WUKAN, China (Reuters) - Zhuang Liehong, a 28-year-old cigarette and liquor salesman, was fed up. Businessmen were seizing land here in Wukan, his hometown fishing village in southern China. Village officials not only didn’t help - they had secretly sold the land. Outside authorities did nothing.

A policeman looks at a paper written with votes counted after an election in Wukan, southern Chinese province of Guangdong in this March 3, 2012 file photo. REUTERS/Bobby Yip/Files

In 2009, Zhuang and a handful of other young villagers launched what they called the Wukan Hot-Blooded Patriotic Youth League. They began with a petition campaign. It was ignored. An early rally drew few supporters.

They kept at it. By the fall of 2011, the village of 15,000 was in open rebellion. They forced the local leadership of the Communist Party to flee and began a months-long standoff with police. Eventually the government caved, sacking the local leaders and, in a first, allowing Wukan to conduct secret-ballot elections. The village voted Zhuang and other protest leaders onto the town council. Across China, people began buzzing about a “Wukan Spring.”

Later this month, Communist Party leader Xi Jinping will officially assume control of China. He has vowed a crackdown on the entrenched interests that has fueled corruption in the party. But in Wukan, the spring is over.

Uprising leader Zhuang quit the village council in October. The new council made little progress in getting back land from the insiders who seized it, prompting Wukan’s new village chief Lin Zuluan to speak privately of stepping down.

Raising money to fund schools and welfare is just as difficult for the new council as it was for the old regime - if not more so.

“I found I couldn’t do anything,” said Zhuang as he sipped steaming green tea in a Chinese tea shop he now runs in Wukan.

Reuters visited Wukan six times over the last year-and-a-half, chronicling the early protests, the uprising, its eventual triumph and now its disillusionment.

The events in Wukan focused keen attention in Beijing over a problem the central government had long underplayed - rampant land seizures across China. The government is drafting revised land management legislation for the annual parliament session in March that would require farmers - an estimated 650 million of them in China - to be adequately compensated and relocated before officials can expropriate any land.

But Wukan’s failure to overcome entrenched corruption shows how difficult it is for grassroots protest to spur lasting change in China. Towering above Wukan is a vast local, regional and national edifice of Party control and vested interests. Indeed, even the Xi administration’s push to overhaul the land seizure law faces opposition from developers, businesses and local governments that depend on property sales.

“For Wukan, amongst all the villages in China, to be able to rise up and protect their interests, then to conduct a democratic election and to become a kind of experimental ground, is significant,” said Peng Peng, a senior researcher with the Guangzhou Academy of Social Sciences. But the inexperience of the new leaders and their halting progress over the land issues has exposed the teething problems of nurturing village democracy in China, he added. “There can’t just be democracy, there needs to be solid administration, too.”

SEEDS OF UPRISING

Flanked by scrubby hills and a sheltered harbor, Wukan was first settled during the reign of the Kangxi emperor in the Qing dynasty some 350 years ago by people from the north. Every morning, small wooden fishing skiffs sputter out on diesel outboard motors through a narrow inlet towards the South China Sea. The village itself is a mix of weather-beaten tiled village houses, colorful temples and modern villas, surrounded by fields, and marshes to the east. Nestled beside a bay on the far eastern reaches of affluent Guangdong province, Wukan is around four hours by car along the coastline from the booming cities of Shenzhen and Hong Kong.

Wukan’s foot soldiers were young men steeped in the migrant labor battles of the Pearl River Delta factory belt in southern Guangdong Province. Wukan sends many of its young to scrape a living in the gritty factory towns of a region known as China’s workshop of the world, some 200 kilometers (120 miles) from the village. Zhuang Liehong was one of them.

The son of a fisherman, Zhuang had heard about the land seizures from China’s twitter-like microblogs called Weibo and other chat rooms used by Wukan youths living and working across Guangdong. A chain smoker with a buck-toothed grin and a fiery character, Zhuang turned up in Guangzhou, the provincial capital, on a hot summer day in June 2009. He was there to assist in a petition campaign against the Wukan land seizures. He arrived with red plastic bags full of rice boxes, expecting a large crowd. Only around 10 people showed up that day.

Zhuang met Hong Ruichao, then 25, who had also heard about the petition campaign through social media. A native of Wukan, he had made the four-hour drive from the town of Heyuan, where he was working at the time as a small goods trader.

“I felt despair then,” Hong recalled later. “How could 10 people make a difference against corrupt officials?”

The two new friends helped form the Wukan Hot-Blooded Patriotic Youth League. They printed membership cards depicting two soaring birds against a rising sun. The League cards had 10 principles, including pledges to lead a moral life, love one’s country and fight for democracy and justice.

The small group began looking into deals brokered by Wukan’s Party boss, Xue Chang, who’d been in charge of the village for over three decades. Land in China is owned either outright by the state, or collectively by a village or city, whose leadership then leases it to residents for cultivation or residence. The laws give local governments wide latitude to expropriate land from farmers, often secretly and with little or no compensation.

Anger grew as Xue continued to brazenly sell off large swathes of land around Wukan in the 1990s and 2000s to businessmen in a web of deals. These included a seahorse-breeding factory, a hotel and other property developments, roughly encompassing around a third of the village’s entire 1,400 hectare (3,460 acre) area, according to documents reviewed by Reuters.

The Hot Blooded Patriots complained to township, county and provincial officials. They were rebuffed or ignored. They launched court cases and petitions that went nowhere. Yet between 2009 and 2011 their group expanded to dozens of members, and then hundreds, as local Party boss Xue and his allies continued to sell off more and more of Wukan’s land.

It wasn’t just happening in Wukan. An estimated 90,000 “mass incidents” - an official term for protests or social disturbances - boil up each year in China. Two-thirds of them are disputes over farmland seized for development, according to a wide-ranging survey in 17 provinces conducted in 2011 by U.S.-based Landesa Rural Development Institute, Renmin University and Michigan State University. The survey found 4 million people on average lose their land to government expropriation each year.

The central government in Beijing reserves almost all taxing power for itself. That means local governments rely on land sales to pay for public services. It’s highly lucrative to do so.

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The mean compensation local governments paid to farmers for taking land was $17,850 an acre, according to the 2011 survey of 1,791 Chinese farming households. The mean price at which it was resold, mostly to commercial developers, was $740,000 an acre. Little wonder local governments such as in Wukan were grabbing and selling as much land as they could.

That trend accelerated during Beijing’s $600 billion stimulus to the economy after the 2008 global financial crisis. Local governments and state-owned enterprises poured borrowed money into infrastructure and real estate projects, often of questionable necessity and mostly using land as collateral.

Brick walls and construction signboards sprouted in Wukan’s rice, yam and peanut fields and along its seashore, marking the homes, factories and hotels that developers were planning. At the new Golden Sands nightclub, hostesses in glittering dresses welcomed patrons into a marble lobby.

MOBILISING A MOVEMENT

Wukan had seen enough. On September 21, 2011, thousands of villagers - clanging gongs, pumping their fists, holding aloft banners with the words, “Return our Ancestral Farmland” - marched up a highway. They headed for Lufeng, the city with direct jurisdiction over Wukan. Some of the protesters recorded the demonstration on their mobile phones to show reporters later.

The next morning, busloads of riot police cracked down in Wukan, beating men, women and school children with truncheons. Farmers and fishermen fought back with anything at hand - sticks, mops, brooms and rocks - along the main street of the village, the phone videos showed.

The Communist Party office in Wukan, a pink-tiled building adorned with a crimson party star, was gutted, along with a police station. Crowds ripped the gates off the hinges at the entrance to the party’s office. They smashed furniture and shredded documents.

After the police pulled out and Party officials scattered out of Wukan, protesters elected a 13-person temporary village council that included a retired Communist Party cadre named Lin Zuluan. Grabbing the microphone at an open-air Chinese theatre with stone dragon pillars, the 67-year-old declared: “Wukan’s original village committee is no long the village committee.”

The crowd was electrified. “I really didn’t know him before,” said Zhuang. “But old Lin had the moral character and authority to unite us.”

Within a week, however, police and security forces returned, and a tense standoff prevailed for 11 weeks. On December 3, 2011, police swooped in to arrest Zhuang and on December 9, other protest leaders were caught on the outskirts of the village, including Hong. Also arrested was 42-year-old Xue Jinbo, a small business owner who had come to the fore of the movement.

A day later, Xue died in prison. The official explanation was cardiac arrest. But his family said Xue’s body had heavy bruising and his thumbs had been pulled back and broken.

Outraged villagers blocked the main roads into Wukan. Thousands of riot police cordoned off the area. Wukan was under siege.

“We pledged to shed blood to protect our village,” said Wu Ruidu, a broad-shouldered 37-year-old fisherman, pointing to where trenches were dug at the time. “If a gong was sounded, everyone in the village was ordered to charge out and fight ... We slept very little.”

Foreign reporters were piling into Wukan, alerted by online posts, photographs and videos the village was sending out.

Villagers chronicled the standoff with snapshots and home videos. “We encouraged this,” said 22-year-old Zhang Jianxing, who zipped around on a black moped with his shoulder-bag stuffed with phones, cameras and other gear. “It was the only way we could prove to people the authorities were telling lies.”

These dispatches marked a turning point. Citizens increasingly connected by social media were the primary source of information about what was happening in Wukan, with government-run media outlets mostly ignoring the story.

THE BIG CLIMBDOWN

In the provincial capital of Guangzhou, Wukan and the international attention it was getting goaded provincial Party Secretary Wang Yang into action.

Born into a poor rural family in eastern Anhui Province, Wang, 57, had become a voice for social and political reform. His modest upbringing contrasted with that of the “princelings,” offspring of former Communist leaders or top military brass, including China’s new leader, Xi Jinping.

Wang had handled similar eruptions before since taking up the post in 2007, as Guangdong’s Pearl River Delta factories were undergoing tumultuous labor unrest. He sent an 18-person team led by his deputy, Zhu Mingguo, to investigate the Wukan land deals. On December 20, after a week of siege, Wukan’s villagers received a text message from Zhu on their mobile phones: Their demands were reasonable and were accepted.

“The majority’s aggressive actions can be understood and forgiven; we will not pursue any responsibility,” the message said in part.

Wang fired Wukan’s village boss, Xue Chang, and Xue’s deputy. Zhuang Liehong and two other members of the Wukan Hot Blooded Youth League were freed from jail.

The village declared an end to the protests.

“People’s democratic awareness is increasing significantly in this changing society,” Wang Yang was quoted as saying by the state media a week later. He even called for a “Wukan approach” to reforming village governance.

In the weeks after Wukan’s uprising, activists from other villagers in China came to study the “Wukan model”, villagers said.

In November 2012, 200 residents of Xincuozhai village near Wukan staged a land-grab protest. Nine villagers were arrested. Their whereabouts remain unknown. An hour east of Wukan, in Liantang village, thousands of villagers recently thronged outside government offices, angered by the brazen sell-off of collective farmland.

“It sets an example,” said Ai Xiaoming, an academic at Guangzhou’s Sun Yat Sen University who made a documentary film about Wukan. “One village and one person cannot change China, but if every village becomes like Wukan, then China will change.”

OPEN GOVERNANCE

On an overcast March 3 last year, some 6,800 people, nearly 80 percent of Wukan’s eligible voters, cast ballots in the town’s first free and fair election for decades.

The elder Party cadre, Lin Zuluan, was elected village chief in a landslide. Zhuang and two other members of the Wukan Hot-Blooded Patriotic Youth League won seats on a seven-member council overseeing village affairs.

The new council has repaired roads and set up a small welfare fund for single mothers and the elderly. It publishes financial statements on posters hung around the village. It holds open tenders for public projects, such as a new typhoon shelter in the harbor and a new school dormitory.

But the plots of land the village managed to wrest back remain in limbo, pending a fuller resolution of the remaining disputed farmland. The new village leaders have refused to release any returned land for individual use because it wants to combine the plots for community development and tourism projects, such as a proposed eco-park, that will benefit the entire village.

The difficulty in getting the rest of the land back is testament to the enduring power of vested interest groups in China.

Li Bingji, a well-connected local businessman and a member of China’s national parliament, bought 25 plots in Wukan before the uprising through his firm, Yi Da Zhou. He then used the land, now revalued on the books at the high price at which he bought it from the village, as collateral for 140 million yuan ($22 million) in bank loans, according to documents reviewed by Reuters.

Wukan has been trying to wrest back that land. Three village committee members told Reuters they believed Li was being protected by higher authorities to avoid bringing down other officials, bank executives and businessmen who profited from Wukan’s land sales.

Li could not be reached for comment. Neither the Lufeng city government nor the provincial government in Guangzhou responded to requests for comment on this story.

Xue Chang, the deposed village leader, was recently handed a three-year, eight month sentence on charges of abuse of official power and illegal land transfers.

According to a witness present at court, Xue sat in a wheelchair with a white beard, visibly aged. He had been undergoing treatment at the Lufeng People’s Hospital for a cardiac condition, police guarding his hospital room said. He will be allowed to serve his sentence at home.

Villagers have grown cynical about the fading Wukan spring. “It’s like being given a check for two million yuan, but it bounces when you go to the bank,” said Wukan resident Chen Jinchao.

WUKAN MODEL

Wang Yang, the Guangdong provincial party secretary who extolled the “Wukan approach,” rarely talked about it after the crisis passed. Wang was once widely considered to be on a short list of candidates for the Politburo Standing Committee, the inner circle of the Communist Party that is the most powerful body in China. Wang was conspicuously absent from the list when Xi and other leaders were introduced at the 18th Party Congress in November. He was replaced in December as the party boss in Guangdong, though there’s widespread talk he could be made a vice premier at this month’s parliament session.

Zhuang, the rebel-turned-tea-shop-owner, hasn’t given up hope. But after quitting his town council seat, he has all but given up on government. Serving tea at a thick wooden table with several friends while smoking and listening to Chinese rock songs, he said he’ll continue working for change. But he’ll do so with a much lower profile.

“I want to use a different role and direction to work for the villagers,” Zhuang said. “We will preserve the strength from behind the scenes, to not allow the government to control us.”