Land conflicts triggered by industrial development and real estate development continue to plague many rural areas in China. In the late 1970s, Huaxi Village, adhering to the principle of collectivism, did not participate in the wave of “household responsibility system”, thereby avoiding the social risks caused by villagers losing their land.

　　“The existence of collectivist villages like Huaxi provides an alternative approach to urbanization and industrialization. At least their villagers do not need to leave home to work, are not troubled by medical insurance or pension insurance, and do not worry about their land being taken away without reasonable compensation or losing their source of livelihood,” said Hou Xiaoshuo, assistant professor at St. Lawrence University in the United States.

　　However, this situation is undergoing subtle changes with the large-scale merger of Huaxi Village and surrounding villages. Since 2001, 13 administrative villages around Huaxi have been merged into Huaxi and renamed “Huaxi Village One” to “Huaxi Village Thirteen”, collectively known as “surrounding villages”. The area of the entire Huaxi expanded from 0.96 square kilometers to 35 square kilometers, larger than Macau. However, during the village merger process, conflicts between Huaxi Village and the surrounding villages over land have continued to erupt.

　　To manage the rapidly expanding “Greater Huaxi”, Huaxi Village proposed the village merger concept of “five unifications and one separation”, namely separation of village and enterprise, unified economic management, unified personnel arrangement, unified use of cadres, unified welfare distribution, and unified village construction planning. The village merger resolved the shortage of land for Huaxi's development. Huaxi Village pays land transfer fees to the surrounding villages at a standard of 1,500 yuan per mu per year (now increased to 2,000 yuan per mu per year). In addition, certain welfare benefits are distributed to villagers in the surrounding villages each year.

　　However, the trigger for the conflict between Huaxi Village and the surrounding villages is that villagers in the surrounding villages cannot obtain shares and dividends from Huaxi Group like Huaxi Village villagers do. What makes the surrounding villagers feel unfair is that Huaxi Village builds industrial factories on the transferred land and rents them out, with annual rent reaching 8,000 yuan per mu. Most of the land revenue flows into Huaxi Village and is not distributed to the surrounding villagers.

　　In addition, Huaxi Village demolishes houses in the surrounding villages in the name of land consolidation and then uniformly builds villas and apartments to sell to the surrounding villagers, which has also caused strong backlash. Surrounding villagers claim that the demolition compensation standard is generally around 100,000 yuan, while if surrounding villagers want to buy a villa built by Huaxi Village, they currently need to pay 520,000 yuan in cash.

　　Some surrounding villagers believe that the village merger has not brought them the fruits of Huaxi's economic development, but instead plunged them into the dilemma of losing land, creating a polarization of income between Huaxi Village villagers and surrounding villagers.

　　“Huaxi Village obtains land resources through village merger and profits from it, effectively depriving the surrounding villagers of their interests. This unfair treatment has planted very deep-seated conflicts within Greater Huaxi,” said Liu Qiang, associate professor at the School of Economics and Management, Tongji University.

　　However, Wu Xie'en, Party Secretary of Huaxi Village, stated in a written reply to China Business News that villagers in the surrounding villages are not shareholders of Huaxi Group and naturally do not enjoy dividends from Huaxi Group. “For more than 10 years, Small Huaxi has spent over 1 billion yuan on Greater Huaxi for grain payments, maintenance funds, and housing subsidies, enabling Greater Huaxi to truly achieve 'basic living guaranteed, care for the elderly and disabled, education for the young, good living environment, promotion of diligence through three observances, and steady rise to moderate prosperity'.”

　　“The 'five unifications and one separation' has indeed achieved rapid integration of Greater Huaxi, but it has also fragmented economic and social development and management. Land has been merged and economic decision-making power centralized, but new social cohesion has not been formed,” said Hou Xiaoshuo.