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Forestland and Property Rights in China: Evolution Towards Private Forestland and Property Rights in China: Evolution towards Private Rights and Public Regulation Shin Wei Ng Thesis submitted for the degree of Ph.D. University College London UMI Number: U591826 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U591826 Published by ProQuest LLC 2013. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 I, Shin Wei NG, confirm that all the work presented in the thesis is my own. Where information has been derived from other sources, I confirm that this has been indicated in the thesis. Shin Wei Ng 25 July 2008 Abstract This thesis examines the impact of the current land ownership arrangement on the use and management of collective forestland in China. Increasingly, the focus of China’s forest and forestry is shifting from timber production to the conservation and protection of the forest ecosystem. So far the Chinese government has carried out a number of major programmes that seek to increase the forest cover and to reduce commercial exploitation in its natural forests. These large-scale state-sponsored programmes involved not only the state but also the collective forests. The government has overwhelming control over the collective forests in relation to the production and use of forest resources. This thesis argues that this is mainly induced by the current land ownership arrangement. Although the collectives are ‘self-governing’ bodies and democratic elections are practised, the collectives nevertheless act more like the ‘agents’ of the government than true representatives of the collective members. By retaining control over collective governance, the state manages to assert control over the use of collective forests; in other words, the state has chosen to regulate land and forest use via the ownership structure. With little protection for individual rights, the state imposes rigid and intrusive measures that severely limit the autonomy of land users and create instances of abuse of power by those who are in control. This has resulted in various serious and negative consequences: inefficient use of forest and land resources; slow growth of rural economy; limited and incomplete private rights; increasing wealth gap; and last but not the least, slow development in the rule of law. As a result, future reforms of collective forests will be futile if the ownership regime is not changed. It is argued that a private ownership regime is now viable and will help China’s rural society to achieve further economic, social and legal development. Under a private ownership regime, the government can exercise control over forest and land use via public regulation, which would allow land use to be regulated in a more transparent and efficient way without compromising individual autonomy. 2 Acknowledgements I am very grateful to Professor Tim Swanson for his supervision and the guidance that he has given. I would also like to thank him for his patience and support throughout the difficult and challenging years. I am thankful to my colleagues at the UCL Faculty of Laws, especially Dr Eva Pils, Dr Emmanuel Voyiakis and Dr Riz Mokal, for the wonderful discussions and conversations on various subjects. I am also grateful to all my friends, especially Dr Chin Won Khoo, Dr Mijin Cha and also Dr Elli Groner for their support and inspirations. I would also like to thank my parents and sisters without whose moral and financial support any achievement would be impossible. The same goes to Adam Wright, who has been wonderfully supportive. I am thankful to Joanne Wright and David Mason for proof-reading my chapters, and to Yue Peng for helping me to get access to Chinese articles. I am also very grateful to the Lee Foundation, which has funded my education for a decade. Lastly, I would like to thank Professor Tim Swanson and Professor David Pearce for giving me the opportunity to get involved in the project in China. I am also thankful to all those who have worked with me such as Tao Wendi, Katrina Mullan, Dr Ben Groom, Dr Andreas Kontoleon, and Professor Zhang Shiqiu. 3 Table of Contents Page number Chapter 1 Theory of Property Rights and China’s Forestland: An Overview 1. Introduction 6 2. Methodology 10 3. Theory of Property Rights 14 3.1 Socio-Political and Legal Analysis of Property Rights 17 3.1.1 Property Rights as Natural Rights 18 3.1.2 Property Rights as Creation of Law 19 3.1.3 A Bundle of Rights 22 3.1.4 Distribution: Justice and Sustainability 24 3.2 Economic Analysis of Property Rights: The Issue of Efficiency 28 3.2.1 Transaction Costs 30 32.2 The Theory of the Firm 32 3.2.3 The Evolution of Property Rights 34 4. An Overview of China’s Forest and Forestland 40 4.1 Timber Trade and Timber Market in China 42 5. Problems with the Existing Regime 45 5.1 Timber Harvest Quota 46 5.2 Excessive Taxes, Charges and Fees 49 5.3 Forestland Tenure and Land Use Rights 53 5.4 Inadequate Compensation for Forest Ecological Benefits 56 5.5 Implementation of Forest Law and Policy 58 6. Conclusion: Approach of the Research 61 Chapter 2 Rural Land Rights in China 1. Introduction 66 2. The Evolution of Rural Land Rights in China 67 2.1 Pre 1949 69 2.2 1949- 1956 73 2.3 1956- 1978 74 2.4 1978- 1998 76 2.4.1 Ways of ‘Contracting Out’ Land and Types of Land 79 2.4.1.1 Contracting out through administrative allocation 79 2.4.1.2 Individual contracting out (mainly for investment purposes) 80 2.4.1.3 Public bidding, auction and negotiation (‘four wasteland’) 83 2.4.2 Types of Regime under Collective Management of Forestland 85 2.5 1998 - present 88 3. Contract-based Entitlements of Rural Households Over Land 97 3.1 Right to Use 97 3.2 Right to Autonomy 102 3.3 Right to Transfer 105 4. The New Property Law 109 4.1 Property Law and Land Ownership Rights in China 111 4.2 Usufruct Rights of Rural Land 113 4.3 Registration and Enforcement of Rural Land Usufruct Rights 115 4.4 Implications of the New Property Law on Rural Land Usufruct Rights 117 5. Conclusion 121 4 Chapter 3 China and Collective Property 1. Introduction 123 2. Collective Ownership: The Ideology and Justifications 125 2.1 The Ideology of Collective Ownership 126 2.2 Land Use Concerns and Justifications 127 2.3 Rebuttal of Justifications 135 3. Productivity and Property: The Household Responsibility System 144 3.1 Mismatch of Reality and Ideology 146 3.2 The Costs to the Government 148 4. Collective Land Ownership: A Thing of the Past? 153 4.1 Relationship between the Village Governance, Local and Central Government 154 4.2 Relationship between the Village Governance and Collective Members 160 5. Conclusion 169 Chapter Four China and Forest Use Management: Institutions for Governance 1. Introduction 172 2. Collective Management in Theory 173 2.1 Common Pool Resources 175 2.2 Important Characteristics of Common Pool Resource Management 179 3. Examples of Collective Forest Management in Practice 188 4. A Comparative Case Study and Lessons for China: Community Forestry In Mexico 191 4.1 Key Characteristics of Community Forest Regime in Mexico 191 4.2 Comparison between Mexico and China: Lessons to be Learned 197 4.2.1 Lessons on Land Use Arrangement 199 4.2.2 Lessons on Community Forestry 204 4.3 Conclusion 211 5. The Latest Forestland Reform: The Panacea? 212 6. Conclusion 218 Chapter Five Conclusion: Property Rights Reform 1. Introduction 221 2. Property Rights Reform 224 2.1 Tenure Security and Forest Management 225 2.2 Land Privatisation and Permanent Leasehold 228 3. The Impact of Property Rights Reform on Forest Governance 236 4. Conclusion 241 Annex I More Facts on China’s Forest and Forestry 243 Annex II Table of Legislation of the PRC Consulted (All in Chinese) 261 Bibliography 263 5 Chapter 1 Theory of Property Rights and China’s Forestland: An Overview 1. Introduction This chapter gives an overview of China’s forests and the role of property rights in addressing the difficulties related to its existing forest regimes. We shall see that in the face of the intensive industrialisation and urbanisation processes that are taking place in China, whilst cropland area has been decreasing, forestland area has been increasing consistently over the past decade. This has been achieved after years of neglect and exploitation of the forest in the early years of the establishment of modem China. Deforestation was particularly severe during the Great Leap Forward period (1958-1962), the Cultural Revolution period (1966-1976) and in the 1980s immediately after forestland de-collectivisation. As China develops at a breathtaking pace, its demand for timber and other forest products has greatly increased, for both the local and international market. As a result, China’s forests have been under substantial pressure. To meet the demand shortfall, China has increased its forest products imports and investment in plantation forests. On the other hand, as the demand for forest environmental services has also increased, China’s forest policy has altered significantly in the last decade.
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