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Long-Term Coexistence of Two Ownerships of Construction Land Should Be Institutionally Ensured

Feb 11,2005

Jiang Xingsan& Liu Shouying

I. The Nationalization Trend in the Process of Using Farmland for Non-farm Purposes

The process of China’s urbanization has always been accompanied by large-scale land nationalization. From 1987 to 2001, a total of 33.946 million mu of farmland were used for construction purpose nationwide, of which, 70 percent were requisitioned land. This means that in the past 10 years or so, nearly 24 million mu of the land owned by farmer collectives were nationalized. Incomplete statistics indicate that before the current macro-regulation, the land that had been placed under the planning of all sorts of development zones reached 36,000 square kilometers (54 million mu), which exceeded the total land being used for urban construction. In recent years, the domains of the cities in some developed regions have rapidly expanded into the hinterland of the countryside. The expansion has been done through adjustments of city boundaries, including the endless transformation of the urban-encircled villages and the massive transformation of village committees into neighborhood committees, counties into districts and cities into districts. More directly, the recent urbanization restructuring done by Shenzhen City simply nationalized all the 260 square kilometers of land of the Bao’an and Longgang districts. One important motive mechanism was to nationalize rural collective land massively, so as to meet the land need of expansionary urbanization at one go.

This trend of land nationalization will inevitably change China’s existing pattern of land requisition for construction purpose and jeopardize the land rights and interests of collective farmers. A survey conducted by the Ministry of Land and Resources indicates that in addition to the land used for transport and water conservancy facilities, about 250,000 square kilometers of land nationwide is actually being used for construction purpose. Of the total, more than 70,000 square kilometers are State-owned land, and about 180,000 square kilometers are collective farmers’ land accounting for 72 percent of the total land for construction purpose. Most land requisition from collective farmers occurred in the coastal regions. These regions are close to cities, where earnings from land and property and from rentals have become an important income source for collective farmers. As these regions are noted for convenient transportation and industrial concentration, they are becoming the primary target of expansionary urbanization. The spread of the trend of land nationalization has deprived the farmers of their right to share the earnings from land differentials in the process of urbanization and industrialization and aggravated the irregularities in the government-monopolized primary land market. This is unfavorable for healthy urbanization and sustainable economic development.

II. The Institutional Cause of Nationalizing Land for Construction Purpose

Under the present conditions, the legal provision that "Land in the cities is owned by the State" is playing a catalyst role in nationalizing land for construction purpose. After the introduction of the people’s communes, a preliminary pattern began taking shape, in which the state ownership of the urban land and the collective ownership of rural land coexisted. Rural land was owned by collectivefarmers in accordance with the principle of"three-level system of ownership, with ownership by the production team as the basic form". For the urban land, a system of personal real estate ownership and land ownership was introduced in the early years of new China by confiscating enemy and puppet properties and taking control of ownerless real estate, confirming real estate ownership and establishing personal real estate ownership and land ownership system. During the period of socialist transformation, the capitalist industrial and commercial establishments were bought over and the owners leasing out private real estate properties were given deposits so that the real estate properties in the urban areas developed into a real estate system based on public ownership. At the same time, private ownership continued to exist for the private real estate properties that were used for personal residence in the urban areas; but a real estate tax was levied on the land to confirm the title of individuals. This coexistence pattern of two ownerships was confirmed in the 1982 Constitution. The related laws and regulations on land administration stipulate that any units or individuals who require land for construction purpose must apply for the use of State-owned land according to law. For this reason, the land collectively owned by the farmers must become State-owned before it is turned into urban construction land. Not only all the existing urban land is owned by the state, but also all the land to be urbanized is owned by the state. Therefore, the advance of the urban areas to the suburban areas and further to the rural hinterland and the formation of new urban areas by incorporating the rural areas, small towns and suburban areas should all be done through steps within the framework of the existing laws.

The weakening of the protection of the farmers’ right to land property has aggravated the nationalization of construction land. It was not until 2002, nearly 20 years after the household contract system was introduced, that the Standing Committee of the National People’s Congress approved the Law on Rural Land Contracting. Although the law offers comprehensive protection of the farmers’ right to land use, land earnings and land transfers, this protection is limited only to using land for agricultural purpose. The General Provisions stipulate that the contracted land cannot be used for non-farm construction unless approved (Article 8). As a result, once the collective farmers’ land is used for non-farm construction, no existing law can confirm and protect their right to land property. The protection of the farmers’ rights and interests of their collective land is limited only to the farmland used for farming purpose. And the urban land is owned by the State. They constitute the two poles of the existing legal system for land, and land requisition is a connection between the two poles. This has provided a legal protection for the government to continuously stake and occupy the rural land, to reap huge land earnings and to expand the scope of cities.

The coexistence of two types of land ownership established by the Constitution is originally designed to prevent the collective farmers’ land from being nationalized. As far back as in 1981 when the NPC Standing Committee discussed constitutional amendments, there was a debate on whether rural land should be nationalized or collectively owned by the farmers as it is now. Some people held that rural land was no longer privately owned by the farmers and should be nationalized outright. Placing land in government control can reduce requisition-related contradictions and promote industrialization. Others believed that the collective farmers’ land ownership should be maintained. There were several reasons. One, it could help maintain rural stability. Mao Zedong decentralized the collective ownership of rural land to "three-level system of ownerships, with ownership by the production team as the basic form" in 1962 and refused to change it even in the chaotic Cultural Revolution. Obviously he based this decision on a long-term consideration. Two, as a collective ownership had been established for rural land, it would be meaningless for the state to nationalize it outright by administrative means. The farmers would not easily agree to the move. Three, the household contract system was just introduced and had been very successful. There was no reason to change it. In the end, the Constitution confirmed the coexistence of two types of ownership. In this way, not only the rural land that had been contracted to farmer households continued to be collectively owned, the rural land in some suburbs of large cities such as Beijing, Shanghai and Wuhan that was preserved as state-owned land for industrial construction was also returned to the farmers as being collectively owned.

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