Ideas and Policy Suggestions for the Transformation toward Urban-Rural Integration

Completely dismantling the urban-rural dual system and ultimately eliminating the urban-rural dual structure will require long-term efforts. While upholding the policy framework for coordinated urban-rural development established since the 16th National Congress of the CPC, we should seize the historic opportunity of comprehensively deepening reform in the next 7 years, take the building of institutions and mechanisms conducive to urban-rural development integration as an important area and key link of reform, accelerate the formation of a new type of worker-peasant and urban-rural relationship in which industry promotes agriculture, cities support the countryside, workers and peasants benefit each other, and urban and rural areas are integrated, and provide institutional safeguards for farmers to participate equally in the modernization process and share in its fruits.

(1) Broadening the perspective on urban-rural development integration

To raise the whole society's awareness of promoting urban-rural development integration and make the building of relevant institutions and mechanisms smoother, it is necessary to have a comprehensive and accurate grasp of the starting point and ultimate goal of promoting urban-rural development integration. In particular, attention should be paid to the following 3 points.

First, promoting urban-rural development integration is both the fundamental way to resolve the “three rural issues” and an important measure to unleash the potential of national economic growth. At present, various quarters, especially departments involved in agriculture, mainly emphasize urban-rural development integration from the perspective of resolving the “three rural issues”. The report of the 17th National Congress of the Party required “forming a new pattern of urban-rural economic and social development integration”. The report of the 18th National Congress of the Party even more explicitly stated that “urban-rural development integration is the fundamental way to resolve the ‘three rural’ issues”. In both the report of the 18th National Congress of the Party and the Decision of the Third Plenary Session of the 18th Central Committee, the relevant arrangements for rural reform and development are placed under the framework of urban-rural development integration. These requirements and judgments are undoubtedly correct. Against the backdrop of a low starting point for agricultural and rural development and the rapid advancement of industrialization and urbanization, attention must be paid to resolving the lag in agricultural modernization and the slow development of rural areas, and to promoting coordinated development between workers and peasants and between urban and rural areas. However, we believe that promoting urban-rural development integration solely from the need to resolve the “three rural issues” is not enough; it is also necessary to understand and promote urban-rural development integration from the perspective of unleashing the potential of national economic growth, and to more deeply grasp the internal economic logic of urban-rural development integration.

⟦NL> At present, China is in a critical period of transition from high-speed to medium-high-speed economic growth, and there is an urgent need to tap and cultivate successive forces supporting economic growth. Urban-rural development integration is a process that achieves both fairness and efficiency. From the perspective of fairness, urban-rural development integration, especially the equalization of basic public services, helps farmers share in the fruits of modernization; from the perspective of efficiency, urban-rural development integration helps improve the efficiency of resource allocation such as land and labor. Improving the utilization efficiency of existing collective construction land and expanding space for industrialization and urbanization land use is of great practical significance for alleviating the pressure of rising land costs. Continuously releasing surplus agricultural labor, strengthening vocational skills training for migrant workers, and enhancing their ability and expectations for stable employment are conducive to alleviating the long-term adverse effects of declining demographic dividends on economic development, and are of great practical significance for improving the quality of China's industrial workers and promoting industrial transformation and upgrading. Increasing farmers' incomes, raising their social security levels, improving rural infrastructure, and further tapping the potential of rural consumption and investment are also of significance that cannot be underestimated for giving play to the foundational role of consumption and the key role of investment. Just like globalization and regional integration, urban-rural development integration can also significantly improve the efficiency of resource allocation. Promoting urban-rural development integration is conducive to providing support for China's economic growth in the coming period. Starting from these two perspectives and handling the relationship between them well is crucial for further consolidating and enhancing consensus on promoting urban-rural development integration.

Second, promoting urban-rural development integration requires attention both to “giving more” and to “invigorating”. Given the reality of an excessively large urban-rural gap and the fact that rural areas are the key difficulty in achieving the goal of building a moderately prosperous society in all respects, there is no doubt that we should adhere to the principle of industry nurturing agriculture, cities supporting rural areas, and giving more, taking less, and invigorating; establish a long-term mechanism in which industry promotes agriculture and cities support the countryside; increase the intensity of policies that strengthen agriculture, benefit farmers, and enrich rural areas; and persist in placing the focus of national infrastructure construction and social undertakings development in rural areas. However, to fundamentally narrow the urban-rural gap and promote common prosperity between urban and rural areas, greater attention must be paid to stimulating and enhancing the vitality of rural self-development. To this end, it is necessary to intensify rural reform, cultivate new types of agricultural operating entities, develop various forms of appropriately scaled operations, and improve agricultural competitiveness; innovate mechanisms for rural infrastructure construction and maintenance, and mobilize the enthusiasm of funds from all quarters to enter rural areas; improve farmers' vocational skills, deepen reform of the rural property rights system, and increase farmers' incomes through multiple channels.

Third, promoting urban-rural development integration requires both raising the level of equalization and highlighting differentiated characteristics. Coordinating urban-rural development and narrowing the urban-rural gap are major measures for promoting social fairness and justice and achieving more equitable sharing of development fruits by all the people. To this end, efforts should be made to promote the equalization of urban and rural residents' basic rights and public services, coordinate the balanced allocation of urban and rural compulsory education resources, improve the financial aid system for students from economically disadvantaged families, build an effective mechanism for expanding the coverage of high-quality educational resources by means of information technology, and gradually narrow regional, urban-rural, and inter-school gaps; improve the equal urban-rural public employment and entrepreneurship service system, and eliminate all institutional barriers and employment discrimination affecting equal employment such as those based on urban-rural status, industry, identity, and gender; strive to narrow income distribution gaps between urban and rural areas, regions, and industries; integrate the basic old-age insurance system and basic medical insurance system for urban and rural residents; and promote the coordinated development of the urban and rural minimum living security systems. It should be noted, however, that while promoting the equalization of urban and rural residents' basic rights and basic public services, the respective characteristics of cities and rural areas should be highlighted. The new countryside should retain local and ethnic characteristics; it is an upgraded version of the traditional countryside, not a clone of the modern city.

(2) Focusing on safeguarding farmers' fair sharing of land value-added benefits, accelerate the building of a unified urban-rural construction land market featuring use control, equal rights and capacities, and shared value-added benefits

The overall direction of land system reform should be, under the premise of strengthening use control and enhancing the binding force of planning, to eliminate the institutional differences in rights and capacities between collective land and state-owned land. That is, use control should be taken as the primary principle, ownership discrimination should be eliminated, and a new balance should be achieved between property rights protection and use control. By 2020, the institutional framework for equal market entry of collective operating construction land should be basically established, the rights and capacities of the right to use homestead land should be significantly expanded, the system for transferring and trading farmers' housing property rights should basically take shape, and the land expropriation compensation mechanism should realize the transition from “compensation according to original use” to “fair compensation”.

First, accelerate the pace of revising relevant laws. Breaking the current urban-rural dual land system framework involves both major adjustments to the structure of interests and major changes in legal relations. To advance land system reform, it is necessary to revise parts of the Constitution, the Land Administration Law, the Guarantee Law, and the Property Law, especially some prohibitive provisions. For example, “land in cities belongs to the state”; “any unit or individual that needs to use land for construction must apply to use state-owned land in accordance with law”; “the state expropriates rural collective land and compensates according to the original use”; “the right to use land owned collectively by farmers may not be transferred, assigned, or leased for non-agricultural construction”; “the land use rights of township (town) and village enterprises may not be mortgaged separately”; and provisions that “the land use rights of collectively owned land such as cultivated land, homestead land, private plots, and private hills” may not be used for mortgage. Only by revising these higher-level laws can land system reform have a legal basis.

Second, clarify the scope of uses after collective operating construction land enters the market and the scope of transferees of farmers' housing property rights. In the current urban land market, the transfer terms and price levels of land use rights for different uses vary greatly; there are obvious price differences between commercial housing using state-owned land and “small property rights housing” using collective land.

To balance the interests of all parties, a plan for the use of collective operating construction land should be formulated as soon as possible, and clear provisions should be made on the uses of collective operating construction land after it enters the market. From the perspective of those transferring out rural housing, the more buyers there are and the more fully competitive the process is, the more conducive it is to increasing their returns. However, from the perspective that China's land resources are scarce and the total amount of rural construction land, including homestead land, should gradually decrease along with urbanization, it is not appropriate to let urban capital go to rural areas to massively enclose rural housing and homestead land. To seek a balance between these two perspectives, the scope of transferees of rural housing should be relaxed from currently only farming households within the same collective economic organization that meet the conditions for newly applying for homestead land to other households meeting certain conditions within a broader geographical scope. As for the geographical scope and qualification conditions, gradual trial and error can be carried out in pilot areas from small to large and from strict to lenient, so as to keep risks controllable.

Third, clarify the principles for distributing value-added benefits from collective land. Establishing a mechanism for distributing land value-added benefits that takes into account the state, the collective, and individuals, and reasonably increasing individual benefits, is both an important principle for reforming the land expropriation compensation mechanism and an important principle for distributing the value-added benefits generated by the transfer and trading of collective construction land. For collective operating construction land, there are large differences in land stock among different collective economic organizations; places with large stock are often also places where there was previously a lot of illegal land occupation; and some land use rights are held by individuals or non-collective enterprises, who did not obtain land use rights in an open and transparent manner. If the value-added benefits generated by transfer and trading are not reasonably regulated, serious social injustice will result. Shenzhen has stipulated that the revenue from the transfer of former collective operating construction land should be distributed between the municipal land revenue fund and the successor organizations of the former collective economic organizations.