China - Context and Land Governance

The transition has seen the adaptation of a centrally planned economy to allow for private enterprise and capital, with 60% of GDP now produced in the private sector, albeit one closely tied to state actors. It is a shift that is mirrored in formal land tenure.

There is a dual system with state-owned land in urban areas, and farmer collective-owned land in rural areas^3,4. During an initial period of collectivisation in the time of Mao Zedong, there was little incentive to maximise production potential. To rectify this situation, the public system has commodified land use rights in order to accommodate foreign and private sector investment⁵.

Yet development has come at the cost of growing wealth inequality⁶. There is disparity between coastal provinces and cities, which were best positioned to take advantage from policies opening up the economy, and other regions. A gap has also increased between urban and rural populations, with the dual land use rights system acting as one contributory factor⁷.

A challenge remains to balance food security and environmental protections against intensive urban and industrial growth, made all the more complex through a bureaucratic system with competing interests between horizontal and vertical levels of governance. 19% of the world’s population must be fed using only 6% of its total land area. As of 2020, the population of China is more than 1.4 billion people.

In December 2019, COVID-19 was first detected in Wuhan, the capital of Hubei province. Strict lockdown policies, with door-to-door health checks were enforced. As China continues to contain the virus, the long term effect on freedom of movement, production systems, food security, and socio-economic well-being remains to be seen. This includes the ability of land markets to ride a period of economic depression, how legislation on usage rights might adapt to protect food sovereignty and stimulate investment, and the overall impact on socio-economic inequality.

Land Legislation and Regulations

The fourth Chinese Constitution was adopted in 1982, and has been revised five times since. Article 10 lays out a dual-system of land ownership, where:

Land in cities is owned by the state. Land in the rural and suburban areas is owned by collectives … The State may, in the public interest and in accordance with the provisions of law, expropriate or requisition land for its use and shall make compensation for the land expropriated or requisitioned. No organization or individual may appropriate, buy, sell or unlawfully transfer land in other ways. The right to the use of the land may be transferred in accordance with the law. All organizations and individuals using land must ensure its rational use.

Following the formation of the People’s Republic in 1949, private ownership was abolished and production controlled through a centrally planned economy. During the 1950s, extensive land reform led to the basic dual system of state-owned urban land and collective-owned rural land. However, with productivity low, the post-Mao era introduced land markets through usage rights. In rural areas, the 1978 Household Responsibility System allowed collectives to contract use of agricultural land to individual households, who could keep or sell any surplus output^{8, 9.} In 1983, the rural commune system was replaced by a township and village system, allowing non-agricultural activities and resulting in a high demand for its corresponding land.

In urban areas, the 1986 Land Management Law allowed the transfer of urban land usage rights for commercial usage, either allocated to state-owned or non-profit users or granted to commercial operators ^{10, 11}. This commercialisation of usage rights was recognised in a revision to the Constitution in 1988, with the private sector given a greater role in economic restructuring from then on. The State Land Administration Bureau was established to register and regulate land transactions and conversions. In 1998, the Land Management Law was amended to protect farmland against conversion to construction land and counter the threat to food security¹². Governments at all tiers are responsible for contributing to annual land utilisation plans, and any development must conform to these plans.

Land Tenure Classifications

Land ownership is held by the state or rural collectives. As a result, households or individuals are only able to obtain usage rights under a leasehold agreement¹³. It is possible to own residential property as freehold but not the land upon which it lies. The maximum usage rights for urban housing including its land is 70 years, industrial purposes 50 years, welfare services (e.g. education, culture and health) 50 years, and commercial, tourist and recreation purposes 40 years¹⁴. However, the 2007 Property Rights Law states that urban residential rights will be automatically renewed when expiring, although there are few details as to how this stipulation can be implemented.

China has an extensive system of land classification with twelve categories (including cropland, forestland and residential land), and 57 sub-categories¹⁵. The 1988 revision to the Constitution legitimised the commercialisation of land use rights, so that in urban areas state land can either be allocated to state-owned or non-profit users for a small fee, or granted to commercial users. The costs for the latter are market-related, and the usage rights can be used as collateral, leased, or sold. Allocated land cannot be transferred (apart from re-acquisition by the state), but can be granted for commercial use by giving compensation (difference in fees) to the state.

In the countryside, the Law on Land Contract in Rural Areas (2002) confirms that usage rights for farmers stand at 30 years and are extendable¹⁶. Rural collective committees can allocate land for construction related to public welfare, township and village enterprises, or housing. However, any allocation must conform to annual land use plans, and seek approval from the State Land Administration Bureau. To further protect farmland, the 1988 Land Management Law was amended where each province must allocate and retain 80% of arable land¹⁷. Since 2006, there exists state ‘red line’ policy to maintain 120 million hectares of farmland^{18, 19}.

Land Use Trends

Different datasets tell us different stories on land use in China, and it is useful to set them out for comparison. Accounting for a total area of 9.6 million square km²⁰, the 2019 Chinese Statistical Yearbook, which defines land through its domestic classification, identifies 69.1% designated for agricultural use and 4.2% for construction, the rest presumably representing unused land²¹. Although urban land is included within the construction category, actual usage may not strictly follow this categorisation. According to land use figures in FAOSTAT for 2017, agricultural land takes up 56.1% of the total country area, forest cover at 22.1% and other land, including areas of construction and industrial complexes, at 21.8%²². Further, following data from the UN Department of Economic and Social Affairs, by 2020 61.4% of the population will live in urban areas of the country, compared to 19.4% in 1980^{23, 24}. This population shift to urban areas accelerated after 1984, when internal migration regulations relaxed and rural peoples could seek employment in non-farm work²⁵. The commercialisation of usage rights has release large amounts of capital to promote the resulting rapid urbanisation²⁶.

Tensions remain behind the retention of vital agricultural land to feed a huge population in a core socialist frame of public control over resources, and a desire to exploit its conversion into capital-generating developments. To stem extensive developments, at different moments moratoria have been placed on agricultural land conversion, most significantly from 1997-9²⁷. A further squeeze on land sees a rural population moving to work in urban areas but keeping their homes and agricultural land in rural areas, thereby ‘hollowing out’ the countryside²⁸. Nevertheless, between 2003 and 2015, over 11.5 million hectares of agricultural land were developed for non-farm uses²⁹.

"Human invader", photo by Beryl Chan, originally published in FLICKR, CC0 license

Land Investments and Acquisitions

China is well known as an investor in land-related deals outside the country, reaching as far as Africa and South America. Yet just as significant have been the attempts to stimulate domestic investment. From the 1980s onwards, led by the 1982 Constitution and subsequent revisions, land legislation has been adapted to allow domestic and foreign investors access to land use rights^{30, 31}. Urban land use rights can be sold, transferred, and leased in the urban land market, while rural land use rights are more restricted so as to favour agricultural use, as clarified in the Land Administration Law³². There are three main areas of development permitted in rural areas: residential plots for farmers, land used for public facilities, and land used for township or collective enterprises. Since the beginning of the 1980s, special status has been conferred to various regions to further stimulate investment. The island of Hainan has been designated a Special Economic Zone (SEZ) at provincial level, while there are five SEZs at city level in Fujian, Guangdong and Xinjiang Provinces. There are also 14 Open Coastal Cities and numerous areas inland designated as free-trade zones, technological development zones, or industrial development zones.

Land legislation has resulted in the setting up of secondary markets³³. Urban usage rights can be used as collateral, rented out, and transferred to others. Via the Household Production Responsibility System, agricultural land can be contracted out to other users, an activity in which agricultural households and farmers themselves can participate. Land titling projects have been conducted around the country since 2008³⁴. In 2019, ‘three rights separation’ policy was enacted, leading to a trifurcation of farmland rights (ownership, right to contract land, right to manage land)^{35, 36, 37}. Farmers can now transfer the rights to manage land in an attempt to improve productivity and free agrarian households to participate in diversified economic activities.

Agricultural land can be expropriated for public use, with ownership transferred to the state. As a result, many communities have undergone compulsory relocation to make way for large-scale government projects³⁸. There have been complaints about a rural population receiving insufficient compensation in such cases, since local governments have monopoly on urban land conversions and transfers, and can acquire land cheaply from farmers before selling to developers^{39, 40}. As a result, the private market in land usage rights has led to uncontrollable land development, and a growth in peasant landlessness^41,42. Various countermeasures have been installed as a result. These include State Council Regulations and the Urban Real Estate Law in 1994, brought in to regulate real estate markets, moratoria on arable land conversion, and a revision of the Land Management Law in 1998 ^{43, 44}. Despite these measures, there remains a risk that market consolidation and increased landlessness may contribute to increases in inequality.

There is evidence around illegal acquisition and development on collective land, becoming a serious source of social discontent ^{45, 46, 47}. Official statistics show that between 1995 and 2002, there were almost a million known cases of illegal land occupation and transaction, involving 189,000 hectares⁴⁸. Following reform of the tax distribution system in 1994, revenue shortages at the level of local government resulted in a dependency on land sales to increase funds^{49, 50}. A black market in land occupation and conversion prevails, particularly in the vicinity of popular urban areas where demand is at its strongest. In 2013, the state promised to better protect land use rights, improve compensation packages and increase the rural voice over negotiations for rural construction land. There are provisions on dispute resolution mechanisms within the Land Management Law and Law on Land Contract in Rural Areas, but on the whole local political actors have been able to activate legislation better than affected farmers. Meanwhile, the government has paid more attention to stopping disputes arising in the first place, such as through placing approval mechanisms at the provincial level⁵¹.

Photo by Larry Quiang, orginally published in Flickr, CC0 license

Women’s Land Rights

The legal framework of China has enshrined gender equality, most clearly positioned in the Law on the Protection of Rights and Interests of Women (1992, revised 2005 and 2018), also known as the Women’s Act. There are various women’s organisations throughout the country, of which the most prominent is the All-China Women’s Federation. Since 1995, there have been three phases of a Program for the Development of Chinese Women promoting activities of political participation, labour, health, education, and equality of rights. 

In specific legal terms, article 48 of the 1982 Constitution states that women enjoy equal rights with men in all spheres of life including politics, economy, culture, society and family. Although the Property Rights Law (2007) contains no specific stipulations on gender, the Law on the Protection of Rights and Interests of Women (1992) declares equal rights for women and men over property (article 28 and 44), ownership relations (article 29), and farmland and residential plots (article 30)⁵². The Law of Succession (1985) proclaims equal gender rights in inheritance (article 9), and the Agriculture Law (1993) confirms this in the case of rural land use rights (article 13). The Law on Land Contract in Rural Areas (2003) states that arable land is contracted to the household and remains so regardless of the death of any individual within that household (article 31). A 2018 amendment to this law states that women’s names will be registered on land certificates and not just the head of the household, most commonly a man. China has also signed and ratified international gender-related conventions, including CEDAW and CEDAW-OP.

As a result of the legal framework, men and women theoretically share land use rights provided to households in rural areas. However, when a woman marries she predominantly relocates to live with her husband, and so may relinquish any land allocated to her in the natal village along with inheritance rights to land from her parents. If divorced from her husband, a woman may find herself disenfranchised, losing rights to land in the conjugal village as well as no longer possessing rights at the natal village. Men still hold most of the political positions in China, and so despite the presence of many women’s organisations, power lies under a patriarchy.

Due to rapid urbanisation and industrialisation, many men have migrated to work in cities, frequently leaving women and the elderly in the countryside⁵³. Although not an exclusive pattern, this has led to feminisation of agriculture where women have taken a greater role as labour and in the management of farms⁵⁴.

Voluntary Guidelines on Responsible Tenure (VGGT)

As a core FAO partner and key institutional language, the VGGT was translated directly into Chinese on its initial publication in 2012⁵⁵. Supporting guides have also been translated, including the technical guide for investors operating on agricultural land, and how to safeguard land tenure rights in the contract of agricultural investment. National workshops have been held for all stakeholder groups in China, raising awareness on the voluntary guidelines and stimulating discussion to improve governance. FAO has also been working with China in terms of its outbound investments in Africa.

Timeline - milestones in land governace

1949     Formation of the People’s Republic of China

Following its establishment, private ownership was abolished and production controlled through a centrally planned economy

1978     Promulgation of Household Responsibility System 

Allows collectives to contract use of agricultural land to individual households, who could keep or sell any surplus output

1986     Promulgation of Land Management Law 

Allowed the transfer of urban land usage rights for commercial usage by state-owned, non-profit or private sector operators

2018     40 years of GDP growth at an average 9.5% per annum

A remarkable transition from a poor developing country, placing China as the world’s second largest economy

2019     ‘Three rights separation’ policy enacted

Farmland rights are trifurcated into the right to ownership, contract land, and manage land, in an attempt to improve productivity and free agrarian households to participate in diversified economic activities

2020     Population over 1.4 billion people

19% of the world’s population are found in China

2020     61.4% of the population living in urban areas

This compares to 19.4% in 1980

Where to go next?

The author's suggestion for further reading

There are a number of special journal issues, which focus on aspects of land in China. Volume 40 of Land Use Policy from 2014 contains 17 articles, such as in Key issues of land use in China and implications for policy making by Yansui Liu, Fang Fang, and Yuheng Li⁵⁶. Volume 74 from 2018 has 31 articles and focuses on land use and rural sustainability, including Land titling program and farmland rental market participation in China: Evidence from pilot provinces by Yahui Wang, Xiubin Li, Wei Li, and Minghong Tan⁵⁷. In the Journal of Agrarian Change, volume 15, issue 3, concerns agrarian change in contemporary China, with the article Land Transfer and the Pursuit of Agricultural Modernization in China by Jingzhong Ye⁵⁸. A further article of interest reviewing agricultural change is Synthesis of agricultural land system change in China over the past 40 years by Zhanli Sun, Liangzhi You, and Daniel Müller⁵⁹. For a detailed analysis of the 2019 ‘three rights separation’ policy, we recommend consulting the paper Reconstruction of China’s Farmland Rights System Based on the ‘Trifurcation of Land Rights’ Reform⁶⁰.