Socialist mindsets hamper China's plans to create free market for rural land

Villagers' reluctance to abandon collective land - the bedrock of socialism - make moves for gradual liberalisation an 'impossible' dream, analysts say

PUBLISHED : Friday, 27 December, 2013, 10:03am
UPDATED : Friday, 27 December, 2013, 10:04am

Despite calls for the gradual liberalisation of rural land use made at the third plenum of senior leaders last month, a free market for farm and village land remains a distant – even impossible – dream, analysts say.

The plan faces at least two main obstacles. One is the ambivalence of rural residents to abandon land settled by their families for generations for an unknown life in the city.

Another is the widely held belief that collectively owned land is the bedrock of socialism and that abandoning this principle could shake the foundations of the country.

While urbanisation has never been an official policy on the mainland, it has been seen as an inevitable trend since the 1980s when millions of rural residents began gravitating to larger cities for work.

In reality, the rational choice for people is to go to the city to enjoy its opportunities and resources, while keeping their roots in the countryside
Ding Li, researcher

By the end of last year, China’s population became prominently urban (51.2 per cent) for the first time, and earlier this month researchers told a planning conference in Beijing that the urban population could swell by 400 million in coming years.

Under Chinese law, rural land is collectively owned by villagers and can only be sold to fellow residents of that village.

But, in their November meeting, senior leaders decreed that pilot programmes in selected areas could proceed “cautiously and steadily” to experiment with mortgages and sales of rural homes.

He Jiancheng, who lives in a suburban community made up of several former villages in Haining, Zhejiang province, said only two families among the 600 households in the villages accepted apartments as compensation instead of retaining their land-use rights to build a new house during a relocation three years ago.

“We have our roots there. Why give it up?” he said.

In a pilot for “rural comprehensive reform” designated by the Ministry of Land and Resources for Baibu township in nearby Haiyan county, only about 60 households out of more than 360 that were relocated in an urbanisation project chose compensation apartments.

Most of the 60 did so because family members had settled in the town, said a local cadre who declined to be named.

Long Yongquan, a villager from a poor mountainous area in Enshi autonomous prefecture, Hubei province, said he was torn between a desire to move closer to town and a wish to keep his house and farmland.

“At least I wouldn’t starve if I couldn’t find a job after moving to the town,” he said.

Ding Li, a senior agricultural researcher at Anbound Consulting in Beijing, said field research indicated that few farmers and migrant workers today wanted to have their hukou (household registration that confers their access to local public services) transferred to cities.

“The top authorities have set policies to make people move out of rural areas,” he said, “but in reality, the rational choice for people is to go to the city to enjoy its opportunities and resources, while keeping their roots in the countryside.”

He added: “After all, their land and the homes they built on it are their biggest assets.”


At a forum held by last week, professor Xu Chenggang from the University of Hong Kong noted that in developed countries, urbanisation was more a process spontaneously generated by the market rather than central planning.

He called for the total liberalisation of the rural land market, saying “when there is no private ownership for land, development of the market will be obstructed”.

Despite similar calls in recent years from other scholars, progress in rural land rights reform has exceedingly slow because the system of collective rural land ownership is still considered by many to be a foundation of socialism.

Dr Li Guoxiang, from the Rural Development Institute at the Chinese Academy of Social Sciences, expected little practical progress in this matter before the authorities reached a theoretical justification of such a reform.

He said that while local governments were generally eager to embrace a free market for rural land, which would bring more revenue, their experiments have remained modest.

In August, the city government of Wenzhou in Zhejiang announced new regulations allowing rural property to be traded within the county, not just the village.

Although the announcement of the move gained extensive media attention, the government later denied the policy change, saying sales would still be limited to fellow villagers.