Peasants more than just in the red

CHINA'S peasants and workers use the phrase Datiaozi or ''throw-away paper'' when referring to the IOUs they are fobbed off with in place of hard cash for goods and labour.

The practice of handing out promissory notes, redeemable for cash at a later date, has long been notorious in China, but their use has reached such proportions recently that the mood of those forced to accept them has turned ugly.

As their use has increased - in the wake of the country's financial system running short of cash - so has the variety of the IOUs being circulated around the country.

Recently, IOUs have also taken on new shades - they are now written on white, green, red and gold strips of paper.

White strips are used by local authorities unable to make cash payments to peasants for their produce. The inability of local governments to pay for farm produce has been a persistent problem since agricultural reforms were carried out in 1984.

Over the past two years, however, the situation has worsened to crisis levels. The number of white strips issued each year, especially in autumn when peasants harvest their crops, has soared so dramatically that it is estimated the actual cash figure forsuch IOUs runs into the tens of billions of yuan.

''Local authorities and banks are ripping off billions of yuan to fund real estate projects. That's why they have no money to pay the peasants,'' said researcher Ma Jiantang, of the China State Council's development research centre.