- The Washington Times - Friday, August 16, 2002

SHANGHAI Mr. Zhang, a hotel worker, and his 67-year-old mother were watching TV one morning when the electricity in their one-bedroom apartment suddenly went dead. Then the water supply cut off.

The same thing happened to his neighbors, some of whom also have had interruptions in their gas and cable television service.

They blame the disruptions on a government-owned demolition company that wants to clear out their rundown neighborhood in central Shanghai to make way for a Hong Kong-financed high-rise.

"They told us we would have to move no matter what, but we never expected them to take such shameful measures," said Mr. Zhang, 34, who asked that his full name not be used. He is one of about 200 people who still live in the neighborhood despite city orders to move.

The company, Wuxing Real Estate Demolition and Removal, which is owned by Shanghai's Luwan district government, denied having anything to do with the utility disruptions.

Such disputes have become common in Shanghai, where many say an unresponsive city government roughly shoves aside people it sees as standing in the way of progress.

Block after block of crowded, gray-brick tenement housing has given way to glittering skyscrapers and shopping malls as this once-decaying city of 17 million people transforms itself into an international business center.

While most people say the changes in the city have been good, they feel progress is sometimes imposed with a heavy hand.

Mr. Zhang and others say the first utility disruptions began during World Cup soccer in June, when cable television service stopped right before key matches and resumed immediately after the games.

It goes beyond that, though. The fate of entire neighborhoods is decided by developers and city officials behind closed doors. Residents wake up to find eviction notices posted on walls and power poles. Government officials say they try to be understanding, but the old neighborhoods must go.

"We do our best to persuade them and offer them fair compensation. But if they refuse, the government has no choice but to guarantee the city's development," said an official in Shanghai's public complaints office, who gave only her last name, Xu.

The evictions highlight the contradictions of a vibrant, for-profit economy emerging in one of the world's last communist regimes.

As in capitalist countries, the disputes often revolve around money. Relocated residents receive government compensation, but they say it is not enough to rent or buy in the new buildings springing up in their former neighborhoods.

Meanwhile, the government, which under communist law still owns most land, reaps big profits selling leases on the sites to developers, many based overseas.

At the same time, China's one-party state gives people no avenue to direct grievances. The same officials in charge of receiving citizens' complaints can be involved in the development deals, and China's courts lack independence.

"You can't defeat a government-backed project in court," said Yang Huali, a resident of another neighborhood that is fighting development plans by a large state-owned company.

Mr. Yang says city authorities failed to consult the 3,000 residents before approving construction for a cluster of 30-story apartment buildings scheduled to go up next to their homes. They complain the project will occupy green space and block sunlight.

One way to protest is to refuse to move. But it has its risks.

In the past, thugs have roughed up holdouts. In one incident four years ago, witnesses said, an elderly man was pushed from a second-story window.

Mr. Zhang's neighborhood, near downtown's trendy Xintiandi district of restaurants and shops, is a labyrinth of dim, two-story buildings built a century ago, when that section of town was ruled by the French before the 1949 communist takeover. Most of the cramped apartments lack toilets or baths.

Residents and the authorities say about 90 percent of the neighborhood's 2,000 households accepted government compensation of about $55 a square foot.

The money let them move to modern high-rises on the city's distant outskirts. But rooms in the new building in their old neighborhood, to be constructed by Hong Kong-based Shui On Group, will cost more than $275 a square foot far beyond their reach.

"Shanghai's downtown is turning into a club for the rich," said Mr. Li, another resident who asked that only his last name be used.

Mr. Zhang said he and other neighbors will not back down. "We will fight until the government gives us a fair hearing," he said.

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