China’s Land Quota Trading Program and Land Use Efficiency

Abstract

<p>China’s land-quota-trading program introduces transferrable development rights among localities, aiming to enhance productive and allocative efficiency in land use through rural land-use conversion. We examine how this program affects local land-use efficiency in quota-generating regions, taking Guangdong Province as a case example. Our pre-post analysis results, based on remote-sensing and econometric methods, show that the program significantly contributes to improving built-up land-use efficiency and rural household disposable income. Still, its effects on agricultural productivity are limited. Overall, the agricultural productivity of reclaimed farmland is low, and many reclaimed plots remain fragmented, dispersed, and underutilized. Mountainous counties continue to suffer from particularly low productivity, as their disadvantageous soil and terrain conditions hinder agricultural production. In contrast, overall land-use efficiency in built-up areas has substantially improved, although inland counties still suffer from low land-use intensity and retain a risk of land squandering arising from spatial urban expansion without proportional population growth. Our main findings underscore the need for more nuanced policies that account for geographical and economic disparities to ensure sustainable land resource management and food security.</p>