Nov 29, 2012
Translated by Zhu Na

Draft amendments to China's Land Administration Law were discussed and approved at a meeting of China's State Council yesterday, according to a report in today's Beijing Times.

The State Council will now submit the draft amendments to the Standing Committee of China's National People's Congress (NPC) for further consideration.

Although the precise details of the proposed changes remain unknown, experts quoted in the Beijing Times article speculate that the draft amendments could include stipulations that would result in a dramatic increase in the amount of compensation required to be paid to rural residents if collectively-owned land was requisitioned by the state. One academic estimates that compensation could increase by at least 10 times the current levels.

Professor Yu Jianrong (于建嵘), director of the Rural Development Institute's Social Issues Research Center at the Chinese Academy of Social Sciences, said the amendments were likely only to impact on the amount of compensation that rural residents would be awarded if collectively-owned land was expropriated and did not involve any reform to rules governing the role of rural residents in transactions involving rural collectively-owned land.

Professor Jiang Ming'an (姜明安), a scholar at Peking University's Law School, speculated that the amendments might involve Article 47 of the Land Administration Law. The provisions in Article 47 stipulate that for land acquisition, compensation is paid in accordance with the use to which the land is being put at the time when it is acquired.

Professor Jiang also said that the compensation should be increased by at least 10 times the present level.

According to the current law, the sum of compensation for land and other resettlement fees can not exceed 30 times the avergae annual value of production on the plot of land over the three years preceeding its acquisition. The professor estimated that according to the current rules, a total compensation of about 60,000 yuan is normally paid for each mu of farming land (0.067 hectare), that works out to about 100 yuan per square meter of land.

Professor Jiang noted that currently after the government has paid 60,000 yuan to acquire one mu of collectively-owned rural land, it can be sold on to real estate developers through competitive bidding for as much as 6 million yuan. The huge price differential often leads to social problems. If the amended law lifts compensation by as much as he's predicting, then farmers may soon be able to get 600,000 yuan in compensation for each mu of land.

Professor Jiang went on to say that amendments to the law needed to go beyond the issue of recalibrating compensation payments and
also clarify the role played by rural residents in land transactions.

Currently most rural land that is being reclaimed by the government is not being used for projects that are for the public good - like freeways and high-speed railway lines - but are instead being used for commercial housing developments or other large projects. Despite this situation, according to the current rules, all collectively-owned rural land first has to be expropriated by the government and can't be directly sold to developers.

Professor Jiang argues that in the future a distinction should be made between real public projects and the other more commercial uses of rural land and that rural residents should be allowed to trade their property rights and extract more benefits from these sales.

Links and Sources
Beijing Times: 集体土地征收补偿 制度修改获国务院通过
Economic Observer: Amendments to Land Administration Law