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The peasant villager, in a straw hat and weathered hands, has long been at the heart of China's self-mythology. Chinese tend to think of themselves as a nation of villagers, some of whom have been living in the city for generations, but whose soul remains located in a cluster of wooden huts amid the paddies. It's a vision that infuses their art and culture and, sometimes tragically, their politics.

That village myth is increasingly misleading – and to the extent that Beijing is trying to keep it true, damaging China's progress.

China boasted that it became an urban-majority country last year, with more urbanites than villagers. Many people here are well aware that this is untrue: That milestone was passed years ago and as many as 200 million of those half-billion "villagers" have been living and working in cities for years.

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They fill the big cities of China's southern and eastern coasts, providing the largest source of industrial labour. They are known as the "floating population," because they are legally villagers, unable to send their kids to school in the city, buy houses or settle, trapped halfway between rural and urban life.

China won't let them become urban citizens – in part for macroeconomic reasons (peasant savings are a cornerstone of China's industrial capitalization) and partly because villagers don't actually own their officially collectivized land, so they have no reason or ability to sell it.

I spent an evening talking with Qin Hui, a Beijing historian renowned for his outspoken criticism of policies. He knows peasant life intimately: During Mao's Cultural Revolution in the 1970s, he was one of 20 million people who were force-ruralized. He spent eight years in unpaid peasant labour and near-starvation.

Today he says he is deeply worried about an even larger group of people forced to be peasants.

"I think the past 30 years have seen the Chinese people develop very rapidly," he acknowledges. "But now you have a very large part of the Chinese population, 200 million people, who are living in a situation not unlike that of South African apartheid, in that they are not allowed to be full citizens unless they are living in certain designated poor rural areas – they can't own property, they can't put their kids in school."

This situation, he says, is both hindering economic development and creating an enormous psychological scar, as tens of millions of children are growing up without their parents, who must ship their kids to school in their faraway villages. The countryside is full of such "hollow villages," containing only grandparents and grandchildren and – because they are basically serving as social-safety-net surrogates – very little agricultural activity.

As a result, China's agriculture is also in bad shape. True, nobody starves to death any more. But Beijing began to acknowledge this month that the patchwork quilt of broken families that passes for rural life is a poor substitute for real farming. At a moment when the world faces food shortages, China is producing far less food than it could.

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"The villages are now left with only aged people and dogs … many farmlands are abandoned," the government agricultural economist Fan Jianping told reporters this week after touring the western Sichuan province. The country's farming, he admitted, "is at present based on scattered household farming and is loosely organized."

These ragtag, half-abandoned, loveless villages have become a source of national shame. In Hangzhou, I met the writer Xiong Peiyun, whose book My Village, My Country has become an unlikely hit. It is a classic defence of the romantic grandeur of Chinese village life, a call for people to embrace their villages of origin – combined with something that hasn't been seen in print before, a militant call for local democracy.

His book is inspired by the uprisings late last year in Wukan, a southern Chinese village whose 12,000 residents protested for the right to control the development of their land, expelled the local Communist Party officials and elected their own representatives. There was a showdown with police and Beijing wouldn't recognize their election, but they weren't punished and some senior officials acknowledged the legitimacy of their actions.

"I believe that what happened in Wukan should be a lesson for all of China," Mr. Xiong told me. "We need to understand that representation and self-government at the local level and private-property rights are crucial." The very fact that he is allowed to say this, and so many Chinese people want to listen, suggests that China may be changing, slowly, from the village upward.

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