General Situation

China' s total area is 960 million hectares, among which the cultivated land, forest land, pasture, land for construction sites, waters and unexploited land account respectively for 13.8%, 20.7%, 27.55%, 2.95%, 3.8% and 31.3% to the total, in accordance with an official statistical survey. Moreover, China is a hilly country with mountainous regions and hilly areas making up two-thirds of its territory, and it is also a populous country characterized by a shortage of arable land. The per capita acreage equals about 0.9 hectare while the per capita arable land comprises about 0.11 hectare, which equals only one-third of the world' s average. In recent years cultivated land has been disappearing at a rate of several hundreds of thousands of hectares each year. The conflict between agricultural demand for land and that of urbanization and industrialization is becoming more and more significant. Excessive cultivation of grasslands, over-grazing, utilization of land by village and township enterprises, soil pollution and erosion and rapid urbanization have caused serious damage to and deterioration of land resources.

As we all know, the per capita usable land resources of China are very low and will continue to decrease in quantity and quality. Due to increasing population, industrialisation, and urbanisation, the demand for land resources has increased. A shortage in land resources has become a major limitation to the sustainable economic and social development of China. Chinese government has realized that an efficient and powerful management and legal system for land resources is vital and of great importance for not only the present but also the future of China.

Today in China, the Ministry of Land and Resources is the leading agency responsible for the overall management of land use, and is an administrative body under the State Council for planning, managing and protecting land, mineral and marine resources. It was established on the basis of the former Ministry of Geology and Mineral Resources, the former State Bureau of Land Administration, the State Oceanic Administration and the State Bureau of Surveying and Mapping.

Land Management

A. The Integrated Management of Land Resources

For the land management in China, the integrated management is now a major priority, which including, among others, the following contents:

(a) Management activities in the surveying, monitoring and planning of land resources. To strengthen the management of development and utilization planning for a large area, such as for agriculture, industry and urban housing over a nationwide range. To strengthen the macro-management of neighboring land development zones, through macro-assessment and evaluation of land resources, land usage, and impacts of land utilization and exploitation. Cultivated land shall be categorized and the transformation of cultivated land into non-agricultural land will be controlled. Management and cooperation will be encouraged in land allocation for large scale construction projects and trans-regional land usage and in working out an overall program for land utilization at the level of provinces, regions or municipalities and prefectures. It is necessary to enhance survey of hilly land resources and undertake suitability assessment, formulate programs for sustainable use of land in mountainous areas, and establish model projects for sustainable development of hilly land to prevent natural disasters and reinforce integrated management of hilly land resources;

(b) The Central land management and legislation bodies will thoroughly examine and perfect the relevant requirements for land legislation and regulations, and draft laws and regulations for the land market and the non-gratuitous usage of land; while, local governments should, with regard to the particulars of the local market, adopt regulations and measures that are functional under the market economy based on the state' s relevant laws, and promote a number of land markets with their managing agencies. Local governments should complete the preparation of regulations for land market, transfer of land use rights, land registration as well as assets management, organize and launch general surveys of basic land price to establish a fundamental land pricing system applicable to various regions in China. Furthermore, local governments should establish organizations to evaluate land investment profitability at regional, municipal and prefectural levels, regulate the land market and eventually unify the urban and rural land markets nationwide. Land management bodies at municipal and prefectural levels will have to complete the overall planning of land utilization, and design land utilization programs including, among others, urban housing, public land usage, land for industrial and agricultural purposes, and special reserves, etc. .

B. Land Information Management

The following steps will be taken to complete modernization of information management for land resources:

(a) China will establish a land information management body to establish regulations and technical codes for land information collection, processing and use, and to exercise a market type operation and management of land information;

(b) Land information management systems and databases will be established at the state and provincial levels;

(c) China will establish a land registration system in large and medium size cities in all economically developed regions, and develop a market information management system for land resources as well as an expert system for resources, which must be paid for by users;

(d) Land management professionals will be trained in maintaining and utilizing the land information system, so that the reliability of data gathering is enhanced;

(e) A land management computer system will be established, and connected with that of related worldwide organizations, as well as those computer systems of land markets scattered all over China, to promote a network of information sharing;

(f) Modern computer software and hardware will be utilized to promote advancement in such fields as applied remote sensing, image processing, mapping, GPS as well as decision-making models and system analysis, etc. .

China will survey land resources at four levels: state, province, region or municipality and prefecture. Management of the survey data and land registration data will be computerized to facilitate information sharing within China and other countries. Chinese government will regularly release land information and policies to the public, and enhance women' s role in this task.

China has undertaken many national information surveys of land resources, and accumulated a large storage of information. Since the survey methodology, data management and renewal, as well as its help to policy-making have been lagging behind the world' s advanced level, till now a complete and effective system for dynamic monitoring and management of land has not yet been established. It is possible to afford the government with a practical and reliable basis for policy-making in land resources management. To reinforce the capacity building in land management, and realize dynamic monitoring and modernize information management is a pressing item on the agenda.

C. Wetland Management

Wetlands are a special land resource and play a unique and valuable ecological role. China has about 25 million hectares of wetland, among which, swamps and estuary marshes amount respectively to 11 million hectares and 2.1 million hectares. The protection of China' s wetland has long been overlooked. These areas are frequently drained for cultivation, or rebuilt into fish or shrimp ponds, and sometimes are excavated and drained of water. In many areas wildlife is killed in large numbers, and the ecosystem shows an overall tendency of degeneration. In recent years signs of improvement have been seen, as some specific wetland reserves and other natural reserves containing wetland have been established. China has joined in 1992 " the International Convention on Important Wetlands in Particular Habitats for Water Poultry " , but damages to wetland still exist widely because of the delayed call for protection, lack of a nationwide protection-consciousness and lack of a unified planning and management system.

Present or future measures for utilization and protection of wetland resources:

(a) Management of existing wetland will focus on preventing careless cultivation of in wetland. If any necessary and real needs, such as a small area for dikes, usage of wetland can only be carried out after the submission and approval of the proper design for the project according to law;

(b) Protection of wetland areas will be strengthened by setting up organizations, with legal means to enforce protection, in the most important areas. Laws and regulations shall be drafted to give these organizations implementation measures;

(c) Wetland utilization and protection will be considered as an essential part of the overall planning of land resource utilization and protection, while a national strategy and action plan for wetland protection is to be envisaged. If an existing dike prohibits flood drainage, or spoils the scenery and the ecological environment of a lake or river, or if the reclaimed swamp is the breeding place of important aquatic birds, the dikes must be eliminated and the area allowed to return to swamp;

(d) China will actively engage in scientific research of wetland resources to determine the amount and distribution of wetland, the quality and utilization potential of various types of wetland, and the best ways to manage wetland resources.

D. Farmland Management

Since 1988, when Chinese government promulgated the Regulations on Reclamation of Land, great progress has been made in the rehabilitation of abandoned land. According to statistics, 163,300 hectares of abandoned land have been rehabilitated or reused, 75% of which have been used for farmland or other agricultural purposes. In 1995, the State Coal Industry Ministry arranged 10 key demonstration projects such as those in such areas as adjacent to Shanxi, Shaanxi, and Inner Mongolia which rehabilitates 4,500 hectares of land annually (accounting for 22.5% of the total subsided area caused by coal mining in that year). Moreover, 1,770 hectares of slag hills were rehabilitated in opencut coal mine areas (accounting for 33% of the total slag hill area created that year). Since the early 1990s, Huaibei City of Anhui Province has made great efforts in the rehabilitation of the subsided land caused by coal mining. The accumulated rehabilitated area was 4,700 hectares, a rehabilitation rate of over 50%.

Since 1989, basic farmland reserves have been established in China. By the end of 1996, 2,100 counties had finished the work and 65% of the farmland is under effective protection. The problem of farmland misuse has been resolved to a certain degree.

In 1996, the State Land Administration Bureau engaged, for the first time, a number of inspectors for land management supervision and set up a social supervision system, an important measure for strengthening the supervision of implementation of land laws.

Farmers have been mobilised to carry out comprehensive management of mountains, rivers, farmland, forests, and roads in about key 10,000 small river basins with serious soil erosion. From 1991 to 1995, 30,000 square km of soil erosion area and 10,000 square km of wind erosion area were brought under control each year. The Government has formulated the encouraging policy of those who control the area, get the benefit and carried out family contracting, corporate sharing, leasing, and auctioning of the usage rights of the land, as well as other kinds of control measures. These steps have protected the legitimate rights of farmers and aroused their enthusiasm to harness bare mountains and land. As a result of their efforts farmers have gained profits.

The macro-adjustment and control system have been established with the main contents of the overall plan for land use, the five-year plan for land use, and the annual plan for land use. The Government has set up a primary system of basic land zoning in order to protect farmland and is establishing a management system for land use. It has also drawn up the utilization and management control system, which provides rational regulations on the location and scale of the land for urban and other kinds of construction. In addition, Chinese Government has implemented the construction-used land management methods, which focus on land scales and allocation of projects, so that construction projects can utilize areas which are not useful for agricultural purposes. Examination and approval systems for all kinds of land use have also been adopted. This management system, which focusing on the identification of ownership, registration, and granting certifications accordingly, has been established for the rural collective land ownership, reclamation, and development.

Twenty-five major soil erosion controlled areas have been established at the state level. Soil and water conservation projects have been carried out in the seven large river basins. The accumulated eroded soil area under control is 67 million hectares. The integrated soil erosion control area in the Loess Plateau is about 15 million hectares, putting 30% of the eroded soil area under control to some extent and decreasing the annual discharge of silt to the Yellow River by more than 300 million tons.

In some areas, experiments have been developed to compensate farmers for valuable farmland lost to non-agricultural purposes. Under the premise of guaranteeing the original quantity and quality of the basic farmland reserves, new farmland with equivalent quality and quantity should be reclaimed to compensate for occupied ones. In cases without reclamation conditions, a cultivation fee is required according to the regulations. This will result in a better utilization of the total amount of farmland.

By the end of 2000, a general program for land survey and utilization will be carried out at the national, provincial, regional, municipal and prefectural levels. Furthermore, China will work to clarify the general directions, goals and tasks of utilization; balance the demands for land; improve land utilization patterns; complete the information system for land management at different governmental levels; set up a network for land use monitoring; follow the dynamical changes in land conditions; and implement modernization of land management.

E. Land Market Management

Land resources emerge on the market as an increasingly unsubstitutable factor of production so far as the mechanism of market economy keeps running in China. With respect to the management of land resources, China is facing the problem of setting up and improving the market-oriented mechanism, policies and regulations and modernizing land management. It is necessary to help create the fundamental influence of market mechanism on allocation of land resources, and concurrently reinforce the logic intervention of the government to implement a highly efficient, fair and sustainable utilization of land.

General Situation

China' s land market is developing into one of the world' s largest, whether one considers the total area of land it covers or the total value of the land. It is an important base from which China' s economy takes off and a driving force for the country' s modernization program. China' s land market cannot be substituted by any other industry. The success or failure of the land market will determine the success or failure of the entire economy to a great extent. For this reason, it has become a focus of attention both at home and abroad.

China' s land market came into being to serve the needs of the development of a socialist-market economy. As a result of the reforms and development that have been carried out in the past years, China' s land market had come into shape as a system.

Five types of markets have been established

1. Markets for selling the right to use state-owned land. These are also known as primary markets on which land-use right is sold to developers and users by means of public auction, bid or agreement by land administration departments at different levels on behalf of the state. This type of market is totally monopolistic.

2. Markets for transferring the right to use state-owned land. These are also known as secondary markets on which developers and administrators carry out development, sales and transfer operations after they have acquired land-use rights according to law. This type of market is totally competitive.

3. Financial land markets. The entry of financial operations into the land market is one of the decisive factors upon which the success of the land market hinges on. Financial transactions such as the leasing, mortgaging and transfer of land-use rights and buildings will serve to vitalize the land market; and the insurance business will help reduce the risks that land developers, administrators and users may face. On the basis of the nature of their links in business, the financial land markets may be sub-divided into land-use right leasing markets and land-use right mortgaging markets.

4. Land markets concerning foreign nationals. Land markets of this type may also be referred to as real estate markets concerning foreigners. Their links to business include the lease of land-use right to foreign businessmen for development purposes and the lease or sale of factory buildings or civil facilities to foreign entrepreneurs for their use. These make up a special type of land markets that have come into being to serve the needs of non-Chinese and non-mainland enterprises.

5. Intermediary service markets. Their links to business include consultation services, brokerage, information, evaluation, registration and arbitration. Without an intermediary service system, it would be impossible to set up an efficient market mechanism.

Five systems have come into shape

1. The land resources disposition system. In accordance with the requirements that land exploitation must be carried out in conformity with the overall plan, the developers and users must be in possession of the corresponding resources and funds, while the acquisition and the development of land and the transfer of real estate should conform to legal procedures involving the entrance into the land market, so that the disposition of land resources may proceed in a rational, orderly and highly efficient manner. This is done for the purpose of making timely and effective adjustments in the basic balance between total supply and demand of land resources and achieving the rational disposition of the uses and functions of land in accordance with the needs of promoting economic and social development, improving the people' s livelihood and creating better ecological environment.

Active efforts need to be made at the moment to expand the scope of land disposition and to transfer as much of the business of land resources disposition as possible into market channels. The ever-increasing amount of land needed by construction projects of cities and townships and foreign-funded (partially or totally) enterprises should be gradually channeled into the market according to law. Conditions should be created also to bring into the land market for construction projects within rural cooperatives.

Land needed for housing of urban residents, including urbanized farmers, should also be guided. To achieve these goals, it is necessary to expand the scope of the sale of land-use rights mainly by means of auctioning and bidding. At the same time, supervision over this area of work should be strengthened so as to bring hidden markets entirely into the open and reduce the number of errors in the disposition of land resources.

2. The land price administration system. Prices play a special role and produce a stabilizing effect on the communication of information, the disposition of land resources, the improvement of management and the promotion of technological progress. In view of the fact that at the moment a land-pricing system is being shaped with the base prices as the basis, market and bottom sales prices as the guide, land price administration will be strengthened. Land price appraising should be speeded up and the total amount of land resources should be ascertained. The publication of base price regulations should be improved and transparent; a land-price stabilizing mechanism should be established and adjustment and control should be performed by introducing market forces. The land-price supervision system should be perfected to prevent under-price sales and speculative activities; and the activities undertaken by price-appraisal officials and personnel should be regulated and standardized.

3. The land-oriented revenue distribution system. The primary task is to clearly define property rights and strengthen land administration by the state. On this basis, a rational ratio and manner of distribution among the state, enterprises and individuals and between the central and local authorities should be determined, so as to help increase the initiative of all parties concerned. Reasonable rates of land rents, taxes and fees should also be set up both with a view to preventing losses of revenues from state-owned land resources and keeping the levying standards at a level acceptable to the land users and developers. At the same time, methods of levying should also be reformed so that a good job may be done in taxation and fee-collection. New taxes such as those levied on value-added should be implemented cautiously; a reasonable taxation rate should be worked out so as to play its important role in the disposition of land resources and curb speculative activities.

4. The legal system of the land market. The market economy should be governed by law. A complete and full legal system is indispensable for a smooth-running land market. To a certain extent, the laws and regulations currently in force are makeshift in character and are not systematic and lack continuity. But the major problem lies in the fact that even these laws and regulations are not strictly enforced owing to the lack of an enforcement network.

5. The market' s intermediary service system. This system concerns itself mainly with land-market information, land-price appraisal and land-use right transactions, providing services in consultation, brokerage, information, economic affairs and matters concerning laws, government policies and technology. The service agencies and personnel obtain their licenses if they meet the requirements and procedures. The service system is the most active in both visible and invisible markets. It is now under rapid development though its activities need regulating in many ways.

The important role of the land markets are making themselves felt by the positive results that have been achieved in their operations. It may be said that China' s land market has taken shape and scored initial success. It is developing quickly and giving impetus to the economy as a whole. At its initial stage of development, it is already exhibiting great vitality and potential strength. According to a preliminary statistics, a total of 44,000 land-use right transactions were concluded by the end of 1993, covering an area totalling 79,000 hectares, reaping a total of 123.1 billion yuan in revenue. The returns of the land-use sales in some cities came to more than 25 % or even 50 % of their total financial revenues. In Guangdong province, for example, the returns in 1992 amounted to 9.4 billion RMB yuan, which represented 45 % of its financial revenue of the same year. Land-use right transfer and real estate development transactions are even larger both in scale and in the profits gained; and land-use right transfer transactions enter more and more into the market.

Owing to the ideal locations and the excellent basic installations, the land resources in those areas are very much favoured by developers and users since they lend themselves to easy development and promise quick results and high profits. The vigorous development in such a short period of time has instilled strong vitality into the overall economic growth. China' s national economy has been experiencing vigorous development for several successive years. The 1993 GNP broke through the 3 thousand billion yuan limit, with the growth rate at 13.4 % in spite of restraining measures such as tightening the money market and structural adjustment and control. The contribution of the land market cannot be overemphasized in helping achieve this.

Legislation, Regulations and Policy Instruments

The following laws and regulations related to land management have been issued by Chinese Government: the Land Management Law, Regulations for the Implementation of Land Management Law, Regulations for the Protection of Fundamental Farmland, Regulations for the Rehabilitation of Land, Provisional Regulations on Land Appreciation Tax, Measures for Management of the Construction-Used Land, etc. . The Land Management Law was revised at the 4th Meeting of the Standing Committee of the Ninth National People' s Congress on August 29, 1998. The newly revised one is enacted in accordance with the Constitution for the purpose of strengthening the land administration, protecting and developing land resources, making better use of land, effectively protecting cultivated land, and promoting sustainable development of the society and economy. Moreover, illegal land use was included in the revised Criminal Law of the People' s Republic of China (issued in 1997). We can say that, land management monitoring and inspection systems in China have been gradually established and completed, thus bringing land management into the realm of legal administration.

In recent years, Chinese Government also promulgated and enforced the Law on Water and Soil Conservation of the People' s Republic of China and the Regulations for Implementation of the Law on Water and Soil Conservation of the People' s Republic of China. All of these have encouraged the control and tackling of soil and water losses.

For implementation of the Land Management Law, related laws and regulations are still under quick construction. After the amendment of the Land Management Law, Measures for Implementation of the Land Management Law and Regulations for Protection of Fundamental Farmland, Measures for Examination of the Construction-Used Land Submitted for Ratification by the State Council was also approved and issued by the State Council. In the meanwhile, 5 Ministerial Regulations, as well as more than 30 Regulative Documents have also been issued successively by the Ministry of Land and Resources, including, among others, Regulations for Management of the Annual Plan of Land Use, Regulations for Management of Examination, Submission and Approval of the Construction-Used Land, Measures for Disposal of Idle Land, Measures for Management of the Collection and Use of the Land Use Charge for the Newly-Increased Construction-Used Land, etc. . Besides, related local laws and regulations have also been enacted by local governments accordingly. All of these efforts have provided, and will continue to provide a powerful and legal guarantee for strengthening the land management, protecting the cultivated land as well as the intensive utilization of land resources.

Moreover, by strict law enforcement and supervision, the land management order, even in a nationwide view, is now turning better and better. For instance, in 1999, about 745 law-breaking cases in connection with land and resources have been investigated and arbitrated, with a case-closing rate of 83%, and 105 cadres in charge were given administrative punishment respectively according to law.