Ma Qingbin: Implementation of the Amended “Land Management Law”: A New Starting Point Towards Common Prosperity

The newly revised “Land Management Law” will come into force on January 1, 2020. The focus of this revision cover three aspects, land acquisition, reform of the management system of rural housing land and the entry of collective-owned land into the market. The newly revised land management law made it clear that rural collective-owned construction land can enter the market through transfer, leasing and other measures, providing that it has been approved by more than two thirds of the members of collective economic organization and the planning and registration of the land complies with the law.

    Recently, Beijing’s first collective land leased house project is expected to be completed in June 2020, implying that the rural collective land leased houses will be tested by the market.

   In fact, many districts in Beijing such as Fengtai, Daxing, Shunyi and Tongzhou have already started the construction of collective land leased houses since last year. Some of the projects have been launched by the collective economic organizations of towns and villages, while others launched by state-owned enterprises such as Capital Group, or private and professional housing rental companies such as Vanke.

   In August 2017, Beijing, Shanghai, Shenyang, Nanjing, Hangzhou, Hefei, Xiamen, Zhengzhou, Wuhan, Guangzhou, Foshan, Zhaoqing, and Chengdu launched the pilot project of building leased houses on collective-owned construction land. According to the plan, Beijing will supply 1,000 hectares of collective-owned land from 2017 to 2021 for the construction of collective leased house, that means 200 hectares a year and about 500,000 house will be built.

Below is a telephone interview with Dr. Ma Qingbin, conducted by CNR-China Business Radio.

Moderator: The newly amended Land Management Law allows rural collective-owned construction land to enter the market, what does it mean for rural land and farmers?

Ma Qingbin: The amended Land Management Law was released on the first day of 2020 and has great significance in the history of rural land.

First of all, 2020 is not only the year of a decisive victory against poverty, but also the year when the Chinese people achieve a well-off society in an all-round way. I believe that people in the countryside will be more optimistic about their future. The significance of this newly amended land law is no less than that of the abolition of the agricultural tax in 2006, which has reduced the burden of rural residents. The newly amended Land Management Law, however, is more about empowerment, enabling farmers to share the wealth generated from the rapid development of cities and industries.

Under the protection of the amended land management law, the issues relating to agriculture, rural areas and rural people will gradually be transformed into strengths and vitality. The entry of collective-owned construction land to the market will awake the sleeping wealth in rural areas and offers rural residents an institutional guarantee for sharing China’s development. Rural land is no longer a mere resource reserve for industrialization and urbanization, but a participant in urban-rural integration, agricultural modernization, new industrialization and new urbanization. More importantly, the newly revised Land Management Law used a whole chapter on “cultivated land protection”, emphasizing that food safety should be controlled by the Chinese people. In other words, the amended law provides a legal guarantee to strengthen China’s food security.

Moderator: China started the pilot project of collective land leased housing as early as three years ago. Beijing’s first collective land leased housing project will be completed and enter the market soon. What do you think of this?

Ma Qingbin: We can analyze this from three perspectives. First of all, rural collective construction land and urban state-owned construction land will now have the same value and rights. Rural residents will be able to get long-term benefits from this kind of project, instead of a one-time financial compensation, hence farmers are motivated to promote and maintain the quality of related housing and maintenance of facilities. Secondly, the expanded supply of rural collective-owned land for leased housing will stabilize the real estate market and farmers’ income, improve the living conditions of urban and rural residents, and ensure that houses are built for living not speculative investment. Lastly, the collective land leased housing project will help big cities, urban agglomerations and metropolitan areas to solve housing-related problems and benefit local economic development.

Moderator: What is the significance of constructing leased housing with collective-owned construction land for establishing a long-term real estate mechanism?

Ma Qingbin: This will not only help us to solve the housing problems of urban residents, rural residents and migrants, but also ensure the diversity of the collective economy. The importance of collective-owned construction land lies in the word “construction”, that is to say, collective construction land should be used to build houses, factory buildings or shopping malls, but preference should be given to the construction of schools and hospitals.

In the past, land in urban and rural areas have separate management systems. Under the new legal requirements, land in urban and rural areas will have the same rights and will be managed in accordance with market principles in the future. The added value of the land shall be fairly distributed between urban and rural areas. Regardless of the development method, nevertheless, part of the funds generated from land should be used for agricultural modernization and infrastructure in the rural areas.

Moderator: The newly revised “Land Management Law” stipulates that villagers who settle in cities are allowed to voluntarily withdraw from their homesteads, and encourages rural collective economic organizations and their members to make active use of idle homesteads and homes. How should we interpret this?

Ma Qingbin: This is in line with the urban and rural economic development and the requirements of urban-rural integration. For traditional dwellings and houses with cultural heritage values, we should protect them, rather than simply demolishing them all. Furthermore, the overall planning of rural collective-owned construction land should take into account of economic development, food security, ecological security and coordinated development.

Moderator: What benefits does this have for farmers in terms of increasing their property-related income?

Ma Qingbin: Targeting urban-rural differences is the key to eliminating the urban-rural gap. In 2013, the average disposable income ratio between urban and rural residents was 2.8: 1. Specially speaking, the net property income ratio between urban and rural residents was 13.1: 1, the wage income ratio was 4.55: 1, the operational income ratio was 0.76: 1 and the transition net income ratio was 2.62: 1. The data shows that the growth potential of rural residents’ income lies in property and the wage income, which means the new policy amended Land Management Law will greatly increase the income of rural residents. In the future, operating income will play an important role in stabilizing the income of rural residents and thus, rural development must be based on market demand and the principles of green development to create unique industries in the countryside.