Urban land reform and the development of land markets: evidence from Hangzhou1 Tian Chuanhao1,2, Yang Hong1 1 Center of Real Estate Research, Zhejiang university 2 College of Public Administration, Zhejiang University Abstract: Fiscal decentralization of china promotes the local government to compete and maximize fiscal revenue. The reform of urban land reservation enables the local government to monopolize the urban land primal market supply and generalize the auction and public bidding in land market. On the positive side, land reservation institute has contributed to emerging land markets, increases government revenue for the financing of massive infrastructure projects and provision of public goods. On the negative side, problems such as loss of social equity, socioeconomic conflicts, and government corruption have emerged. Email:
[email protected]
This paper is benefited greatly from discussions and comments by Shi Jinchuan, Gu Jie, James Wen and Ye Jianliang. We also thank CRPE for financial support. All views expressed here are our own and do not necessarily reflect those of the above individuals and organizations.
1
Urban land reform and the development of land markets: evidence from Hangzhou 1. Introduction Urban land tenure in China has changed dramatically in the past three decades. In 1978, the constitution banned all land transactions and land was allocated free of charge. Land was neither considered as a commodity nor as an asset for producing economic wealth. The traditional administrative allocation of urban land was abandoned and public land leasing was adopted as the foundation for China urban land use in late 1980s. Local government, as a representative of the state, sells land-use rights to buyers for a fixed period through auction, tender, or negotiation in land primal markets 2 (LPM) which are far from mature (Ding et al., 2000). Urban land market has been the focus of scholars (Deng 2003; Chengri Ding, 2003; Lin and Ho, 2005), but the difference and the change of land supply models were ignored. It is prevalent that the negotiated 3 model is less efficient compared with the auction and public bidding 4 . There were lots of corruption and rent seeking in the negotiated land markets 5 , and the negotiated land prices were far lower than the auction and public bidding land prices (Xie et. al., 1994). But it was interesting that the negotiated approach had been popular in land markets from 1987 to 2000 while scholars (Feng, 1994;Xie et. al., 1994; Tang, 1992)and some government leaders (Wang, 1992, 1993; Ma, 1992) argued that the auction and tender must replace the negotiated 2
There are two kinds of land transaction. One is the sale of land-use rights and the other is the transfer of land-use rights (Hu, 1990). The former is called the land primal markets (LPM) which is the focus in this paper. 3 The so-called negotiation approach requires an applicant for land use rights to submit an application, including planning permit, development proposal and environmental assessment, to the Municipal Land Administration Bureau (MLAB). MLAB has to make a decision within 30 days and call the successful applicant to negotiate with MLAB on the terms of land-use rights and make an agreement. 4
The tender procedure includes several steps. First, MLAB publishes a tender notice and provides relevant documents to tenders. Second, tenders submit written tender documents and deposits to MLAB before the deadline. Third, tenders are opened, assessed and selected against the criteria before the Notary Public Office by MLAB. Fourth, all tenders are informed of the result in writing and the successful tender is invited to sign a land-use contract with the municipal government and granted a certificate for land-use rights by MLAB. 4 During the auction, the auctioneer introduced the location of the land parcel, its size, prescribed future use, base price and price increment for each call. Tenders promptly offered their prices against each other and finally land was leased to the tender who offered the highest price. 5 China’s Minister of Land and Resources (Tian Fengshan) was stripped of his post and party membership for bribery charges in 2004.
approach in urban land primary markets. Until 2004.08.31, the negotiated approach was prohibited in the profited land 6 market. This paper argues that the implement of Land Reserve Institution (LRI) 7 enhance the local government’s competence to control the urban land markets, promote the monopoly of land primal markets, and popularize the auction and tender in land markets and mature LPM. In the next section, urban land reform after 1949 and LRI implement in Hang Zhou are summarized presentation. The third section is sampling and data. In the fourth section, the impact of LRI on LPM and the different mechanism of land price determined by negotiation and auction are analyzed. And then, further discussion and conclusion about LRI will be presented.
2 Urban Land reform and LRI in Hang Zhou 2.1 First step of urban land-use system reform: the establishment of pay-for-use principle The establishment of People’s Republic of China in 1949 soon led to the "nationalization" of urban land during the "Great Leap Forward" (1957-1962) and the "Cultural Revolution" (1966-1976) and the "Collectivization" of rural land (1963-1965).From 1956 onward, the government of China proceeded to complete the nationalization of land, a process which was finalized around 1982. As a result, the ownership of land in nowadays China consists of state-owned land, mainly in cities and towns, and rural collectives-owned land, mainly in rural areas and towns not owned by the state. According to Constitution of People’s Republic of China amended in 1982, no organization or individual may appropriate, buy, sell or lease or unlawfully transfer land in other ways (Clause 4 article 10). Therefore, land can only be allocated by government to users without charge or limitation on the length of use and any private land transaction was prohibited. Obviously, the administrative allocation of land is inefficient and basically a product of planned economy in China during this period, but the situation began to change when the market-oriented economic reform gradually carried on. Urban land-use reform in China began in 1979 when law on “Sino-foreign Joint 6
In china, the profit lands include the residential land and the commercial land, but not include the industrial land. Land Reserve Institution (LRI) was carried out in Shanghai city at first in 1996. It was put into practice in Hangzhou city in 1997 and then spread across China. LRI which is consigned by government collects, stores, develops and arranges the plots that have been dispersed over the land users though repurchase, expropriation, exchange and callback methods. According to annual land supply plans, the plots that have been elementarily developed are leased by public tender or auction. It is considered as an institutional innovation of urban land utilization that can advance and develop the urban land markets, strengthen the government’s ability to regulate and control land market, and increase the financial revenue (Zhang et. al., 2000;Yang 2002).
7
Venture Enterprises” allowed indigenous enterprises to use their land as capital to co-operate with foreign investors. Between 1982 and 1987, pilot schemes in various cities were set up to collect land-use fees. The level of fee related to the land use, amount of supply and infrastructure; the level of fees is quite low, but it was the first step towards pay-to-use land system (Zhang, 1997). After almost 10 years of economic reform, China began to abandon the traditional administrative allocation of urban land and adopt public land leasing (or the transfer of so-called “land-use right”) as the foundation for its urban land use in late 1980s.September 8th 1987, Local officials in Shenzhen City first initiated land leasing through negotiation; a week later, another piece of land was leased through tender; December 1st 1987, a third piece of land was leased through auction8. The efforts made by the Shenzhen city soon are copied in several other districts such as Hainan Special Economic Zone, Guangzhou city, Shanghai city etc. Between 1988 and 1990, three momentous pieces of legislation were passed which both made the reform lawful and consolidated the achievements. April 1988, the seventh National People’s Congress passed a significant amendment to the PRC Constitution, in which Clause 4 of Article 10 read: "no organization or individual may appropriate, buy, sell, or lease or unlawfully transfer land in other ways. The right of land use can be transferred in accordance with the law." September 27th 1988, the State Council promulgated the “Tentative Regulations of Land use Taxation in Cities and Towns of the People’s Republic of China”. These taxes are levied on all indigenous profit-making enterprises and organizations. December 1988, the fifth session of the Standing Committee of the National People’s Congress made amendment to the Land Administration Law of the PRC. The related significant changes are:
The land use rights of state- or collective owned land
may be transferred through legal procedures. The detailed methods for land-use right transfers will be regulated by the State Council.
The state will practice a pay-for-use
land system for state-owned land, whereby users will pay for the right to use the land under the regulation of the State Council.
There will be prohibition of any occupation
of state land or land belonging to a commune or sale or letting except in accordance with the law. Until August 1991, 17 provinces in PRC had experimented public land leasing, and more than 1000 plots were leased. Table 1 shows the details. Table 1 Land leasing in PRC during 1987～1992 8
During the auction, the auctioneer introduced the location of the land parcel, its size, prescribed future use, base price and price increment for each call. Tenders promptly offered their prices against each other and finally land was leased to the tender who offered the highest price.
1987
1988
1989
1990
1991
1992
Plots of land
5
118
127
100
750
3000
Size（ha.）
15.75
389.08
625.22
3800.00
2000.00
13000.00
Revenue（Billion）
0.035
0.416
0.447
0.125
10.187
50.00
source：Xie et. al., (1994) 。
2.2 Background of the LRI implement in Hangzhou Although great steps had been made towards marketed-oriented reform in urban land system, the urban land public leasing was yet not transparent and the negotiation approach was frequently used. However, negotiation always comes to an end with some compromise and the price of land is not negotiated at market prices. Moreover, the negotiation approach was often related to corruption. The establishment of land reserve in 1996 gradually changed the situation. Since mid-1980s, it has been experimenting with urban land reform that transformed traditional administrative allocation system to public land leasing in Hangzhou. After 1992, Hangzhou urban land reform has accelerated LPM’s development. At the beginning, the land was generally transacted through negotiation and there were many problems in the land markets. The government lacked the available control mechanism, which led to the emergence of a gray land market. In the gray land market, great deals of land resources were wasted and land price couldn’t reflect the real land value. As many urban areas in China, Hangzhou was subject to important peripheral growth and intense urban land use that gave rise to a wave of large-scale land expropriation. It was not beneficial to optimize land use structure and enhance the effectiveness of the "stock" land utilization. August 1996, China’s first land reserve institution–the Shanghai land development center-came into existence. However, there are several land grantors in Shanghai including both Shanghai municipality and governments of administrative subdivisions of Shanghai. In Aug. 1997, Hangzhou set up land reserve system (LRI) to exercise primary land markets monopoly. Different from the Shanghai pattern, Hangzhou municipality was the only grantor. The purpose of establishing the Land Reserve Center was to normalize the land market order of Hangzhou, make full operation of the urban State-owned land resources and raise funds for the urban construction. On Jan. 1, 1999, the Land Reserve Center on behalf of the government made the unified supply of the reserved land plots to the general public using auction and tender for the first time.
3 Sampling and Data The urban land primary market of Hangzhou was selected as subject investigated
and 367 land leasing plots in LPM from 1992 to 2001 were sampled. It included all profitability land transactions in private negotiation, auction or tender during 1999-2001, and all in auction or tender, part in private negotiation during1992-1996. The data underlying this study came from Hangzhou Municipal Land and Resources Administration Bureau. For some reasons, we had not obtained the land transactions during 1997-1998. But it did not affect the study’s reliability and validity. Statistical analyses were performed using SPSS for Windows. Table 2
1992.01.01~ 1996.12.31 1999.01.01~ 2001.10.23 Total
Statistics for different grades of leased land in Hangzhou (1992-2001) (plot)
First order land
Second order land
Third order land
Fourth order land
Fifth order land
Sixth order land
Seventh order land
Total
57
45
37
34
9
3
0
185
29
36
37
34
24
6
16
182
86
81
74
68
33
9
16
367
Source: Hangzhou Municipal Land and Resources Administration Bureau, 2002
Table 3 Statistics for different uses of leased land in Hangzhou (1992-2001) (plot) Residential
Commercial
Mixed use
Others
Not clear*
Total
79
22
52
32
0
185
84
9
27
56
6
182
163
31
79
88
6
367
1992.01.01~ 1996.12.31 1999.01.01~ 2001.10.23 Total
* indicate that the parcels of land use for the gas stations, and those could not belong to the above types. Source: Hangzhou Municipal Land and Resources Administration Bureau, 2002
Statistics for investigated samples are presented in Table 1 and 2.As showed in Table 1, the higher was the grade, the more plots were leased in LPM. Especially before 1997, the plots of the first to fourth order land were in the majority of the land transactions. After 1999, the number of the fifth and the seventh order land leased in LPM had increased. From table 2, there were far more residential parcels than other land uses in the land transactions. The impact of public land leasing in LPM on housing reform was very prominent.
4 Comparative analyze 4.1 Comparison of auction or tender in land leasing before and after the implement of LRI Among the three leasing methods (auction, tender and negotiation) in PRC, auction and tender could allocate land to the highest bidder. It corresponds to the basic economic principle of highest and best use of land (Deng, 2003). Meanwhile, a fair competition mechanism is introduced to the market. Auction and tender are obviously more transparent and fair. So land prices go up to their real land value (Cai et. al., 2001). Table 4 Description of land leased by tender or auction in Hangzhou Number of plots （plot）
Total Area (hectare)
Average size per plot (hectare)
Maximum size of the plots (hectare)
Minimum size of the plots (hectare)
1992
8
6.48
0.81
2.82
0.24
1999 2000
8 26
7.26 34.69
0.91 1.33
2.96 10.00
0.07 0.18
2001
14
45.46
3.25
10.08
0.27
Source: Hangzhou Municipal Land and Resources Administration Bureau, 2002
However auction and tender in land leasing was not common during 1992-2001 (Table 3). There were far more land leasing by auction or tender in terms of number of plots, total area, maximum and minimum size of the plots after the implement of LRI. From 1999 to 2001, 48 parcels of land were leased out through auction or tender, while only 8 parcels did before 1997. And no auction and tender was used in land leasing
during 1993-1996. Obviously, the system of auction and tender in leasing had not been strictly enforced in practice before 1997. Table 5 Tender or auction in land leasing and land grades 1992
1999
2000
2001
First and Second order land
Number of plots （plot）
6
7
11
4
Land price (RMB/m2.)
6858.69
8640.88
9776.54
17274.23
Third and
Number of plots （plot）
2
1
5
3
Land price (RMB/m2.)
4568.41
4692.06
4812.85
7241.45
Number of plots （plot）
/
/
9
7
Land price (RMB/m2)
/
/
3063.73
3302.56
Fourth order land Fifth, Sixth and Seventh order land
Source: Hangzhou Municipal Land and Resources Administration Bureau, 2002
The number of samples leased by auction or tender in lower grade increased gradually after 1999(Table 5). As shown in table 5, land price in every grade had the trend of increase by time.
4.2 Comparison of private negotiation in land leasing before and after the implement of LRI Benchmark land price is set annually by government and used as a basis for land leasing. The payment for land leasing usually consists of three major components, including a lump-sum premium (A), urban infrastructure fee (B), and community infrastructure fee (C). The different between last two fees is that the former is for infrastructure for the whole city, while the latter is only for the neighborhood. Table 6 Private negotiation in land leasing and land agreement prices A
A+B
A+B+C
Illegible**
合计
13
199
8
91
311
Area (hectare)
11.77
232.29
7.50
120.29
371.85
Leasing revenue (0.1 billion RMB)
0.62
52.90
1.40
24.55
79.47
526.76
2277.33
1869.75*
2040.90
2137.15
Number of plots （plot）
Land price (RMB/m2)
*Because a parcel of 2,8200 square meters land was leased by private negotiation and the price was very low, only 240 RMB/m2. **Those parcels of land were leased during 1992-1996. Source: Hangzhou Municipal Land and Resources Administration Bureau, 2002
But because the conception of the payment in negotiation was not clear before the implement of LRI, it was always not integral. As shown in table 5, only the payments of 8 parcels included the above three components, and just the lump-sum premium (A) and urban infrastructure fee (B) were included in most parcels of land leased. In addition, the payments of 91 parcels of land leased during 1992-1996 were illegible, could not be explained. It implied that the negotiation procedure was not transparent and standardized enough in LPM before the implement of LRI. Due to lack of money for
developing the plots, land was normally "sold" in its original condition not leveled, nor with the basic infrastructure. Before 1997, negotiation in land leasing was the most common. The leasing prices depended on the negotiations between local governments and developers. Negotiation was untransparent and leaved more room for corruption or patron-client relationship. After the LRI was put into practice, according to an official document of Hangzhou, land used for commercial purposes, tourism, entertainment and commodity housing should be acquired through open tender or auction, especially the land used for commodity housing must be leased by open tender or auction. Some land transfer deals, due to the historic reasons, were still leased by private negotiation, but the procedure was more transparent and standardized. Negotiation had to be conducted on the basis of appraised value. The final negotiated price had to be collectively reviewed and agreed by various government departments in charge of land and property, planning, construction, finance and pricing. Table 7 lists the statistics for private negotiation in land leasing. Table 7 Statistics for private negotiation in land leasing in Hangzhou (1992-2001) 1992 Number of plots （plot） Area(hectare)
1993
1994
1995
1996
1999
2000
2001
Total
13
59
44
40
21
12
86
36
311
11.15
78.71
22.24
24.95
21.20
18.60
141.74
53.26
743.70
Source: Hangzhou Municipal Land and Resources Administration Bureau, 2002
For the land agreement prices were nebulous and in order to analyze the prices by year, we should modify them. Table 8 is the statistics for the modified prices (including A, B and C). Figure 1 illustrates the changes of land agreement prices in the second and the fourth order land during 1993-2001. It indicates the land agreement prices fluctuated during 1993-1996 and has obviously soared since 1999. The prices of second order parcels in city center went up more rapidly than the price of fourth order parcels at urban fringe. Table 8 Statistics for modified land agreement price in Hangzhou 1993
1994
1995
1996
1999
2000
2001
Total
Number of plots （plot）
31
13
24
12
12
83
30
205
Area (hectare)
9.07
3.26
13.55
10.05
18.6
139.71
47.68
241.92
2.24
0.93
4.54
3.00
5.56
50.19
21.52
87.99
2465.26
2865.92
3350.57
2985.57
2988.72
3592.63
4514.21
3637.01
Modified leasing revenue (0.1 billion RMB) Modified land agreement price (RMB/m2)
Note: For the agreement prices were illegible, could not be explained, so the samples in 1992 were ignored here. Source: Hangzhou Municipal Land and Resources Administration Bureau, 2002
Figure 1: Changes of modified land agreement prices in Hangzhou (1992-2001) Source: Hangzhou Municipal Land and Resources Administration Bureau, 2002
4.3 Emergence of the real land value after the implement of LRI In the market where the price information is true, as long as the government follows the economy rule, even though land is leased by private negotiation, the price will match the land market value well (Cai et. al., 2001). Negotiation has to be conducted on the basis of appraised value. And the appraised value is produced by market based land valuation method to adjust to account for changing marker conditions. So if the land market information is perfect, the appraised value will equal to its land market price. The base price of auction or tender also relies on the appraised value. Obviously it is influenced by the development of land market. Before 1997, because the land market was infantile and the volume of the market information was very poor, the appraised value was depended on the benchmark land price. After LRI was carried out, leasing price of auction or tender vary according to the supply-and-demand market situation, and was higher than benchmark land price. So the appraised value based on the marker information was also higher. With paired-samples T test in SPSS, we compared the differences in benchmark land prices, modified land agreement prices and the prices of bidding or auction in different periods (see table 9). Land leasing prices were statistical higher than benchmark land prices from 1999 to 2001, while there was no difference between them before 1997. It appeared that the tender and auction system was systematically carried out in the urban commercial construct land market with the implement of urban land reserve institution, and the LPM developed and the real land value emerged. The appraised value that was based on the price information in market rose, so did the agreement price.
Table 9 Paired-Sample T-Tests Comparing land leasing prices Modified land agreement prices -- Benchmark land prices Base prices of auction or tender--Benchmark land prices
1992～1996
1999～2001
合计
-82.07 (1.29)
1210.74** (11.66)
710.09** (8.75)
1810.89 （1.82）
1522.29** (7.51)
1568.47** (6.90)
* Significant at the 5% level. **Significant at the 1% level. Source: Hangzhou Municipal Land and Resources Administration Bureau, 2002
But, even though LRI was carried out, there were still differences between land agreement prices and the prices of tender or auction. With one-way ANOVA in SPSS, we compared the differences in different land grades after 1999(Table 9). The agreement prices were statistical lower than the prices of tender or auction in each grade, except the fourth order land. It implied that the land market was not mature enough and the land market information was not perfect. Land leasing through tender and auction was still use infrequently in the land market while large percentages of land were leased by negotiation instead of public bidding or auction. Table 10 One-way ANOVA Comparing modified land agreement prices and the prices of tender or auction in different land grades after 1999 Second land Modified land agreement prices the prices of bidding or auction
order
Third order land
Fourth order land
Fifth order land
Seventh order land
-2493.78**
-1776.32**
-201.02
-1223.92**
-2287.08**
（12.33）
（8.37）
（0.34）
（8.40）
（142.90）
* Significant at the 5% level. **Significant at the 1% level. Source: Hangzhou Municipal Land and Resources Administration Bureau, 2002
5 Further Discussion 5.1 LRI of Hangzhou mode is the innovation of urban land use tenure June 1999, Ministry of Land and Resources forwarded two important documents -“Regulations on land purchase and reserve of Hangzhou” and “Notice on the establishment of land reserve system in Qingdao”-to local government. From then on, many other cities has copied the experience of Hangzhou and Qingdao, and established their own land reserve institution. May 2001, the State Council of PRC promulgated “Notice on strengthening management of state-owned land assets”, and requested the local official establish land reserve system if possible.2002, Ministry of Land and Resources promulgated “Regulations on the tender and auction of public land-use right”. These two documents
provided policy and statutory authorization of land reserve system, and resulted in widespread adoption throughout the country. Table 2 shows the number of newly-added land reserve institution each year during 1999～2003.
Table 11 Number of urban LRI in PRC: 1996～2003 year
1996
1997
1998
1999
2000
2001
2002
2003
Number
1
8
8
32
134
346
581
490
Accumulated number
1
9
17
49
183
529
1110
1600
Source：yang et. al., ‘the analyze of land bank institution in China’, Economic Geography.2005.4.p557-561
5.2 The implement of LRI matures LPM 5.2.1 The evolution of laws and regulations concerning “auction and tender approach of urban land leasing” On May 19th 1990, the State Council promulgated the “Tentative Regulation on China's Urban Land-Use Rights Lease and Transfers”, in which Clause 13 article 1 read “The land-use rights may be granted in any of the following ways: agreement (negotiation), public bidding (tender) and auction”. The tentative regulation didn’t suggest or compel local authorities to adopt the tender or auction approach. From 1993 to 2002, more than seven laws and regulations concerning the public leasing of land strongly suggested the local government to take tender or auction approach if possible, but no compulsory regulation was promulgated. Only three types of land use including the development of luxurious real estate project were obliged to lease by tender or auction. In March 2004, Ministry of Supervision and Ministry of Land and Resource jointly promulgated a notice concerning supervision on approaches of public land leasing, which explicitly demonstrated that all local governments should lease land of business use by tender or auction, and no negotiation approach was allowed on land of business use. Moreover, the notice set August 31st 2004 as the deadline to the solution of historical issues, and after that any single plot leased by negotiation approach will be seriously investigated and related officials will be severely punished. In October 2004, the State Council promulgated” Decisions on deepening the reform of land management”, suggesting land of industrial use 9 leased by tender or auction.
9
Land of industrial use was rarely leased by tender or auction before.
5.2.2 Practice of urban land leasing by tender and auction During the development of land market in China, local officials have been searching for more suitable ways of land leasing. Although tender and auction were considered to be more efficient way of land allocation, the negotiation approach was most frequently used, and more than 90% of land was leased by negotiation. However, together with the evolution of laws and regulations of land reserve and land leasing, the tender and auction approach dominated public land leasing, especially for land of business use. After August 31st 2004, all land of business use leased by tender or auction throughout China.
Table 12 Changes of land leasing between 1999 and 2004
Leasing approach
No. of plots leased by
1999
2004
23 cities adopted tender
All land of business use leased by tender or
and auction approach
auction throughout China
15325
50006
1082
52097
2.38
29.15
tender and auction Size of land leased by tender and auction(ha) Proportion
of
land
leased by tender and auction(%)
With land sales contributing an important part of local revenue, local governments at various administrative levels have every motive to engage in land development legally or illegally (Wong and Zhao 1999; Guo 2001). The development of LPM and the reform of land use system benefited from one another. The “pay-for-use” reform of land use system greatly advanced the development of urban land market, however, the negotiation approach dominated land releasing for a long time until the establishment of land reserve system. The Hangzhou experience of land reserve was a win-win situation, and was soon extended to other cities by Ministry of Land and Resource. This innovation of land reserve effectively promoted the use of tender and auction in land leasing through the monopoly of land supply, and greatly contributed to development of urban land market. The tender and auction approach of land leasing promoted the development of land market, and made urban land use more efficient. The revenue from land leasing account
for a large proportion of local finance, and much of the land leasing revenue used for improvement of infrastructure and public service, which dramatically changed the living and working condition of the city and increased welfare situation.
6 Conclusion By analyzing public land leasing data from 1992 to 2001, this paper estimated the impact of urban LRI on the development of urban land primary market (LPM). Empirical analysis implied that the implement of LRI accelerated the development of LPM. After the LRI was put into practice, the municipal government was the only authority on land allocation for new construction to manage land under the principle of unified purchase and supply. The tender and auction system was systematically carried out in the urban commercial construct land, which made the real land value emerge and the agreement price match the real land value gradually. Auction and tender were obviously more transparent, fair and left little room for corruption. Furthermore, Land leasing revenue became an important source of local public finance. In addition, the implement of LRI optimized land use structure through the reestablishment of private property rights; promoted urban construction and economic development. From the running status of LRI, there do still exist some problems. The government has not completely monopolized the primary market. Large percentages of land are still leased through private negotiation instead of bidding or auction, which restrict the development of the land market. Thus the present LRI should be consummate. We suggest that a reduction of the supply of land leased through negotiation and an increase in the supply of land leased by tendering and auction should be considered. In other words, land used for commercial purposes should be all sold by way of open tender, auction, and land “sale” through private agreement should not be allowed. It will benefit to optimize urban land use structure, develop the land market and improve local public finance.
References 1.
Deng, F. Frederic. China’s Urban Land Reform, Urban Productivity, and Local Government Behavior Eurasian Geography & Economics (forthcoming). http://www.albany.edu/~fdeng/
2. Cai Bingbei, Ouyang Anjiao, et al. Study on the relationship between land leasing by auction or tender and the rise of real estate price. China Land Science,2001,15(6):24~28（in Chinese）
3. Xie Jinrong，Cao Kangping，Chen Jiangfeng，Wang Tao(1994) Price and count measures on different approaches of public land leasing. China land science 3:10~13(in Chinese). 4. Ma Kewei(1992), A review of land reform in China. China land science 5: 1~7(in Chinese). 5. Feng Guangjing(1994), When can tender and auction approaches dominate land leasing? China Land 2:9, 10, 45(in Chinese). 6. Qi Yuanjun(2004), Review and expectation of land reform in China. Reference on Economic Study 13:18~29(in Chinese). 7. Shi Shulin(1994), Perfect administration and gradually deepen public land-use system. China land and situation 12:30~32(in Chinese). 8. Yan Zuming(1993), Marketization of urban land is the key issue. China real estate 10:58~61(in Chinese). 9. Wang Xianjin(1993),How to cultivate and management the land market. China Land Science (in Chinese): 10. Wang Xianjin(1992),Promote the reform of land system. China economic system reform 11:38~40(in Chinese). 11. Tan Shukui,Peng Buzhuo(2003),Comparative analysis on land reserve systems of several cities in China. China real estate 1:10~12(in Chinese). 12. Yu Zhi(2005), Empirical analysis on public land market leasing in China. China real estate finance 5:33~35(in Chinese). 13. Tang Jian(1992),Several issues on administrative allocation of public land-use right. China land science 2:7~9, 24(in Chinese). 14. Tian Chuanhao, Jia Shenghua, Ren Enwei (2004), Supervision system, market information and land price of negotiation. Economics (Quarterly) Vol.3 No.2(in Chinese). 15. Jia Shenghua, Zhang Hongbin, Jin Xing, Shao Jianfeng(2001),Urban land reserve system: pattern, effect, problem and count measures. Modern urban study 3:44~47(in Chinese). 16. Yang Linjie, Li Gang, Gao Yong, Tao Xiaolong(2005), Analysis on the development of land reserve system in China. Economic geography 4:557-561(in Chinese). 17. Zhang hongbin, Jia shenghua. The function of the urban land reserve system and its operation mechanism. City Planning Review,2000,24(8):17~20（in Chinese） 18. Zhou Ganghua(2005), An empirical study on micro-determinants of urban land price .Beijing: Economics Science Press(in Chinese). 19. Li,L.H, Walker. Benchmark pricing Behavior of land in chine’s reform. Journal of property research, 13:183 -196.
