In the process, the software – namely the rural population – would not become a burden as they enjoy better income, not only from their urban employment but also from rural assets, such as rental of property, interest from land deposits, and returns from holding shares on pieces of land.

Allow House-site Conversion
Another constraint under the current system is the “collective ownership” of house-site land. Rural populations apply for such land from a collective entity, upon approval they receive the rights to use the land for free. However, the term “collective ownership” is not clearly defined, and ironically, houses built on such land are considered personal property.

When we push for reform in the dualism mechanism, how do we deal with house-site land belonging to farmers who have left for urban jobs? At present, house-site land is nationalized and local governments would pay farmers a sum of compensation to acquire such land.

In reality, many farmers are dissatisfied with such an arrangement. Here, I would like to explore three possibilities for dealing with the matter:

• Similar to the proposal of allowing the rights to transfer contract land, this model can be extended to house-site land. When farmers leave for the cities with their families, they can opt to lease out or turn the land into a shareholding entity, the same can be applied to house-site land. Yet, under this arrangement, several complications arise. What will happen to the structures standing on such land? Can the new occupant demolish them? If the original owner, due to unforeseen circumstances decided to return to the village, does he have the right to reclaim the property? Or should he reapply for land and rebuild a house? 
• Allow the sales of house-site land, along with the property built on it, to other villagers, city residents or enterprises. This will enable farmers, who are planning to move to the cities, to obtain a sum of money to start afresh with in the new environment. The present law, however, forbids the sales of land under collective ownership.
• Allow house-site conversion. This refers to entrusting the local governments to make arrangements under a set of guidelines to swap rural assets with those in the cities. Rural families intending to move to the city can surrender their land and property to the local governments, which in turn can help to arrange for household registry conversion and allocate housing for them in the cities. In some better off districts, the local governments can even consider providing minimal social security benefits within their capacities to help rural families resettling in the cities. This model may involve tedious bureaucracy and procedures, but in the long run, it will help to prevent future disputes.
  
  Unlike land rights transfer, farmers who mortgage their land along with the property on it reserve their claims over the assets. Once they have re-paid the loans, the assets return to their fold.

Under the current circumstances, the third option – house-site conversion – appears to be the most appealing one.