Rural Reform, Step by Step
   2013-11-16 15:38:53    Xinhua      Web Editor: Mao

Like many migrant workers, Huang Ying, 45, has scant interest in the outcome of China's top-level reform meeting, but when told about possible changes concerning her land in the countryside, she knows what's in her best interest.

"I would not sell my land even I were allowed to, but leasing or mortgaging it would be good," the gardener in Haikou, capital of south China's Hainan Province, told Xinhua on being told that farmers will soon have more liberty with their land-use rights.

In China, urban land is owned by the state and rural land is normally under collective ownership. While gradual reforms since 1987 saw the trading of urban land evolve into a vigorous property market that became a major growth driver, land in the countryside remains largely static.

Under China's land regulations, farmers only have rights to use, but cannot directly sell or mortgage, land. They must first be acquired by a local government before being used for development.

The policy usually results in disputable land takings with meager compensation for farmers, and for those like Huang who want to make a living in the cities, restrictions on land transfer mean they have to start afresh on their urban journey.

That is set to change.


China's new leadership has determined to build a fairer mechanism to narrow the urban-rural divide and maintain social stability during its urbanization drive.

Among the key reform decision publicized on Friday by the Communist Party of CHina Central Committee, integrated development in villages and cities is a major highlight.

China is to build a unified market for urban and rural construction land, meaning land used for non-agricultural purposes. Previously, the official wording is to "gradually" achieve such a unification.

Li Ping, senior attorney for Landesa Rural Development Institute in Beijing, a nonprofit organization focusing on securing land rights for the poor, sees the move as a light at the end of the tunnel of a long controversial land expropriation regime.

"Allowing market transactions of rural construction land means farmers could negotiate directly with developers, taking local government out of the equation and enabling farmers to negotiate for the true value of their land," Li wrote in a research note. 

On the precondition that the scale of farmland is guaranteed, farmers will also be allowed to transfer and mortgage their land-use rights, or turn the rights into shares in large-scale farming entities, according to the document.

The CPC also pledged to give farmers more property rights, and set up a trading market for the transfer of land-use rights to promote an open, fair and orderly platform.

"Taken together, they are important steps toward allowing farmers to participate on equal terms in the land market, and use their land as a source of capital to fund agricultural development or to move to the city," Li said.

Although the latest policies point in the right direction, plenty of work remains to be done, analysts cautioned.

The biggest barrier is land registration, without which the land market cannot function.

A survey of 1,791 farmers across 17 provincial regions by Landesa in 2011, said only around 36.7 percent of the households have both documents -- contracts and land-rights certificates -- as required by law and policy, among which less than half contain all the legally required information and can be considered strictly law-compliant.

According to China's No.1 central document announced earlier this year, the government aims to complete the registration of management rights of contractual land in five years.

Until that work is completed, the rural land transfers as experimented in some areas in Guangdong and Anhui is unlikely to be rolled out nationwide, analysts said.

"We expect a system for the registration and confirmation of land-use rights to be rolled out nationwide, but it will take time to allow for land transfer," said Chang Jian, economist with Barclays.


Another key barrier holding back China's urbanization process is the rigid hukou system, or household registration system, which is tied to one's place of residence and is used to obtain access to basic welfare and public services.

The system has prevented migrants like Huang from gaining equal access to services in cities, disadvantaging them to a more vulnerable position.

Although China's urban population exceeded its rural population for the first time last year, with city-dwellers accounting for 51.27 percent of the population, a considerable portion of them have no official city hukou.

Friday's document promised to gradually allow eligible rural migrants become official city residents, accelerate reform in the hukou system to fully remove restrictions in towns and small cities, gradually ease restriction in mid-sized cities, setting reasonable conditions for settling in big cities while strictly controlling the population in megacities.

"The trend to gradually cut the tie between hukou and social benefits will remove the hukou system in the end," said Chi Fulin, head of the China Institute for Reform and Development, a think tank based in southern China's Hainan Province.


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