From Cover, issue no. 387-388, September 29 - October 6, 2008
Translated by Ren Yujie
Original article: [Chinese]

The Chinese government has been reviewing the posibility to relax regulations on rural land by allowing farmers to trade their land-use rights, and this may pave the way for legalizing sale of rural property to urban population.

The EO learned that Land and Resources Ministry was reviewing the Land Administration Law, proposing that members of a commune with collective-owned rural land be permitted to transfer, rent and mortgage their share of the land-use rights upon official approval.

Sources said the proposed admendments also called for farmers with house-site land - rural land allocated for residential use - be allowed to build houses and susidiary facilities on it; and that upon approval, they could legally trasfer, rent and mortgage the land and the property built on it.

However, once the farmers gave up their access rights to house-site land, they were barred from re-applying for new allocation.

Other suggested amendments included permission to transfer, subcontract, exchange, share, inherit and mortgage the land use rights for agricultural plots.

Sources said the proposal had yet to be submitted to the State Council, and that the soonest it could be deliberated by Chinese legislators and passed as amended Law would be in the first half of next year.

Resolving "Minor Property" Problems
Under the current Chinese Law, all the above were prohibited and led to problems facing the "minor property" - houses and facilities built on rural collective-owned land.

In recent years, some rural communes had developed commercial residential units and other facilities on their collective-owned land, but sale of such property were deemed unlawful. There had also been cases where urban residents were brought to the court for purchasing "minor property".

Over the past few years, there had been calls from economists and legal scholars for the government to allow legal transactions of rural land and property.

If the proposed amendments materialized, urban residents would have the posibility to access rural land and housing once restricted to the rural population only.

Meanwhile, rural residents would have ways to raise fund and develop their land for commercial use by selling, renting or mortgaging their land-use rights.

Wang Xiaoying, researcher of Rural Development Institute under the Chinese Academy of Social Science - a leading think tank in China, said if farmers were banned from trading their land use rights, the value of their property was in fact depreciating, and that would put them in the disadvantage when official land acquisition took place.

Jia Ruoxiang, researcher of Territorial Development and Regional Economics Research Institute under National development and Reform Commission, said land was farmers' security to livelihood. By amending the Law, it would be favarouble to boosting the social security of farmers as urbanization set in.

In recent years, the Chinese government was pushing for accelerating the pace and outreach of urbanization. The efforts included providing similar public services to urban and rural residents and reforming household registration system, which chained a person to his or her place of origin.

In Tianjin for instance, the municipality had experimented with a land-for-urban status exhange system, whereby farmers handed in their rural house sites for collective development projects; in compensation, they received urban residential land and social security package.

The experiment, however, met with strong criticism and was halted, as some scholars and officials expressed fears that farmers without land were in fact losing their social security.

Wang differed in opinion, he said: "Only when individual trades, the market mechanism will fix the price, and through that, farmers may learn of the real value of their property."