases. These practitioners usually also know what kinds of injuries and illnesses need treatment in a hospital.

Recommendations

1. Research among various ethnic minority groups could develop an array of treatments for common health problems, so that both local people and health workers would have access to a variety of possible treatments. Researchers should include health providers and ethnobotanists.
2. Training for practitioners in the three-tier health care system should include how to incorporate local healing practices into the array of treatments available for villagers. Local treatments should particularly be encouraged for patients who cannot afford prescription medicines.
3. Better training should be offered to village health care workers, and larger numbers of ethnic minorities should be recruited so that they can work in their home areas.
4. Funding should be available to provide basic equipment and medicines for all village health clinics.

7.5 Land Use

The bulk of this report focuses on Simao and Xishuangbanna, which have experienced the most rapid economic development of any of the three regions, but also face the most serious environmental consequences. The recommendations for Simao and Xishuangbanna, therefore, stress a combination of two elements. The first element is increased active participation by local communities in plans to develop the lands they manage. The second element is the involvement of government line agencies and research institutions from both prefectural and provincial levels in the planning and implementation of any large-scale resource-based development.

The first element emphasizes the importance of involving local land users in decision making. This process would be important in any locale, but is critical where land forms and endemic species vary so dramatically from one small valley to the next. The second element is important because investors in projects such as dams, mining, and agro-industries are often national or even international firms. County or prefecture-level governments have difficulty refusing or controlling such investments. To assist with evaluating and monitoring large projects, local government needs the clout of higher-level state administrative, research, and legal systems.

State rubber farms were established in Xishuangbanna Prefecture in southern Yunnan beginning in the late 1950s, as part of a strategic national policy to become self-sufficient in rubber production. Over the past 40 years, the state rubber farms have grown to take up much of the middle-hill slopes in Xishuangbanna, displacing upland farmers such as the Hani, Lahu, and Jinuo who used to manage community forests and swiddens in these sites. Since 1987, when individual households were first allowed to plant rubber, even more extensive areas of hilly land have been turned over to monoculture rubber plantation. Researchers at the Xishuangbanna Tropical Botanic Garden and the Kunming Institute of Botany have shown that rubber plantations have altered the hydrology in Simao and Xishuangbanna, as well as reduced the biodiversity from areas that were once covered in tropical forest, or in mixed farming systems. Since many of the plans for future development of Xishuangbanna involve further plantation of tropical crops, planners need to be aware that losses in water flow, increased erosion, and further loss of biodiversity limit not only future economic development, but also affect the long-term viability of this important stretch of the Mekong watershed (Xu, 1995).

In spite of cautionary reports about the effects of monoculture plantations, however, new kinds of state farms have been proliferating in Xishuangbanna over the past ten years. Plantations of coffee, cacao, sticklac, cinchona, and tropical fruits and nuts have replaced lowland areas that were once either natural forest or wet rice fields. The drive to benefit from one of the few tropical areas of China sometimes precludes careful planning. In one instance, the prefecture government in Jinghong decided to plant 20,000 ha in macadamia nuts without first running trials of the imported seeds (Xu, 1995b). But the prefectural government is under the same kind of pressure that county and township governments face, when they must replace diminishing state funding with income-earning activities. Therefore, to place agents of prefecture governments in charge of deciding whether the prefecture should allow additional international investment in agro-industries is equivalent to asking the fox to protect the chicken coop.

To prevent this kind of disaster, there needs to be a "board of directors" that evaluates and approves new development projects in areas such as Xishuangbanna, but the "board of directors" needs to include agents from the provincial government, and researchers from provincial and prefectural institutes, as well as staff from various departments involved in land use planning for the prefecture. The "board of directors" should also include representatives of minority nationality villages from various parts of Xishuangbanna, including Dai, Hani, Lahu, Jinuo, as well as other ethnic groups who area affected by agro-industries and other large development projects. This board should be able to reject investment proposals that seem likely to compromise prospects for sustainable development, as well as proposals that threaten local culture, health, and economic viability.

To coordinate development all along the Mekong corridor among the three regions, there also needs to be an interlocked series of "boards of directors" who would be able to reject projects, such as dams and large mining operations, that could harm the sustainable development of people in lower watersheds. These interlocked "boards of directors" should also be able to require stringent environmental impact assessments, and modifications in projects to secure better prospects for sustainable development.

Funding mechanisms should empower these "boards of directors" in long-term ways that would allow prefecture governments to agree to turn down projects that would bring in substantial international funding. This is a tricky problem when prefecture governments rely on outside funding to establish plantations of tropical cash crops, for example. Often plantations are joint state-private ventures intended to provide a steady stream of government income.

Upland areas of Xishuangbanna are characterized by diverse land management systems tailored to the local elevation, rainfall, and endemic species. Often these systems depend on forests, either for the collection of subsistence timber and non-timber forest products, or in shifting cultivation systems. As the project encourages upland farmers to increase the production and marketing of cash crops, project staff should bear in mind that upland people often already know how to produce and manage agroforestry systems, how to enrich swidden fallows, and how to regenerate biodiverse forests. A significant project achievement would be to help negotiate with county and township forestry departments so that farmers could extend agroforestry into areas marked as forest. Another achievement would be to work out mechanisms to allow upland farmers to manage areas of state forest, in return for a percentage of the income from timber sales. This kind of mechanism has been successful in other parts of Yunnan.

7.6 Overall Recommendations

Two caveats should be borne in mind in all project activities.

First, Yunnan’s diversity of ethnic peoples, topography, and flora and fauna represent its wealth. While such varied conditions and cultures can cause difficulties for development projects, which normally like to have simple, uniform project goals, in Yunnan all project activities need to encourage and rely on that very multiplicity of life. Cookie-cutter, broad scale development initiatives could easily eradicate the biodiversity of natural systems as well as exacerbate the trajectories of poverty, especially in remote, upland areas. On the other hand, a project that nurtures diverse approaches in the differing social and natural environments in Yunnan can actually enhance biodiversity and the sustainable development of both people and the natural world.

Second, Chinese policies have ensured that ethnic minorities are integrated into mainstream society through education, property rights, and market opportunities. Government offices throughout Yunnan have staff from the regionally-predominant ethnic minorities. Many of these minority administrators, however, have adopted government or Han Chinese perspectives on ethnic minorities--that they are backward, lacking in culture, and unappreciative of the benefits of development. Therefore, to ensure that project activities are genuinely based on local people’s knowledge and needs, the project needs the help of both ethnic minority villagers from many different locales, and researchers who value diverse cultures and can help identify useful land use, health care, and development practices.

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