First parcel of China's collective rural land, in Shenzhen, up for auction

PUBLISHED : Wednesday, 04 December, 2013, 5:33am
UPDATED : Wednesday, 04 December, 2013, 6:40am

The first parcel of collective rural land to be made available for public auction in Shenzhen will be offered for sale on December 20.

The move is seen as an experiment in changing rural land policy on the mainland and comes as the central government undertakes a gradual liberalisation of the rural land market.

Urban land designated for construction can be sold or mortgaged, but until now rural land could not be used by entities outside the village.

The third plenum of the Communist Party's 18th Central Committee, which closed on November 12, said a unified market for rural and urban construction land should be formed and farmers should be given more property rights.

The land to be sold is in the Baoan district of Shenzhen. It covers 14,600 square metres and can provide a total gross floor area of 69,900 square metres.

The government has set a reserve price of 116 million yuan (HK$147 million) for the site, which will be designated for industrial use.

According to the tender document, 30 per cent of the proceeds will go to farmers who own the land, and 70 per cent will go to city government.

The government of Anhui province has also allowed farmers in the 20 counties to sell land designated for their own houses as a way to expand their income.

"The reforms are an experiment to change rural land policy. They are part of the central government's urbanisation plan to integrate farmers into city life," said David Hong, the head of research for China Real Estate Information Corp, a unit of US-listed E-House China.

"But the whole liberation process takes time and many parties will be involved," said Hong. "It will have only a limited impact on the property market."