Nine Major Trends of the New Land Reform in the Context of Urbanization

Every successive land reform has had a significant and far-reaching impact on China. The "new land reform" can be said to be difficult to understand and equally difficult to carry out. The existing land system has already formed a self-circulating, self-reinforcing pattern of interests and development inertia. Breaking this cycle is by no means the work of a single day. It requires both top-level design, with the determination to cut off one's own wrist and leave a mark on iron, and also a down-to-earth approach, going to the grassroots to listen to the experience of bold exploration and careful verification from pilot projects in various places.

The Third Plenary Session of the 18th Central Committee made new strategic arrangements for China's urbanization construction, clarified the main tasks of rural land system reform, and opened the curtain on a new round of land reform. How great will the force of the new land reform be? Where will this "sharp arrow" that affects the whole body be sent? Based on the spirit of the central government's new round of reform, combined with current exploration and practice in various places and the laws and experience of foreign land transformation, this article attempts to make forward-looking judgments on the possible trends of the "new land reform" from nine aspects: reform goal orientation, urbanization model, collective land property rights, land market subjects, land revenue distribution, the "three rural" issues, sources of newly added construction land, small property rights, and land laws and regulations.

(1) Reform orientation shifts from "land-based" to "people-based"

For a long time, local governments have been keen on city-building movements driven by the original motive of increasing land value, while being passive about the citizenization of land-lost farmers and the improvement of their welfare, bringing huge social costs, affecting the sustainable and balanced development of the economy and society, and entering a period in which negative effects continue to erupt. The situation of "wanting land but not people" in the new round of land reform will inevitably change. Not only will the proportion of farmers' land property rights income be increased, but a series of institutional arrangements for employment, social security, and household registration targeting land-lost farmers will also follow. Premier Li Keqiang pointed out at the symposium on advancing pilot work for new urbanization that new urbanization values highlighting the word "new" and that its core lies in writing well the word "people." Differentiated household registration policies should be implemented, exploring the linkage between transfer payments and the citizenization of the agricultural transferred population, and bringing farmers who enter cities into the urban housing and social security systems. From the information revealed by senior levels, whether in land system reform or related supporting system reform, whether people's happiness can be achieved is the core orientation for measuring success or failure.

(2) It will prompt the urbanization model to shift from "land-led" to "three-wheel-driven"

The "land model" that has supported China's high-speed urbanization development over the past thirty years, namely the cyclical model of low-price land expropriation——attracting investment——development and monetization——filling public finances——investing in industry——giving back to society——expropriating land again, is essentially government-led. Relying on the monopoly mechanism of urban land owned by the state and rural land owned collectively, and through granting land use rights, it is a development path for capital accumulation in urbanization and industrialization. It is an endogenous and indispensable institutional arrangement that has promoted China's thirty years of high-speed economic development.

With the advancement of urban-rural land integration, the increase in farmers' land property rights income, the end of the era of huge profits in residential real estate, and the rise in the scarcity cost of land resources, the urbanization model of government monopoly and the rolling cycle of cheap land expropriation will be difficult to sustain. On the other hand, after decades of painstaking accumulation, China as a whole already has abundant capital accumulation. China's new urbanization model will change the single land-driven development model and enter a stage of development driven by the trinity of "capital-industry-land," with capital as the guide, industry as the core, and land as the foundation. In the future, it will no longer pursue a quantitative indicator such as the urbanization rate, but will focus on solving issues closely related to the quality of urbanization, such as reform of the household registration system, diversified investment and financing mechanisms, modernization of urban governance, industry-city integration, and residents' employment.

(3) The urban-rural land market shifts from a "dual system" to "integration"

If the core of the previous round of land reform was the separation of ownership and use rights and the realization of the marketization and capitalization of state-owned land, then the new round of land reform will focus on exploring and promoting the capitalization and marketization of collective land. The integration of the urban-rural land market based on "same land, same rights, same compensation" will ultimately be established. Considering the imbalance in China's regional development and the different degrees of completeness of supporting environments, the integration process will inevitably be advanced gradually in stages and batches. First, narrow the scope of land expropriation and clearly define land for public welfare purposes; second, gradually open collective operating construction land to the market, first opening industrial collective construction land for commercial, tourism, and industrial uses and land for public rental housing; third, on the basis of improved fiscal, property rights, and household registration systems, allowing free transactions of homestead land between urban and rural areas will become possible, thereby completely abolishing the dual system of urban and rural land use.

(4) Collective land property rights shift from "collective ownership" to "quasi-privatization"

Clear property rights are the foundation for realizing the marketization and capitalization of land. At present, there is much discussion in all sectors of society about the direction of collective land property rights reform, roughly divided into three major schools: state ownership, private ownership, and mixed ownership. Our research believes that, considering the diversity and imbalance of China's national conditions, a purely one-size-fits-all nationalization or privatization is not advisable. In view of the awakening of people's property rights awareness and the popularization of market awareness, under the premise of not changing collective ownership and with the government strengthening strict land use control and land planning, giving farmers greater income rights and disposal rights over contracted land, homestead land, and collective asset equity is the general trend. For example, in the United Kingdom, land ownership belongs to the British Crown, but individuals have a 999-year lease term, equivalent to permanent lease rights. It should be particularly pointed out that "quasi-privatization" does not change collective ownership, but emphasizes that farmers have more use rights and income rights. Giving farmers more property rights income does not mean letting the government withdraw. The government will be stricter in land planning, use control, and supervision of development rights.