Chinese protest after money doesn't grow on trees

BEIJING, Oct 20 (Reuters) - Hundreds of people in Beijing scuffled with police outside a government office on Monday, demanding help recovering money from a get-rich-quick scheme involving tree plantations to stem desertification.

More than 30,000 investors, mostly retirees, sunk 1.3 billion yuan ($190 million) into a company's tree-planting scheme in the arid northern region of Inner Mongolia, lured by promises of huge returns within eight years.

Authorities seized the company's plantations and sued its directors for false advertising after the project was exposed as a failed pyramid scheme, state media reported earlier this year.

Police in Beijing detained several protesters for putting up a banner outside the government office, as angry investors from across the country complained of dead trees and lost life savings.

Protesters complained the tree plantations on land transferred for the scheme had been left to wither and die after the company was investigated and its assets seized.

"(The company) planted trees in the desert in Inner Mongolia, then sold them to us. It was supposed to green the desert," said a Beijing resident surnamed Li, who lost about 100,000 yuan in the scheme.

"The company planted about 720,000 mu (48,000 hectares), but about 40 percent died," Li added.

The scheme, which saw some farmers transfer their land to the company to use for its plantations, has shone the spotlight on China's recent rural reforms, which will allow farmers to transfer their land-use rights.

China's rural residents own the product of their land but not the land itself and were barred from trading their land-use rights.

The state-owned land system, a hangover from the huge collective communes set up under Mao Zedong, is routinely abused by local governments who often seize rural plots to sell to factories or developers, often paying only minimal compensation to farmers.

State media have hailed the reforms as a landmark step in guaranteeing farmers' rights and boosting the country's agricultural output through larger, more efficient farms.

Protesters welcomed the reforms, but expressed doubts that they would protect rural residents from opportunistic officials.

"Of course, these reforms are beneficial. But there needs to be more public supervision otherwise people will keep getting cheated," said a Beijing resident who declined to leave his name.

$1=6.828 Yuan Editing by Bill Tarrant