Economic reform in the urban land system in China

Abstract

The past decade has witnessed a mass change in urban physical structure in major Chinese cities. Such changes could not have been realized without the implementation of economic reform in the urban land system. However, the economic reform measures undertaken in the urban land economy are only partial and gradual. The old socialist allocation system of land for both private and public land users still exists and in some cases such allocation exceeds the market system in terms of land granted. The pricing system of urban land is still not truly competitive as in most cases land users obtain land by means of private treaty grant with the relevant government department. Despite all these weakness in the economic reform measures, the land market in Shanghai, as well as other major cities, seems to have begun a rationalization process with less competitive land uses reallocated to the urban periphery, according to land economics principles. This paper tries to argue that under certain conditions, such as active market activities with open information on transaction details, such a partial economic reform programme could bring initial success to the authority, which will further speed up the gradual reform process.