Wei Ziqi’s business career began with leeches. Other ideas had caught his eye, usually when he went to the city to see relatives. For a spell, he considered Amway, because a man on the street handed him a flyer, and he also thought about a direct-marketing company that sold phone cards. But the leeches impressed him most. At a cousin’s house, he had seen a television program about successful rural entrepreneurs who raised leeches, which they sold to manufacturers of traditional Chinese medicine.

Wei Ziqi collected a stake of five hundred and fifty dollars, with contributions from two of his nephews. He built a shallow cement pool beside his house, and then he travelled to Tangxian County, the leech capital of northern China. It represented the farthest journey of his life: four hours by bus. He returned with two barrels, filled with leeches that were so small they looked like the squiggles of a calligrapher’s brush. Every day, Wei Ziqi fed them the blood of chickens, sheep, and pigs. Within a week, the squiggles began to diminish. Maybe the water was too cold, or too deep; he never knew for certain. But soon the pool was empty, and that was the end of Wei Ziqi’s career as a leech farmer.

He lived in Sancha, a village situated at the top of a dead-end dirt road about two hours’ drive from Beijing. Sancha had never been large, and in recent decades it had become even smaller. Across China, rural settlements are losing people—an estimated hundred and fifty million have left the countryside to find jobs in the cities. In the seventies, Sancha’s population had been more than three hundred; by 2001, the year Wei Ziqi tried the leech business, it was about a hundred and fifty. None of the villagers owned an automobile; only one person had a cell phone. The local school had been shut down in the early nineteen-nineties. There were no restaurants, no shops—not a single place to spend money. A few times a week, a peddler arrived in a flatbed truck loaded with food and simple household goods for sale. At harvest, other trucks appeared to buy the villagers’ crops. All these vehicles parked in the dirt lot at the end of the road. That patch of earth represented the full range of Sancha commerce—it was a parking-lot economy.

For young people, the search for improvement usually led away from the village, and Wei Ziqi had left Sancha in 1987, at the age of eighteen. In Beijing, he found factory jobs: first he made electrical capacitors for televisions, then cardboard boxes. “You’re always on the same place in the assembly line, and nothing changes,” he told me. For a few years, he worked as a security guard, but opportunities for advancement were rare, especially since he had only an eighth-grade education.

Wei Ziqi’s physical appearance was also a disadvantage. In the Chinese work world, looks matter greatly, and better listings often require a man to be at least five feet eight inches tall. Wei Ziqi stood under five and a half feet, and he was barrel-chested, with squat, powerful legs. His eyes were quick, but he had the dark complexion of a peasant. He looked as if he belonged in Sancha, and in 1996 he finally returned, tending a hundred walnut and chestnut trees. He lived with his parents, his wife, and their young son, and they cared for his oldest brother, who was mentally disabled. The six people lived on an income of less than a thousand dollars a year.

Nearly all Wei Ziqi’s peers were gone. Of his eleven former school classmates, only three remained in the village. His able-bodied siblings—two older brothers, two older sisters—had all left. His path was unusual, but he refused to see it as a retreat; in his mind, the village still had a future. But it wasn’t until the year after the leech failure that Sancha began to change.

In 2002, the county government gave the village enough money to pave the dirt road. Not long after the surface had hardened, Wei Ziqi posted the first advertisement ever made by a villager. He took a discarded tractor hood, painted it blue, and inscribed it with big characters in red: “An Outpost on the Great Wall.”

Sancha was just beyond the Great Wall, and occasionally a weekend motorist from the city found his way to the makeshift sign. Cao Chunmei, Wei Ziqi’s wife, cooked pork and local vegetables. They charged three and a half dollars for a meal; guests could see the Great Wall from the table. That year, the family restaurant recouped all the money that had been lost on leeches.

I began visiting Sancha in the spring of 2001, when the road was still dirt. Back then, I was searching for a writer’s retreat, and sometimes I came across an entire settlement that had been abandoned—millstones toppled over, roofs collapsed, house frames standing with the numb silence of tombstones. Whenever I saw an empty village, I thought, Too late.

One day, I went for a drive with an American friend, Mimi Kuo-Deemer, and stumbled upon Sancha. By our second visit, we had been shown two empty houses; by the third trip, we had a rental contract for one of them. We paid three hundred and fifty yuan a month—a forty-two-dollar time-share. Wei Ziqi handled the contract, because the place belonged to his nephew, who had moved to the city.

After a couple of months, the police began to appear whenever Mimi or I came to town. There were no cops in the village; the nearest station was in Shayu, six miles away by mountain roads. These men were polite, but they always told us that foreigners had to leave by nightfall. Wei Ziqi explained that the problem stemmed from our very first visit. “You looked at two houses,” he said. “This one, and a house that belongs to another man. He’s the one who calls the police.”

The other place had been decrepit, with a floor of packed earth. I asked why the owner called the cops.

“Because you’re not renting from him,” Wei Ziqi said.

That was my introduction to village politics. During the following year, Mimi and I often visited the police station; we handed out moon cakes at the Mid-Autumn Festival, and we distributed cigarettes at Chinese New Year’s. Finally, the police agreed to let us stay in the village, provided that we registered before each visit. It also helped that we became close with the Weis. In 2002, their son fell seriously ill, and Mimi and I did our best to find medical care in the capital. (I wrote about the child’s illness in this magazine.)

There was never any reconciliation with the other man. He and Wei Ziqi shared a great-great-grandfather, but they weren’t especially friendly, and Wei Ziqi said he liked to stir up trouble. He was in his late forties, with a strong, square-jawed face, and his gaze was unsettling. He had a strange power: the villagers distrusted him, but nevertheless they allowed him to influence local affairs. He was a member of the Communist Party, a sign of status in Sancha. Mimi and I nicknamed him the Shitkicker.

In the village, the Year of the New Road was followed by the Year of the New Car. That was the modern Chinese zodiac: instead of the parade of ox to tiger to rabbit, time was often best tracked by stages of development. Beginning in 2003, the Chinese government paved more rural roads in a two-year span than it had during the previous half century. Meanwhile, consumer patterns were changing, sometimes for unexpected reasons. That spring, panic over the SARS virus swept across China, and for weeks city people avoided public transportation. Even after the fear subsided, it had a lingering effect on the new middle class. People suddenly wanted private space on the road, and passenger-car sales boomed: in 2003, they increased eighty per cent.

In Sancha, scores of city drivers found their way to the dead-end road. The Weis’ income rose by nearly fifty per cent; they built a new kitchen, and dug a pond for live trout. In the past, Wei Ziqi had worn Army-surplus clothes, like most village men, but he now dressed differently whenever he travelled to the nearby city of Huairou to get supplies. The first thing he acquired was a pair of leather loafers. Later, he bought some bluejeans. He learned to smoke—a critical skill for any Chinese man engaged in the world of business guanxi, or relationships.

Back in the village, Wei Ziqi dealt with another kind of guanxi. In order to expand, he had borrowed heavily from family, but he also needed a bank loan, which is complicated in the countryside. The problem is collateral: like any Chinese farmer, Wei Ziqi worked land that was worthless in the eyes of the bank.

In China, the economies of urban and rural regions are sharply divided. Market reforms have been most extensive in cities, where residents can freely buy and sell apartments, and the government has steadily restructured state-owned companies, shifting to a private economy. Cities have essentially turned the individual loose: entrepreneurs can start businesses with minimal government oversight.

But rural Chinese—eight hundred million, or sixty per cent of the population—remain tethered to the group. In the villages, all land belongs to the local government, a holdover from the communes established by Mao Zedong in the nineteen-fifties. The system was reformed under Deng Xiaoping, who allowed individuals to contract land from villages. These days, farmers sign thirty-year leases for the right to work a plot, and they are no longer required to pay harvest quotas or most agricultural taxes. But the gap between the average incomes of city and country residents has continued to widen—the ratio is greater than three to one, the largest in the history of the People’s Republic. And farmers still can’t own land. They can sublet a leased plot, but they can’t sell it, and they can’t use it as collateral for a loan. Hernando de Soto, a development economist, calls this kind of possession “dead capital.” It generally leads to inefficiency and short-term thinking, and it also limits the impact of outside money. In Sancha, I would have bought my house, but there was no legal basis for such a transaction. The best I could do was a long-term lease, and the local authorities could always reclaim the land.

Village governments wield enormous power. They handle major land transactions if a city developer moves in, paying a nominal fee to break the thirty-year lease. Village officials also must approve individual applications for government loans. When Wei Ziqi started his business, Sancha’s core leadership consisted of eighteen men and three women who had joined the Communist Party. At the head was the Party Secretary, a woman in her late forties named Liu Xiuying. Most local girls married men outside the village and moved away, but Liu was one of the few who stayed. In the seventies, she served as a “barefoot doctor,” a basic rural health professional, and now she farmed; since 1998, she had also served as the top local official. She was the only female Party Secretary in the township.

Liu had broad shoulders and thick, calloused hands, and she moved with confidence. Modern Chinese women rarely have such a presence—in the cities, it is far more common for women to affect a certain physical helplessness. But the Party Secretary had no use for that routine. She was not a tall woman, but she held her head high, and she was good-looking in a rugged way. She had a gruff, booming voice—from my house, I heard it every time she answered her phone. Whenever I came to the village, her greetings were friendly and blunt: “Hey! You just get here?” But I knew that she was ambivalent about me. After Mimi and I began renting, we heard that the local Party members held a meeting about us. The Shitkicker played his hand immediately: he wanted us out, which meant that he was left with nothing when the police finally allowed us to stay. But the Party Secretary never expressed a clear opinion, which in China means you’re waiting to see how things turn out. After the first year, as a gesture of good will, Mimi and I donated some bags of cement to the village, with the idea that they might be used to repair the new road. Instead, a perfect sidewalk was paved to the Party Secretary’s house. Now she could ride her motorcycle all the way to the front gate.