MySheen

Why is the reform of land marketization in China slow?

Published: 2024-11-08 Author: mysheen
Last Updated: 2024/11/08, In China, the marketization of resource allocation has also been the basic mainstream consensus. The third Plenary session of the 18th CPC Central Committee even proposed to "let the market play a decisive role in the allocation of resources" and put the reform of the land system into the part of "speeding up the improvement of the modern market system".

In China, the marketization of resource allocation has also been the basic mainstream consensus. The third Plenary session of the 18th CPC Central Committee even proposed to "let the market play a decisive role in the allocation of resources" and include the reform of the land system in the part of "speeding up the improvement of the modern market system." the implication is obviously that the market should also play a decisive role in land allocation. Moreover, land marketization is not only the key to promoting China's market-oriented reform, but also the most core and fundamental issue in the implementation of farmers' land rights-because if rural collective land cannot be directly developed and traded, its value can not be fully realized.

However, it is strange that land, as a basic resource, has in fact been following the mode of quota control planned by the government in China, and there is still no substantive reform. For example, although the "decision" of the third Plenary session of the 18th CPC Central Committee cancelled the important restriction that the third Plenary session of the 17th CPC Central Committee decided to limit the entry of collective construction land to "outside the scope of urban construction land determined by land use planning", but at the same time limited that only "rural collective construction land" can enter the market-in detail, this includes two restrictions: first, Not all collective land can enter the market, only collective construction land can enter the market. Second, not all collective construction land can enter the market, only commercial construction land can enter the market.

As far as the first restriction is concerned, as long as collective land is designated as construction land by urban and rural planning, it should be allowed to enter the market independently. Because the existing agricultural land is freely and across-the-board limited to agricultural use, it is worth discussing. Moreover, if rural land is to be occupied for the sake of construction, the planning should be changed first, and since the planning has changed, the use of rural land has also been changed to construction land, so why can't we enter the market? The second restriction seems unreasonable and unnecessary, and the cost of regulation is very high, which inevitably leads to this requirement and limitation becoming a mere formality.

According to the latest report, at the 13th meeting of the standing Committee of the 12th National people's Congress on February 25, the State Council's proposal on authorizing the State Council to temporarily adjust the relevant legal provisions in the administrative areas of 33 pilot counties (cities and districts), including Daxing District of Beijing, is proposed to allow collective construction land to enter the market in the administrative areas of 33 pilot counties (cities and districts) across the country, including Daxing in Beijing.

The news immediately drew hot comments and cheers. However, in fact, this is nothing more than a belated implementation of the decision of the third Plenary session of the 18th CPC Central Committee. Moreover, if we carefully analyze the contents of the "decision (draft)", we will find that there are extremely prudent restrictions: first, only the transfer, leasing and shareholding of the right to the use of rural collective construction land are allowed, which is the same as the right to the use of state-owned construction land. This means that other rural construction land (including land for public facilities, homestead and new village and town enterprise land) cannot enter the market, and agricultural land that is included in urban planning and intended for non-public interests cannot enter the market; second, only farmers settled in cities are allowed to voluntarily withdraw or transfer homestead within their collective economic organizations, which means that foreign social capital still cannot go to the countryside, and houses with small property rights cannot enter the market. From this, we can see that compared with the decision of the third Plenary session of the 18th CPC Central Committee, the decision (draft) is nothing new and even more conservative.

On the one hand, China's current land allocation model is an important mystery of government revenue, infrastructure construction and the rapid growth and development of the real estate industry, which can be described as an important part of the "Chinese model". But on the other hand, it has also caused many very serious negative consequences, such as: it not only leads to the limited supply of residential and commercial land, resulting in high housing prices and unfair distribution of wealth, but also leads to serious waste of land (especially the land used by various power departments). And urban infrastructure land and industrial land that can directly improve political performance), damaging the long-term economic development. The administrative cost of land management is extremely high, land use efficiency is inefficient, and breed serious corruption and the loss of public assets, but also damage land rights and cause a large number of social conflicts.

 
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