Model and Strategy of Urban and Rural Construction Land Market Integration

Wanying DU, Zisheng YANG

Institute of Land Resources and Sustainable Development, Yunnan University of Finance and Economics, Kunming 650221, China

Abstract At present, one of the important contents of China’s rural land system reform is to build a unified construction land market in urban and rural areas. The unified construction land market in urban and rural areas will produce higher economic and social benefits. It is imperative to promote the integration of urban and rural construction land market to improve the income of farmers, invigorate the stock of rural collective construction land and improve the efficiency of land use. This paper analyzes the current situation of urban and rural construction land market, the two models and typical cases of urban and rural construction land market integration, the restrictive factors and practical difficulties of urban and rural construction land market integration, and puts forward some suggestions and measures. This provides a theoretical basis for accelerating the integration of urban and rural construction land market, and hopes to provide a certain reference for the integration of urban and rural construction land market.

Key words Urban and rural construction land market, Integration, Model

1 Introduction

The 18th National Congress of the Communist Party of China proposed that we should improve the utilization efficiency of construction land, strictly control the increment, invigorate the stock, optimize the structure and improve the efficiency of construction land use in the process of urbanization, in order to take the new road of urbanization with Chinese characteristics. One of the important driving forces for the construction of a new type of urbanization is to build a unified construction land market between urban and rural areas. Construction land market is not only an important part of the market economic system, but also a link and bridge to connect urban and rural land elements and promote the interaction between urban and rural economy. With the rapid development of new urbanization, the supply of urban construction land exceeds the demand. The dual land market of urban and rural dual-track operation has increasingly prominent deficiencies in the optimal allocation of urban and rural land resources, the efficient use of land, the protection of the rights and interests of land property owners, the improvement of the welfare of urban and rural residents and so on. This has become the main bottleneck of healthy and sustainable development of economy and society. In the Third Plenary Session of the 18th CPC Central Committee, it was clearly proposed to establish a unified construction land market in urban and rural areas, and it was pointed out that "the construction of a unified, open and orderly market system is the basis for the market to play a decisive role in the allocation of resources" and "the market should play a decisive role in the allocation of resources". It was also proposed that the rural collective construction land and the state-owned land enter the market equally, and realize the same price and the same right[1]. In order to truly realize "the same land, the same right and the same price", it is necessary to give full play to the decisive role of the market in the allocation of construction land resources, speed up the establishment of a unified urban and rural construction land market, and solve the various problems existing in the current urban and rural construction land market, so as to strive to achieve win-win results in both urban and rural areas.

The domestic research perspective has gradually shifted from the evolution of the rural collective construction land market[2]to the direct entry of rural collective construction land into the market[3]. Finally, it is transformed into how to construct the urban and rural unified construction land market featuring "the same land, the same right and the same price"[4]. For the establishment of a unified construction land market in urban and rural areas, domestic scholars have analyzed and studied it from different angles. Some scholars study it from the perspective of the motivation for establishment. Huang Ke believes that the drive of interests is the driving force for the linking and integration of the urban and rural construction land market, and improving the expectation of collective construction land transaction income and improving the level of rural social security are important ways to promote the integration of urban and rural construction land market[5]. Some scholars elaborate from the perspective of the path of promotion. For example, Huang Zhong believes that one of the important components of the urban-rural integration and development mechanism is to establish a unified urban-rural construction land market, and promoting the circulation of collective construction land is its core[6].Lu Chunyang provides a reference for the development of urban and rural unified construction land market from four aspects: supply and demand balance mechanism, price mechanism, macro-control mechanism and market transaction mechanism[7]. Some scholars elaborate from the perspective of market entry model. For example, Tan Shukuietal. think that it can be divided into market-oriented model and government-led model[8]. Xia Lian expounds from three ways of entering the market: indirect market entry of land by increase-decrease linkage; indirect market entry of collective land; direct market entry of collective construction land for profit[9]. There are also some scholars elaborating from the perspective of process review and forecast. Wang Xinjunetal. divide the process of institutional change of urban and rural construction land market into four stages: complete division, legal regulation, circulation standardization and linking and unification. On this basis, they analyze the restrictive factors and practical difficulties of the integration of urban and rural construction land market, and finally put forward some suggestions[10]. Based on the relevant theoretical analysis, this paper realizes the dual research of the integration model of urban and rural construction land market and typical cases. It has a certain practical value for the horizontal development and vertical deepening of the integration of urban and rural construction land market, and it provides some useful reference for the smooth implementation of the national rural revitalization strategy.

2 Current situation of urban and rural construction land market

2.1 Typical dual characteristicsAccording to the relevant laws and regulations of land, the market structure of construction land divided between urban and rural areas in China is characterized by typical dual characteristics. This is reflected in the following aspects: First, the dualization of urban and rural land property rights. China implements the socialist public ownership system of land. According to the relevant provisions of theLandManagementLawofthePeople’sRepublicofChina, the land in urban areas belongs to the state, and the land in rural and urban suburbs belongs to farmers, except for those that are owned by the state as prescribed by law. Homestead, reserved land and reserved mountains are collectively owned by farmers. From this we can see that the ownership of urban land belongs to the state, and the rural land is collectively owned by farmers. Second, the dualization of urban and rural land market. Article 43 of theLandManagementLawofthePeople’sRepublicofChinaclearly stipulates, "Any unit or individual that needs to use land for construction must apply for the use of state-owned land in accordance with the law."

As a result, it can be seen that the land owned by farmers cannot enter the market directly. In order to enter the market, farmers’ collectively owned land must be transformed into state-owned construction land through expropriation or requisition, land circulation, land lease, and so on. The marketization of rural land must not change the land use and must ensure the land contract right of farmers, while the marketization of urban land presents diversified forms, unlike the restrictions of rural land marketization.

2.2 Mature market of state-owned construction land in cities mature while immature market of collective construction land in rural areasSince the amendment of theConstitutionandtheLandManagementLawofthePeople’sRepublicofChinain 1988, the commodity attribute of land use right has been defined at the legal level, and the state-owned land has stepped into the track of marketization and fast development. However, the relevant laws on the marketization of collective construction land have been absent and have not been fully developed. According to the relevant provisions of theLandManagementLawofthePeople’sRepublicofChina, the local government monopolizes the primary market of construction land in the name of the state. In principle, collective construction land is not qualified to enter the primary land market. Even if there is collective construction land into the primary land market, it will be subject to a lot of restrictions in the secondary market. As a result of heavy restrictions, collective construction land cannot produce the same economic and social effects as state-owned land. Compared with the development and reform process of the marketization of state-owned construction land, the primary market or secondary market of collective construction land has not been effectively formed.

3 Two models and typical cases of constructing the integration of urban and rural construction land market

The third plenary session of the 18th CPC Central Committee put forward the request for the first time to establish a unified construction land market in urban and rural areas. The report of the 19th CPC National Congress proposed we should establish and improve the institutional mechanism and policy system for the integrated development of urban and rural areas. In the context of opening up the circulation of rural collective construction land, the relevant national laws and regulations and operating rules have not yet been issued, all regions test each step before taking it[11]. Since the relevant provisions of theLandManagementLawofthePeople’sRepublicofChinastipulate that if any unit or individual needs to use land for construction, it must apply for the use of state-owned land in accordance with the law. Therefore, if the construction land owned by the rural collective wants to enter the market, it must go through the circulation. Because of the different economic development, different stages of market development, and the immobility of land, if we want to speed up the promotion of the unified urban and rural construction land market, we must not be limited to a single model. The current circulation of collective construction land in China is mainly manifested in two modes: barter transaction and quota (land quota) transaction.

3.1 Barter transaction model and typical cases

3.1.1Barter transaction model. The circulation of the right to the use of rural collective construction land itself is a barter transaction. Because of the immovable characteristics of land, for the suburbs with better location factors or places with special functions, it is easier to enter the construction land market, so this model is generally suitable for the eastern region and the suburbs of the city. The transaction method of this model is circulation led by the market and spontaneously carried out by farmers and the circulation dominated by collective economic organizations. The circulation led by the market and spontaneously carried out by farmers is mainly aimed at the right to the use of homestead, because the urban housing price is higher, and the living environment in some rural areas is better than that in the city, there is a transaction of rural homestead and housing. The circulation dominated by collective economic organizations refers to the sale and rental of houses and factories to other civil subjects after the collective organizations build houses and factories on the land. The advantage of this model is that it is beneficial to the marketization of the land in the suburbs of the city or the land with special location advantages. However, there are also shortcomings, such as more restrictions on the circulation of the right to the use of homestead, which makes the circulation difficult, and the use of collective construction land strictly controlled, limiting the maximization of the interests of collective construction land to a certain extent. Therefore, in the barter transaction, we should lift the restrictions on the circulation of collective construction land, relax the use control of collective construction land, and allow the construction of public rental housing, commercial housing or commercial tourism development in accordance with the planning.

3.1.2Typical cases of barter transactions (taking Nanhai model as an example). The well-known Nanhai model is typical of barter transactions dominated by collective economic organizations. Nanhai model is a joint-stock cooperative system of land capitalization and rural industrialization caused by a large number of foreign-funded enterprises collectively and spontaneously renting out land or factories to enterprises for use, the difficulty of land expropriation and the role of the market[12]. Nanhai City is an early area to explore the circulation of collective construction land, and has developed a "Nanhai model". In Nanhai District, the land shareholding system is mainly tried out, and the village collective uses the shareholding certificate in exchange for the contract right certificate in the hands of farmers to obtain the land management right. This model makes the procedures for enterprises to rent collective land simple and fast, and the rental period of collective construction land can be adjusted according to different land needs, so more enterprises are willing to rent collective land for construction. This approach has attracted many enterprises to Nanhai for development, and promoted the process of industrialization and urbanization in the Nanhai. The basic practices of Nanhai model can be summarized as follows:

(i) In the name of setting up township enterprises, the collective economic organizations at the village and group levels in Nanhai District apply for land and issue the land use right certificate. (ii) Zoning planning is carried out. On the premise of following the functional zoning of land use by local governments, the fertile land is designated as an agricultural protection zone, the land close to the town and the traffic trunk line as an industrial development zone, and the land close to the village as an administrative residential area. (iii) The land and collective property are appraised and converted into shares. After being appraised and converted into shares, the land of the whole village is uniformly planned, managed and operated in the unit of village or villager group. (iv) Dividend distribution and equity management. In general, the village committee integrates the functions of public management and economic development. However, through the establishment of the village collective asset management committee, Nanhai separates the two functions of the village committee. The village collective asset management committee is specifically responsible for the distribution of shares and the management of shares, which is more conducive to the protection of the rights and interests of shareholders.

At that time, the "Nanhai model" enhanced the market value of land and promoted the development of local private economy. However, under the traditional "Nanhai model", the land use efficiency is low, and a large number of collective construction lands present an extensive, scattered and fragmented state with mixed function. And there are a large number of highly polluting enterprises, so that the grade of land development and the quality of construction is not high, and public infrastructure investment is insufficient. On February 27, 2015, the Standing Committee of the National People’s Congress approved the reform pilot project known as "Three Plots" in 33 pilot areas, including Daxing District in Beijing City, Jixian County in Tianjin City and Dingzhou City in Hebei Province. Nanhai is the only pilot area in Guangdong. In the future, Nanhai model can keep pace with the times. In order to clarify the relationship between land circulation and industrial development, and to coordinate the interests of all parties, it is necessary to set up a village collective assets management committee to be specifically responsible for the operation of village collective economic assets, so that rural land stock cooperative organizations can develop in the direction of modern enterprise system. The continuous improvement and development of "Nanhai model" will certainly help to improve the efficiency of land use, bring more benefits to farmers, and provide more reference experience for the market entry of collective construction land in other areas.

3.2 Quota (land quota) transaction model and cases

3.2.1Quota (land quota) transaction model. Against the backdrop of land use control, there are difficulties and situation of "land without market" in the suburbs far away from the city and the rural areas in the west. Against the backdrop of linking the increase and decrease of urban and rural construction land, the quota (land index) transaction mode arises at the historic moment. The transaction of collective construction land quota has a remarkable characteristic, that is, it does not transfer the right to the use of collective construction land directly, but obtains the quota of new construction land through the reclamation of construction land into cultivated land. The obtained quota will be traded on the quota market[6]in order to improve the efficiency of land use. The advantage of this model is to solve the problem of entering the market for the remote rural collective construction land and improve the efficiency of the remote rural construction land. The collective construction land in remote areas can narrow the income gap between the remote rural collective construction land and the urban suburban land by selling the development rights. But this model also has its drawbacks. The current policy of "linking increase and decrease" still requires that the implementation of the project must be approved in advance by the Ministry of Land and Resources, and the quota must also be circulated and used in the project area. Therefore, the degree of freedom of the main body to participate in "linking increase and decrease" is still very limited.

3.2.2Typical case of quota (land quota) transaction (taking Chengdu homestead circulation model as an example). The circulation model of homestead in Chengdu is a typical case of quota (land quota) transaction model. Chengdu allows rural areas to obtain funds through the renovation of construction land and the replacement of the quota of new construction land obtained after the reclamation of construction land into cultivated land[13]. Through the implementation of this policy, Chengdu not only alleviates the contradiction between the idle rural construction land and the shortage of urban construction land, but also improves the utilization efficiency of the homestead in the hands of farmers. Moreover, after the Wenchuan earthquake, the increase and decrease linkage system breaks through the county scope to realize the circulation between counties, so as to improve the freedom of the main body, and the homestead circulation system has made a breakthrough from the policy aspect. The basic practice of the circulation mode of homestead in Chengdu is as follows: (i) The land consolidation is carried out. It takes the village as the unit, in accordance with the principle of "whole village advance", first applies to the Bureau of Land and Resources for the establishment of the project, obtains the approval of the Bureau of Land and Resources, and begins to implement the consolidation project. (ii) The land under consolidation is examined and approved for acceptance. The consolidation project must meet the quality requirements of the department of land and resources on the reclamation of cultivated land and new houses, and the department of land and resources shall issue the corresponding "Quota Certificate of Construction Land". (iii) Land quota is traded. In Chengdu Rural Property Right Exchange, collectives and individuals who obtain land quota through land consolidation, as well as investors who need to trade land quota can trade through public listing. If there is unused land quota on the market, in order to protect the interests of farmers, the municipal government will designate the organization to carry out repurchase at the lowest protection price. (iv) The incomes are distributed. The circulation of residential land in Chengdu has an obvious advantage, that is, the distribution of income is fully based on the results of the reform of rural property rights system. The specific income distribution is decided by the peasant collective and the rural household independently, which has played the role of fully protecting the rights and interests of farmers.

The circulation mode of homestead in Chengdu has obvious advantages. The circulation of homestead in Chengdu is completely based on the principle of collective and peasant households’ willingness. Farmers have gained the dominant position in the market, and farmers’ autonomy in dealing with their own property has been greatly enhanced. Moreover, the income of the transaction depends on the bargaining power of farmers and the cost of land consolidation, and farmers have gained autonomy. It can be seen that this trading model gives farmers more rights. However, this model also has its shortcomings. The circulation range of construction land quota is limited and can only be carried out in Chengdu. The quota of construction land in other cities and counties in Sichuan cannot go in, which is not conducive to narrowing the gap of income from homestead circulation in Sichuan Province. The scope of rural homestead circulation in Chengdu is not limited by the annual construction land quota policy. However, because of this, it not only leads to the uncertainty of the annual supply of land quota in Chengdu, but also increases the uncertainty of the trading market and increases the risk of the market.

4 Restricting factors and practical difficulties of the integration of urban and rural construction land market

4.1 Irrationality in the existing land-related laws and regulations and the improvement of the system lags behindThere are some loopholes and irrationality in the current laws and regulations on land in our country, which can easily lead to the difficulty of collective construction land in entering the market and hinder the integration of urban and rural construction land. China has basically established and improved the policies and regulations of state-owned land resources management, but for the management of collective construction land, there has been no effective and feasible policy. Two Decisions issued at the Third Plenary Session of the 17th CPC Central Committee and the Third Plenary Session of the 18th CPC Central Committee, point out that "the rural collective construction land for profit should be equal to the state-owned land in the market with the same right and the same price" and "it is necessary to carry out the free and orderly circulation of collective construction land". It is allowed to carry out the reform of collective construction land on the basis of following this principle. However, the method is not detailed and specific, the specific implementation of the policy is not perfect, so the collective construction land to enter the market is still facing difficulties.

4.2 Note clear subject of collective land ownership and easy to cause confusion in the course of transactionAccording to the provisions of theLandManagementLawofthePeople’sRepublicofChinaand according to the specific circumstances, there are three levels of the subject and representative of collective land ownership in our country: village collective economic organizations or villagers’ committees; rural collective economic organizations or villagers’ groups; township (town) rural collective economic organizations. In other words, village collective economic organizations, villagers’ committees, villagers’ groups or township (town) rural collective economic organizations can act as the subject of collective land ownership. The unclear subject of ownership is easy to cause confusion and interest disputes in the process of transaction. The vagueness of collective land ownership is a major obstacle to the integration of urban and rural construction land market.

4.3 Not diversified current market entry model of collective construction landThe current circulation of collective construction land in China is mainly manifested in two modes: barter transaction and quota (land quota) transaction. The two models have their own advantages, and also have their own shortcomings. Although each has its own scope of application, it cannot cover all the collective construction land in our country. Because of the vast territory of our country, the problems of collective construction land entering the market are various and different, and there is indeed a situation in which the two models cannot be fully applied. In this case, the land cannot be transferred, resulting in the low efficiency of collective construction land use, and farmers cannot obtain income to improve the quality and level of life.

4.4 Lack of a reasonable and efficient land market trading platformAt present, the property right of rural land in our country is relatively complex, and the registration of land right has not been fully implemented. The unclear ownership of rural collective land makes it difficult to guarantee the subject status and rights and interests of farmers. There are many obstacles for rural collective construction land to enter the market. Collective construction land entering the market also lacks a reasonable and efficient land market trading platform, so that the rights and interests of farmers cannot be fully protected. Due to the lack of effective land market trading platform, farmers are unable to obtain legal and efficient trading ways of construction land. This is also an important reason for the proliferation of "grey" and "invisible" market of rural construction land.

5 Suggestions and measures for the integration of urban and rural construction land market

5.1 Relevant departments shall improve relevant laws and regulations on land management in a timely manner and remove policy obstaclesThe improvement of laws and regulations related to land management is the most critical step to promote the integration of urban and rural construction land market. Sound land management laws and regulations can provide policy support for the integration of urban and rural construction land market and promote the collective construction land to enter into the market according to the law. The relevant departments should speed up the revision of relevant laws and regulations and the construction of the system, and remove the constraints and obstacles from the existing laws, regulations and policies. For such a rapidly developing agricultural country as China, the construction of laws and regulations related to land management is particularly important. Although there are difficulties, the relevant departments should actively deal with many problems encountered in the process of construction, improve and overcome the various problems in the existing laws as soon as possible, and speed up the innovation and reform of the legal system of land management, to maintain the socialist public ownership of land, improve the efficiency of land use, and provide support and driving force for the sustainable development of social economy.

5.2 It is necessary to speed up the implementation of the confirmation of rural land rights and adhering to the same right and the same price for the same landOnly when the property right of rural collective construction land is clear, can the ownership of collective land flow into the market smoothly and efficiently, and be protected by law in the course of transaction. Therefore, the confirmation of rural collective land property rights is a prerequisite and legal cornerstone to guide rural collective construction land into the market. The progress of confirming the right of rural residential land and collective construction land is different, and the low efficiency areas should speed up the implementation of the work of confirming the right of land. The Decision adopted by the Third Plenary Session of the 18th CPC Central Committee pointed out, "Rural collective operational construction land shall enter the market with the same rights and the same price as state-owned land." The collective construction land should have the equal status with the state-owned construction land when entering the market for circulation and transaction, and should enjoy the same power as the state-owned construction land. Only in this way can we realize the optimal allocation of land resources, improve the efficiency of land use and protect the rights and interests of the main body of land.

5.3 It is necessary to enrich the mode of collective construction land entering the market and select the best mode of entering the market according to local conditionsThe current mode of entering the market in China cannot meet the needs of the land transaction market. It is necessary to broaden the channels of entering the market and enrich the mode of entering the market, so that all kinds of collective construction land can find efficient and reasonable ways to enter the market. Collective construction land has different locations, different environment, and different geological conditions, so when choosing the market mode for collective construction land, it is necessary to adjust measures to local conditions, seek truth from facts, and make comprehensive analysis and judgment. It is necessary to make use of the advantages and commonness of different market entry models to find the most suitable and efficient way to enter the market. It is necessary to promote the diversification and innovation of collective construction land into the market, achieve the double or multiple effects of two or more modes, and inject vitality into the rapid development of urban and rural construction land integration.

5.4 It is necessary to speed up the construction of an effective land market trading platformThe land market trading platform should be led by the government and built in accordance with local conditions. Because the conditions for human and economic development are different in various localities, they should be built according to the actual situation. The government should also play its role in macro-control, coordinate the relationship between all parties, and protect the rational distribution of income. There is a need to speed up the construction of an effective land market trading platform, which can effectively alleviate the problem of "grey" and "invisible" market, and ensure the legitimacy of collective construction land. This is beneficial to invigorating the rural collective construction land and promoting the utilization efficiency of rural collective construction land. Therefore, speeding up the construction of an effective land market trading platform is of great influence and significance to promoting the integration of urban and rural construction land.

6 Conclusions

The rural revitalization strategy was clearly put forward in the report of the 19th CPC National Congress, which is an important measure to solve the issues concerning agriculture, countryside and farmers and is conducive to promoting China’s agricultural development, rural prosperity and increasing farmers’ income. The core of the issues concerning agriculture, countryside and farmers is to solve the land problem, but China’s existing construction land market has typical dual characteristics, and the problem that the market of state-owned construction land in cities is mature while the market of collective construction land in rural areas is very immature. Therefore, the key to solving the problem is to speed up the commercialization and marketization of collective construction land, actively promote the circulation of collective construction land, and build a unified construction land market in urban and rural areas. The integration of urban and rural construction land market is conducive to breaking through the traditional dual structure of urban and rural land, invigorate rural collective construction land, improve land use efficiency and alleviate the contradiction between supply and demand of urban land. It is not only an important way to solve the problem of idle rural land and the shortage of urban construction land, but also conducive to the sustainable development of China’s economy and social harmony and stability.