Chapter One Introduction Introduction China saw rapid expansion in the area of land used for human settlements, industrial and mining sites from 1949 to 1996. According to Lin and Ho, this expansion of land for construction had taken place at the expense of agricultural land and unused land, among which the loss of cultivated or arable land (gengdi) was most acute. Based on an analysis of the 1996 nation-wide land survey results, it was estimated that around 80 percent of newly acquired land for construction was converted from arable land.1 In addition, much of the converted arable land was requisitioned from peasant collectives. Of the 2.26 million hectares of arable land converted to non-agricultural use from 1987 to 2001, it was estimated that 70 percent or 1.58 million hectares were collectively-owned land requisitioned by the government.2 As of 2007, China’s arable land per capita had fallen to 1.39 mu or 0.093 hectare, which is only a third of the world’s average.3 The depletion of agricultural land was accompanied by a rise in proceeds from land leasing. In 2006, total revenue from the leasing of state-owned land swelled to 767.7 billion yuan, a jump of 30 percent from that of 2004.4 The lucrativeness of land leasing, constitutes a strong revenue imperative for governments at various levels, propelling a host of intractable and unlawful government behaviour in the use of land. Since 1999, there had been over one million instances of unlawful land practices.5 George C. S. Lin and Samuel P. S. Ho, “China's Land Resources and Land-Use Change: Insights from the 1996 Land Survey,” Land Use Policy, No. 20 (2003), pp. 97. “Shui guanxin shidi nongmin de mingyun?” (“Who will care for the fate of landless farmers?”), Zhongguo jingji shibao (China Financial News), May 2003. One mu is equal to 0.067 hectare. In this thesis, I use “cultivated land” and “arable land” interchangeably to refer to “gengdi.” “Woguo tudi jiadi zhi duoshao?” (“How much you know about our country’s land assets?”), Zhonghua renmin gongheguo guotu ziyuan bu (The Ministry of Land and Resources P.R.C.), http://www.mlr.gov.cn, 20 November 2007, accessed 12 February 2008. “Zhongguo guotu ziyuan gongbao” (“China’s national land resources bulletin”), 2006, Zhonghua renmin gongheguo guotu ziyuan bu (The Ministry of Land and Resources P.R.C.), http://www.mlr.gov.cn, accessed December 2007. Zhang Xiaosong, “Tudi weifa xingwei chengxian san da xin tedian” (“Three new characteristics of unlawful land practices”), Jingji cankaobao (Economic Reference News), 17 April 2006, pp. 003. Yew Chiew Ping Chapter One Introduction According to the law enforcement bureau of the Ministry of Land and Resources (MLR), almost all severe cases of land offences involved government officials.6 From September to mid November 2007 alone, the MLR uncovered 32,000 cases of illegal land use involving 233,450 hectares of land. The majority of the cases had to with using and occupying land before obtaining approval, often for key construction projects at the national and provincial levels. Usual violators include cadres and political leaders at the prefecture-level and below, of various government departments such as the court, land and housing management bureau, construction bureau, and land resources bureau.7 More often than not, government officials at different levels and departments collude to take hold of collective land through unlawful means. In a typical case highlighted by the MLR, for example, one company’s illicit acquisition of land in a county of Henan was facilitated by a network of government officials including the county-level land and resources bureau chief, the county head and vice head, the former vice head of the county’s Standing Committee of the People’s Congress, the town party secretary, and village cadres.8 Some may contend that the extensive conversion of agricultural land for construction is hardly surprising given China’s rapid urbanization since the late 1970s. In under a decade, urban population increased from in 215.7 million in 1982 to 314.4 million in 1990, after which it boomed further to nearly 470 million or 37 percent of the entire Zhang Xiaosong, “Tudi tiaokong xinzheng jianzhi defang ‘tudi caizheng’” (“Macro-control of land targeted at ‘land financing’”), Xinhua meiri dianxun (Xinhua Daily News Bulletin), September 2006, pp. 001. “Quanguo tudi zhifa bairi xingdong tongbao de ba qi dianxing tudi weifa anjian chachu qingkuang” (“Report on the nation-wide hundred-day enforcement of land laws: investigation and prosecution of eight typical cases of land laws infringement”), Zhonghua renmin gongheguo guotu ziyuan bu (The Ministry of Land and Resources P.R.C.), http://www.mlr.gov.cn, 10 December 2007, accessed 13 December 2007; Yu Zeyuan, “Zhongguo jianchabu: jiang baochi gaoya chachu tudi weifa’an” (“China Ministry of Supervision to keep up unrelenting investigation and prosecution of unlawful land practices”), Lianhe zaobao (United Morning Post), 11 December 2007. Yu Zeyuan, “Zhongguo jianchabu.” Yew Chiew Ping Chapter One Introduction population in 2000.9 The demands of a growing population have fuelled the taking of agricultural land for urban development such as housing and other infrastructure. Yet alongside this urban spatial expansion propelled by demographic changes, a different path of urbanization has been observed since the mid-1990s. Instead of being driven by the needs of a bigger urban population, city expansion is motivated by land finance (tudi caizheng), whereby local governments raise revenue and attract investment through land leasing and land development that necessitate the extensive conversion of agricultural land.10 In other words, land is primarily used as an instrument to enhance the government’s fiscal situation rather than to accommodate a growing urban population. In view of these two concomitant processes of urbanization in China, it may be argued that attributing the conversion of agricultural land to the demands of urbanization only tells part of the story. The other part of the story revolves around the supply of agricultural land for conversion and what determines this supply. Since local officials are the key decision-maker empowered to manage and regulate the supply of land within the constraints of central policy, how local officials benefit from land use conversion and the ways in which their incentive structure is shaped by the institutional context are important to understanding the supply side of the story. The central role of local state agents in supplying land is further augmented in the context See Shen Jianfa, “Estimating Urbanization Levels in Chinese Provinces in 1982-2000,” International Statistical Review, Vol. 74, No. (2006), pp. 95. The figures are calculated based on the 1982, 1990 and 2000 censuses and have been adjusted to include a non-hukou population. 10 Refer to George C. S. Lin, “Reproducing Spaces of Chinese Urbanization: New City-Based and LandCentered Urban Transformation,” Urban Studies, Vol. 44, No. (2007), pp. 1832-33; Liu Mingxing, Tao Ran, Yuan Fei and Cao Guangzhong, “Instrumental Land Use Investment-Driven Growth in China,” Journal of the Asia Pacific Economy, Vol. 13, No. (2008), pp. 313-31. See also Lin Jiabin, “Dui ‘chengshi jingying’ re de toushi yu sikao” (“Insight and reflection on the ‘urbanization business’ fever”), Chengshi guihua huikan (Urban Planning Forum), No. (2004), pp. 10-13; Liu Shouying, “Jingti tudi jingying chengshihua de caizheng he jinrong fengxian” (“Be wary of the financial risks in using land deals to promote urbanization”), Lilun tantao (Theory Exploration), No. (2005), 46-47; Zhang Meng and Miao Jie, “Chengshi tudi jingying zhong de yige yidiyangdi moxing de fenxi yanjiu” (“The land financing model in urban land transactions: an analysis and study”), Quanguo shangqing (Nation’s Business News), No. 12 (2007), pp. 32-33. Yew Chiew Ping Chapter One Introduction of China, where the State monopolizes the supply of agricultural land for users who intend to utilize it for non-agricultural purposes.11 The central question this study asks, therefore, is: what determines local governments’ capacity in supplying agricultural land for conversion? The quest to answer this question begins from an investigation of the general incentives for and constraints on local officials in supplying land before delving into local variations. This thesis first raises the following query: in what ways does the supply of agricultural land for conversion serve as an instrument to local governments in fulfilling their objectives? Through a case study of a county-level city in Guangdong, it then poses the question of how this general incentive structure that shapes officials’ behaviour interact with local conditions, such as the local fiscal situation, path of development or industrialization, the availability of land resources and other resources, quality of governance etc., to determine local patterns of land use conversion. Since a crucial, if secondary, theme that runs through this study is the consequences of land use conversion, some attention shall also be devoted to answering these questions: What are the externalities of instrumental land use conversion? Under what conditions is it beneficial or detrimental for the society under local governance? Defining Land Use Conversion in this Study Under China’s Land Administration Law, land is classified into three categories according to usage: land for agriculture (nongyongdi), land for construction (jianshe yongdi), and unused land (wei liyong di). Land for agriculture is further subdivided into arable land (gengdi), forest (lindi), pasture (caodi), land for irrigation and water conservancy (nongtian shuili yongdi), and water surfaces for aquaculture (yangzhi shuimian). Of the categories of agricultural land, arable land is the core of the State’s concern. Land for construction refers to land on which buildings and other structures There are, of course, illegal means of getting agricultural land directly from rural collectives or peasants through the black market. 11 Yew Chiew Ping Chapter One Introduction are erected, including land used for housing in urban and rural areas, for public utilities, for industries and mining, for communications and water conservancy, for tourism and military installations and so on. Unused land refers to all land other than those for agriculture and construction.12 Figure 1.1 depicts how land is currently used in China. Figure 1.1 Land Use Distribution in China, 2007 (%) Cultivate d land 12.81 Unus e d Land 27.45 Orchards 1.24 Wate r Cons e rvancy 0.38 Fore s t land 24.84 Roads 0.26 Re s ide ntial, Indus trial and M ining 2.8 Othe r Agricultural land 2.68 Gras s land 27.54 Source: “Zhongguo guotu ziyuan gongbao,” 2007. In addition, land is also classified by ownership. Under the Land Administration Law, land in the urban areas of cities is owned by the State whereas land in rural and suburban areas is owned by peasant collectives (nongmin jiti), with the exception of that owned by the State as provided for by the law. Housing sites and private plots of cropland and hilly land are owned by peasant collectives.13 Land use conversion in this dissertation refers specifically to the process whereby land for agriculture is converted into land for construction. According to the Land Administration Law, Chapter 5, Article 43, 12 13 Refer to the Land Administration Law (Tudi guanlifa), Chapter 1, Article 4. Ibid., Chapter 2, Article 8. Yew Chiew Ping Chapter One Introduction all units and individuals that need land for construction purposes shall apply for the use of state-owned land in accordance with the law, with the exception of those who have lawfully obtained approval to use collectively-owned land of their own collective economic organizations to start town and township enterprises and build houses for villagers, or those who have lawfully obtained approval to used collectively-owned land to build public utilities and public welfare undertakings in a town(ship) and village.14 Since agricultural land is likely to be located in rural and suburban areas, land use conversion often involves a change of ownership from the peasant collectives to the State.15 After land use conversion is approved, collectively-owned land has to be first expropriated or requisitioned (zhengshou) from peasants, effectively transferring ownership to the State before it can be conveyed to potential users.16 Land use change, however, often takes place without going through the proper procedures outlined above. In 2005, the MLR’s surveillance of 16 cities through satellite remote sensing reveals that close to 50 percent of newly added land for construction were acquired unlawfully.17 A common way of violating the law is to convert agricultural land without a change of ownership.18 While maintaining collective-ownership, agricultural land is converted to land for construction through leasing, shareholding, transfer and exchange. Peasants lose their land use rights in the process and no land conveyance fee is paid to the State in the process.19 In other instances, local governments occupy arable land without accounting for the adjustment in their respective land use plan; they may also convert land for urban In general, though, the land use rights of collectively-owned land are not to be sold, transferred or leased for non-agricultural construction. See the Land Administration Law, Chapter 5, Article 63. 15 For a detailed analysis of land-use change based on the 1996 land survey, refer to Lin and Ho, “China’s land resources,” pp. 87-107. For land use change in China’s coastal region, see Ho, Samuel P. S. and George C. S. Lin, “Converting Land to Nonagricultural Use in China's Coastal Provinces: Evidence from Jiangsu,” Modern China, Vol. 30, No. (2004), pp. 81-112. 16 Refer to the Land Administration Law, Chapter 5, Article 45. Land expropriation has been a major cause of conflicts between villagers and officials, often because of low or unpaid compensation and other mis-implementations in the process. Refer to a case study in Chapter Six of this thesis. 17 Zhang Xiaosong, “Tudi tiaokong,” pp. 001. 18 With the exception of township and village enterprises (TVEs) and other undertakings specified in Article 43 of the Land Administration Law. 19 Yuan Ying and Kong Xiangzhi, “Nongcun gongyehua guocheng zhong tudi feinonghua moshi yanjiu” (“A study on the models of non-agricultural land use conversion in the process of rural industrialization”), Shanxi caijing daxue xuebao (Journal of the Shanxi University of Finance), Vol. 28, No. (2006), pp. 53-55. 14 Yew Chiew Ping Chapter One Introduction construction in the name of village building or collaborate with real estate developers to build properties on villagers’ land; others covertly approve or condone the illegal use of land.20 In short, land use change may be unlawful in two respects: nonagricultural activity is undertaken on collectively-owned agricultural land without the formal transfer of ownership from the collective to the State and/or without acquiring formal approval for conversion. Individual peasants may also violate land laws either by directly converting agricultural land to residential and other non-agricultural purposes or transferring land use rights to other non-agricultural users. The illegal conversion of land by peasants is driven by profits, especially in comparison with the returns from farming and other agricultural activities. In Shenzhen, for instance, villagers started building private houses and apartments to meet the housing demands of migrant workers from the 1980s. Rental income of villagers was estimated to be between 4,000 to 7,000 million yuan per year.21 The motivations for peasants are, however, beyond the scope of this thesis, which focuses on explaining motivations for local state agents. The Evolution of China’s Land Management System Under Deng Xiaoping’s leadership in the late 1970s, China embarked on a series of economic and political reforms with far-reaching consequences. The adoption of the open-door policy, the promotion of rural industrialization and private entrepreneurship, and the decollectivization of agriculture had transformed China’s economy. Although reform was accompanied by a new set of problems including “Guotubu dui shiliu chengshi jiance” (“The MLR monitors 16 cities”). See Wang Ruyuan, “Shenzhen tequ chengzhongcun tudi shouyi de lilun tantao” (“Land proceeds in Shenzhen’s villages-in-city: a theoretical analysis”), Guotu jingji (China Land Economy), No. 11 (2003), pp. 17-18; Tan Gang, “Chengzhongcun jingji zhuti, jingji huodong ji zhuyao tezheng” (“The economic entity, activity and characteristics of villages-in-city”), Kaifang daobao (Open Economy Herald), No. (2005), pp. 51-56. 20 21 Yew Chiew Ping Chapter One Introduction corruption and regional inequality, China achieved remarkable growth. Within a decade from 1978 to 1988, real GDP per capita more than doubled.22 Along with rapid economic development was the evolution of China’s land use trends. Reforms unleashed the pent-up demand for better infrastructure, housing and other modern amenities that led to the widespread conversion of agricultural land for construction purposes. In the 1980s, industries and warehouses occupied as much as 30 percent of the area in Chinese cities and rural industries in the form of township and village enterprises (TVEs) took land extensively in the countryside. The rapid expansion of roads also depleted large areas of agricultural land, particularly in eastern China where population density was high and the economy was fast growing.23 The extensive conversion of land to non-agricultural use brought with it a host of problems such as duplicate construction, idle land, and burgeoning local extrabudgetary funds that resulted in the loss of revenue accruing to the Centre. In the reform era, the misuse and loss of agricultural land to construction prompted the central government to circulate several notices and promulgate new rules to tighten land management. Capital construction (jiben jianshe), TVEs and village collectives were highlighted as responsible for taking most of the agricultural land, often unlawfully.24 This observation is affirmed by statistics on the land taken for nonagricultural purposes in Guangdong from 1987 to 1995, which show that an average of more than 60 percent were used for national construction projects and more than 22 Kenneth Lieberthal, Governing China: From Revolution Through Reform (New York & London: W. W. Norton & Company, 2004), pp. 129. 23 Samuel P. S. Ho and George C. S. Lin, “Non-Agricultural Land Use in Post-Reform China,” China Quarterly, No. 179 (2004), pp. 762-65. 24 Zhongfa document no. (1986), “Zhonggong Zhongyang, Guowuyuan guanyu jiaqiang tudi guanli, zhizhi luanzhan gengdi de tongzhi” (“Notice from the Party Central Committee and the State Council on strengthening control on land and stopping the indiscriminate taking of cultivated land”). Yew Chiew Ping Chapter One Introduction 20 percent for township and village collective construction, whereas less than 10 percent were taken by the building of rural housing.25 While the demands of urbanization triggered by the reforms were driving land use conversion at the macro-level, the institutional contexts in the first decade of the reform era and that from 1988 onwards are different, thereby influencing the set of incentives and constraints that structure cadres’ behaviour in the process of land use change. Prior to 1988, state-owned land was allocated to local users at virtually no cost whereas local-foreign joint-ventures paid an annual fee of five yuan to 300 yuan per square metre for the use of site (changdi shiyongfei).26 In 1988, the Constitution of the PRC and the Land Administrative Law were amended to legalize the paid transfer of land use rights.27 Furthermore, the collection of land use tax in cities and town was implemented in the same year, superseding the collection of the land use fee.28 Payment for the use of urban land was not fully implemented till 1988 although advocacy for doing so began in the early 1980s.29 The Land Administration Law provides the basic legal framework governing China’s land system. Enacted in 1986, the Land Administration Law was revised in 1988, 1998 and underwent minor amendments more recently on 28 August 2004, at the 11th Meeting of the Standing Committee of the 10th National People’s Congress.30 The 25 Guangdong dizheng dichan nianjian 1996 (Yearbook of Guangdong Land Governance and Land Resources 1996) (Guangdongsheng ditu chubanshe, 1996), pp. 278-79. 26 Guofa document no. 201 (1980), “Guowuyuan guanyu zhongwai heying qiye jianshe yongdi de zanxing guiding” (“The State Council’s provisional regulations on the use of construction land by sinoforeign joint ventures”); See also Zhu Jieming, “Local Growth Coalition: The Context and Implications of China’s Gradualist Urban Land Reform,” International Journal of Urban and Regional Research, Vol. 23, No. (1999), pp. 534-48. 27 Refer to the 1988 Land Administration Law, Article 2; Zhang Chuanjiu, “Shouwang dadi 20 nian” (“Watching over the land for 20 years”), Zhongguo tudi (China Land), No. (2006), pp. 4-8. 28 “Zhonghua renmin gongheguo xianfa xiuzhengan” (“Amendment to the Constitution of the PRC”), 1988; Guofa document no. 17 (1988), “Zhonghua renmin gongheguo chengzhen tudi shiyongshui zanxing tiaoli” (“The PRC’s Provisional regulations on land use tax in cities and towns”). 29 Anthony Gar-On Yeh and Wu Fulong, “The New Land Development Process and Urban Development in Chinese Cities,” International Journal of Urban and Regional Research, Vol. 20, No. (1996), pp. 334-35. 30 The 2004 amendments involve changing the Chinese term for requisition from “zhengyong” to “zhengshou.” For the reasons behind this change, refer to Sun Xiaohong, “Xi tudi ‘zhengshou’ yu ‘zhengyong’” (“An analysis of the ‘zhengshou’ and ‘zhengyong’ of land”), Zhejiang guotu ziyuan Yew Chiew Ping Chapter One Introduction Land Administration Law that exists today took shape in 1998. Among the main changes were the imposition of the land use plan from top-down; the classification of land into agricultural, construction and unused land and an approval system for the conversion of agricultural land; and the upward concentration of approval authority for land requisition into the hands of the central and provincial governments.31 Today, the existing law contains eight Chapters and 86 Articles codifying land ownership and land use rights, land use plan, protection of cultivated land, land used for construction, supervision and inspection of land use and so on.32 The leading government agency overseeing land management is the Ministry of Land and Resources (MLR), established in 1998 through the merger of the former State Bureau of Land Administration, the State Oceanic Administration, the State Bureau of Survey and Mapping, and the Ministry of Geology and Mineral Resources.33 Both the Land Administration Law and the former State Bureau of Land Administration were established in response to the alarming rate at which cultivated land was disappearing in the 1980s. From 1980 to 1985, around 37 million mu of cultivated land were lost nationwide, with rate of disappearance peaking at over 15 million mu in 1985.34 Massive land enclosure occurred after Deng Xiaoping’s southern tour in 1992, which led to the development zone and real estate fever.35 So (Zhejiang Land and Resources), No. 10 (2004), pp. 48-49; Wang Zhenzhong and Wang Kai, “Qianyi tudi zhengshou yu zhengyong zhidu” (“A preliminary discussion of the zhengshou and zhengyong of land”), Henan guotu ziyuan (Henan Land and Resources), No. (2006), pp. 16-17. 31 “Zhonghua renmin gongheguo tudi guanlifa” (“The Land Administration Law of the PRC”), revised on 29 December 1988, Zhonghua renmin gongheguo guowuyuan gongbao (The PRC State Council’s Gazette), No. 27 (1988), pp. 873-82; Mao Donglin, “Weile women de shengmingxian – ‘tudi guanlifa’ xiugai pingshu” (“For the sake of our lifeline – Assessing the revision of the ‘Land Administration Law’”), Kuangchan ziyuan kaifa (Mineral Resources Exploitation), No. 10 (1998), pp. 15-17; Zhu Daolin, “Falü, wei tudi shichang huhang” (“Safeguarding the land market with law”), Zhongguo tudi (China Land), No. (2006), pp. 9-10. 32 Refer to the Land Administration Law. For more information on the evolution of China’s land system, see Ding Chengri, “Land Policy Reform in China: Assessment and Prospects,” Land Use Policy, Vol. 20, No. (2003), pp. 110-13. 33 The State Bureau of Land Administration was set up a month after the promulgation of the Land Administration Law in 1988. See Zhang Chuanjiu, “Shouwang dadi,” pp. 5. 34 See Zhang Chuanjiu, “Shouwang dadi,” pp. 4. 35 Zhang Xiaojing and Sun Tao, “China’s Current Real Estate Cycle and Potential Financial Risks,” China & World Economy, Vol. 14, No. (2006), pp. 59-60; Carolyn Cartier, “‘Zone Fever’, the Arable Yew Chiew Ping 10 Chapter One Introduction far, the State had taken drastic measures in the form of moratoriums to arrest the loss of cultivated land. On 20 May 1997, a moratorium on non-agricultural construction taking up cultivated land was imposed and its one year duration was subsequently extended in 1998 till the revision of the Land Administration Law was complete.36 However, not long after the tightening of control over the approval of land use conversion, land requisition and others in the revised law, the area of arable land used for construction began to rise again, soaring to 3.4 million mu in 2003 from 2.4 million mu in 2000.37 From 2001 to 2005, the area of arable land decreased by 92.4 million mu at an annual depletion rate of 18.48 million mu.38 On 18 July 2003, the State Council issued a notice to suspend the approval of all development zones, together with complementary measures to remove illegal development zones.39 For half a year till November 2004, all approval for the conversion of agricultural land to construction land was also shelved.40 Yet again, presumably due to the pent-up demand for land use conversion whilst the moratorium was in effect, the arable land used for construction picked up with a vengeance after the ban was lifted, rising over Land Debate, and Real Estate Speculation: China’s Evolving Land Use Regime and Its Geographical Contradictions,” Journal of Contemporary China, Vol. 10, No. 28 (2001), pp. 468; Zhang Chuanjiu, “Shouwang dadi,” pp. 6. 36 Guojia tudi guanli ju and Guojia jihua weiyuanhui, document no. (1997), “Dongjie feinongye jianshe xiangmu zhanyong gengdi guiding” (“The regulation on freezing the taking of arable land for nonagricultural construction items”); “Guojia jiang jixu dongjie feinong jianshe zhanyong gengdi” (“The State to continue the moratorium on the taking of arable land for non-agricultural construction”), Xin nongcun (New Village), No. (1998), pp. 2; “1998: tudi guanli dashiji” (“1998: major events in land management”), Renmin ribao (Peoples’ Daily), 26 June 1998, pp. 9. 37 “Zhongguo guotu ziyuan gongbao” (“China’s national land resources bulletin”), 2001-2006, Zhonghua renmin gongheguo guotu ziyuan bu (The Ministry of Land and Resources P.R.C.), http://www.mlr.gov.cn, accessed December 2007. 38 Zhang Chuanjiu, “Shouwang dadi,” pp. 7. 39 Guoban faming dian document no. 30 (2003), “Guowuyuan bangongting guanyu zanting shenpi gelei kaifaqu de jinji tongzhi” (“An emergency notice from the State Council on the temporary freeze on the approval for all types of development zones”); Guotuzifa no. 45 (2003), “Guotu ziyuanbu guanyu qingli gelei yuanqu yongdi, jiaqiang tudi gongying tiaokong de jinji tongzhi” (“The MLR’s emergency notice regarding the cleaning up of all types of zones and strengthening control over land supply”); Fagaiwaizi document no. 2343 (2003), “Guotu ziyuanbu guanyu qingli zhengdun xianyou gelei kaifaqu de juti biaozhun he zhengce jiexian” (“The MLR on specifications and policy limits on the administration and restructuring of all existing development zones”). 40 Guoban faming dian document no. 20 (2004), “Guowuyuan bangongting guanyu shenru kaizhan tudi shicahng zhili zhengdun yange tudi guanli de jinji tongzhi” (“An emergency notice from the State Council on deepening the administration and restructuring of the land market and tightening land management”). Yew Chiew Ping 11 Chapter One Introduction 70 percent from 2.2 million mu in 2004 to 3.9 million mu in 2006.41 From 2007, the provincial government has taken on the responsibility of auditing all requests for the conversion of agricultural land and land requisition under their jurisdiction before submitting them for the State Council’s approval.42 The arable land taken for construction subsequently declined to 2.82 million mu in 2007, rising slightly to 2.87 million mu in 2008 (see Figure 1.2).43 Figure 1.2 Trends in China’s Non-Agricultural Land Use 8000 4.5 6866 7000 3.88 3.5 3.43 6000 2.87 2.95 5000 2.18 2.46 4000 3000 2053 2.82 2.5 2.08 2037 2000 1.5 1568 1000 0.5 2001 2002 2003 2004 2005 2006 2007 2008 No. of Developm ent Zones Arable Land Occupied for Cons truction (m illion m u) Sources: “Zhongguo guotu ziyuan gongbao” (“China’s national land resources bulletin”), 2001-2008, Zhonghua renmin gongheguo guotu ziyuan bu (The Ministry of Land and Resources P.R.C.), http://www.mlr.gov.cn, accessed on various dates; Zhang Pu and Li Xiaowen, “Fangzhi kaifaqu weifa quandi xinsikao” (New thoughts on preventing illegal land enclosures by development zones), Zhongguo tudi (China Land), No. (2007), pp. 15; “Guojia fazhan gaigewei quanwei jiedu kaifaqu qingli zhengdun gongzuo” (“The State Development and Reform Committee’s authoritative interpretation of the reduction and restructuring of development zones”), Zhongguo touzi (China Investment), No. (2007), pp. 20. “Zhongguo guotu ziyuan gongbao”; Guotuzifa document no. 45 (2003), “Guotu ziyuanbu guanyu qingli gelei yuanqu yongdi, jiaqiang tudi gongying tiaokong de jinji tongzhi” (“The MLR’s emergency notice regarding the cleaning up of all types of zones and strengthening control over land supply”). The moratorium on the approval of land use in State-level development zones was subsequently lifted in 2005. See Guobanfa document no. 15 (2005), “Guowuyuan bangongting zhuanfa shangwubu deng bumen guanyu cujin guojiaji jingji jishu kaifaqu jinyibu tigao fazhan shuiping ruogan yijian de tongzhi” (“A State Council Office’s notice on the circulation of some suggestions by the Ministry of Commerce and others on advancing the development of State-level economic technology development zones”). 42 Guotuzifa document no. 320 (2006), ‘Guanyu tiaozheng bao Guowuyuan pizhun chengshi jianshe yongdi shenpi fangshi youguan wenti de tongzhi” (“A notice on the issues related to the adjustment of the verification method for urban construction land to be submitted to the State Council for approval”). 43 Zhongguo guotu ziyuan gongbao.”. 41 Yew Chiew Ping 12 Chapter One Introduction Table 1.1 Chronology of Events in China’s Land Management44 1980-1985 1986 1987 1988 • • • • • • • 1990-1996 1990 • 1992 • 1992 • 1993 • 1997 • 1997 • 1998 • • • • 2001-2005 2003 2003 • 2004-2006 2004 • • • 2005 2006 • • • • • 2006 • 2007 • Loss of around 36.8 million mu of arable land Enactment of the Land Administration Law (LAL) Establishment of the State Bureau of Land Administration The first paid conveyance of land use rights took place in Shenzhen Amendment of the Constitution of the PRC to legalize the paid transfer of land use rights Amendment of the LAL to legalize the paid transfer of land use rights Implementation of the collection of land use tax in cities and town, superseding the collection of the land use fee Loss of 72.77 million mu of arable land Enactment of new legislation to legalize the secondary transfer of land use rights of state-owned land in towns and townships and that by foreign investors There were 1,951 development zones all over China with a total planned area of 15,300 square kilometres The State Council issued an urgent notice to stop the indiscriminate encroachment and use of arable land Enactment of “provisional rules on the levy of land appreciation tax on the profits from the transfer of land use rights and buildings and other attachments on land” There were 4,210 development zones in China with a total planned area of 12,400 square kilometres Imposition of a moratorium on non-agricultural construction taking up cultivated land Extension of the 1997 moratorium Amendment of the LAL Establishment of the Ministry of Land and Resources (MLR) 13.1 million mu of arable land were taken for construction purposes The number of development zones in China hit 6,866 Imposition of a moratorium on the approval of all development zones, together with complementary measures to remove illegal development zones The number of development zones fell from 2,053 to 1,568 Amendment of the LAL Imposition of a moratorium on the conversion of agricultural land for nonagricultural construction from April to November The MLR issued specific guidelines on the restructuring of development zones Moratorium lifted for State-level development zones Arable land taken for construction purposes soars to 3.88 million mu from 2.08 million mu in the previous year Provincial governments delegated with greater responsibility in auditing requests for the conversion of agricultural land and land requisition under their jurisdiction Arable land taken for construction purposes fell to 2.82 million mu Significance The choice of research topic is justified in a few respects. Firstly, the significance of land use in China is self-evident with regard to the scarcity of land. Despite having the third largest land mass in the world, China’s land per capita is but a third of the world’s average.45 How land is managed to mitigate the consequences of its scarcity 44 For the data on arable land loss and the number of development zones, refer to Zhang Chuanjiu, “Shouwang dadi,” pp. 4; Lin and Ho, “China’s Land Resources,” pp. 96; “Zhongguo guotu ziyuan gongbao,” 2001-2005; Zhang Pu and Li Xiaowen, “Fangzhi kaifaqu,” pp. 15; “Guojia fazhan gaigewei,” pp. 20; “Zhongguo kaifaqu fenbu tubiao” (“The distribution of development zones in China”), MLR website, http://www.mlr.gov.cn, accessed 14 June 2008. For other sources, refer to footnotes 26 to 42 in this chapter. 45 “Woguo tudi jiadi zhi duoshao?” Yew Chiew Ping 13 Chapter One Introduction is therefore critical. Some propose that, in contrast to highly mobile labour and capital, land is the sole basic factor of production that still remains under the socialist state’s control in today’s globalized context.46 Yet evidence suggests that this control is constantly being challenged, and that the fragmented Chinese state is grappling to rein in the misuse of her most valuable asset by her agents. As later parts of this thesis shall demonstrate, indiscriminate land use conversion has led to duplicate construction, reckless industrialization, arbitrary city expansion and large areas of idle land.47 Studies have also shown that a reduction in arable land area does not necessarily lead to GDP growth, pointing to the questionable efficacy of land use.48 Understanding the motivations behind local governments’ zealous pursuit of land development is thus key to arresting the trend in indiscriminate and irresponsible land use conversion. Secondly, the rural community, which makes up 57 percent of China’s population, is at the receiving and losing end of land use change and land expropriation.49 From the mid-1990s, China’s investment-driven urbanization and industrialization have displaced large numbers of rural residents from the periphery of cities and industrial locations.50 “Since much of the land for urban expansion has actually been acquired from the countryside,” argue Lin and Ho, “it would not be possible to understand the complex processes of land development without a close scrutiny of how land is taken 46 George C. S. Lin and Samuel P. S. Ho, “The State, Land System, and Land Development Processes in Contemporary China.” Annals of the Association of American Geographers, Vol. 95, No. (2005), pp. 413. 47 See Yang Dali, Book Review, American Political Science Review, Vol. 94, No. (2000), pp. 491; Xing Yuzhong, “Zhizhi chongfu jianshe, dujue mangmu yongdi” (“Curb duplicate construction and eliminate indiscriminate use of land”), Zhongguo tudi (China Land), No. (1999), pp. 25-27; Cartier, “‘Zone Fever’,” pp. 454-57; Zhou Wenshui, “‘Zhengji gongcheng’ la chengzhen jianshe ‘xiashui’” (“‘Showcases of political achievement’ extend to the building of cities and towns”), Shidai chao (Trend of the Time), No. (2003), pp. 34-35. 48 Chen Baiming and Du Hongliang, “Shilun gengdi zhanyong yu GDP zengzhang de tuogou yanjiu” (“A decoupling study on arable land occupation and GDP growth),” Ziyuan kexue (Resource Science), Vol. 28, No. (2006), pp. 36-42; Tan Rong, Qu Futian, and Guo Zhongxing, “Zhongguo gengdi feinonghua dui jingji zengzhang gongxian de diqu chayi fenxi” (“The conversion of agricultural land and its contribution to economic growth in China: an analysis of regional disparity),” Changjiang liuyu ziyuan yu huanjing (Resources and Environment in the Yangtze Basin), Vol. 14, No. (2005), pp. 277-81. 49 Zhongguo tongji nianjian 2006 (China Statistical Yearbook 2006), Li Xiaochao et al. (eds.), (Zhongguo tongji chubanshe, 2006), pp. 99. 50 Liu Mingxing et al., “Instrumental Land Use,” pp. 313-14. Yew Chiew Ping 14 Chapter One Introduction away from the rural collective at low cost for high-value urban development.”51 Indeed, the urban-rural disparity in land value has encouraged opportunistic and predatory behaviour towards the politically weak peasants. As local governments resort to land sales to finance urban infrastructure, the requisition of rural land at low cost has become an easy and vital means for them to amass land for sale.52 Land expropriation, compensation and related issues, which often involve a direct conflict of interests between local state actors and peasants, have become the main reasons for villagers’ appeals and complaints to higher authorities.53 Considering China’s large rural population and growing numbers of “landless farmers,” estimated to be around 50 to 60 million, the impact of land use change and land expropriation on rural stability is surely worth looking into.54 Case Study and Selection Bias In seeking answers, this study draws on existing theories and empirical evidence from Western and Chinese literature on the subject, supplemented by the author’s fieldwork in Sihui, located in Zhaoqing of the Guangdong province. Guangdong is chosen as the site of this study for several reasons. According to the 1996 national land survey, the conversion of agricultural land to non-agricultural use in the 1990s was concentrated in eastern and central China, especially the eastern coastal region which occupies less than ten percent of China’s land area but has disproportionately large areas of arable land and non-agricultural land at 22 percent Lin and Ho, “The State, Land System”, pp. 414. George E. Peterson, “Land Leasing and Land Sale as an Infrastructure-Financing Option,” World Bank Policy Research Working Paper 4043, 2006, The World Bank, http://www.worldbank.org, accessed 12 February 2008. 53 Zhang Shi, “Qunzhong xinfang huodong de tedian ji qi fenxi” (“Characteristics and analysis of the public's appeal activity”), Guangzhou shehui zhuyi xueyuan xuebao (Journal of Guangzhou Institute of Socialism), No. (2004), pp. 17-19; Ji Zhongji, “Nongcun xinfang jubao duo de yuanyin ji duice” (“Reasons and solutions for the high numbers of village appeals and reports”), Zhongguo jiancha (China Surveillance), No. (2005), pp. 26; Lu Ying and Hu Hao, “Shedi xinfang anjian de tedian ji chuli cuoshi” (“The characteristics and measures in dealing with land related appeals”), Guotu ziyuan (Land and Resources), No. (2005), pp. 38-39. 54 Liao Xiaojun, Zhongguo shidi nongmin yanjiu (Research on China's Landless Farmers) (Beijing: Shehui kexue wenxian chubanshe, 2005), pp. 98-99. 51 52 Yew Chiew Ping 15 Chapter One Introduction and 39 percent respectively.55 In contrast, agricultural land had expanded through the conversion of unused land in western China over the same period.56 Table 1.2 Land Use in China by Region in 1996 (hectares) Total Agricultural Land NonWater Area Unused Agricultural Land Cultivated Land Land China 950,676,195 633,736,518 130,039,229 29,542,982 42,308,827 245,087,868 East 131,890,053 93,419,224 36,955,888 11,001,852 11,775,492 15,693,485 Central 281,590,107 222,432,293 56,118,890 11,754,037 13,908,260 33,495,517 West 537,196,036 317,885,001 36,964,452 6,787,093 16,625,075 195,898,867 Source: Lin and Ho, “China’s Land Resources,” pp. 96, citing from Liu Y. (ed.), Zhongguo tudi ziyuan diaochu shujuji (Compilation of results from the survey of China’s land resources) (Quanguo tudi ziyuan diaocha bangongshi, Beijing, 2000). The trends described above also means that tension between farming and nonagricultural land use is high in the eastern coast, as attested to by the situation in Guangdong.57 The magnitude and growth of both land use conversion and land expropriation in Guangdong underscores the far-reaching impact and repercussions of these land processes. Figure 1.3 depicts the loss of arable land to non-agricultural construction in Guangdong in the decade prior to 2000. Guangdong was also one of the provinces that requisitioned the greatest area of land in 2004 and 2005.58 Table 1.3 shows the area of land expropriated by various Guangdong prefectures from 2004 to 2006. The total area of land expropriated in Guangdong nearly trebled from 2004 to 2005. A number of prefectures at varying levels of development from a GDP per capita of around 5,000 yuan to over 70,000 yuan – Shaoguan, Shantou, Zhaoqing, Shanwei, Heyuan, Dongguan and Zhongshan – saw a staggering growth Ho and Lin, “Non-Agricultural Land Use,” pp. 760. The east coast refers to Beijing, Tianjin, Hebei, Shandong, Shanghai, Jiangsu, Zhejiang, Fujian, Guangdong, and Hainan but excludes the northeastern provinces of Liaoning, Jilin and Heilongjiang. 56 Western China, which encompasses Guangxi, Sichuan, Guizhou, Yunnan, Tibet, Gansu, Qinghai, Ningxia and Xinjiang, had seen an increase in agricultural land accompanying a decline in unused land in the 1990s. Concurrently, there was also an increase in non-agricultural land in the west. The central concern of this thesis, i.e. the conversion of agricultural land to non-agricultural use, at first glance, may appear to be of little relevance to western China. However, because the actual conversion between land types is not known, the increase in non-agricultural land cannot be wholly attributed to direct conversion from unused land. This means that the possibility of using unused land to replace agricultural land that had been converted to non-agricultural use cannot be ruled out. Refer to Ho and Lin, “Non-Agricultural Land Use,” pp. 761. 57 China’s diversity notwithstanding, Guangdong’s land use pattern has been quite similar to that of other coastal provinces. Refer to Ho and Lin, “Non-Agricultural Land Use,” pp. 772-73. 58 Zhongguo tongji nianjian 2005 (China Statistical Yearbook 2005), Zheng Jingping et al. (eds.), (Zhongguo tongji chubanshe, 2005), pp. 381; Zhongguo tongji nianjian 2006, pp. 396. 55 Yew Chiew Ping 16 Chapter One Introduction in the area of land expropriated in 2005 from the previous years.59 Over the period of 2004-2006, 18,416 hectares of agricultural land were lost, of which 7,386 hectares or 40 percent were arable land. In the process, 274,911 peasants were resettled.60 The scale of land use change and land expropriation in Guangdong makes it an ideal site for investigating how agricultural land has been taken away from peasants to meet the needs of local governments. Figure 1.3 Loss of Cultivated Land to Non-Agricultural Construction in Guangdong (hectares) 18000 16000 14000 12000 10000 8000 6000 4000 2000 1999 1998 1997 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 Sources: Guangdong dizheng dichan nianjian 1996, pp. 278-79; Guangdong dizheng dichan nianjian 1999, pp. 366-67; Guangdong guotu ziyuan nianjian 2000, pp. 277. 59 For the GDP levels of Guangdong’s prefectures, refer to Guangdong tongji nianjian 2005 (Guangdong Statistical Yearbook 2005), Pu Xinmin et al. (eds.), (Beijing: Zhongguo tongji chubanshe, 2005), pp. 87. Curiously, the 2004 national moratorium on land use change approval did not seem to have slowed down the rate of land expropriation in some localities such as Foshan, Zhanjiang, Chaozhou and Jieyang. Refer to the statistics in Guangdong guotu ziyuan nianjian 2005 (Guangdong Land Resources Yearbook 2005), Lin Haokun et al. (eds.), (Guangdongsheng ditu chubanshe, 2005), pp. 358; Guangdong guotu ziyuan nianjian 2006 (Guangdong Land Resources Yearbook 2006), Lin Haokun et al. (eds.), (Guangdongsheng ditu chubanshe, 2006), pp. 427; Guangdong guotu ziyuan nianjian 2007 (Guangdong Land Resources Yearbook 2007), (Guangdongsheng ditu chubanshe, 2007), pp. 497. 60 Guangdong guotu ziyuan nianjian 2005, pp. 358; Guangdong guotu ziyuan nianjian 2006, pp. 427; Guangdong guotu ziyuan nianjian 2007, pp. 497. Yew Chiew Ping 17 Chapter One Introduction Table 1.3 Land Expropriated in Guangdong61 (hectares) 2004 Total Land Expropriated Agricultural Land 2005 Total Land Expropriated Cultivated Land 1482.92 422.38 19.25 187.90 26.96 36.93 6.36 1.55 54.23 67.36 3.65 54.95 106.22 132.56 133.92 40.01 117.25 71.44 Agricultural Land 2006 Total Land Expropriated Cultivated Land 3543.83 605.71 126.56 11.98 168.00 5.37 7.14 24.54 54.02 117.36 137.11 61.04 19.51 94.49 149.12 338.13 420.10 22.91 13.65 87.51 1079.58 Agricultural Land GUANGDONG 4218.49 3457.89 11730.76 9736.02 6415.79 5222.37 Guangzhou 1008.45 823.88 1860.63 1633.74 779.89 699.66 Shaoguan 27.23 26.12 253.01 227.21 160.33 151.39 Shantou 0.46 0.01 18.28 11.98 5.23 5.19 Foshan 677.23 590.28 529.28 467.20 355.39 309.39 Jiangmen 164.47 120.64 56.24 9.13 68.51 64.80 Zhanjiang 80.76 54.96 38.41 27.58 43.86 16.68 Maoming 13.65 13.65 71.28 68.95 50.87 35.39 Zhaoqing 1.92 1.88 116 100.97 82.78 81.69 Huizhou 249.49 240.96 340.22 277.61 307.76 241.64 Meizhou 175.95 96.81 295.77 254.86 101.51 97.50 Shanwei 5.84 5.84 98.22 73.32 58.93 35.49 Heyuan 6.05 4.99 34.16 21.16 219.66 173.58 Yangjiang 182.38 120.79 327.69 167.35 364.33 291.63 Qingyuan 132.08 114.50 379.85 268.64 134.90 118.53 Dongguan 904.58 709.26 2601.8 1855.17 1855.29 1305.84 Zhongshan 246.88 236.19 639.92 604.79 573.37 508.58 Chaozhou 77.7 65.10 34.67 34.64 105.05 102.41 Jieyang 145.92 127.79 41.07 14.87 67.49 64.81 Yunfu 117.45 106.24 230.69 204.60 145.09 137.77 Approved by the State 0 3763.57 3412.25 935.54 780.40 Council Sources: Guangdong guotu ziyuan nianjian 2005, pp. 358; Guangdong guotu ziyuan nianjian 2006, pp. 427; Guangdong guotu ziyuan nianjian 2007, pp. 497. 61 Cultivated Land 2359.24 333.00 98.94 5.19 70.68 31.62 12.77 7.06 43.80 83.54 86.12 32.68 120.97 213.63 48.42 237.82 401.14 81.77 58.57 54.59 336.92 Excluding Shenzhen and Zhuhai. Yew Chiew Ping 18 Chapter One Introduction Since the author’s fieldwork was carried out in Guangdong, one of the most affluent provinces, the study does not claim that its findings can be generalized to all of China. Biases may stem mainly from Guangdong’s land use distribution, its high level of urbanization and economic development in comparison to the provinces in central and western China (see Table 1.4), and how these interact with local officials’ incentives for converting agricultural land. Table 1.4 Gross Regional Product and Urbanization Level by Province Region Gross Regional Product Urbanization Level (100 million yuan) in 2006 (%) in 2000 Beijing 7870.28 77.55 Tianjin 4359.15 71.99 Hebei 11660.43 26.33 Shanxi 4752.54 35.21 Inner Mongolia 4791.48 42.70 Liaoning 9251.15 54.91 Jilin 4275.12 49.66 Heilongjiang 6188.90 51.53 Shanghai 10366.37 88.31 Jiangsu 21645.08 42.25 Zhejiang 15742.51 48.67 Anhui 6148.73 26.72 Fujian 7614.55 41.96 Jiangxi 4670.53 27.69 Shandong 22077.36 38.15 Henan 12495.97 23.44 Hubei 7581.32 40.48 Hunan 7568.89 27.50 Guangdong 26204.47 55.66 Guangxi 4828.51 28.16 Hainan 1052.85 40.68 Chongqing 3491.57 33.09 Sichuan 8637.81 27.09 Guizhou 2282.00 23.96 Yunnan 4006.72 23.38 Tibet 291.01 19.43 Shaanxi 4523.74 32.15 Gansu 2276.70 23.95 Qinghai 641.58 32.34 Ningxia 710.76 32.44 Xinjiang 3045.26 33.84 Sources: Zhongguo tongji nianjian 2007 (China Statistical Yearbook 2007), Li Xiaochao et al. (eds.), (Zhongguo tongji chubanshe, 2007), pp. 68; Shen Jianfa, “Estimating Urbanization Levels,” pp. 100. As mentioned earlier, in comparison to central and western China, eastern coastal provinces have disproportionately large areas of arable land and non-agricultural land.62 Officials in eastern cities, therefore, have less unused and other agricultural land to tap on for construction purposes. Since large areas of land have already been 62 Ho and Lin, “Non-Agricultural Land Use,” pp. 760. Yew Chiew Ping 19 Chapter One Introduction used for non-agricultural purposes and arable land is under strict protection, this means that future supply of land for construction is relatively scarce. Furthermore, demand for non-agricultural land in the coastal region is higher. Figure 1.4 depicts the loss of cultivated land by cause and regions in 1994. The decline in cultivated to construction purposes – state construction, collective construction and rural housing – ranged from 30 percent in the east, to 12 percent in central China and 11 percent in the west. Figures 1.5 and 1.6 also provide more current evidence of a higher demand for non-agricultural land in the east than in other regions. In addition, the area of land requisitioned by the State in different regions may also serve as a rough gauge. In 2006, for example, the average areas of land requisitioned in the east coast and the west were 94.3 square kilometres and 22.4 square kilometres respectively.63 Figure 1.4 Decline in Cultivated Land (hectares) in 1994 by Cause and Region East Chinaa 52425 22% 74028 30% 13821 6% 4075 2% 99304 40% Central Chinab 41599 12% 22895 7% 14012 4% 3718 1% 265904 76% 63 Zhongguo tongji nianjian 2007, pp. 396. Yew Chiew Ping 20 Chapter One Introduction West Chinac 25344 13% 14474 7% 3787 2% 3933 2% 145917 76% State cons truction Rural Hous ing Natural dis as te r Colle ctive cons truction Othe r agricultural us e Source: Lin and Ho, “China’s Land Resources,” pp. 103. a Liaoning, Beijing, Tianjin, Hebei, Shandong, Jiangsu, Shanghai, Zhejiang, Fujian, Guangdong, Hainan, Guangxi b Heilongjiang, Jilin, Inner Mongolia, Shanxi, Henan, Anhui, Jiangxi, Hubei, Hunan c Sichuan (including Chongqing), Guizhou, Yunnan, Qinghai, Tibet, Shaanxi, Ningxia, Ganxu, Xinjiang Figure 1.5 Conveyance of Land by Region (%), 2008 Ce ntral, 25.2 Eas t, 51.3 We s t, 23.5 Source: “Zhongguo guotu ziyuan gongbao,” 2008. Figure 1.6 Approved Use of Land for Construction by Region (%), 2008 Central, 29.3 East, 40 West, 30.7 Source: “Zhongguo guotu ziyuan gongbao,” 2008. Yew Chiew Ping 21 Chapter One Introduction Greater demand for land in coastal China may be attributed to a few factors. For one, new construction land is necessary to accommodate its growing urban population.64 An estimation of rural-urban migrants at the end of 1998 reveals that 81 percent of all migrants come from inland areas, mostly relocating to other provinces in the coastal region.65 Moreover, land is desired by government officials for city-building and for the substantial earnings from land leasing. A comparison of land prices in three cities in Jiangsu, Anhui and Sichuan, for instance, shows that commercial and industrial land commands the highest price in coastal Jiangsu at an average of 356 yuan per square metre whereas that in Sichuan is 143 yuan per square metre.66 Lastly, there is also greater demand for land from commercial and industrial land users because of the competitive advantages of coastal provinces, such as better infrastructure and system of transportation etc.67 The ways in which the aforementioned factors may interact with officials’ cost-benefit calculations in supplying land for conversion throw up further questions. For instance, does the relative shortage of land, coupled with higher demand and land prices, intensify illegal land use conversion in coastal provinces such as Guangdong? Conversely, local governments exercise greater restraint and prudence in land conversion and development because of the higher opportunity costs? What is the relationship between land leasing and the availability of other revenue sources? 64 Rural-urban migration is the dominant source of urban population growth in China from 1978-1999. See Kevin Zhang Honglin and Song Shunfeng, “Rural-Urban Migration and Urbanization in China: Evidence from Time-Series and Cross-Section Analyses,” China Economic Review, Vol. 14 (2003), pp. 390. 65 Kevin Zhang Honglin and Song Shunfeng, “Rural-Urban Migration,” pp. 389-91. 66 Wang Xiaoying, He Mingyu and Gao Yong, “Woguo nongdi zhuanyong zhong de tudi shouyi fenpei shizheng yanjiu” (“An Analysis of the Distribution of Land Proceeds in the Conversion of Agricultural Land for Construction in China”), Rural Development Institute, Chinese Academy of Social Sciences, available at http://rdi.cass.cn, accessed February 2007. 67 Zou Wei, Zhang Fen and Zhuang Ziyin and Song Hairong, “Transport Infrastructure, Growth, and Poverty Alleviation: Empirical Analysis of China,” Annals of Economics and Finance, Vol. 9, No. (2008), pp. 345-71; Sylvie Démurger, “Infrastructure Development and Economic Growth: An Explanation for Regional Disparities in China?” Journal of Comparative Economics, Vol. 25 (2001), pp. 95-117. Yew Chiew Ping 22 Chapter One Introduction Taking the above factors into consideration, the scenario for officials converting agricultural land in western and central regions will, of course, be different from that in coastal China. It may be surmised that urbanization in the sense of a shift from rural-agricultural activity to urban-industrial activity casts a greater influence on land use conversion in the eastern coastal provinces than in provinces in less developed regions. While the general incentives for and constraints on land use conversion discussed in this study may apply broadly to all localities, local conditions in less developed counties in central and western China have to be taken into account. The demand for and supply of land, the local government’s fiscal situation and the locality’s path of development etc. interact with the general incentive structure differently to produce varying effects on land use conversion. On the other hand, limitations on the applicability of this study may be partly mitigated by testing hypotheses against more comprehensive data on the subject, such as through comparison with existing statistical evidence and empirical studies to increase the number of observations.68 Guangdong’s regional patterns of land use change will be analyzed alongside nationwide trends in this study. Data collected from fieldwork is juxtaposed with statistical evidence at the national level and that of other provinces to advance a more general understanding on the issue from a broader perspective. Structure of This Study The next chapter reviews alternative explanations for land use conversion in China and offers a coherent framework in studying local patterns of land use conversion. It proposes that the demands of macro-processes such as industrialization and urbanization are not adequate in explaining the conversion of agricultural land to non68 Since a small number of observations coupled with several explanatory variables imply that the research design may be indeterminate, it helps to increase the number of observations. See Gary King, Robert O. Keohane and Sidney Verba, Designing Social Inquiry: Scientific Inference in Qualitative Research (Princeton, New Jersey: Princeton University Press, 2004), pp. 120-21. Yew Chiew Ping 23 Chapter One Introduction agricultural use in China. Similarly, problems and flaws in China’s land system also not provide sufficient motivations. Rather, the determinants of land use conversion include a number of structural, institutional and agential factors. The political and fiscal institutions that shape officials’ behaviour are important but a comprehensive study also considers local conditions and the way these local-specific factors interact with officials’ incentives in explaining local variations in the extent of land use change. Chapters Three and Four look into the incentives for and constraints on land use conversion by local officials from 1988 to the present. The commercialization of land since 1988 has strengthened local governments’ incentives to profit from land. Growing expenditures and diminishing revenue sources in the 1994 and post-1994 tax sharing reforms such as the cancellation of agricultural taxes have compelled local government to seek alternative revenue sources increasingly derived from land and land development activities. Land revenues comprising of miscellaneous ad hoc fees and land rent have grown into a substantial “land coffer” beyond the withinbudget fund that is at the disposal of the local government, who may use it to fund land development activities or the operating expenses of public offices and so on. Chapter Four suggests that the precedence of economic goals such as GDP levels, the amount of tax revenues etc. in the evaluation of cadres’ performance prompts local officials to use land to expand the urban built-up area and generate revenue in order to maximize their careers. This government engineered, land-centred urban sprawl, which may not be predicated on the demands of urbanization in the sense of a shift from rural-agricultural activity to urban-industrial activity, has led to externalities in the form of large-scale but underutilized infrastructure construction and the proliferation of development zones that impose considerable costs on society. Yew Chiew Ping 24 Chapter One Introduction Chapter Five and Six present a case study of land use conversion in Sihui. Chapter Five examines local conditions such as Sihui’s geographical landscape and fiscal requirements that impose constraints on the government’s capacity in supplying agricultural land for conversion. It also shows how these restrictions interact with officials’ incentives in converting land, which are reinforced by the upper level governments’ emphasis on industrialization and the relocation of industries from the Pearl River Delta. Concurrently, local officials also sought to profit from higher land prices through the expansion of Sihui’s city district. Together, these land development processes, which encroached upon agricultural land, generated considerable amounts of taxes and land revenues for the local coffer. Through the case study of Xiamao town in Sihui, Chapter Six demonstrates how the conversion of agricultural land to accommodate the inflow of industries translates into direct benefits for local cadres. It also suggests that officials’ political careers may be jeopardized under certain conditions when they convert land illegally to fulfil economic targets. Furthermore, although Sihui’s officials had profited and maximized revenues through appropriating agricultural land at low cost and leasing it at high prices, little was spent in return on collective goods. This evidence, together with the detrimental consequences of indiscriminate land use conversion – environmental degradation, idle land, and rural disputes over land issues – point to the local government’s instrumental supply of land as a kind of predatory behaviour. The concluding chapter extends lessons from land use conversion in Sihui to China as a whole. The discussion covers the broader implications of land use change, in particular the feasibility and sustainability of an urban-biased developmental strategy in societies with a large rural sector and rural population, and the consequences of governments’ reliance on land use conversion to raise revenue while expending little in return on the rural sector and the society. Furthermore, the chapter outlines some Yew Chiew Ping 25 Chapter One Introduction often raised policy suggestions to regulate land use change and explores the limitations of these recommendations against the backdrop of institutional dynamics illustrated in the preceding chapters and China’s illiberal political system. It suggests that weaknesses in enforcing State regulations on land stem from the lack of effective checks on local officials in a political system that is averse to societal participation in governance. Yew Chiew Ping 26 [...]... non-agricultural use in the 19 90s was concentrated in eastern and central China, especially the eastern coastal region which occupies less than ten percent of China s land area but has disproportionately large areas of arable land and non-agricultural land at 22 percent Lin and Ho, The State, Land System”, pp 414 George E Peterson, Land Leasing and Land Sale as an Infrastructure-Financing Option,” World Bank... Jiangsu, Zhejiang, Fujian, Guangdong, and Hainan but excludes the northeastern provinces of Liaoning, Jilin and Heilongjiang 56 Western China, which encompasses Guangxi, Sichuan, Guizhou, Yunnan, Tibet, Gansu, Qinghai, Ningxia and Xinjiang, had seen an increase in agricultural land accompanying a decline in unused land in the 19 90s Concurrently, there was also an increase in non-agricultural land in. .. resettled.60 The scale of land use change and land expropriation in Guangdong makes it an ideal site for investigating how agricultural land has been taken away from peasants to meet the needs of local governments Figure 1. 3 Loss of Cultivated Land to Non-Agricultural Construction in Guangdong (hectares) 18 000 16 000 14 000 12 000 10 000 8000 6000 4000 2000 19 99 19 98 19 97 19 95 19 94 19 93 19 92 19 91 1990 19 89 19 88 19 87... of land use rights Amendment of the LAL to legalize the paid transfer of land use rights Implementation of the collection of land use tax in cities and town, superseding the collection of the land use fee Loss of 72.77 million mu of arable land Enactment of new legislation to legalize the secondary transfer of land use rights of state-owned land in towns and townships and that by foreign investors There... the far-reaching impact and repercussions of these land processes Figure 1. 3 depicts the loss of arable land to non-agricultural construction in Guangdong in the decade prior to 2000 Guangdong was also one of the provinces that requisitioned the greatest area of land in 2004 and 2005.58 Table 1. 3 shows the area of land expropriated by various Guangdong prefectures from 2004 to 2006 The total area of. .. Expropriated in Guangdong6 1 (hectares) 2004 Total Land Expropriated Agricultural Land 2005 Total Land Expropriated Cultivated Land 14 82.92 422.38 19 .25 0 18 7.90 26.96 36.93 6.36 1. 55 54.23 67.36 0 3.65 54.95 10 6.22 13 2.56 13 3.92 40. 01 117 .25 71. 44 0 Agricultural Land 2006 Total Land Expropriated Cultivated Land 3543.83 605. 71 126.56 11 .98 16 8.00 5.37 7 .14 24.54 54.02 11 7.36 13 7 .11 61. 04 19 . 51 94.49 14 9 .12 ... coastal Jiangsu at an average of 356 yuan per square metre whereas that in Sichuan is 14 3 yuan per square metre.66 Lastly, there is also greater demand for land from commercial and industrial land users because of the competitive advantages of coastal provinces, such as better infrastructure and system of transportation etc.67 The ways in which the aforementioned factors may interact with officials’... Taking the above factors into consideration, the scenario for officials converting agricultural land in western and central regions will, of course, be different from that in coastal China It may be surmised that urbanization in the sense of a shift from rural-agricultural activity to urban-industrial activity casts a greater influence on land use conversion in the eastern coastal provinces than in. .. framework in studying local patterns of land use conversion It proposes that the demands of macro-processes such as industrialization and urbanization are not adequate in explaining the conversion of agricultural land to non68 Since a small number of observations coupled with several explanatory variables imply that the research design may be indeterminate, it helps to increase the number of observations... were 1, 9 51 development zones all over China with a total planned area of 15 ,300 square kilometres The State Council issued an urgent notice to stop the indiscriminate encroachment and use of arable land Enactment of “provisional rules on the levy of land appreciation tax on the profits from the transfer of land use rights and buildings and other attachments on land There were 4, 210 development zones in . and Xinjiang, had seen an increase in agricultural land accompanying a decline in unused land in the 19 90s. Concurrently, there was also an increase in non-agricultural land in the west. The. Chronology of Events in China s Land Management 44 19 80 -19 85 • Loss of around 36.8 million mu of arable land 19 86 • Enactment of the Land Administration Law (LAL) • Establishment of the State Bureau of. 2006 Total Land Expropriated Agricultural Land Cultivated Land Total Land Expropriated Agricultural Land Cultivated Land Total Land Expropriated Agricultural Land Cultivated Land GUANGDONG