Limited Progress Expected in Rural Land System Reform This Year

After the Third Plenary Session of the 18th Central Committee, expectations for land reform were quite high across all sectors, but land reform has not shown momentum of acceleration; lack of consensus and numerous concerns have put land reform in a cautious and conservative posture. Liu Shijin, deputy director of the Development Research Center of the State Council, once pointed out: “Land reform can be said to be an area where controversy is relatively great and consensus is relatively small.”

It cannot be said that the central government has not attached importance to land reform. In September 2014, President Xi Jinping chaired the fifth meeting of the Central Leading Group for Comprehensively Deepening Reforms and deployed the promotion of rural land reform. On December 2, 2014, President Xi Jinping chaired the seventh meeting of the Central Leading Group for Comprehensively Deepening Reforms, which reviewed the “Opinions on the Pilot Work of Rural Land Expropriation, Market Entry of Collective Operational Construction Land, and Reform of the Homestead System.” This shows that rural land reform, which had not been advanced for a long time and was regarded as a “hard bone,” will be a reform priority in the future. But the lag in the actual reform process may disappoint outside expectations.

The General Office of the CPC Central Committee and the General Office of the State Council recently jointly issued the “Opinions on the Pilot Work of Rural Land Expropriation, Market Entry of Collective Operational Construction Land, and Reform of the Homestead System.” In terms of reform of market entry of rural collective operational construction land, it is necessary to explore and improve the land property rights system, grant rural collective operational construction land the functions and powers of transfer, leasing, and equity participation; clarify the scope and channels for market entry of rural collective operational construction land; establish and improve market transaction rules and service supervision systems, etc. In terms of reform of the rural homestead system, it is necessary to improve the protection of homestead rights and interests and the methods of acquisition, explore multiple forms of realizing farmers' housing security with housing available in different regions; for situations such as occupying homesteads beyond standards and having more than one homestead per household, explore the implementation of paid use; explore allowing farmers who have settled in cities to voluntarily withdraw from or transfer homesteads within their own collective economic organizations with compensation, etc. This means that in key areas such as collective operational construction land and homesteads, the pilot work of land reform has taken another step forward.

However, judging from statements by relevant departments, the advancement of land reform will not be fast and still seeks to be prudent. Jiang Daming, Minister of Land and Resources and State Land Inspector-General, said that the requirements for the reform pilot are, first, to adhere to small-scale piloting. Coordinate the eastern, central, western, and northeastern regions, take into account different development stages and models, mainly arrange pilots in comprehensive pilot areas for new-type urbanization and rural reform pilot areas, and select a number of counties or county-level cities with foundations and conditions to carry them out. Second, adhere to reform in accordance with the law. The pilot involves breaking through relevant legal provisions, and the State Council needs to request authorization from the Standing Committee of the National People's Congress, allowing pilot areas to suspend the implementation of relevant legal provisions during the pilot period. Third, adhere to closed operation. Pilots are strictly limited to legally authorized counties (cities), and non-pilot areas should not blindly compare themselves or act without authorization, ensuring that the pilots operate in a closed manner and risks are controllable. The pilot work will be completed by the end of 2017. In other words, there are still nearly three years, and there is no rush to roll it out.

Before this, Han Changfu, Minister of Agriculture, said on December 23, 2014 that in 2015 China will actively and prudently advance rural land system reform, will cooperate with the Standing Committee of the National People's Congress to promptly revise the Land Contract Law, grant farmers the functions and powers to mortgage and guarantee land management rights, and allow farmers to use management rights as equity to develop agricultural industrialized operations. It will take about 5 years to basically complete the confirmation, registration, and certification of rural land contractual management rights. Confirmation, registration, and certification are the foundation of land circulation, and this foundational work alone will take 5 years, which also means that the circulation of land contractual management rights cannot achieve major progress in the short term.

The achievements of land reform in 2014 remained limited to basic areas such as confirmation, registration, and certification. Although many places are experimenting with feasible models of land reform, it is still too early to form a mature model universally applicable across the country. There have been many experiments in the circulation of land contractual management rights, but the circulation of rural homesteads and collective construction land is the most difficult part of rural land system reform; policy operations are very difficult and movement is slow. In the field of legislation and law revision, apart from the “Interim Regulations on Real Estate Registration,” there has not been much movement. On the issue of legalizing small property rights housing, there are also no signs of loosening in the government's tone.

Looking ahead to 2015, the areas expected to make some progress are still the further expansion of pilot confirmation, registration, and certification of land contractual management rights, as well as local pilots on the circulation of land contractual management rights. However, the circulation of rural homesteads and collective construction land is relatively sensitive and lacks consensus, so it may not advance quickly, but instead gradually experiment and innovate on the basis of pilots, striving to be active and prudent. Therefore, expectations for progress in rural land system reform in 2015 should not be too high.

The central government's cautious attitude on the land reform issue has its objective reasons. In the view of our research team, land reform is an important part of comprehensively deepening reform, an unavoidable task after reform enters the tough-tackling stage, and an important means of solving the three rural issues. The lag in reform will produce negative effects, such as affecting the advancement of new-type urbanization. With the abolition of the household registration system and the unification of urban and rural social security, resistance to urbanization at the “urban end” is becoming smaller and smaller. But at the “rural end,” due to the lag in rural land system reform, farmers' land assets are difficult to properly dispose of and realize, and cannot provide strong support for farmers moving into cities. Integrated urban-rural development may be dragged down by land system reform. The currently fragmented rural land property rights system, while weakening the protection of farmers' rights, also reduces the sources and amount of rural property income, not only increasing the cost of rural social and economic development, but also causing rural social and economic development opportunities to be gradually lost. 2015 is a key year for comprehensively deepening reform, and the central government should show greater boldness in tackling this “hard bone” of land reform. If this government can complete the historic reform of land reform, it will be enough to shine in the annals of history.

In short, although the government attaches great importance to land reform and the concept of land reform is very hot, at the specific operational level, rural land reform in 2015 will still mainly focus on pilots and prudence, and the results of reform may be lower than many people expect.