From negotiation to auction : Land-Conveyance Reform in China and its institutional and social impacts

Abstract

The land market and the associated land-development-control mechanism in China have been experiencing a series of reforms since the 1990s, of which Land Conveyance Reform (LCR) in 2004 is a very recent and an important one. LCR-the formal procedure to transfer the land-use rights (LURs) from the government to other users-has been used together with land use planning as institutional tools to generate and distribute the revenues for both local municipal government and real estate developers. Meanwhile, a large-scale government-led deindustrialization has been going on sine 1995 in city of Beijing, where many State-Owned Enterprises (SOEs) were relocated from downtown Beijing to suburbs or other cities. I studied the change of the LCR from the former negotiation approach to the current auction approach. I analyzed its institutional impact on the land-use planning decision-making process and its social impacts on the deindustrialization process, specifically, the economic and social condition of working staff of SOEs. I conducted an empirical study in Beijing to investigate both institutional and social impacts. The LCR has caused an institutional shift in the land-use planning process, from the former "developer-coordinated process" to the current "local government-coordinated process." However, that shift did not solve the social problems caused by deindustrialization and SOE privatization; instead, it just slows down the occurrence of the problems.