Land Use Reforms: Towards Sustainable Development in China

Abstract

This article explores the nature of China’s land-use rights system, its evolution and impact on resource allocation and local governments’ public finances. In recent decades, the public ownership of land has not hindered the development of a thriving market economy. Since the inception of the economic reform, land-use rights, a new institution, have been introduced to address the rigidness and ineffectiveness of land ownership in China. The current land-use rights system (LURS) has provided enterprises and individuals with a largely stable land tenure system while permitting local governments to leverage land finance for infrastructure investment. Nevertheless, rampant corruption and predatory behaviors by local governments are associated with land transactions, which pose a threat to social stability at the grassroots level. The Chinese experience sheds fresh light on the development of a sound land administration system in developing countries.