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Chinese Land Reform: Property Rights and Land Use Xinhao Yang [email protected]

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Chinese Land Reform: Property Rights and Land Use Xinhao Yang Gut10xya@Student.Lu.Se Master in International Economic with a focus on China Chinese land reform: property rights and land use Xinhao Yang [email protected] Abstract: Is China’s “ property rights ” legislation, which distinguishes transferable “property rights” and inalienable “land ownership”, a new concept that is unknown before, or a pragmatic reversion to the individual property rights system abolished by the communist revolution? This study claims that the latter is a better exposition. As part of a “socialist market economy”, such a reversion is manifested in the legal recognition of the leasehold tenure after the “responsibility system” in agricultural production had proved to be successful. As the development of private property rights is a prelude to market transactions, land use rights reform in China should be conducive to the success of China’s economic liberalization policies, provided that there is a contemporaneous advance in the development of the polices and technical know-how, such as new land use right policy and land surveying. Key words: property rights, land reform, land ownership, private property rights, rules of law. EKHM52 Master thesis, First year (15 credits ECTS) October 2014 Supervisor: Patrick Svensson Examiner: Christer Gunnarsson 1 Acknowledgments At the point of finishing this paper, I’d like to express my sincere thanks to all those who have lent me hands in the course of my writing this paper. First of all, I'd like to take this opportunity to show my sincere gratitude to my supervisor, Patrick Svensson, who has given me so much useful advices on my writing, and has tried his best to improve my paper. Secondly, I’d like to thank those leaders, teachers: Christer Gunnarsson and Sonja Opper for their helpful in an amazing year. Last but not the least, I’d like to express my gratitude to my classmates and friends who offered me references and information on time. Xinhao Yang Lund, August 2014 2 Table of Contents Chapter 1. Introduction and Background................................................................. 4 1.1 Short introduction and Background..............................................................................4 1.2 The Aim of the Thesis and Research Questions...........................................................6 Chapter2. The Methodology....................................................................................... 6 2.1 Participant Observation............................................................................................. 7 2.2 Individual interviews................................................................................................. 7 2.3 Community Observation........................................................................................... 8 2.4 The Surveys and Field study.......................................................................................10 Chapter3. Theoretical Framework and Literature Review.................................... 10 3.1 Griffen's poverty and the distribution of land.............................................................10 3.2 Theories of Property Rights........................................................................................11 3.3 Use Case..................................................................................................................... 15 3.3.1 Private Property in USA............................................................................................. 15 3.3.2 The Rights for private land owner.............................................................................. 16 3.4 Types of land ownership and different property rights in China................................18 3.5 Land Use Rights in China...........................................................................................20 3.6 The change of properties structure of China’s land reform........................................21 3.6.1 Chinese collective land system change and a new round of land reform....................21 3.6.2 Theoretical debate on further property rights in China ............................................. 22 Chapter4. The Findings reports of one city and one village...................................26 4.1 Wuxi city.................................................................................................................... 26 4.1.1 Basic Conditions and Resources..................................................................................26 4.1.2 A case to support my argument................................................................................... 27 4.1.3 Various Speculations................................................................................................... 29 4.1.4 An incomplete land system reform..............................................................................30 4.2 HuaXi village..............................................................................................................30 4.2.1 Basic Conditions and Resources..................................................................................30 4.2.2 History of development............................................................................................... 31 4.2.3 Land system in Hua xi village..................................................................................... 31 4.2.4 Village land allocation criteria.....................................................................................33 Chapter5. Conclusion and discussion.......................................................................35 3 Chapter6. References and Appendix........................................................................38 1. Introduction 1.1 Short Introduction and Background China has experienced two main land reforms during the 20th century. One reform happened from 1947 to 52 by the force of People’s Liberation Army. Land owned by landlords, temples and clans(Bramall 2004), and land rented out by rich farmers (Bramall 2004), was seized by the newly farmed village of Farmers’ Associations. This confiscated land was then re-distributed to middle and poor farmers, and to landless laborers. By 1952, a system of small-scale family farming had been successfully created by the Chinese Communist Party. This system continued to 1956, when it was replaced by collective agriculture. For the second land reform between 1981 and 1983 grew out of a series of policies aimed to make the collective operate more effective. These collective farm policies, which started to be implemented in 1976, was originally intended to restore the material incentives, and in the same time to reduce the size of the unit of account from production teams to working groups. In 1978, more radical reforms were taken in several places, mainly in Jiangsu and Anhui province. Farmland and agricultural equipment was handed over to farmers, effectively restoring the family farming. However, this de-collectivization process was very slow; even to the end of 1980, only 5 percent of the production teams had adopted the family farming across China. But 1980 proved to be the last year of collective farming as the process(Bramall 2004) of de-collectivization gathered momentum and Chinese leaders decided to resume the small scale farming system of the 1950s, an era widely viewed within the CCP during the early 1980s as the (Leninist) ‘golden age’ of Chinese socialism(Bramall 2004). In October 1981, 38 percent of farmers’ production teams had introduced the system of 4 family farming known as “Da bao gan”(big contracting) or “ Bao gan dao hu” (‘ contracting every thing to the household ’), and this number had risen to 67 percent by June 1982. From 1982 to 1983, even recalcitrant provinces such as Yunnan were forced to bend before the prevailing winds. By December 1983, 94 percent of China’s production teams had abandoned the collective and the process was completed in 1984. 1.2 The Aim of the Thesis and Research Questions The aim of the thesis is to study and explore how the current and the proposed property rights structure for land in China affect rural and urban settlements. In general, the concepts and literature which are used in this paper is the discussions of the assessment offered by Griffin, Coase, Chen and Freyfogle (GCCF) of land reform and property rights theory. I choose these four researchers because they have different ideas in land reform and property rights. However, this is also as the very boldness of the claims made by GCCF for China’s reforms. Coase et al.(1958) speak about the 4 important criteria for efficiency of property rights: First is universality—all scarce resources are owned by someone;Second is exclusivity — property rights are exclusive rights; the third transferability—to ensure that resources can be allocated from low to high yield uses; the last is operability — can used by people. This thesis will show that only when one finds the above factors and the connections from rural and urban such a complete framework is it possible to solve the Chinese puzzle of property rights.The research questions of this thesis are: How do dwellers in cities and villages perceive the existing and future property rights system? What is the role government can play in the whole process of land reform? Moreover, looking the past years, how well does the system fit the needs of China’s rapidly growing economy? In short, the factors should be the most important both in Chinese rural and urban place. Without the whole factors, 5 there would not totally realize Chinese property rights
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