With illegal land requisition on the rise, China is attempting to clamp down 　　at the local level with new supervisory measures
　　The complaints about land rights violations are many, and growing. In China"s central Hebei Province, a peasant told land regulators that “a person has started mining in our village before securing land use rights from the government.” The peasant added that the local land resources management department, without getting permission from residents, had carved out for the miner the hilly land that has long been allotted for the private use of locals.
　　In a district of Zhengzhou, a city in Henan Province, a furniture retailer set up shop last year. The owner had no official land use authorization but nevertheless occupied more than 220 hectares of farmland and wild land.
　　Henan media reported that the local government had granted the furniture retailer its full support. However, according to Ding Fan, head of the land use supervision department of Zhengzhou’s Land and Resources Bureau, “the retailer illegally acquired the land. We already issued a notice warning them to stop operating on December 9, 2004.”
　　Companies acquiring land through corrupt deals with local officials and regulatory bodies is a violation of land rights that is becoming increasingly common in rural China, to the growing anger of farmers who suffer as a result.
　　“This new kind of illegal land use features three ‘evasions:’ evasion of legal approval procedures from the government, evasion of usage fees for the newly created commercial land, and evasion of the compensation fee for land requisition and the accommodation fee for peasants,” said Zhang Xinbao, head of the law enforcement department of the Ministry of Land and Resources.
　　Zhang added that these land rights violations, if they continue, will only become bolder, further hurting the interests of poor farmers and by extension the interests of the country.
　　
　　A growing problem
　　
　　On June 14, the Ministry of Land and Resources said the latest law enforcement effort discovered that illegal land grabs account for 60 percent of all land use cases and 50 percent of all land devoted to building projects, reaching as high as 90 percent of all land in some regions.
　　From 1999 to 2005, more than a million cases of illegal land use were reported nationwide. The property market was significantly distorted, resulting in skyrocketing housing prices. In the first five months of this year, 25,153 illegal land use cases were brought to the national regulators, equal to the total for the entire previous year. More than 12,241 hectares of land were involved, an increase of nearly 20 percent from last year, meaning that the amount of land involved in each case is growing.
　　Starting last year, in order to fight the problem, the Chinese Government switched its macro-control focus to the real estate industry as well as other fields involving land. This year, the Ministry of Land and Resources has announced new measures to enhance land use enforcement and punish illegal land use activities.
　　In May, the ministry, acting in cooperation with the Ministry of Supervision, investigated five serious land use cases. On May 30, the ministry issued an urgent notice on tightening land use management; on June 1, a nationwide land law enforcement working conference was held in Nanjing to study ways to deal with illegal land use. Less than two weeks later, the ministry sent another urgent notice requiring land and resources departments at all levels to implement the regulations relating to land use and prevent violations of these rules.
　　“Illegal land use, which is acquiesced to or is directed by the local government, has become more and more unscrupulous. Many of the illegal land use cases are backed by local officials,” noted Zhang Xinbao. Local governments are the principal part of land abuse, and are assisted by an ineffective land supervision and management system.
　　
　　New supervision bureaus
　　
　　On June 25, which marked World Land Day, Sun Wensheng, Minister of Land and Resources, stated that, “the Central Government is confident and determined to manage the land effectively.”
　　One month after that announcement, Sun shouldered the responsibility of being chief administrator of all land in the nation, and a new national land supervisory and inspection system was launched. The Ministry of Land and Resources was authorized by the State Council, China’s cabinet, to supervise and investigate the land use and land management situation of local governments. Land inspection bureaus are to be established in the major Chinese cities of Beijing, Shenyang, Shanghai, Nanjing, Jinan, Guangzhou, Wuhan, Chengdu and Xi’an.
　　At the administrative level, the heads of all local land inspection bureaus are to report directly to the chief administrator instead of to the local government. Some experts believe that this measure will make up a missing link in checks and balances as land management in China is controlled by local governments.
　　In the past, “both the national land administrative department and the land supervisory department were in the charge of the local government. As a result, the land supervisory body did not have the authority to supervise the conduct of the government and was considered to be in the way when investigating the misconduct of the subordinate department,” said Yan Jinming, a professor of land management at Renmin University of China. He added that the new land supervisory system is intended to break down this barrier.
　　Song Shiming, a professor with the China National School of Administration, said this isn’t the first time such a barrier-smashing measure has been undertaken.
　　“In 1998, when the government rectified the money market, the same measures were taken,” he noted. In order to cope with problems stemming from financial management in the provinces, in 1988 the People’s Bank of China withdrew its branch in each province and re-established nine major branches. These measures successfully enabled China to withstand the financial crisis that swept across Asia in the late 1990s.
　　Song said he thinks the goal of land market rectification is obvious. “It is the Central Government’s effort to enhance its macro-control strength and effectiveness.” Credit and land are two measures frequently used in macro-control. However, in actual practice, the government has the inclination of using credit policy more than the land, as many local governments rely heavily on land.
　　China’s Vice Premier Zeng Peiyan recently pointed out that the national economy is on a sound track this year. However, he added that problems still exist, including excessive fixed assets investment and bank loans, overconsumption of energy resources, and worsening environmental degradation. Therefore, Zeng stated, “Every local government should further tighten management and control of land. It will be conducive to controlling the excessive fixed assets investment, adjusting and optimizing the industrial structure, and stimulating the rapid, coordinated and sound development of our national economy.”
　　The national land supervisory bureau does not investigate or deal with land cases directly, and it won’t change or replace the administrative rights of local governments and land management departments in terms of administrative licensing and penalties. But experts believe that as rights are centralized, local governments will have to look before leaping. Experts say the founding of the new bureau will be helpful in improving land supervision and strengthening the land management system.
　　“To achieve a balance between the general interest and the partial interest, the law enforcement department must enhance its efforts to punish those who disobey the law,” noted Song Shiming.
　　It was widely expected that a stricter land examination and approval system would be created as doubts about the direct land supervisory bureau have long existed. Some experts argue that the bureau is just a kind of external administrative supervision, and if the systematic root of land abuse is not wiped out, the establishment of the land bureaus will only add to land management costs. Further, they note that it is nearly impossible to stop local governments from taking advantage of land under their control.
　　Yi Xianrong, an economist with the Chinese Academy of Social Sciences, questioned the effectiveness of the new measures, asking: How can the bureau maintain its independence, who should supervise this independent land supervisory bureau and how can the bureau be prevented from getting into cahoots with those using land for illegal purposes?
　　“Land control involves many factors, such as geology, technology and the market. The control pace may be very slow. It could take as long as half a year or a year to see its effectiveness. Meanwhile, the local government’s performance is crucial,” noted a land researcher who spoke only under condition of anonymity.
　　
　　Adjusting income from land use
　　
　　While the land supervisory system is aimed at preventing the illegal conduct of local officials, the land pricing policy is another way for the Central Government to supervise land use.
　　On August 14, Vice Premier Zeng announced four requirements to strengthen land management. Apart from enhancing land management and supervision, the government should also adjust land income distribution, activate unused land and enforce the responsibilities of local governments.
　　On July 25, at an executive meeting of the State Council, Premier Wen Jiabao announced three measures in line with strengthening land control, including adjusting the interest mechanism, and fixing the responsibility system and legal mechanism. Those at the meeting decided that granting fees for land-use rights should be included in the budgets of local governments.
　　The purpose of including these fees in budgets is to prevent the local government from using the revenue randomly. In 1993, the Central Government transferred granting fees to local governments. As these fees were not included in local budgets, they became a major source of funding for local governments to expand the scale of city construction or build so-called “image projects.”
　　According to a report from Development Research Center of the State Council, direct tax receivable from land use and tax from city expansion accounted for 40 percent of the financial revenue of local government budgets, while the net income from granting fees for land use rights made up of more than 60 percent of the off-budget revenue.
　　Experts noted that the rectification and management of the granting fees will help correct the shortsighted behavior of local governments and make land use more transparent. In this way, the Central Government is able to macro-control the economy better by way of land control.
　　Another purpose of reforming the granting fees for land use rights is to make the local government more responsible in guaranteeing the basic housing benefit for its residents. It is reported that in 2005, granting fees for land use rights reached as much as 550 billion yuan on the Chinese mainland. However, of this total, only 6.2 billion yuan, or about 1 percent, was used to build affordable apartments. So far, more than 70 county-level cities and above have not yet established a system for providing affordable housing to residents. To cope with this, the Ministry of Finance issued a notice stipulating that 5 percent of the money gained from land use rights should be used to create an affordable housing system, including apartments available at low rent.
　　While these changes are widely expected to be beneficial, some experts have pointed out that the reform has actually interfered with the interest of local governments and will definitely encounter barriers. They predict that it is not possible to contain all the granting fees in the central budget. A probable method is that the major part of the granting fees will be included in the budgets of local governments, and “national land revenue” will be established to leave some money for the future development of successive governments.
　　The land reserve system is equally as important in terms of land reform. According to the 21st Century Business Herald, of all residential land in Beijing, 2,947 hectares have not been used. This unused land accounts for 51 percent of the total land supply. The ineffectiveness of the land reserve system is obvious.
　　“Currently, the management of existing land is ineffective and the requisition and utilization of the newly added areas is also inefficient,” said Professor Yan, adding that local governments sometimes collect land blindly. “They don’t care about how and when the land is used. Their responsibility is to sell the land.”

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