Urbanization urgently needs to establish an institutional channel for the "separation of people from land"

Recently, the General Office of the State Council issued the "Plan for Promoting the Settlement of 100 Million People Without Urban Household Registration in Cities." During the 13th Five-Year Plan period, the urbanization rate of the registered population will increase by more than 1 percentage point annually, with an average of more than 13 million people transferring their household registration each year. By 2020, the national urbanization rate of the registered population will rise to 45%, and the gap between the urbanization rate of the registered population and the urbanization rate of the resident population in all regions will be narrowed by more than 2 percentage points compared with 2013.

In my view, the process of urbanization manifests as the concentration of the rural population in cities, accompanied by a large number of agricultural people completely breaking free from the bonds of the land and leaving agricultural land to enter the cities, that is, the "separation of people from land." What China is currently exploring should be the establishment of a "separation of people from land" model with Chinese characteristics.

Over the past more than 30 years of reform and opening up, China has adopted an incomplete "separation of people from land" model. Under the urban-rural dual land system arrangement, rural residents are allocated contracted land and homestead land by collective economic organizations, and a large number of agricultural migrants, while working and living in cities, still retain various rights to rural land. This institutional arrangement increased development "flexibility" and avoided social turmoil caused by economic fluctuations. Most typically, the 2008 global financial crisis once dealt a relatively large shock to urban employment in China, and a large number of migrant workers chose to return to rural areas rather than continue to gather in cities, avoiding the risk of social conflict caused by unemployment. But this institutional arrangement also brought about the problem of "land occupation at both ends" in urban and rural areas. While China's rural population declined significantly, the scale of rural construction land continued to grow. In the 11 years at the beginning of the new century, the rural population decreased by 133 million, but rural residential land increased by 30.45 million mu. This is inconsistent with China's basic national conditions of scarce land resources and limited environmental carrying capacity, and also threatens national food security and even ecological security.

In my view, exploring a "separation of people from land" model first requires facing up to the profound changes occurring in current urban-rural relations. Farmers' attitude toward moving to cities is shifting from "spending money to settle in cities and towns" to "meeting the conditions but being unwilling to settle in cities and towns." Under the urban-rural dual system, urbanization has brought rapid increases in the value of rural assets, further highlighted the ecological value of rural areas, and, combined with the rapid improvement of various rural public services and benefits, changed the long-standing position of cities as having an absolute advantage in comprehensive services. The advantage gap between urban and rural areas has undergone major adjustment, and some agricultural migrants are unwilling to settle in cities at the cost of giving up land and other rural rights. According to a questionnaire survey conducted by the National Development and Reform Commission and the All-China Federation of Trade Unions, fear of losing rights such as land in rural areas is currently the primary factor behind unwillingness to transfer household registration or uncertainty about doing so.

In fact, looking at the world's major developed economies, land appreciation brought by urbanization is not evenly distributed. Differential rent is mainly concentrated in land around large cities, and most rural land does not appreciate substantially. Differential land rent will certainly exist, but it is highly concentrated in areas around large cities. Under strict regulation of land development use, it is difficult for land value in most rural areas to grow rapidly.

Second, in exploring a "separation of people from land" model with Chinese characteristics, the core is to achieve overall coordination. In terms of timing, it is necessary to coordinate both the rapid establishment of institutional channels and the realization of "separation" over a relatively long period. In terms of momentum, it is necessary to coordinate the forces of the government, the market, and society, and clarify their respective divisions of labor and roles. In terms of process, it must be advanced steadily and in an orderly manner. The concentration of population in cities is a long-term historical process. "Separation of people from land" will change the public mentality formed over several thousand years in China and will also have a major impact on the economy and society. There must be sufficient historical patience, and we must never seek quick success, still less rush headlong into mass action.

Third, in terms of mechanisms, it is necessary to accelerate the establishment of an institutional channel for the "separation of people from land" and provide convenience and possibility for those who are willing. This channel needs to be compatible with both "separation" and "non-separation" mechanisms. On the one hand, resolutely safeguard the lawful rural rights and interests of farmers who settle in cities, accelerate the confirmation, registration, and certification of rural land rights, decouple the "people-land relationship" from the "people-household relationship," do not make withdrawal from rural rights and interests a prerequisite for settling in cities, and still less make withdrawal from rural rights and interests a consequence of settling in cities, and determine this as soon as possible in the form of law and institution. On the other hand, establish a mechanism for the voluntary and compensated withdrawal of rural rights and interests by farmers who settle in cities, including the right to use homestead land, land contracting rights, and the right to collective income distribution. Practice in some places shows that about 8% to 10% of farmers who settle in cities voluntarily choose compensated withdrawal from rural rights and interests each year. If about 10 million agricultural migrants settle in cities and towns nationwide each year, then about 800,000 to 1 million have the willingness to withdraw, and there must be an institutional supply for the "separation of people from land."

In terms of momentum choices, it is necessary to adopt a combination of market-based approaches and better leveraging the role of the government. Through methods such as shareholding reform and marketization, the problems of land contracting rights and collective income distribution rights in most areas can be solved, but withdrawal from the right to use homestead land is more complex. It is necessary to promote close cooperation between the government and the market, the "two hands," and also give play to the forces of society, culture, and other aspects. Regarding homestead land withdrawal, some regions have already begun beneficial exploration and attempts, taking respect for farmers' right to make their own choices as the premise, using the government and collective economic organizations as intermediaries, and taking market-based withdrawal as the main form, forming relatively accurate price signals through effective factor trading markets, turning "assets" into "capital" and "equity," and enhancing farmers' ability to "enter cities with capital" and "enter cities with rights."