China’s People’s Daily Demands Answers on $26M ‘Sky-High’ Compensation
China’s state-run People’s Daily has published a searing commentary demanding transparency and accountability over a 190 million yuan (approximately US$26 million) “sky-high” compensation payment in Zhangbei County, Hebei Province. The payment, made by a state-owned enterprise to a private company for land use rights at a wind power project, has sparked a corruption investigation that has already led to the detention of a former township party secretary.
The Dispute at a Glance
At the center of the controversy is a payment made by state-owned Hebei Construction & Investment Group (河北建投) to Zhangjiakou Xiangtong Tourism Development Co., Ltd. (张家口祥通旅游开发有限公司) — a private company that had leased land from three villages in Zhanhai Township at just 18 yuan per mu per year for 36-year terms, signed in December 2016 and October 2017.
When the wind power project needed the land, it paid Xiangtong approximately 330,000 yuan per mu in compensation — nearly ten times the local standard for permanent land acquisition. The Hebei Provincial Audit Office has since identified the payment as a potential state asset loss and referred the case to the discipline inspection commission, according to People’s Daily’s investigative report.
A Troubling Timeline
The timeline raises serious questions. The wind power project was initiated as early as 2013, with a development agreement signed around August 2014 — over two years before Xiangtong began leasing the same land. A Zhangbei County official told People’s Daily that “from the timeline and method of contracting, Xiangtong Company does have the suspicion of land grabbing.”
Due to the land disputes, the project was reduced from 200 MW to 108 MW for Phase I, with Phase II (92 MW) remaining stalled. The conflict also created a serious safety hazard: a 30-meter-long, 50+ ton wind turbine tower section was left perched on a hillside above the G95 Capital Ring Expressway before being moved to a safer location in late May.
Investigation and Detention
Former Zhanhai Township Party Secretary Mi Jidong has been placed under investigation (留置) by the Zhangjiakou City Commission for Discipline Inspection. In a follow-up report published May 31, People’s Daily posed three pointed questions: Was there collusion between officials and the company? Was the land contract legally valid? And was the compensation payment compliant with regulations?
Current Zhanhai Township Party Secretary Liu Dek told reporters that the village did not keep the original contract, and all township materials were taken by the municipal discipline commission. Villagers from Erdaoba village reported receiving 15,000 yuan per person from the land lease but stated they never saw the complete contract or any public notice.
Legal Questions
Lawyer Wang Yuchen of Beijing Jinsu Law Firm noted that under China’s Rural Land Contract Law, if the required approval of two-thirds of village collective economic organization members was not obtained, the contract may be invalid. Xiangtong Tourism Development Co., Ltd. was dissolved in January 2024, and its head, Liu Xiong, has been uncooperative with authorities.
Broader Implications
The commentary, published under the “People’s Sharp Commentary” (人民锐评) column, argues that this case represents more than a simple land dispute. “What is more frightening than project stagnation and resource waste is the failure of grassroots institutions and the loss of decision-making and regulatory standards,” it states.
Zhangbei County Deputy Magistrate Zhao Wanxin acknowledged the audit findings, telling People’s Daily: “It cannot be ruled out that there is a situation of ‘one side demanding an exorbitant price, the other side making illegal decisions.’”
A Hebei Jiantou subsidiary official, identified by the pseudonym Zhao Tong, described the pressure that led to the payment: “The project has a production deadline. If it exceeds the deadline, it will be cancelled. We were pushed to the wall before paying the sky-high compensation.” This account highlights how deadline pressures on state-owned enterprises can create vulnerabilities that private actors may exploit.
Systemic Failures
The case exposes multiple layers of institutional breakdown. The township government failed to identify land-use conflicts before approving the wind power project. Village decision-making procedures for collective land leasing may have been bypassed — villagers reported never seeing the complete contract or any public notice. And when disputes arose, years of crisis management failed to produce a resolution.
An anonymous Zhangbei County official told People’s Daily: “It’s understandable to lease small plots of land, but to contract almost all idle land of three villages at once is abnormal.” This assessment underscores the unusual nature of Xiangtong’s land-grabbing strategy.
What’s Next
The case has become a national symbol of grassroots governance failure in China. The county has launched special investigations into land contracting, project land use, safety hazards, and malicious work disruption. However, all parties are awaiting the results of the discipline inspection commission’s investigation before any further action can be taken on the stalled Phase II of the wind power project.
For China’s renewable energy sector, the case highlights a critical vulnerability: land-use conflicts that can derail major infrastructure projects and expose state-owned enterprises to significant financial losses when local governance mechanisms fail. As China pursues ambitious wind and solar targets, ensuring that land rights are clearly defined and local institutions function properly will be essential to avoiding similar costly disputes in the future.